SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 16, 1997 (April 1, 1997).
DIMON Incorporated
(Exact name of registrant as specified in charter)
Virginia 0-25734; 1-13684 54-1746567
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
512 Bridge Street, Danville, Virginia 24543
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 792-7511
________________________________________________________________________
(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
On April 1, 1997, DIMON acquired all the outstanding capital
stock and other rights of Intabex Holdings Worldwide S.A.
("Intabex"), a privately-owned Luxembourg holding company. Intabex
maintains coordination and service offices in Wokingham, England,
near London. It owns and operates leaf tobacco buying, processing
and exporting operations in principal tobacco markets around the world
including the United States, Brazil, Argentina, Malawi, Italy and
Thailand. An Intabex subsidiary, Compania de Filipinas (CdF), is one
of the two major suppliers of premium cigar leaf and other dark
air-cured tobaccos to the resurgent cigar industry in the United
States and Europe. Separately, a Zimbabwe company that is a
wholly-owned subsidiary of DIMON, acquired certain tobacco assets
from an Intabex affiliated company in Zimbabwe. Intabex is a major
supplier of Zimbabwean and other African grown tobacco to the cigarette
industry.
The $264.19 million aggregate purchase price for Intabex, the
Zimbabwe assets and other rights acquired consisted of 1.70 million
shares of DIMON common stock, $140 million in 10-year, 6.25 percent
subordinated debentures convertible into 4.866 million DIMON shares at
$28.77 per share, and $86.12 million in cash. The source of cash was
working capital of DIMON. Intabex's shareholders, Folium Inc.,
Tabacalera, S.A. and Leaf Management Investments Ltd., have agreed to
indemnify DIMON against certain liabilities in connection with the
acquisition of Intabex, subject to a maximum of $90 million. DIMON may
set-off any such liabilities against $90 million of the debentures held
by Folium and Tabacalera. The amount of debentures subject to set-off
declines in stages, with $15 million subject to set-off after October 1,
1998, through July 31, 1999, and $10 million subject to set-off from
August 1, 1999, through April 1, 2000, subject to extension with respect
to outstanding claims. A DIMON subsidiary in Zimbabwe is entitled to
similar indemnification and set-off rights in connection with the
Zimbabwe tobacco assets purchased, subject to a maximum of $12 million.
DIMON has granted Folium and Tabacalera, formerly Intabex's
largest shareholders, the right to require DIMON to register the
common stock issued in connection with the acquisition of Intabex
or upon conversion of the debentures and the debentures themselves.
The demand registration rights may be exercised not more than twice
by each of Folium and Tabacalera and may not be exercised before
April 1, 1998, or after March 31, 2001, subject to extension if
registration is deferred by DIMON in certain cases. Folium,
Tabacalera and Leaf Management Investments also have been granted
"piggy-back" registration rights allowing them to participate in
certain offerings of DIMON common stock during the same period.
Unless registered, the DIMON shares and debentures will be "restricted"
and transferable only pursuant to any applicable exemption from
registration pursuant to the Securities Act of 1933.
Also as part of the transaction, Anthony C.B. Taberer, the Chairman
of the Board of Directors of Intabex, joined DIMON's Board and became
non-executive Chairman of Intabex. Mr. Taberer will serve as a
consultant to a trading subsidiary of Intabex under an agreement with
an initial term expiring in October 2000. Folium has executed
Non-Competition Agreements providing that it will not compete in the
non-U.S. tobacco business through March 2002. Mr. Taberer also has
agreed to be subject to these agreements.
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There is no material relationship between Intabex and its
shareholders and DIMON or any of its affiliates, any director or
officer of the registrant or any associate of any such director or
officer.
Item 7. (a) Financial Statements of Businesses Acquired
It is impractical to provide the historical
financial statements required by Item 7(a)
as of the date hereof. The required financial
statements will be filed by June 16, 1997.
(b) Pro Forma Financial Information
It is impractical to provide the pro forma financial
information required by Item 7(b) as of the date hereof.
The required pro forma financial information will be
filed by June 16, 1997.
(c) Exhibits
The following exhibits are filed with this Form 8-K:
10.1 Stock Purchase Agreement, dated as of February 14, 1997, among
DIMON Incorporated, Intabex Holdings Worldwide S.A., Folium Inc.,
Leaf Management Investments Ltd. and Tabacalera S.A.
10.2 Indenture, dated as of April 1, 1997, by DIMON Incorporated to
LaSalle National Bank, relating to $140 Million of 6 1/4%
Convertible Subordinated Debentures due March 31, 2007
10.3 Non-Competition Agreement, dated as of April 1,1997, by and
between Intabex S.A. (Zug) and Folium Inc.
10.4 Registration Rights Agreement, dated as of April 1, 1997, by and
between DIMON Incorporated, Tabacalera S.A., Folium Inc. and
Leaf Management Investments Ltd.
10.5 Consulting Agreement, dated April 1, 1997, by and between
Intabex S.A. (Zug) and Anthony C.B. Taberer
10.6 Asset Purchase Agreement, dated as of February 14, 1997, by
and between Dibrell Brothers Zimbabwe (Private) Limited and
Tabex (Private) Limited
10.7 Non-Competition Agreement, dated as of April 1, 1997, by
and between Intabex S.A. (Zug) and Folium Inc.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
April 16, 1997 DIMON INCORPORATED
By: /s/ Jerry L. Parker
Name: Jerry L. Parker
Title: Vice President -
Controller
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INDEX TO EXHIBITS
Page
10.1 Stock Purchase Agreement, dated as of
February 14, 1997, among DIMON Incorporated,
Intabex Holdings Worldwide S.A., Folium Inc.,
Leaf Management Investments Ltd. and
Tabacalera S.A.. . . . . . . . . . . . . . . . . . . . . . 6 - 69
10.2 Indenture, dated as of April 1, 1997, by
DIMON Incorporated to LaSalle National Bank,
relating to $140 Million of 6 1/4% Convertible
Subordinated Debentures due March 31, 2007 . . . . . . . . 70 - 156
10.3 Non-Competition Agreement, dated as of
April 1, 1997, by and between Intabex S.A.
(Zug) and Folium Inc.. . . . . . . . . . . . . . . . . . .157 - 162
10.4 Registration Rights Agreement, dated as of
April 1, 1997, by and between DIMON Incorporated,
Tabacalera S.A., Folium Inc. and Leaf Management
Investments Ltd. . . . . . . . . . . . . . . . . . . . . .163 - 177
10.5 Consulting Agreement, dated April 1, 1997, by
and between Intabex S.A. (Zug) and Anthony C.B.
Taberer. . . . . . . . . . . . . . . . . . . . . . . . . .178 - 187
10.6 Asset Purchase Agreement, dated as of February 14,
1997, by and between Dibrell Brothers Zimbabwe
(Private) Limited and Tabex (Private) Limited. . . . . . .188 - 221
10.7 Non-Competition Agreement, dated as of
April 1, 1997, by and between Intabex S.A. (Zug)
and Folium Inc. . . . . . . . . . . . . . . . . . . . . . 222 - 227
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EXECUTION COPY
STOCK PURCHASE AGREEMENT
among
DIMON INCORPORATED,
INTABEX HOLDINGS WORLDWIDE S.A.
and
THE SHAREHOLDERS LISTED ON
THE SIGNATURE PAGES HEREOF
As of February 14, 1997
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TABLE OF CONTENTS
Page
ARTICLE I SALE OF SHARES AND CLOSING. . . . . . . . . . . . . . . 1
1.01. Sale of Shares. . . . . . . . . . . . . . . . . . . . . 1
1.02. Purchase Price. . . . . . . . . . . . . . . . . . . . . 1
1.03. Exchange of Certificates . . . . . . . . . . . . . . . 1
1.04. Closing . . . . . . . . . . . . . . . . . . . . . . . . 2
1.05. Final Balance Sheet: Adjustment of Purchase Price. . . .2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY AND
SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . 3
2.01 Representations and Warranties of the Company . . . . . 3
2.02 Representations of the Shareholders. . . . . . . . . . 15
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . .18
3.01. Corporate Existence. . . . . . . . . . . . . . . . . . 18
3.02. Authority. . . . . . . . . . . . . . . . . . . . . . . 18
3.03. No Conflicts.. . . . . . . . . . . . . . . . . . . . . 18
3.04. Governmental Approvals and Filings . . . . . . . . . . 19
3.05. Books and Records. . . . . . . . . . . . . . . . . . . 19
3.06. SEC Reports; Purchaser Financial Statements. . . . . . 19
3.07. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 20
3.08. Legal Proceedings. . . . . . . . . . . . . . . . . . . 20
3.09. Compliance With Laws and Orders. . . . . . . . . . . . 20
3.10. Brokers. . . . . . . . . . . . . . . . . . . . . . . . 20
3.11. Financing. . . . . . . . . . . . . . . . . . . . . . . 21
3.12. Purchase for Investment. . . . . . . . . . . . . . . . 21
3.13. Investigation by Purchaser.. . . . . . . . . . . . . . 21
3.14. FIRPTA . . . . . . . . . . . . . . . . . . . . . . . . 21
3.15. Control Share Statute. . . . . . . . . . . . . . . . . 22
3.16. Investment Company Act . . . . . . . . . . . . . . . . 22
3.17. Public Utility Holding Company Act . . . . . . . . . . 22
3.18. Absence of Certain Events. . . . . . . . . . . . . . . 22
3.19. Accuracy of Information. . . . . . . . . . . . . . . . 22
3.20. No Other Representations . . . . . . . . . . . . . . . 22
ARTICLE IV COVENANTS OF THE COMPANY AND THE SHAREHOLDERS . . . . .22
4.01. Regulatory and Other Approvals. . . . . . . . . . . . .23
4.02. HSR Filings. . . . . . . . . . . . . . . . . . . . . . 23
4.03. Investigation by Purchaser.. . . . . . . . . . . . . . 23
4.04. Conduct of Business. . . . . . . . . . . . . . . . . . 24
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4.05. No Solicitations.. . . . . . . . . . . . . . . . . . . 25
4.06. Fulfillment of Conditions. . . . . . . . . . . . . . . 26
4.07. Resignations . . . . . . . . . . . . . . . . . . . . . 26
4.08. Transfer of Excluded Items . . . . . . . . . . . . . . 26
ARTICLE V COVENANTS OF PURCHASER . . . . . . . . . . . . . . . . 26
5.01. Regulatory and Other Approvals.. . . . . . . . . . . . 26
5.02. HSR Filings. . . . . . . . . . . . . . . . . . . . . . 27
5.03. Release of Guarantees. . . . . . . . . . . . . . . . . 27
5.04. Fulfillment of Conditions. . . . . . . . . . . . . . . 27
ARTICLE VI CONDITIONS TO OBLIGATIONS OF PURCHASER. . . . . . . . .27
6.01. Representations and Warranties. . . . . . . . . . . . .27
6.02. Performance. . . . . . . . . . . . . . . . . . . . . . 28
6.03. Officers' Certificates.. . . . . . . . . . . . . . . . 28
6.04. Orders and Laws. . . . . . . . . . . . . . . . . . . . 28
6.05. Regulatory Consents and Approvals. . . . . . . . . . . 28
6.06. Third Party Consents.. . . . . . . . . . . . . . . . . 28
6.07. Opinion of Counsel.. . . . . . . . . . . . . . . . . . 28
6.08. Purchase of Certain Assets of Tabex (PVT) Limited. . . 28
6.09. Noncompetition Agreement and Consulting Agreement. . . 29
6.10. Resignations of Officers and Directors . . . . . . . . 29
6.11. Warrants. . . . . . . . . . . . . . . . . . . . . . . 29
6.12. Tax and Withholding Matters. . . . . . . . . . . . . . 29
6.13. Agreement of Accountants. . . . . . . . . . . . . . . 29
6.14. Transfer of Excluded Items.. . . . . . . . . . . . . . 29
6.15. Settlement of Related Party Accounts.. . . . . . . . . 29
6.16. Agreements of Malawi Joint Venture Partners. . . . . . 29
6.17. Coordinating Agreement.. . . . . . . . . . . . . . . . 30
6.18. Additional Certificates. . . . . . . . . . . . . . . . 30
ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE
SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . .30
7.01. Representations and Warranties.. . . . . . . . . . . . 30
7.02. Performance. . . . . . . . . . . . . . . . . . . . . . 30
7.03. Officers' Certificates.. . . . . . . . . . . . . . . . 30
7.04. Orders and Laws. . . . . . . . . . . . . . . . . . . . 30
7.05. Regulatory Consents and Approvals. . . . . . . . . . . 30
7.06. Third Party Consents.. . . . . . . . . . . . . . . . . 31
7.07. Opinion of Counsel.. . . . . . . . . . . . . . . . . . 31
7.08. Purchase of Certain Assets of Tabex (PVT) Limited. . . 31
7.09. Folium Agreements. . . . . . . . . . . . . . . . . . . 31
7.10. Listing of Purchaser Common Stock. . . . . . . . . . . 31
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7.11 Board of Directors.. . . . . . . . . . . . . . . . . . 31
7.12 Registration Rights. . . . . . . . . . . . . . . . . . 31
7.13. Additional Certificates. . . . . . . . . . . . . . . . 31
ARTICLE VIII TERMINATION . . . . . . . . . . . . . . . . . . . . . .31
8.01. Termination. . . . . . . . . . . . . . . . . . . . . . 31
8.02. Effect of Termination. . . . . . . . . . . . . . . . . 32
ARTICLE IX DEFINITIONS . . . . . . . . . . . . . . . . . . . . . .32
9.01. Definitions. . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . .39
10.01. Notices.. . . . . . . . . . . . . . . . . . . . . . . .39
10.02. Entire Agreement. . . . . . . . . . . . . . . . . . . .42
10.03. Expenses. . . . . . . . . . . . . . . . . . . . . . . .42
10.04. Public Announcements. . . . . . . . . . . . . . . . . .42
10.05. Confidentiality.. . . . . . . . . . . . . . . . . . . .42
10.06. Further Assurances; Post-Closing Cooperation. . . . . .43
10.07. Waiver. . . . . . . . . . . . . . . . . . . . . . . . .43
10.08. Amendment. . . . . . . . . . . . . . . . . . . . . . .44
10.09. No Third Party Beneficiary. . . . . . . . . . . . . . .44
10.10. No Assignment; Binding Effect.. . . . . . . . . . . . .44
10.11. Headings. . . . . . . . . . . . . . . . . . . . . . . .44
10.12. Invalid Provisions. . . . . . . . . . . . . . . . . .44
10.13. Counterparts. . . . . . . . . . . . . . . . . . . . . .44
10.14. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . .44
10.15. Tobacco Industry Generally. . . . . . . . . . . . . . .45
10.16. Specific Performance. . . . . . . . . . . . . . . . . .45
10.17. Release of Claims . . . . . . . . . . . . . . . . . . .45
10.18. Consent to Assignment of Supply Agreement . . . . . . .45
ARTICLE XI SURVIVAL OF REPRESENTATIONS, WARRANTIES,COVENANTS
AND AGREEMENTS. . . . . . . . . . . . . . . . . . . . .45
11.01. Survival of Representations, Warranties, Covenants and
Agreements . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE XII INDEMNIFICATION . . . . . . . . . . . . . . . . . . . .46
12.01. Indemnification. . . . . . . . . . . . . . . . . . . . 46
12.02. Method of Asserting Claims . . . . . . . . . . . . . . 47
12.03. Method of Calculating Losses.. . . . . . . . . . . . . 49
12.04. Exclusivity. . . . . . . . . . . . . . . . . . . . . . 50
12.05. Right of Set-Off; Restriction on Transfer
of Convertible Debentures. . . . . . . . . . . . . . .50
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ARTICLE XIII GOVERNING LAW AND SUBMISSION TO JURISDICTION. . . . . .55
13.01 Governing Law. . . . . . . . . . . . . . . . . . . . . 55
13.02 Dispute Resolution . . . . . . . . . . . . . . . . . . 55
13.03 Agent for Service of Process.. . . . . . . . . . . . . 55
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT dated as of February 14, 1997 is
made and entered by and among DIMON INCORPORATED, a Virginia corporation
("Purchaser"), INTABEX HOLDINGS WORLDWIDE S.A., a Luxembourg holding
company ("the "Company"), and each of the shareholders listed on the
signature pages hereof (each, a "Shareholder" and collectively, the
"Shareholders"). Capitalized terms not otherwise defined herein have the
meanings set forth in Section 9.01.
WHEREAS, Folium Inc. ("Folium") owns 466,679 Class A
Shares and 466,521 Class B Shares; Tabacalera S.A. ("Tabacalera") owns
466,521 Class B Shares; and Leaf Management Investments Ltd. ("LMI") owns
66,800 Class A Shares;
WHEREAS, the Shareholders desire to sell, and Purchaser
desires to purchase, the Shares on the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
SALE OF SHARES AND CLOSING
1.01. Sale of Shares. The Shareholders agree to sell to
Purchaser, and Purchaser agrees to purchase from the Shareholders, all of
the right, title and interest of the Shareholders in and to the Shares at
the Closing free and clear of all Liens on the terms and subject to the
conditions set forth in this Agreement.
1.02. Purchase Price. (a) The purchase price for the Shares and
all outstanding Options shall be paid as follows: (i) $49,250,000 in
cash; (ii) the issuance of 2,000,000 shares of common stock of Purchaser,
no par value (the "Purchaser Common Stock"); and (iii) the issuance of
the Convertible Debentures.
(b) As additional consideration for the Shares,
Purchaser shall pay Shareholders an additional amount in cash equal to
the net proceeds received by Compania de Filipinas S.A. ("CdeF") for the
sale of the Barcelona Building received in cash. For purposes of the
preceding sentence, net proceeds shall mean that amount equal to the
gross proceeds received in cash by CdeF less an amount equal to all
out-of-pocket costs and expenses of Purchaser in connection with such
sale and the net expenses of ownership or operation of the Barcelona
Building following Closing, including, without limitation, all real
estate, sales, transfer and other taxes (including income taxes
calculated at the highest applicable marginal rate on any gain recognized
on the sale), deposits,
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insurance, interest and maintenance and any costs incurred or payments
made in connection with the settlement or discharge of any Liens related
to the Barcelona Building or the proceeds therefrom.
(c) The foregoing shall be allocated among the
Shareholders and Warrantholders as set forth on Schedule 1.02(a).
1.03. Exchange of Certificates. (a) If a certificate for
Purchaser Common Stock or a Convertible Debenture is to be delivered to a
person other than the person in whose name the certificates for Shares or
Options (the "Certificates") surrendered for exchange are registered, it
shall be a condition of the exchange that the person requesting such
exchange shall pay to the Purchaser any transfer or other taxes required
by reason of the delivery of such Certificate to a person other than the
registered holder of the Certificate surrendered, or shall establish to
the satisfaction of the Purchaser that such tax has been paid or is not
applicable.
(b) The cash paid and the shares of Purchaser Common
Stock and Convertible Debentures issued upon the surrender of
Certificates in accordance with the terms hereof shall be deemed to have
been paid and issued in full satisfaction of all rights pertaining to
such Shares.
1.04. Closing. (a) The Closing will take place at the offices
of King & Spalding, 191 Peachtree Street, Atlanta, Georgia 30303, or at
such other place as Purchaser and the Company mutually agree, at 10:00
A.M. local time, on the Closing Date. At the Closing, (i) all
outstanding Shares and Options shall be surrendered, accompanied by funds
sufficient for the payment of any transfer or other taxes payable by the
Shareholders pursuant to Section 1.03(a), to Purchaser and (ii) Purchaser
(A) will issue the number of shares of Purchaser Common Stock required
pursuant to Section 1.02(a) registered in the names and denominations as
set forth on Schedule 1.02(a); (B) shall pay the cash consideration
required to be paid pursuant to Section 1.02(a) by wire transfer of
immediately available funds to such accounts as the Shareholders may
reasonably direct; and (C) will issue the Convertible Debentures required
pursuant to Section 1.02(a) registered in the names and denominations set
forth on Schedule 1.02(a). At the Closing, there shall also be delivered
to Purchaser and the Company the documents, certificates and opinions to
be delivered under Articles VI and VII.
(b) The purchase price to be paid pursuant to Section
1.02(b) shall be paid within five (5) business days after the closing of
the sale of the Barcelona Building by wire transfer of immediately
available funds to such accounts as the Shareholders may reasonably
request.
1.05. Final Balance Sheet: Adjustment of Purchase Price.
(a) Within forty-five (45) days after the Closing,
Ernst & Young LLP, independent public accountants for the Company
("Accountants"), shall, at the Company's expense, audit and deliver draft
Final Financial Statements, which shall be prepared in a manner
consistent with the Unaudited Financial Statements and in accordance with
GAAP as modified by the specific accounting principles set forth on
Schedule 1.05. The Shareholders will cooperate with, and will cause
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their Affiliates to cooperate with, the Company and the Purchaser in the
preparation of the Final Financial Statements and shall deliver such
representations and certificates reasonably requested by the Accountants
in their audit of such statements.
(b) If Purchaser has no objections to the draft Final
Financial Statements, such draft shall be certified by Accountants and
shall constitute the Final Financial Statements. If Purchaser has
objections to the draft Final Financial Statements, it will deliver a
detailed statement describing its objections to Accountants and the
Shareholders within thirty (30) days after receiving the draft Final
Financial Statements. Purchaser, Accountants and the Shareholders will
use their reasonable best efforts to resolve any such objections. If a
final resolution is not obtained within thirty (30) days after
Accountants and the Shareholders have received the statement of
objections, Purchaser and the Shareholders will select a nationally-
recognized accounting firm mutually acceptable to them to resolve any
remaining objections. If Purchaser and the Shareholders are unable to
agree on the choice of an accounting firm, they will select a nationally-
recognized accounting firm by lot (after excluding Accountants).
(c) Accountants will revise the draft Final Financial
Statements as appropriate to reflect the resolution of Purchaser's
objections (as agreed upon by Purchaser, Accountants and the Shareholders
or as determined by such selected accounting firm) and deliver it to
Purchaser and the Shareholders within ten (10) days after the resolution
of such objections. Such revised balance sheet shall be certified by
Accountants and shall constitute the Final Financial Statements.
(d) To the extent that the Final Balance Sheet shows
that the Final Net Worth calculated in accordance with the specified
accounting principles set forth in Schedule 1.05 is less than the
September Net Worth, the Shareholders shall pay such difference to
Purchaser in immediately available funds within five business days of
Accountants' delivery of such Final Balance Sheet. Payments pursuant to
this Section 1.05 shall be accompanied by accrued interest thereon from
the Closing at the prevailing prime rate as announced by NationsBank,
N.A. in Charlotte, North Carolina, on the Closing Date. Acceptance of
the Final Balance Sheet or receipt of any payment pursuant to this
Section 1.05(d) shall not constitute a waiver of any other rights
Purchaser may have under this Agreement.
(e) If any unresolved objections are submitted to an
accounting firm for resolution as provided above, Purchaser, on the one
hand, and the Shareholders, on the other hand, will share equally the
fees and expenses of such accounting firm.
(f) Accountants will make the work papers used in
preparing the draft Final Financial Statements and the Final Financial
Statements available to Purchaser and its representatives at reasonable
times and upon reasonable notice at any time during the preparation by
Accountants of the draft Final Financial Statements and the resolution of
any objections with respect thereto.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDERS
2.01 Representations and Warranties of the Company. The
Company hereby represents and warrants to Purchaser as follows:
(a) Corporate Existence of the Company. The Company is
a corporation validly existing and in good standing under the Laws of
Luxembourg, and has full corporate power and authority to conduct its
business as and to the extent now conducted and to own, use and lease its
Assets and Properties. The Company is duly qualified, licensed or
admitted to do business in those jurisdictions specified in Section
2.01(a) of the Disclosure Schedule, which are the only jurisdictions in
which the ownership, use or leasing of its Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except for those jurisdictions in which the adverse
effects of all such failures by the Company and the Subsidiaries to be
qualified, licensed or admitted and in good standing could not in the
aggregate reasonably be expected to have a material adverse effect on the
Business or Condition of the Company. The Company has prior to the
execution of this Agreement delivered to Purchaser true and complete
copies of the certificate or articles of incorporation and bylaws or
other comparable corporate charter documents of the Company as in effect
on the date hereof.
(b) Authority. The execution and delivery of this
Agreement and of all of the other documents and instruments required
hereby by the Company and the performance by the Company of its
obligations hereunder and thereunder, have been duly and validly
authorized by the Board of Directors of the Company and the Shareholders,
no other corporate action on the part of the Company or its shareholders
being necessary. This Agreement and all of the other documents and
instruments required hereby have been or will be duly and validly
executed and delivered by the Company and constitute or will, upon
execution and delivery thereof, constitute valid and binding obligations
of the Company, enforceable against the Company in accordance with their
terms.
(c) Capital Stock. The authorized capital stock of the
Company consists solely of 580,599 Class A Shares and 933,042 Class B
Shares, of which only the Shares listed on Section 2.02(a) of the
Disclosure Schedule have been issued and are outstanding. The
outstanding Shares are duly authorized, validly issued, fully paid and
nonassessable. Except for this Agreement and as disclosed in
Section 2.01 (c) of the Disclosure Schedule, there are no outstanding
Options with respect to the Company's Shares.
(d) Subsidiaries.
(i) Each Subsidiary is a corporation, limited
liability company, partnership, joint venture, or other entity
validly existing and in good standing under the Laws of its
jurisdiction of organization identified in Section 2.01(d)(i) of
the Disclosure Schedule, and has full power and authority to
conduct its business as and to the extent now conducted and to
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<PAGE>
own, use and lease its Assets and Properties. Each Subsidiary
is duly qualified, licensed or admitted to do business and is
in good standing in those jurisdictions specified in Section
2.01(d)(i) of the Disclosure Schedule, which are the only
jurisdictions in which the ownership, use or leasing of such
Subsidiary's Assets and Properties, or the conduct or nature of
its business, makes such qualification, licensing or admission
necessary, except for those jurisdictions in which the adverse
effects of all such failures by the Company and the Subsidiaries
to be qualified, licensed or admitted and in good standing could
not in the aggregate reasonably be expected to have a material
adverse effect on the Business or Condition of the Company.
Section 2.01(d)(i) of the Disclosure Schedule lists for each
Subsidiary that is a corporation, the name and jurisdiction of
incorporation of each Subsidiary, the amount of its authorized
capital stock, the amount of its outstanding capital stock and
the record owners of such outstanding capital stock.
Except as disclosed in Section 2.01(d)(i) of the Disclosure
Schedule, all of the outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable, and are owned, beneficially and of record,
by the Company, or Subsidiaries of the Company, free and clear of
all Liens. Section 2.01(d)(i) of the Disclosure Schedule lists
for each Subsidiary that is a limited liability company,
partnership, joint venture or other entity that is not a
corporation the name and jurisdiction of organization of such
Subsidiary, the type of entity and the nature and extent of the
Company's interest in each such Subsidiary. Except as disclosed
in Section 2.01(d)(i) of the Disclosure Schedule, the interests of
the Company in each such Subsidiary are owned, beneficially and
of record, by the Company, or Subsidiaries of the Company, free
and clear of all Liens. Except as disclosed in Section 2.01(d)(i)
of the Disclosure Schedule, there are no outstanding Options with
respect to any Subsidiary. The Company has prior to the execution
of this Agreement delivered to Purchaser true and complete copies
of the certificate or articles of incorporation and bylaws or
other comparable organizational and other documents governing the
operation of each of the Subsidiaries as in effect on the date
hereof. The Company has no Subsidiaries other than those listed
in Section 2.01(d)(i) of the Disclosure Schedule.
(ii) Section 2.01(d)(ii) of the Disclosure
Schedule lists all corporations, limited liability companies,
partnerships,joint ventures and other entities in which the
Company or any of its Subsidiaries has an interest, and sets forth
the name and jurisdiction of incorporation for such entity and the
amount and nature of such interest. All of such interests are
owned by the Company or Subsidiaries of the Company free and clear
of all Liens.
(e) No Conflicts. The execution and delivery by the
Company of this Agreement do not, and the performance by the Company of
its obligations under this Agreement and the consummation of the
transactions contemplated hereby will not:
(i) conflict with or result in a violation or
breach by the Company or any Subsidiary of any of the certificate
or articles of incorporation or bylaws or other comparable
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<PAGE>
organizational and other documents governing the operation of the
Company or any such Subsidiary;
(ii) subject to obtaining the consents,
approvals and actions, making the filings and giving the notices
disclosed in Section 2.01(f) of the Disclosure Schedule, conflict
with or result in a violation or breach of any Law or Order
applicable to the Company or any Subsidiary or any of their
respective Assets and Properties; or
(iii) except as disclosed in Section 2.01(e) of the
Disclosure Schedule, (A) conflict with or result in a violation or
breach of, (B) constitute (with or without notice or lapse of time
or both) a default under, (C) require the Company or any Subsidiary
to obtain any consent, approval or authorization of, make any
filing with or give any notice to any Person as a result or under
the terms of, (D) result in the creation or imposition of any Lien
upon the Company or any Subsidiary or any of their respective
Assets and Properties under, any Contract or License to which the
Company or any Subsidiary is a party or by which any of their
respective Assets and Properties is bound or (E) give rise to any
right of any party to any Contract to cancel, terminate or exercise
any option under such Contract.
(f) Governmental Approvals and Filings. Except as
disclosed in Section 2.01(f) of the Disclosure Schedule, no consent,
approval or action of, filing with, or notice to any Governmental or
Regulatory Authority on the part of the Company or any Subsidiary is
required in connection with the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated
hereby.
(g) Books and Records. The minute books and other
similar records of the Company and the Subsidiaries as made available to
Purchaser prior to the execution of this Agreement and thereafter contain
a true and complete record, in all material respects, of all action taken
at all meetings and by all written consents in lieu of meetings of the
stockholders, the boards of directors and committees of the boards of
directors of the Company and the Subsidiaries.
(h) Financial Statements and Condition.
(i) Prior to the execution of this Agreement, the
Company has delivered to Purchaser true and complete copies of
(A) the audited balance sheets of the Company and its consolidated
subsidiaries as of March 31, 1996, 1995, 1994, 1993 and 1992, and
the related audited consolidated statements of operations,
stockholders' equity and cash flows for each of the fiscal years
then ended, (B) the unaudited balance sheets of the Company and its
consolidated subsidiaries as of September 30, 1996 and 1995, and
the related unaudited consolidated statements of operations,
stockholders' equity and cashflows for the portion of the fiscal
years then ended and (C) the unaudited pro forma balance sheet of
the Company and its consolidated subsidiaries as of September 30,
1996, and the related unaudited pro forma consolidated statements
of operations, stockholders' equity and cash flows for the six-
month period then ended, showing separately all adjustments
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<PAGE>
necessary to eliminate the effect on such financial statements of
the Excluded Items. All such financial statements were, and the
Final Financial Statements will be, prepared in accordance with
GAAP, and all such financial statements, and the Final Financial
Statements will, fairly present in all material respects the
consolidated financial condition and results of operations of the
Company and its consolidated subsidiaries as of the respective
dates thereof and for the respective periods covered thereby. In
addition, the Final Balance Sheet also will be prepared in
accordance with the specific accounting principles specified on
Schedule 1.05.
(ii) Except for the execution and delivery of this
Agreement and the consummation of transactions contemplated hereby
on or prior to the Closing Date, since the Financial Statement Date
there has not been any material adverse change in the Business or
Condition of the Company.
(iii) Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any kind,
whether absolute, accrued, asserted or unasserted, contingent
or otherwise, except liabilities, obligations or contingencies
that are accrued or reserved against in the consolidated balance
sheet of the Company as of the Financial Statement Date delivered
to the Purchaser pursuant to this Section or in the Final
Financial Statements, as the case may be, or reflected in the notes
thereto, or that were incurred after the Financial Statement Date
in the ordinary course of business and consistent with past
practices or as otherwise specifically contemplated by this
Agreement.
(i) Taxes.
(i) Each of the Company and its Subsidiaries has
filed all Tax Returns that it was required to file, and has paid
all Taxes shown thereon as owing. The Tax Returns so filed are
true and complete in all material respects and there is not a
material amount of unpaid Tax incurred by the Company or any
Subsidiary or by any other person that is or could become a Lien on
any asset of, or otherwise have a material adverse effect on, the
Company and its Subsidiaries. None of the Company and its
Subsidiaries has waived any statute of limitation in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency. None of the Company and its Subsidiaries
is a party to any Tax allocation or sharing agreement.
(ii) Each of the Company and its Subsidiaries is
in compliance with and its records contain all information and
documents necessary to comply with, all information reporting and
tax withholding requirements under federal, state, local and
foreign laws, rules and regulations applicable to the Company and
its Subsidiaries.
(iii) The consolidated balance sheet included in
the Unaudited Financial Statements fully and properly reflects, as
of the date thereof, the liabilities of the Company and its
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<PAGE>
Subsidiaries for all accrued taxes, additions to tax, penalties and
interest, and for periods ending after the date of such statements,
the books and records of each such entity fully and properly
reflect its liability for all taxes, additions to tax, penalties
and interest due and payable.
(j) Legal Proceedings. Except as disclosed in
Section 2.01(j) of the Disclosure Schedule (with paragraph references
corresponding to those set forth below):
(i) there are no Actions or Proceedings pending
or, to the Knowledge of the Company, threatened against,
relating to or affecting the Company or any Subsidiary or
any of their respective Assets and Properties which (A)
could reasonably be expected to result in the issuance of
an Order restraining, enjoining or otherwise prohibiting
or making illegal the consummation of any of the
transactions contemplated by this Agreement, or (B) could
individually or in the aggregate have an adverse effect
on the Business or Condition of the Company; and
(ii) there are no Orders outstanding
against the Company or any Subsidiary.
(k) Compliance With Laws and Orders; Permits. Except as
disclosed in Section 2.01(k) of the Disclosure Schedule, each of the
Company and its Subsidiaries has complied with all Laws or Orders
applicable to the Company or any Subsidiary or any of their respective
Assets and Properties including, without limitation, Laws and Orders
relating to customs, shipping, import and export of goods, currency
restrictions and exchange controls. All Permits required by the Company
and its Subsidiaries to conduct their businesses have been obtained, are
in full force and effect and are being complied with in all material
respects. All such Permits will remain in full force and effect
immediately following the consummation of the transactions contemplated
herein.
(l) Employee Benefit Plans. Section 2.01(l) of the
Disclosure Schedule lists each Employee Benefit Plan that any of the
Company and its Subsidiaries maintains or to which any of the Company and
its Subsidiaries contributes (true and complete copies of which, together
with all amendments and supplements thereto, have been delivered to
Purchaser prior to the execution of this Agreement). Each such Employee
Benefit Plan (and each related trust, insurance contract, or fund)
complies in form and in operation in all respects with the applicable
requirements of the Laws of the jurisdiction in which the Employee
Benefit Plan is in effect. All contributions (including all employer
contributions and employee salary contributions) which are due have been
paid to each Employee Benefit Plan. The Company and each of its
Subsidiaries has filed or caused to be filed on a timely basis returns,
reports, statements, notices, declarations and other documents required
by any governmental agency with respect to each Employee Benefit Plan
sponsored or maintained by the Company or any of its Subsidiaries.
(m) Contracts. Section 2.01(m) of the Disclosure
Schedule contains a true and complete list of the material Contracts (true
and complete copies of which, together with all amendments and supplements
thereto, have been delivered to Purchaser prior to the execution of this
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<PAGE>
Agreement), to which the Company or any Subsidiary is a party or by which
any of their respective Assets and Properties is bound. No event has
occurred that would, with the passage of time or compliance with any
applicable notice requirements, constitute a default by the Company or
any of its Subsidiaries or, to the Knowledge of the Company, any other
party under any of such Contracts, and, to the Knowledge of the Company,
no party to any such Contracts intends to cancel, terminate or exercise
any option under any of such Contracts, the result of which would have a
material adverse effect on the Business or Condition of the Company. For
purposes of this Section, a Contract shall be deemed material if it
involves (i) a lease of any interest in real property; (ii) a lease of
any personal property with (A) aggregate remaining rental payments in
excess of $100,000 or (B) a remaining term in excess of one year (unless
cancelable without penalty upon not more than 90 days notice); (iii) an
agreement to purchase or sell a capital asset for a price in excess of
$100,000; (iv) an agreement relating to the borrowing or lending of more
than $1,000,000; (v) a guaranty, contribution agreement or other
agreement that includes any indemnification, contribution or support
obligation; (vi) any agreement limiting in any respect the ability of the
Company or any Subsidiary to compete in any line of business or with any
person; and (vii) any other agreement involving more than $100,000.
(n) Brokers. Except as disclosed in Section 2.01(n) of
the Disclosure Schedule, all negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by the Company
directly with Purchaser without the intervention of any Person on behalf
of the Company in such manner as to give rise to any valid claim by any
Person against the Company, or any Subsidiary or Purchaser for a finder's
fee, brokerage commission or similar payment.
(o) Absence of Certain Events. Except as set forth on
Section 2.01(o) of the Disclosure Schedule, there has not been since
March 31, 1996: (i) any entry into any agreement or understanding between
the Company or any of its Subsidiaries on the one hand, and any of their
respective officers or employees on the other hand, providing for
employment of any such officer or employee or any general or material
increase in compensation, severance or termination benefits payable or to
become payable by the Company or any of its Subsidiaries to any of their
respective officers or employees, or any increase in any bonus,
insurance, pension or other employee benefit plan, payment or arrangement
made to, for or with any such officer or employee; (ii) any labor dispute
which is or could reasonably be expected to be material to the Business
or Condition of the Company; (iii) any entry by the Company or any of its
Subsidiaries into any material commitment, agreement, license or
transaction (including, without limitation, any borrowing, capital
expenditure, sale of assets or any mortgage, pledge, lien or encumbrances
made on any of the properties or assets of the Company or its
Subsidiaries) other than in the ordinary and usual course of business;
(iv) any change in the accounting methods of the Company or any of its
Subsidiaries; or (v) any agreement to do any of the foregoing. Except as
set forth in Section 2.01(o) of the Disclosure Schedule, since September
30, 1996, (i) the Company has not declared, set aside for payment or
agreed to declare or set aside for payment any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, (ii) the Company and its
Subsidiaries (a) have operated only in the ordinary course of business
consistent with past practices, (b) have not paid, discharged or
satisfied or agreed to pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued or unaccrued, asserted or
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<PAGE>
unasserted, contingent or otherwise), other than the payment, discharge
or satisfaction in the ordinary course of business of liabilities
reflected or reserved against in the Unaudited Financial Statements or
incurred after the date of such Unaudited Financial Statements in the
ordinary course of business consistent with past practices and (c) have
not made any payments to any Related Party other than pursuant to the
terms of any Contract or Employee Benefit Plan properly listed in the
Disclosure Schedule, or agreed to make any such payments.
(p) Title to Assets; Tangible Assets. The Company and
each of its Subsidiaries own good and marketable title to or a valid
leasehold in the assets used by them, located on their premises or
reflected on the consolidated balance sheet included in the Unaudited
Financial Statements, free and clear of any and all Liens, except Permitted
Liens described on Section 2.01(p) of the Disclosure Schedule, and except
for assets disposed of in the ordinary course of business since the date of
such balance sheet. The Company and each of its Subsidiaries own or
lease all buildings, machinery, equipment and other tangible assets
necessary for the conduct of their businesses as presently conducted and
as presently proposed to be conducted. Such tangible assets are free
from material defects (patent and latent), have been maintained in
accordance with normal industry practice, are in good operating condition
and repair (subject to normal wear and tear and obsolescence), and are
suitable for the purposes for which they presently are used.
(q) Inventory. Except as set forth in Section 2.01(q)
of the Disclosure Schedule, the inventory of the Company and its
Subsidiaries consists of raw materials, goods in process and finished
goods, all of which are merchantable and fit for the purpose for which
they were procured or manufactured and are legally qualified for export
and sale subject to minimum pricing laws (none of which will preclude the
fulfillment of any commitments or orders) and none of which is slow-
moving, distressed, damaged or defective. Section 2.01(q) of the
Disclosure Schedule sets forth (i) all tobacco inventories, showing type,
origin, grade, crop year, quantity and book value, and, for committed
inventories of the Company and its Subsidiaries other than Intabex S.A.
(ZUG), the committed price, and, for committed inventories of Intabex
S.A. (ZUG), the committed value, and (ii) all commitments to purchase or
deliver tobacco, showing type, origin, grade, crop year, quantity and
purchase price, all as of December 31, 1996. The Company and its
Subsidiaries have no material commitments to purchase or deliver tobacco
other than as set forth in Section 2.01(q) of the Disclosure Schedule.
The schedule of inventories supporting the Final Financial Statements
referred to in Schedule 1.05 will be true and complete and, subject to
subsection (ii) below, (i) each item of inventory shown in the Final
Financial Statements will be recorded at the least of cost, fair market
value or commitment price; subject, in the case of such contracts that do
not by their terms provide for the payment of interest, to a net present
value adjustment determined by reference to Seller's Average Borrowing
Rate (as defined herein) for any amounts to be collected after the 180th
day following the Closing Date; and (ii) each item of inventory shown in
the Final Financial Statements that is subject to a legally binding
contract will be sold upon terms and at a price no less favorable than
those set forth in the applicable contract subject to a reserve against
inventory set forth on the face of the Final Balance Sheet; provided,
however, that the representation contained in clause (ii) above shall not
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<PAGE>
be deemed to have been breached if such inventory is not sold as a result
of Purchaser's failure to deal with such inventory in good faith or to
use its commercially reasonable best efforts to sell such inventory in
accordance with the terms of any applicable contract. For purposes of
this Agreement "Seller's Average Borrowing Rate" shall mean the weighted
average interest rate of all borrowings of the Company outstanding at the
Closing Date, which shall in no event be less than the LIBO Rate.
(r) Accounts and Advances on Tobacco Purchases. (i) All
Accounts owned by the Company and its Subsidiaries are reflected properly
on their books and records, are valid receivables subject to no setoffs
or counterclaims, are current and collectible, and will be collected in
accordance with their respective terms at their recorded amounts, subject
only to any reserve against accounts set forth on the face of the Final
Balance Sheet. Unless interest is paid on such Accounts in accordance
with their terms, Accounts that by their terms are not collectible by the
180th day following the Closing Date shall be adjusted to their net
present value determined by reference to Seller's Average Borrowing Rate.
Section 2.01(r)(i) of the Disclosure Schedule includes a summary
indicating the aggregate balance of all of the Accounts of the Company
and its consolidated Subsidiaries as of December 31, 1996;
(ii) All Advances on Tobacco Purchases of the
Company and its Subsidiaries are reflected properly on their books and
records, have arisen from bona fide transactions in the ordinary course of
business and the Company and its Subsidiaries will receive tobacco having
a fair market value at least equal to the amount of each such advance as
reflected on the Final Balance Sheet (or, if applicable, at least equal
to the amount of such advance plus any additional amounts that the
Company is required to pay pursuant to the terms of such advance) or a
refund of all amounts advanced, all in accordance with the terms of such
advance and subject to any reserve against advances collected set forth
on the face of the Final Balance Sheet; and
(iii) All accounts payable of the Company and its
Subsidiaries have arisen from bona fide transactions in the ordinary
course of business and are to be paid in accordance with normal trade
practice.
(s) Real Property. Section 2.01(s) of the Disclosure
Schedule sets forth a list of each of the Company's factories and the
Company's Wokingham, England, headquarters (each, a "Facility") and the
address and record owner of such Facility. With respect to each such
Facility, except as set forth in Section 2.01(s) of the Disclosure
Schedule:
(i) there are no pending or, to the Knowledge
of the Company, threatened condemnation proceedings, lawsuits or
administrative actions relating to the Facility or other matters
adversely affecting the current use, occupancy or value thereof;
(ii) each Facility has received all approvals of
Governmental or Regulatory Authorities (including permits) required
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<PAGE>
in connection with the ownership, occupation or operation thereof
and has been operated and maintained in accordance with applicable
laws;
(iii) there are no leases, subleases, licenses,
concessions or other agreements, written or oral, granting to any
Person the right of use or occupancy of any portion of a Facility
and no Person other than the Company or its Subsidiaries is in
possession of any Facility or part thereof;
(iv) there are no outstanding options or rights of
first refusal to purchase a Facility or interest therein;
(v) each Facility is supplied with utilities and
other services necessary and adequate for the operation of the
Facility and each Facility is located on, or has irrevocable access
to, a public road; and
(vi) none of the Company or its Subsidiaries
owns any material parcel of Real Property that is material to
the Business or Condition of the Company other than the Facilities.
(t) Intellectual Property.
(i) Except as set forth in Section 2.01(t) of the
Disclosure Schedule, the Company and its Subsidiaries own
exclusively or have the exclusive right to use pursuant to license,
sublicense, agreement or permission all Intellectual Property used
in their businesses as presently conducted; each item of
Intellectual Property owned or used by any of the Company and its
Subsidiaries immediately prior to Closing will be owned or
available for use by Purchaser on identical terms and conditions
immediately subsequent to closing; the Company and its Subsidiaries
have taken all necessary and desirable action to maintain and
protect each item of Intellectual Property that they own or use; no
owned item of Intellectual Property has been abandoned; each item
of Intellectual Property used by the Company or any of its
Subsidiaries pursuant to license or other authorization of a third
party is used with the authorization of every other claimant
thereto, and the execution, delivery and performance of this
Agreement by the Company and the Purchaser will not impair such
use. To the Knowledge of the Company, no third party has
interfered with, infringed upon, misappropriated or otherwise come
into conflict with any Intellectual Property rights of the Company
or any of its Subsidiaries. Section 2.01(t) of the Disclosure
Schedule identifies each patent, trademark, copyright or other
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<PAGE>
registration that has been issued to the Company or any of its
Subsidiaries with respect to any of their Intellectual Property,
identifies each pending application or application for registration
that the Company or any of its Subsidiaries has made with respect
to any of its Intellectual Property and identifies each license,
agreement or other permission that the Company or any of its
Subsidiaries has granted to any third party with respect to any of
its Intellectual Property (together with any exceptions thereto).
Except as set forth in Section 2.01(t) of the Disclosure Schedule,
with respect to each item of Intellectual Property required to be
identified therein; (i) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling or charge; (ii) no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the Knowledge of the
Company, is threatened which challenges the legality, validity,
enforceability, use or ownership of the item; and (iii) neither the
Company nor any of its Subsidiaries has licensed or permitted any
third party to use any such item.
(u) Insurance. Except as set forth in Section 2.01(u) of
the Disclosure Schedule, with respect to each insurance policy to which
the Company or any of its Subsidiaries has been a party, a named insured
or otherwise the beneficiary of coverage at any time which is still in
effect or under which the Company or any of its Subsidiaries has any
continuing rights or obligations: (i) the policy will continue to be
legal, valid, binding, enforceable and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby; (ii) neither the Company nor its Subsidiaries is in
breach or default thereunder (including with respect to the payment of
premiums or the giving of notices), and no event has occurred that, with
notice or the lapse of time, would constitute such a breach or default by
the Company or its Subsidiaries, or permit termination, modification or
acceleration under the policy; and (iii) to the Knowledge of the Company,
no party to the policy has repudiated any provision thereof. Each of the
Company and its Subsidiaries has been covered during the past ten years
by insurance in scope and amount customary and reasonable for the
businesses in which it has been engaged during such ten-year period.
Schedule 2.01(u) of the Disclosure Schedule describes any self-insurance
arrangements affecting the Company or any of its Subsidiaries.
(v) Environmental Matters.
(i) Except as set forth in Section 2.01(v) of the
Disclosure Schedule, (y) neither the Company, any of its
Subsidiaries nor any of the Former Subsidiaries has used, stored,
treated, transported, manufactured, refined, handled, produced or
disposed of any Hazardous Materials or Petroleum Products on,
under, at, from or in any way affecting any of their properties or
assets (including, without limitation, any properties or assets now
or previously owned or operated by the Company, any of its
Subsidiaries or any of the Former Subsidiaries), or otherwise, in
any manner which at the time of the action in question violated any
Environmental Law governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials or Petroleum Products, and (z) to
the Knowledge of the Company, no prior owner of such property or
asset or any tenant, subtenant, prior tenant or prior subtenant
thereof has used Hazardous Materials or Petroleum Products on, from
or in any way affecting any such property or asset, or otherwise,
in any manner which at the time of the action in question violated
any Environmental Law governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials or Petroleum Products.
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<PAGE>
(ii) Except as set forth in Section 2.01(v) of the
Disclosure Schedule, neither the Company nor any of its
Subsidiaries has any obligations or liabilities, whether absolute
or contingent, accrued or unaccrued, asserted or unasserted, known
or unknown, or otherwise, that could have a material effect on
Business or Condition of the Company and no pending claims have
been made against any of the foregoing and no presently outstanding
citations or notices have been issued against any of the foregoing,
that could have a material adverse effect on the Business or
Condition of the Company, and that in the case of any of the
foregoing, have been or are imposed by reason of or based upon any
provision of any Environmental Laws, including, without limitation,
any such obligations or liabilities relating to or arising out of
or attributable, in whole or in part, to the manufacture,
processing, distribution, use, treatment, storage, release,
disposal, arranging for disposal, transport or handling of any
Hazardous Materials or Petroleum Products by the Company, any of
its Subsidiaries or any of the Former Subsidiaries or, to the
Knowledge of the Company, by any predecessors in interest in
connection with or in any way arising from or relating to the
Company, any of its Subsidiaries or any of the Former Subsidiaries
or any of their respective properties, or relating to or arising
from or attributable, in whole or in part, to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of any such substance by any other person at
or on or under any of the real properties owned or used by the
Company, any of its Subsidiaries or any of the Former Subsidiaries.
(iii) The Company and its Subsidiaries have
received all Permits as may be required of them under applicable
Environmental Laws to conduct their respective businesses, and each
of the Company and its Subsidiaries is in compliance in all
material respects with the terms and conditions of all such
Permits.
(w) Transactions With Related Parties. Except as set
forth in Section 2.01(w) of the Disclosure Schedule, since March 31, 1996,
neither the Company nor any of its Subsidiaries has, in the ordinary
course of business or otherwise, purchased, leased or otherwise acquired
any material property or assets or obtained any material services from,
or sold, leased or otherwise disposed of any material property or assets
or provided any material services to (except with respect to remuneration
for services rendered as a director, officer or employee of one or more
of the Company and its Subsidiaries) (i) any holder of 5% or more of the
voting securities of the Company, (ii) any director, officer or employee
of the Company or any of its Subsidiaries, (iii) except for any
transactions among the Company and its Subsidiaries, any person, firm or
corporation that directly or indirectly controls, is controlled by or is
under common control with the Company or any of its Subsidiaries or (iv)
any member of the immediate families of any such persons (collectively, a
"Related Party"). Except as set forth in Section 2.01(w) of the
Disclosure Schedule, (i) the Contracts do not include any obligation or
commitment between the Company or any of its Subsidiaries and any Related
Party, and (ii) the assets of the Company do not include any receivable
or other obligation or commitment from an Related Party to the Company or
any of its Subsidiaries.
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<PAGE>
(x) Labor Matters. Section 2.01(x) of the Disclosure
Schedule lists all collective bargaining or similar agreements to which
the Company or any of its Subsidiaries is a party. Except as set forth
in Section 2.01(x) of the Disclosure Schedule, with respect to employees
of the Company and its Subsidiaries:
(i) each of the Company and its Subsidiaries is
and has been in compliance in all material respects with all
applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours;
(ii) no grievance or any arbitration proceeding
arising out of or under collective bargaining or similar agreements
is pending and, to the Knowledge of the Company, no claims therefor
exist or have been threatened; and
(iii) there is no litigation, arbitration
proceeding, governmental investigation, citation or action of any
kind pending or, to the Knowledge of the Company, proposed or
threatened against the Company or any of its Subsidiaries relating
to employment, employment practices, terms and conditions of
employment or wages and hours.
(y) Business in Certain Countries. Except for the
dealings listed in Section 2.01(y) of the Disclosure Schedule, neither the
Company nor any of its Subsidiaries has further obligation to (i) purchase,
(ii) sell, (iii) deal in or assist in dealing in any goods for export to,
import from, or transhipment through Cuba, Iraq, Iran, Libya, or North
Korea. Except for those Persons and assets listed in Section 2.01(y) of
the Disclosure Schedule, to the Knowledge of the Company (i) neither the
Company nor any of its Subsidiaries will hold any assets of the
governments (including any agencies or subdivisions thereof) of the
countries listed above or the Federal Republic of Yugoslavia (including
the governments of Serbia and Montenegro) to the extent any such assets
of the Federal Republic of Yugoslavia are "blocked" for purposes of
applicable U.S. law, their nationals, or Persons located in such
countries or organized under their laws, (ii) no assets of the Company or
any of its Subsidiaries will be held by any of such Persons, or (iii) no
amounts will be due to or from the Company or any of its subsidiaries
from or to any of such Persons.
(z) Accuracy of Information. This Agreement and all
other documents provided by the Company to Purchaser in connection with the
transactions contemplated herein, taken as a whole, do not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading.
(aa) No Other Representations. Notwithstanding anything
to the contrary contained in this Agreement, it is the explicit intent of
each party hereto that the Company is making no representation or
warranty whatsoever, express or implied, except those representations and
warranties contained in this Section 2.01 and in any certificate
delivered pursuant to Section 6.03.
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<PAGE>
2.02 Representations of the Shareholders. Each Shareholder
hereby severally represents and warrants, solely with respect to itself, to
Purchaser as follows:
(a) Corporate Existence of Shareholders. Folium is a
corporation validly existing under the Laws of the British Virgin
Islands. Tabacalera is a corporation validly existing under the Laws of
the Kingdom of Spain. LMI is a corporation validly existing under the
Laws of the British Virgin Islands. Each Shareholder has full corporate
power and authority to execute and deliver this Agreement and to perform
its obligations hereunder and to consummate the transactions contemplated
hereby, including without limitation to own, hold, sell and transfer
(pursuant to this Agreement) the Shares. Each Shareholder owns the
Shares set forth in Section 2.02(a) of the Disclosure Schedule,
beneficially and of record, free and clear of all Liens, except as set
forth in such Section 2.02(a) of the Disclosure Schedule.
(b) Authority. The execution and delivery by such
Shareholder of this Agreement and the performance by such Shareholder of
its obligations hereunder, have been duly and validly authorized by the
respective Board of Directors of such Shareholder, no other corporate
action on the part of such Shareholder or its stockholders being
necessary. This Agreement has been duly and validly executed and
delivered by such Shareholder and constitutes a legal, valid and binding
obligation of such Shareholder enforceable against such Shareholder in
accordance with its terms.
(c) Investigation by Shareholders; Investment Intent.
The Shareholders have conducted their own independent review and analysis
of the businesses, assets, condition, operations and prospects of the
Purchaser and its Subsidiaries and acknowledge that they have been
provided access satisfactory to them to the properties and records of the
Purchaser and its Subsidiaries for this purpose and have been afforded an
opportunity satisfactory to them to discuss the foregoing with management
of Purchaser. In entering into this Agreement, the Shareholders have
relied solely upon their own respective investigations and analysis and
the representations contained herein and the Shareholders:
(i) except as otherwise set forth in this
Agreement, acknowledge that none of Purchaser, the Company,
their respective Subsidiaries or any of their respective
directors, officers, employees, Affiliates, agents or
representatives make any representation or warranty, either
express or implied, as to the accuracy or completeness of any
of the information provided or made available to the Shareholders
or their agents or representatives prior to the execution of
this Agreement;
(ii) understand that the shares of Purchaser
Common Stock and Convertible Debentures have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), and
may not be transferred in the absence of an effective registration
statement for such securities under the 1933 Act or an opinion of
counsel satisfactory to the Company that registration is not
required under the 1933 Act. Certificates representing the shares
of Purchaser Common Stock and the Convertible Debentures may bear
a legend to such effect;
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<PAGE>
(iii) agree, to the fullest extent permitted by
law, that none of the Purchaser, its Subsidiaries or any of their
respective directors, officers, employees, Affiliates, agents or
representatives shall have any liability or responsibility
whatsoever to the Shareholders on any basis (including, without
limitation, in contract or tort, under federal or state securities
laws or otherwise) based upon any information provided or made
available, or statements made, to the Company or the Shareholders
prior to the execution of this Agreement, except that the foregoing
limitations shall not apply to the Purchaser to the extent that the
Purchaser makes the specific representations and warranties set
forth in this Agreement and in the Schedules, but always subject
to the limitations and restrictions contained in this Agreement
and the Schedules;
(iv) represent that they are not "U.S.
Persons" (and they are not purchasing for the account of any U.S.
Person) within the meaning of Regulation S under 1933 Act;
(v) agree that they will not, prior to the
expiration of the 40-day restricted period provided for in Rule 903
of Regulation S under the 1933 Act, sell or otherwise dispose of
(including by means of a short sale or other hedging transaction)
any Purchaser Common Stock or the Convertible Debentures; and
(vi) any Purchaser Common Stock or Convertible
Debentures acquired by them will be acquired for their own accounts
for the purpose of investment.
(d) Beneficial Ownership. As of the date hereof, none of
the Shareholders was the "beneficial owner," as such term is defined in
Sections 13.1-725 and 13.728.1 of the Virginia Code, of any shares of
Purchaser Common Stock except as disclosed in Schedule 2.02(d).
(e) No Conflicts. The execution and delivery by the
Shareholders of this Agreement do not, and the performance by the
Shareholders of their obligations under this Agreement and the
consummation of the transactions contemplated hereby will not:
(i) conflict with or result in a violation or
breach of any of the certificate or articles of incorporation or
bylaws or other comparable organizational and other documents
governing the operation of any of the Shareholders;
(ii) subject to obtaining the consents, approvals
and actions, making the filings and giving the notices disclosed in
Section 2.02(e)(ii) of the Disclosure Schedule, conflict with or
result in a violation or breach of any Law or Order applicable to
any of the Shareholders or any of their Assets or Properties;
(iii) except as disclosed in Section 2.02(e)(iii)
of the Disclosure Schedule, (x) conflict with or result in a
violation or breach of, (y) constitute (with or without notice or
lapse of time or both) a default under, or (z) require any
Shareholder to obtain any consent, approval or action of, make any
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<PAGE>
filing with or give any notice to any Person as a result or under
the terms of, any Contract or License to which such Shareholder is
a party or by which any of its Assets and Properties is bound.
(f) Governmental Approvals and Filings. Except as
disclosed in Section 2.02(f) of the Disclosure Schedule, no consent,
approval or action of, filing with, or notice to any Governmental or
Regulatory Authority on the part of any of the Shareholders is required
in connection with the execution delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby.
(g) Legal Proceedings. Except as disclosed in
Section 2.02(g) of the Disclosure Schedule, there are no Actions or
Proceedings pending or, to the respective knowledge of the Shareholders,
threatened against, relating to or affecting any of them or their Shares,
that could reasonably be expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by the Agreement.
(h) Receipt of Disclosure. Each of the Shareholders
acknowledge that it has received complete disclosure with respect to the
terms and conditions of all of the transactions contemplated by this
Agreement and the consideration to be received by each other Shareholder
and its Affiliates in connection with such transactions, including,
without limitation, in connection with the acquisition by Purchaser of
certain assets of Tabex (PVT) Limited.
(i) No Immunity. In any proceedings taken in relation to
this Agreement or the related documents, none of the Shareholders will be
entitled to claim for itself or any of its assets immunity from suit,
execution, attachment or other legal process.
(j) No Other Representations. Notwithstanding anything
to the contrary contained in this Agreement, it is the explicit intent of
each party hereto that each Shareholder is making no representation or
warranty whatsoever, express or implied, except those representations and
warranties contained in this Section 2.02.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company and each
Shareholder as follows:
3.01. Corporate Existence. Purchaser is a corporation validly
existing and in good standing under the Laws of the Commonwealth of
Virginia. Purchaser has full corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
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<PAGE>
3.02. Authority. The execution and delivery by Purchaser of this
Agreement, and the performance by Purchaser of its obligations hereunder,
have been duly and validly authorized by the Board of Directors of
Purchaser, no other corporate action on the part of Purchaser or its
stockholders being necessary. This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes a legal, valid and
binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms.
3.03. No Conflicts. The execution and delivery by Purchaser of
this Agreement do not, and the performance by Purchaser of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby will not:
(a) conflict with or result in a violation or breach by
Purchaser of the Amended and Restated Articles of Incorporation or
Amended and Restated Bylaws of Purchaser;
(b) subject to obtaining the consents, approvals and
actions, making the filings and giving the notices disclosed in
Schedule 3.03 hereto, conflict with or result in a violation or breach of
any Law or Order applicable to Purchaser or any of its Assets and
Properties; or
(c) except as disclosed in Schedule 3.03 hereto, (i)
conflict with or result in a violation or breach of, (ii) constitute
(with or without notice or lapse of time or both) a default under, (iii)
require Purchaser to obtain any consent, approval or action of, make any
filing with or give any notice to any Person as a result or under the
terms of, (iv) result in the creation or imposition of any Lien upon
Purchaser or any of their respective Assets or Properties under, any
Contract or License to which Purchaser is a party or by which any of
their respective Assets and Properties is bound or (v) give rise to any
right of any party to any Contract to cancel, terminate or exercise any
option under such Contract; other than such conflicts, violations,
defaults, breaches, consents, approvals, authorizations, filings,
notices, liens or rights referred to in paragraphs (a), (b) or (c)
which could not in the aggregate reasonably be expected to materially
adversely affect the validity or enforceability of this Agreement or
to have a material adverse effect on the Business or Condition of the
Purchaser.
3.04. Governmental Approvals and Filings. Except as disclosed in
Schedule 3.04, no consent, approval or action of, filing with or notice
to any Governmental or Regulatory Authority on the part of Purchaser is
required in connection with the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated
hereby, except where the failure to obtain any such consent, approval or
action to make any such filing or to give any such notice could not
reasonably be expected to materially adversely affect the validity or
enforceability of this Agreement or to have a material adverse effect on
the Business or Condition of the Purchaser.
3.05. Books and Records. The minute books and other similar
records of Purchaser and its Subsidiaries as made available to the
Company prior to the execution of this Agreement contain a true and
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<PAGE>
complete record, in all material respects, of all action taken at all
meetings and by all written consents in lieu of meetings of the
stockholders, the boards of directors and committees of the boards of
directors of Purchaser and its Subsidiaries.
3.06. SEC Reports; Purchaser Financial Statements.
(a) Except as disclosed in Schedule 3.06, since
January 1, 1995, Purchaser has timely filed all reports, registration
statements, proxy statements or information statements and all other
documents, together with any amendments required to be made thereto,
required to be filed with the SEC (collectively, the "Purchaser Reports")
under the 1933 Act, as amended or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Purchaser has made available to Company true
copies of all the Purchaser Reports, together with all exhibits thereto,
that Company has requested. Included in such Purchaser Reports are (i)
audited consolidated balance sheets of Purchaser and its Subsidiaries at
June 30, 1996 and the related consolidated statements of income,
stockholders' equity and cash flows for the fiscal years then ended, and
the notes thereto and (ii) the unaudited consolidated balance sheets of
Purchaser and its Subsidiaries at September 30, 1996 and 1995, and the
related unaudited consolidated statements of income, stockholders' equity
and cash flows for the periods then ended and the notes thereto.
(b) All of the financial statements included in the
Purchaser Reports (which are collectively referred to herein as the
"Purchaser Consolidated Financial Statements") fairly presented in all
material respects the consolidated financial position of Purchaser and
its Subsidiaries as at the dates mentioned and the consolidated results
of operations, changes in stockholders' equity and cash flows for the
periods then ended in conformity with GAAP applied on a consistent basis
(subject to any exceptions as to consistency specified therein or as may
be indicated in the notes thereto or in the case of the unaudited
statements, as may be permitted by Form 10-Q of the Exchange Act and
subject, in the case of unaudited statements, to normal, recurring audit
adjustments). As of their respective dates, the Purchaser Reports
complied in all material respects with all applicable rules and
regulations promulgated by the SEC and did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
3.07. Taxes. Except as disclosed in the Purchaser Reports filed
on or before the date of this Agreement, there is not a material amount of
unpaid Tax incurred by Purchaser or any of its Subsidiaries that is or
could become a Lien on any asset of Purchaser and its Subsidiaries and
that would thereby or otherwise have a material adverse effect on the
Business or Condition of Purchaser.
3.08. Legal Proceedings. Except as disclosed in the Purchaser
Reports filed on or before the date of this Agreement:
(a) There are no Actions or Proceedings pending or, to
the Knowledge of Purchaser, threatened against, relating to or affecting
Purchaser or any of its Subsidiaries or any of their respective Assets
and Properties which (i) could reasonably be expected to result in the
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<PAGE>
issuance of an Order restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated
by this Agreement, or (ii) could individually or in the aggregate have a
material adverse effect on the Business or Condition of Purchaser; and
(b) there are no Orders outstanding against Purchaser or
any of its Subsidiaries that could, individually or in the aggregate,
have a material adverse effect on the Business or Condition of Purchaser.
3.09. Compliance With Laws and Orders. Except as disclosed in the
Purchaser Reports filed on or before the date of this Agreement,
Purchaser and any of its Subsidiaries have complied with all Laws and
Orders applicable to Purchaser or such Subsidiary or any of their
respective Assets or Properties, except for any non-compliance that could
not reasonably be expected to have a material adverse effect on the
Business or Condition of the Purchaser.
3.10. Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by Purchaser
directly with the Company without the intervention of any Person on
behalf of Purchaser in such manner as to give rise to any valid claim by
any Person against the Company, any Subsidiary or any Shareholder for a
finder's fee, brokerage commission or similar payment.
3.11. Financing. Purchaser has sufficient cash and/or available
credit facilities (and has provided the Company with evidence thereof) to
pay the cash consideration for the Shares and to make all other necessary
payments of fees and expenses in connection with the transactions
contemplated by this Agreement.
3.12. Purchase for Investment. The Shares will be acquired by
Purchaser (or, if applicable, its assignee pursuant to Section 10.10(b))
for its own account for the purpose of investment. Purchaser (or such
assignee, as the case may be) will refrain from transferring or otherwise
disposing of any of the Shares, or any interest therein, in such manner
as to cause any Shareholder to be in violation of the registration
requirements of the 1933 Act or applicable state securities or blue sky
laws.
3.13. Investigation by Purchaser. Purchaser has conducted its own
independent review and analysis of the businesses, assets, condition,
operations and prospects of Company and its Subsidiaries and acknowledges
that Purchaser has been provided access to the properties, premises and
records of the Company and its Subsidiaries for this purpose and has been
afforded an opportunity satisfactory to it to discuss the foregoing with
management of Purchases. In entering into this Agreement, Purchaser has
relied solely upon its own investigation and analysis and the
representations and warranties contained herein, and Purchaser:
(a) except as otherwise set forth in this Agreement,
acknowledges that none of the Company, its Subsidiaries, the Shareholders
or any of their respective directors, officers, employees, Affiliates,
agents or representatives makes any representation or warranty, either
- - 31 -
<PAGE>
express or implied, as to the accuracy or completeness of any of the
information provided or made available to Purchaser or its agents or
representatives prior to the execution of this Agreement; and
(b) understands that the Shares have not been registered
under the 1933 Act; and
(c) agrees, to the fullest extent permitted by law, that
none of the Company, its Subsidiaries, the Shareholders or any of their
respective directors officers, employees, Affiliates, agents or
representatives shall have any liability or responsibility whatsoever to
Purchaser on any basis (including, without limitation, in contract or
tort, under federal or state securities laws or otherwise) based upon any
information provided or made available, or statements made, to Purchaser
prior to the execution of this Agreement, except that the foregoing
limitations shall not apply to the Company or any Shareholder to the
extent the Company or such Shareholder makes the specific representations
and warranties set forth in this Agreement and in the Disclosure
Schedule, but always subject to the limitations and restrictions
contained in this Agreement and in the Disclosure Schedule.
3.14. FIRPTA. Purchaser is not a United States real property
holding corporation within the meaning of Section 897 of the United
States Internal Revenue Code of 1986, as amended.
3.15. Control Share Statute. Based solely upon the information
provided on Schedule 1.02(a) and in Section 2.02(d) of the Disclosure
Schedule with respect to the number of shares of Purchaser Common Stock
to be issued to each Shareholder at Closing or upon conversion of the
Convertible Debentures and the beneficial ownership by the Shareholders
of Purchaser Common Stock and assuming that no Shareholder beneficially
owns the shares of Purchaser Common Stock held of record by any other
Shareholder, no Shareholder is, or will be solely as a result of the
transactions contemplated by this Agreement, an "interested shareholder"
of Purchaser within the meaning of Section 13.1-725 of the Virginia Code.
3.16. Investment Company Act. Purchaser is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
3.17. Public Utility Holding Company Act. Purchaser is not
subject to regulation as an "electric utility company," a "public utility
company," a "holding company," a "subsidiary company" of a holding
company or an "associate company" of a holding company or an "affiliate"
of any of the foregoing under the Public Utility Holding Company Act of
1935, as amended.
3.18. Absence of Certain Events. Except as disclosed in the
Purchaser Reports filed on or before the date of this Agreement, there
has not been, since June 30, 1996: (i) any material adverse change in the
Business or Condition of Purchaser; or (ii) any change in the accounting
methods of the Purchaser or any of its Subsidiaries.
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<PAGE>
3.19. Accuracy of Information. This Agreement and all other
documents provided by Purchaser to the Company in connection with the
transactions contemplated herein, taken as a whole, do not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading.
3.20. No Other Representations. Notwithstanding anything to the
contrary contained in this Agreement, it is the explicit intent of each
party hereto that Purchaser is making no representation or warranty
whatsoever, express or implied, except those representations and
warranties contained in this Article III and in any certificate delivered
pursuant to Section 7.03.
ARTICLE IV
COVENANTS OF THE COMPANY AND THE SHAREHOLDERS
The Company and the Shareholders covenant and agree with Purchaser
that, at all times from and after the date hereof until the Closing, the
Company and the Shareholders will comply with all covenants and
provisions of this Article IV applicable to the Company and the
Shareholders, except to the extent Purchaser may otherwise consent in
writing.
4.01. Regulatory and Other Approvals. The Company will (a) use
all commercially reasonable efforts and proceed diligently and in good
faith as promptly as practicable to obtain all consents, approvals or
actions of, to make all filings with and to give all notices to
Governmental or Regulatory Authorities or any other Person required of
the Company or any Subsidiary to consummate the transactions contemplated
hereby, including without limitation those described in Sections 2.01(e)
and (f) of the Disclosure Schedule, (b) provide such other information
and communications to such Governmental or Regulatory Authorities or other
Persons as such Governmental or Regulatory Authorities or other Persons
may reasonably request and (c) provide reasonable cooperation to
Purchaser in obtaining all consents, approvals or actions of, making all
filings with and giving all notices to Governmental or Regulatory
Authorities or other Persons required of Purchaser to consummate the
transactions contemplated hereby. The Company will provide prompt
notification to Purchaser when any such consent, approval, action, filing
or notice referred to in clause (a) above is obtained, taken, made or
given, as applicable, and will advise Purchaser of any communications
(and, unless precluded by Law, provide copies of any such communications
that are in writing) with any Governmental or Regulatory Authority or
other Person regarding any of the transactions contemplated by this
Agreement.
4.02. HSR Filings. In addition to and not in limitation of its
covenants contained in Section 4.01, the Company will (a) take promptly
all actions necessary to make the filings required of the Company or its
Affiliates under the HSR Act, (b) comply at the earliest practicable date
with any request for additional information received by the Company or
its Affiliates from the Federal Trade Commission or the Antitrust
Division of the Department of Justice pursuant to the HSR Act and (c) use
all commercially reasonable efforts to cooperate with Purchaser in
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<PAGE>
connection with their filing under the HSR Act and in connection with
resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade
Commission or the Antitrust Division of the Department of Justice or
state attorneys general; provided that the Company shall not be required
to expend any material sum, dispose of any material assets or incur any
material liabilities in pursuing any such resolution.
4.03. Investigation by Purchaser. The Company will (a) provide
Purchaser, its officers, employees, counsel, accountants, financial
advisors, consultants and other representatives (together,
"Representatives") with access, upon reasonable prior notice and during
normal business hours, to all officers, employees, agents and accountants
of the Company and its Subsidiaries and their Assets and Properties and
Books and Records as Purchaser or any such Representative may reasonably
request, but only to the extent that such access does not unreasonably
interfere with the business and operations of the Company and its
Subsidiaries, and (b) furnish Purchaser and such other Persons with all
such information and data (including without limitation copies of
Contracts, Benefit Plans and other Books and Records) concerning the
business and operations of the Company and its Subsidiaries as Purchaser
or any of such other Persons reasonably may request in connection with
such investigation, but only to the extent that furnishing any such
information or data would not violate any Law, Order, Contract or License
applicable to the Company or any Subsidiary or by which any of their
respective Assets and Properties is bound; provided that the Company has
identified such information or data that it is unable to furnish pursuant
to the preceding clause in Section 4.03 of the Disclosure Schedule.
4.04. Conduct of Business. The Company and its Subsidiaries will
conduct business only in the ordinary course. Without limiting the
generality of the foregoing, the Company and its Subsidiaries will use
commercially reasonable efforts, to the extent the officers of the
Company believe such action to be in best interests of the Company and
its Subsidiaries, to (a) preserve intact the present business
organization and reputation of the Company and its Subsidiaries, (b) keep
available (subject to dismissals and retirements in the ordinary course
of business) the services of the key officers and employees of the
Company and its Subsidiaries in all material respects, (c) maintain the
Assets and Properties of the Company and its Subsidiaries in good working
order and condition, ordinary wear and tear excepted, and (d) maintain
the good will of customers and suppliers of the Company or any of its
Subsidiary. Without limiting the generality of the foregoing, and except
as otherwise expressly provided in this Agreement, prior to the Closing,
neither the Company nor any of its Subsidiaries will, without the prior
written consent of Purchaser:
(a) amend its Articles or Certificate of Incorporation,
bylaws, partnership or joint venture agreements or other
organizational documents;
(b) authorize for issuance or issue, sell or deliver
(whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any
stock of any class or any other securities of interests, except as
- - 34 -
<PAGE>
required by the terms of any options, warrants, rights or other
securities outstanding as of the date hereof;
(c) split, combine or reclassify any shares of its
capital stock, declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, or redeem
or otherwise acquire any of its securities or any securities of
their respective Subsidiaries;
(d) (i) incur or assume any long-term debt not currently
outstanding, (ii) assume, guarantee, endorse or otherwise become
liable or responsible for the obligations of any person, other than
a Subsidiary, (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than
customary loans or advances to employees in accordance with past
practice), (iv) enter into any contract or agreement other than in
the ordinary course of business or in connection with the
transactions contemplated by this Agreement or (v) authorize any
single capital expenditure which is in excess of $100,000 or
capital expenditures which are, in the aggregate, in excess of $1.0
million, other than capital expenditures pursuant to contracts
entered into prior to the date hereof and set forth in
Section 4.04(d) of the Disclosure Schedule;
(e) adopt or amend (except as may be required by Law or
as provided in this Agreement) any bonus, profit sharing,
compensation, severance, termination, stock option, stock
appreciation right, restricted stock, pension, retirement, deferred
compensation, employment, severance or other employee benefit
agreements, trusts, plans, funds or other arrangements for the
benefit or welfare of any director, officer or employee, or (except
for normal increases in the ordinary course of business that are
consistent with past practices and that, in the aggregate, do not
result in a material increase in benefits or compensation expense)
increase in any manner the compensation or fringe benefits of any
director, officer, or employee or pay any benefit not required by
any existing plan and arrangement (including, without limitation,
the granting of stock options, stock appreciation rights, shares of
restricted stock or performance units) or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing;
(f) acquire, sell, lease or dispose of any material
assets, other than acquisitions, sales and dispositions of
inventory in the ordinary course of business, or as set forth
in Section 4.04(f) of the Disclosure Schedule, provided that DIMON
shall have approved in advance the terms and conditions of any
transaction set forth therein;
(g) take any action other than in the ordinary course of
business and in a manner consistent with past practice with respect
to accounting policies or procedures;
(h) make any material Tax election or settle or
compromise any material Tax liability;
(i) pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business of liabilities
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<PAGE>
reflected or reserved against in the Unaudited Financial
Statements;
(j) enter into any individual commitment (binding or
otherwise) to purchase or sell tobacco of a discrete grade, type or
origin having a fair market value at the time of the commitment in
excess of $2,000,000; or
(k) agree in writing or otherwise to take any of the
foregoing actions.
4.05. No Solicitations. Neither the Company nor the Shareholders
will take, nor will the Company permit its Subsidiaries or any Affiliate
thereof (or authorize or permit any investment banker, financial advisor,
attorney, accountant or other person retained by or acting for or on
behalf of the Company, the Shareholders, the Subsidiaries or any such
Affiliate) to take, directly or indirectly, any action to initiate,
assist, solicit, receive, negotiate, encourage or accept any offer or
inquiry from any Person (a) to engage in any Business Combination with
the Company or any Subsidiary; (b) to reach any agreement for, or
otherwise attempt to consummate, any Business Combination with the
Company or any Subsidiary or (c) to furnish or cause to be furnished any
information with respect to the Company or any Subsidiary to any Person
(other than as contemplated by Section 4.03) who the Company, any
Subsidiary or any such Affiliate (or any such Person acting for or on
their behalf) knows or has reason to believe is in the process of
considering any Business Combination with the Company or any Subsidiary.
4.06. Fulfillment of Conditions. The Company and the Shareholders
will use all commercially reasonable efforts and proceed diligently and
in good faith to satisfy each condition to the obligations of Purchaser
contained in this Agreement and will not, and will not permit the Company
or any Subsidiary to, take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any such
condition.
4.07. Resignations. The Shareholders shall cause their respective
representatives on the Board of Directors of the Company to resign
immediately upon the Closing. The Company shall cause its representatives
on the Board of Directors of each Subsidiary designated by DIMON in
writing at least two weeks in advance of the Closing to resign effective
as of the Closing.
4.08. Transfer of Excluded Items. Prior to Closing, the Company
shall take whatever actions are necessary to effectively transfer
ownership and responsibility for the Excluded Items to Purchaser's
satisfaction.
4.09. Valuation of Philippine Property. The Company shall cause
the valuation of the Philippine Property to be recorded on the Final
Balance Sheet at an amount not greater than the lesser of cost and the
then-current market value of the Philippine Property.
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<PAGE>
ARTICLE V
COVENANTS OF PURCHASER
Purchaser covenants and agrees with the Company and each
Shareholder that, at all times from and after the date hereof until the
Closing, Purchaser will comply with all covenants and provisions of this
Article V, except to the extent the Company may otherwise consent in
writing.
5.01. Regulatory and Other Approvals. Purchaser will (a) use all
commercially reasonable efforts and proceed diligently and in good faith
as promptly as practicable to obtain all consents, approvals or actions
of, to make all filings with and to give all notices to Governmental or
Regulatory Authorities or any other Person required of Purchaser to
consummate the transactions contemplated hereby, including without
limitation those described in Schedules 3.03 and 3.04 hereto, (b) provide
such other information and communications to such Governmental or
Regulatory Authorities or other Persons as such Governmental or
Regulatory Authorities or other Persons may reasonably request and (c)
provide reasonable cooperation to the Company and its Subsidiaries in
obtaining all consents, approvals or actions of, making all filings with
and giving all notices to Governmental or Regulatory Authorities or other
Persons required of the Company or any of its Subsidiary to consummate
the transactions contemplated hereby. Purchaser will provide prompt
notification to the Company when any such consent, approval, action,
filing or notice referred to in clause (a) above is obtained, taken, made
or given, as applicable, and will advise the Company of any
communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated
by this Agreement.
5.02. HSR Filings. In addition to and without limiting
Purchaser's covenants contained in Section 5.01, Purchaser will (i)
take promptly all actions necessary to make the filings required of
Purchaser or its Affiliates under the HSR Act, (ii) comply at the
earliest practicable date with any request for additional
information received by Purchaser or its Affiliates from the Federal
Trade Commission or the Antitrust Division of the Department of
Justice pursuant to the HSR Act and (iii) use all commercially
reasonable efforts to cooperate with the Company in connection with
filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade
Commission or the Antitrust Division of the Department of Justice or
state attorneys general; provided that Purchaser shall not be required to
expend any material sum, dispose of any material assets, or incur any
material liabilities in pursuing any such resolution.
5.03. Release of Guarantees. Following the Closing, Purchaser
shall cooperate with the Company in seeking to have the Shareholders
released from, and will indemnify and hold the Shareholders harmless
against payments the Company is required to make from and after the
Closing in respect of, the guarantees that the Shareholders have given in
respect of Indebtedness of the Company and the Subsidiaries described in
Section 5.03 of the Disclosure Schedule.
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<PAGE>
5.04. Fulfillment of Conditions. Purchaser will use all
commercially reasonable efforts and proceed diligently and in good faith
to satisfy each condition to the obligations of the Company contained in
this Agreement and will not take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any such
condition.
5.05. Barcelona Building. (a) Purchaser shall cause CdeF to use
its best efforts to sell the Barcelona Building at a price equal to the
book value thereof as promptly as practicable after the Closing;
provided, that in the event Purchaser has not caused the Barcelona
Building to be sold within 12 months of the Closing Date, Purchaser shall
be entitled to sell the Barcelona Building in good faith for whatever
price it can obtain.
(b) Purchaser shall, within five (5) Business days of
receipt of the final settlement or rendering of a final nonappealable
judgment amount in the COISA litigation referred to in Section 2.01(j) of
the Disclosure Schedule relating to the Barcelona Building pay to the
Shareholders, in such manner as the Shareholders shall direct, any
amounts in excess of 250 million Spanish pesetas that CdeF shall be
entitled to retain or receive as a result of such settlement or
nonappealable judgment.
(c) The Shareholders shall hold Purchaser harmless from
and against any and all claims and losses relating to or arising out of
the prosecution of the litigation related to the Barcelona Building or
the sale, ownership and operation of the Barcelona Building after the
Closing, except for those claims and losses arising solely from the gross
negligence or willful misconduct of Purchaser.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder are subject to the
fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by
Purchaser in its sole discretion):
6.01. Representations and Warranties. The representations and
warranties made by the Company and the Shareholders in this Agreement
(without regard to the qualification of the last sentence of Section
10.15) shall be true and correct in all material respects on and as of
the Closing Date as though made on and as of the Closing Date or, in the
case of representations and warranties made as of a specified date
earlier than the Closing Date, on and as of such earlier date.
6.02. Performance. The Company shall have performed and complied
with, in all material respects, the agreements, covenants and obligations
required by this Agreement to be so performed or complied with by the
Company at or before the Closing.
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<PAGE>
6.03. Officers' Certificates. The Company and each Shareholder
shall have delivered to Purchaser a certificate, dated the Closing Date
and executed by the Chairman of the Board and Chief Financial Officer of
the Company or by the Chief Executive Officer, Chief Financial Officer or
any two directors of the Shareholders, respectively, substantially in the
form and to the effect of Exhibits A-1, A-2, A-3 and A-4 hereto, and a
certificate, dated the Closing Date and executed by the Secretary or any
Assistant Secretary of the Company and each Shareholder, substantially in
the form and to the effect of Exhibits B-1, B-2, B-3 and B-4 hereto.
6.04. Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement.
6.05. Regulatory Consents and Approvals. All consents, approvals
and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit Purchaser, the Company and the
Shareholders to perform their obligations under this Agreement and to
consummate the transactions contemplated hereby, which are listed in
Schedule 6.05 hereto, shall have been duly obtained, made or given and
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority
necessary for the consummation of the transactions contemplated by this
Agreement, including under the HSR Act, shall have occurred.
6.06. Third Party Consents. The consents (or in lieu thereof
waivers) listed in Schedule 6.06 hereto shall have been obtained and
shall be in full force and effect.
6.07. Opinion of Counsel. Purchaser shall have received the
opinion of Wagener & Rukavina; Cuatrecasas Abogados; Smith-Hughes Raworth
& MacKenzie; Webber Wentzel Bowers; and King & Spalding; counsel to the
Company and the respective Shareholders, dated the Closing Date,
substantially in the form and to the effect of Exhibit C-1, C-2, C-3, C-4
and C-5 hereto, respectively, with such changes as are reasonably
acceptable to Purchaser.
6.08. Purchase of Certain Assets of Tabex (PVT) Limited.
Simultaneously with the Closing hereunder, Purchaser or an affiliate
shall have purchased from Tabex (PVT) Limited certain assets of Tabex
(PVT) Limited pursuant to that certain Asset Purchase Agreement between
Purchaser and Tabex (PVT) Limited dated as of the date hereof (the "Asset
Purchase Agreement").
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<PAGE>
6.09. Noncompetition Agreements and Consulting Agreement. There
shall have been executed and delivered to Purchaser the Noncompetition
Agreements and Consulting Agreement in substantially the form attached
hereto as Exhibits D-1, D-2 and D-3 (the "Folium Agreements").
6.10. Resignations of Officers and Directors. The officers and
directors of the Company and its Subsidiaries designated by DIMON
pursuant to Section 4.07 shall have resigned, effective as of Closing.
6.11. Warrants. Each Warrantholder shall have surrendered its
respective Options for the consideration specified in Schedule 1.02 and
shall have executed and delivered to Purchaser an investment letter,
substantially in the form and to the effect of Exhibit E hereto.
6.12. Tax and Withholding Matters. Purchaser shall have received
from the Shareholders and the Warrantholders all documents it shall
reasonably require to enable it to comply with any and all tax and
withholding requirements in connection with the transactions contemplated
hereby, including, without limitation, Forms W-8 or W-9 as applicable and
all elections pursuant to Section 338 of the Internal Revenue Code or
similar provisions of foreign, state or local law.
6.13. Agreement of Accountants. Ernst & Young LLP and each other
accounting firm on which Ernst & Young LLP has relied in preparing its
reports on any Financial Statements of the Company and the Final
Financial Statements shall have agreed in writing (i) to provide
Purchaser and its agents and employees reasonable access after the
Closing to its workpapers relating to such Financial Statements and the
Final Financial Statements and to their personnel who have participated
in the preparation or review of such Final Financial Statements, (ii) to
provide Purchaser with such additional manually-executed copies of such
reports as it may reasonably request, and (iii) to consent to the
inclusion or incorporation by reference of such reports in Purchaser's
filings under the 1933 Act, the Exchange Act and the related rules and
regulations.
6.14. Transfer of Excluded Items. Purchaser shall have received
evidence satisfactory to it that the Excluded Items have been effectively
transferred by the Company or the appropriate Subsidiary.
6.15. Settlement of Related Party Accounts. All amounts owed by
all of the Company's Related Parties to the Company or any of its
Subsidiaries or any other Person in which any of the Company or any of
its Subsidiaries has an interest, and all amounts owed to DIMON by the
Company or any of its Subsidiaries or owed by DIMON to the Company or any
of its Subsidiaries shall have been paid in full, including, without
limitation, all accounts receivable listed in Section 2.01(w) of the
Disclosure Schedule and all other receivables set forth on Schedule 6.15.
6.16. Agreements of Malawi Joint Venture Partners. Subject to
Schedule 6.16, the parties shall mutually agree on a satisfactory
resolution of the status of the Company's interest in its Malawi joint
ventures.
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<PAGE>
6.17. Additional Certificates. Purchaser shall have received such
other certificates of officers of the Company and the Shareholders as it
may reasonably request.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE
SHAREHOLDERS
The obligations of the Company and the Shareholders hereunder are
subject to the fulfillment, at or before the Closing, of each of the
following conditions (all or any of which may be waived in whole or in
part by the Company in its sole discretion):
7.01. Representations and Warranties. The representations and
warranties made by Purchaser in this Agreement (without regard to the
qualification of the last sentence of Section 10.15) shall be true and
correct in all material respects on and as of the Closing Date as though
made on and as of the Closing Date.
7.02. Performance. Purchaser shall have performed and complied
with, in all material respects, the agreements, covenants and obligations
required by this Agreement to be so performed or complied with by
Purchaser at or before the Closing.
7.03. Officers' Certificates. Purchaser shall have delivered to
the Company a certificate, dated the Closing Date and executed by the
Chief Executive Officer and the Chief Financial Officer of Purchaser,
substantially in the form and to the effect of Exhibit F hereto, and a
certificate, dated the Closing Date and executed by the Secretary or
Assistant Secretary of Purchaser, substantially in the form and to the
effect of Exhibit G hereto.
7.04. Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement.
7.05. Regulatory Consents and Approvals. All consents, approvals
and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit the Company, the Shareholders
and the Purchaser to perform their obligations under this Agreement and
to consummate the transactions contemplated hereby, which are listed on
Schedule 7.05 hereto, shall have been duly obtained, made or given and
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority
necessary for the consummation of the transactions contemplated by this
Agreement, including under the HSR Act, shall have occurred.
7.06. Third Party Consents. The consents (or in lieu thereof
waivers) listed in Schedule 7.06 shall have been obtained and shall be
in full force and effect.
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<PAGE>
7.07. Opinion of Counsel. The Company shall have received the
opinion of Hunton & Williams, counsel to Purchaser, dated the Closing
Date, substantially in the form and to the effect of Exhibit H hereto
with such changes as are reasonably acceptable to the Company and the
Shareholders.
7.08. Purchase of Certain Assets of Tabex (PVT) Limited.
Simultaneously with the Closing hereunder, Purchaser or an affiliate
shall have purchased from Tabex (PVT) Limited certain assets of Tabex
(PVT) Limited pursuant to the Asset Purchase Agreement.
7.09. Folium Agreements. Purchaser shall have executed and
delivered the Folium Agreements.
7.10. Listing of Purchaser Common Stock. Purchaser shall have
done all things necessary to cause the Purchaser Common Stock to be issued
at Closing and to be issued upon conversion of the Convertible Debentures
to be listed on the New York Stock Exchange, upon official notice of
issuance.
7.11. Board of Directors. Effective on the Closing Date,
Purchaser will (a) expand the size of its Board of Directors from
twelve directors to thirteen directors and will elect a nominee of
Folium, reasonably acceptable to Purchaser, to fill the vacancy created
for a term expiring at its 1997 Annual Meeting of Shareholders.
Purchaser will cause such nominee to be nominated to stand for election
as a director at the 1997 Annual Meeting of Shareholders for a three
year term and will use its reasonable best efforts to cause him to be
so elected; (b) cause A.C.B. Taberer to be elected non-executive
Chairman of the Board of the Company.
7.12. Registration Rights. Purchaser shall have executed and
delivered the Registration Rights Agreement in substantially the form of
Exhibit I hereto.
7.13. Additional Certificates. The Company and the Shareholders
shall have received such other certificates of officers of Purchaser as
it may reasonably request.
ARTICLE VIII
TERMINATION
8.01. Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement of the Company, Purchaser and Shareholders;
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<PAGE>
(b) at any time before the Closing, by the Company,
Purchaser or the Shareholders in the event that any Order or Law becomes
effective restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement, upon notification of the non-terminating party by the
terminating party; provided that the terminating party has used its best
efforts to have any such Order removed;
(c) at any time before the Closing, by the Company,
Purchaser or the Shareholders upon notification of the non-terminating
party by the terminating party if the Asset Purchase Agreement shall have
been terminated prior to a closing thereunder pursuant to and in
accordance with the terms thereof;
(d) [intentionally omitted]; or
(e) at any time after June 30, 1997 by the Company,
Purchaser or the Shareholders upon notification of the non-terminating
party by the terminating party if the Closing shall not have occurred on
or before such date and such failure to consummate is not caused by a
breach of this Agreement by the terminating party.
8.02. Effect of Termination. If this Agreement is validly
terminated pursuant to Section 8.01, this Agreement will forthwith become
null and void, and there will be no liability or obligation on the part
of the Company, Purchaser or the Shareholders (or any of their respective
officers, directors, employees, agents or other representatives or
Affiliates), except that the provisions with respect to expenses in
Section 10.03 and confidentiality in Section 10.05 will continue to apply
following any such termination. Notwithstanding any other provision in
this Agreement to the contrary, upon termination of this Agreement
pursuant to Section 8.01(b), (c), (d) or (e), the Company will remain
liable to Purchaser for any willful breach of Section 4.06 of this
Agreement by the Company existing at the time of such termination, and
Purchaser will remain liable to the Company and the Shareholders for any
willful breach of Section 5.04 of this Agreement by Purchaser existing at
the time of such termination, and the Company, Purchaser or the
Shareholders may seek such remedies, including damages and fees of
attorneys, against the other with respect to any such willful breach as
are provided in this Agreement or as are otherwise available at Law or in
equity.
ARTICLE IX
DEFINITIONS
9.01. Definitions. (a) As used in this Agreement, the
following defined terms shall have the meanings indicated below:
"Accounts" shall mean accounts receivable, notes receivable and
associated rights.
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<PAGE>
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation.
"Advances on Tobacco Purchases" shall mean all loans, advances and
extensions of credit made by the Company or any of its Subsidiaries to
growers and other suppliers of tobacco and tobacco growers' cooperatives,
whether short-term or long-term, to finance the growing or processing of
tobacco.
"Affiliate" means any Person that directly, or indirectly through
one of more intermediaries, controls or is controlled by or is under
common control with the Person specified. For purposes of this
definition, control of a Person means the power, direct or indirect, to
direct or cause the direction of the management and policies of such
Person whether by Contract or otherwise and, in any event and without
limitation of the previous sentence, any Person owning more than fifty
(50%) of the voting securities of a second Person shall be deemed to
control that second Person.
"Agreement" means this Stock Purchase Agreement and the Exhibits,
the Disclosure Schedule and the Schedules hereto and the certificates
delivered in accordance with Sections 6.03 and 7.03, as the same shall be
amended from time to time.
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether
real, personal or mixed, whether tangible or intangible, and wherever
situated), operated, owned or leased by such Person which are material to
the business, financial condition or results of operations of such Person
and its Subsidiaries taken as a whole.
"Barcelona Building" means that building located at Ramblas 109,
Barcelona 08002 Spain and all rights and liabilities associated
therewith.
"Beheer Option" means the stock option agreement made as of the 6th
day of March 1995 by and among the Company and all of the shareholders of
LPL Beheer B.V.
"Books and Records" means all files, documents, instruments,
papers, books and records relating to the Business or Condition of the
Company, including without limitation financial statements, Tax Returns
and related work papers and letters from accountants, budgets, pricing
guidelines, ledgers, journals, deeds, title policies, minute books, stock
certificates and books, stock transfer ledgers, Contracts, Licenses,
customer lists, computer files and programs, retrieval programs,
operating data and plans and environmental studies and plans.
"Business Combination" shall mean any merger, consolidation or sale
of substantially all assets in one or a series of related transactions.
"Business Day" means a day other than Saturday, Sunday or any day
on which banks located in London, England, New York, New York and
Danville, Virginia are authorized or obligated to close.
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<PAGE>
"Business or Condition of the Company" and "Business or Condition
of Purchaser" means the business, financial condition or results of
operations of either the Company and its Subsidiaries, taken as a whole,
or the Purchaser and its Subsidiaries, taken as a whole, as the case may
be.
"Claim Notice" means written notification pursuant to
Section 12.02(a) of a Third Party Claim as to which indemnity under
Section 12.01 is sought by an Indemnified Party, enclosing a copy of all
papers served, if any, and specifying the nature of and basis for such
Third Party Claim and for the Indemnified Party's claim against the
Indemnifying Party under Section 12.01, together with the amount or, if
not then reasonably ascertainable, the estimated amount, determined in
good faith, of such Third Party Claim.
"Class A Shares" means the Class A ordinary shares of the Company.
"Class B Shares" means the Class B ordinary shares of the Company.
"Closing" means the closing of the transactions contemplated by
Section 1.04.
"Closing Date" means (a) April 1, 1997 or (b) such other date as
Purchaser, the Shareholders and the Company mutually agree upon in
writing.
"Confidentiality Agreement" means the Nondisclosure Agreement dated
October 17, 1996 among Purchaser, the Company and Tabex (PVT) Limited.
"Contract" means any agreement, lease, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract.
"Convertible Debentures" means the $140,000,000 6.25% Convertible
Subordinated Debentures due 2007 of the Purchaser.
"Cut-off Date" means, with respect to any representation, warranty,
covenant or agreement contained in this Agreement, the date on which such
representation, warranty, covenant or agreement ceases to survive as
provided in clause (a) or (b) of Section 11.01, as applicable.
"Disclosure Schedule" means the record delivered to Purchaser by
the Company herewith and dated as of the date hereof, containing all
lists, descriptions, exceptions and other information and materials as
are required to be included therein by the Company pursuant to this
Agreement.
"Dispute Period" means the period ending fifteen (15) calendar
days following receipt by an Indemnifying Party of either a Claim Notice
or an Indemnity Notice.
"Employee Benefit Plan" means any plan, program, policy or
arrangement to, or on behalf of, one, or more than one, current or former
employee or director or any of their dependents.
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<PAGE>
"Environmental Laws" shall mean any and all national, federal,
state, provincial, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees or requirements of any Governmental
or Regulatory Authority regulating, relating to or imposing liability or
standards of conduct concerning any Hazardous Materials or Petroleum
Products or environmental protection as now or at any time hereafter in
effect, together with any amendment or re-authorization thereto or
thereof.
"Excluded Items" means the Beheer Option and the Zanzibar Assets.
"Final Balance Sheet" shall mean the Final Balance sheet of the
Company as of the Closing Date, prepared in accordance with Section 1.05.
"Final Financial Statements" shall mean the audited consolidated
balance sheet of the Company and its subsidiaries as of the Closing Date
and the related audited consolidated statements of operations,
stockholders' equity and cash flows for the fiscal year, or portion
thereof, then ended, prepared in accordance with Section 1.05.
"Final Net Worth" shall mean the difference between the total
assets and total liabilities as reflected on the Final Balance Sheet.
"Financial Statement Date" means the last day of the most recent
fiscal quarter of the Company for which Financial Statements are
delivered to Purchaser pursuant to Section 2.01(h).
"Financial Statements" means the consolidated financial statements
of the Company and its consolidated Subsidiaries delivered to Purchaser
pursuant to Section 2.01(h).
"Former Subsidiaries" means all corporations, limited liability
companies, partnerships, joint ventures and other entities in which the
Company, directly or indirectly, owned an interest during the five years
prior to the date of this Agreement, which entities would have been
Subsidiaries of the Company had such interest been owned on the date of
this Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied throughout the specified period
and in the immediately prior comparable period.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other
instrumentality of any country, state, province, county, city or other
political subdivision.
"HSR Act" means Section 7A of the Clayton Act (Title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and the
rules and regulations promulgated thereunder.
"Hazardous Materials" shall mean any hazardous material, hazardous
wast, infectious medical waste, hazardous or toxic substance defined or
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<PAGE>
regulated as such in any or under any Environmental Law, including
without limitation, materials exhibiting the characteristics of
ignitability, corrosivity, reactivity or extraction procedure toxicity,
as such terms are now or hereafter defined in connection with hazardous
materials or hazardous wastes or hazardous or toxic substances in any
Environmental Law.
"Indebtedness" of any Person means all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or
services (other than trade payables or accruals incurred in the ordinary
course of business), (iv) under capital leases and (v) in the nature of
guarantees of the obligations described in clauses (i) through (iv) above
of any other Person.
"Indemnity Notice" means written notification pursuant to Section
12.02(b) of a claim for indemnity under Article XII by an Indemnified
Party, specifying the nature of and basis for such claim, together with
the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such claim.
"Indemnified Party" means any Person claiming indemnification under
any provision of Article XII.
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article XII.
"Indenture" means the Indenture dated as of the Closing between
Purchaser and the trustee named therein, substantially in the form of
Exhibit J hereto, pursuant to which the Convertible Debentures are to be
issued.
"Intellectual Property" shall mean (a) inventions (whether
patentable or unpatentable and whether or not reduced to practice),
improvements thereto and patents, patent applications and patent
disclosures, together with reissuance, continuations, continuations-in-
part, revisions, extensions and reexaminations thereof, (b) trademarks,
service marks, trade dress, logos, trade names and corporate names,
together with translations, adaptations, derivations and combinations
thereof and including goodwill associated therewith and applications,
registrations and renewals in connection therewith, (c) copyrightable
works, copyrights and applications, registrations and renewals in
connection therewith, (d) trade secrets and confidential business
information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer
and supplier lists, pricing and cost information and business and
marketing plans and proposals, (e) computer software (including data and
related documentation), (f) other proprietary rights, (g) rights as a
licensee or authorized user of the intellectual property of any third
party and (h) copies and tangible embodiments thereof (in whatever form
or medium), in each case that are material to the business of the Company
and its Subsidiaries.
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<PAGE>
"Knowledge of the Company" means the actual knowledge of the
officers and employees of the Company listed in Section 9.01 of the
Disclosure Schedule.
"Knowledge of Purchaser" means the actual knowledge of the officers
and employees of Purchaser listed on Schedule 9.01.
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of any country, state,
province, county, city or other political subdivision or of any
Governmental or Regulatory Authority.
"LIBO Rate" means a per annum interest rate equal to the rate per
annum at which deposits in U.S. Dollars are offered in the London
interbank market as of the date prior to any calculation and published in
The Financial Times; provided that if no such rate is published on the
date of calculation the LIBO Rate shall be equal to the rate appearing on
the Telerate Page 3750 as of 11:00 A.M. London time on the date of
calculation.
"Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance.
"Loss" means any and all damages, fines, penalties, deficiencies,
losses and expenses (including without limitation interest, court costs,
reasonable fees of attorneys, accountants and other experts or other
reasonable expenses of litigation or other proceedings or of any claim,
default or assessment) and any amounts incurred in mitigation of the
foregoing.
"Option" with respect to any Person means any security, right,
subscription, warrant, option or other Contract that gives the right to
purchase or otherwise receive or be issued any shares of capital stock of
such Person or any security of any kind convertible into or exchangeable
or exercisable for any shares of capital stock of such Person.
"Order" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"Permits" means permits, licenses and governmental authorizations,
registrations and approvals.
"Permitted Liens" shall mean those Liens listed on Section 2.01(p)
of the Disclosure Schedule.
"Person" means any natural person, corporation, general
partnership, limited partnership, limited liability company,
proprietorship, other business organization, trust, union, association or
Governmental or Regulatory Authority.
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<PAGE>
"Petroleum Products" shall mean gasoline, diesel fuel, motor oil,
waste or used oil, heating oil, kerosene and other petroleum products.
"Philippine Property" means all property associated with La Union
Ventures Inc. and listed on Schedule 4.09.
"Representatives" has the meaning ascribed to it in Section 4.03.
"September Net Worth" shall mean $138.5 million (after adjustment
for write up of the Senior Notes to face value) plus $3.5 million (or
such lesser amount of costs and expenses actually incurred by the Company
pursuant to Section 10.03).
"Shares" means the Class A Shares and the Class B Shares.
"Specified Investments" means (i) direct obligations of the United
States of America or any country in the European Union and agencies
thereof for which the full faith and credit of the United States of
America or such country is pledged, (ii) obligations fully guaranteed by
the United States of America or any country in the European Union, (iii)
certificates of deposit issued by, or bankers' acceptances of, or time
deposits (including overnight deposits) with, any bank, trust company or
national banking association incorporated or doing business under the
laws of the United States of America or one of the states thereof or any
country in the European Union having combined capital and surplus and
retained earnings of at least $500,000,000; (iv) repurchase agreements
with any financial institution described in clause (iii) above having a
combined capital and surplus of at least $750,000,000 fully
collateralized by obligations of the type described in clauses (i)
through (iii) above; and (v) any equity or investment grade debt security
listed on any stock exchange or equivalent in the United States of
America or any country in the European Union or any equity or investment
grade debt security included for trading in The Nasdaq National Market.
"Subsidiary" means any corporation or limited liability company in
which the Company or the Purchaser directly or indirectly through
subsidiaries or otherwise, beneficially owns 50% or more of the
outstanding equity interests or other interests having the right to elect
directors or managers or which the Company or the Purchaser, directly or
indirectly, otherwise controls or has the right to control, and each
partnership, joint venture or other entity which is not a corporation or
limited liability company in which the Company or the Purchaser has an
interest.
"Supply Agreement" means the supply agreement dated July 29, 1994
between Tabacalera and Compania General de Tabacos de Filipinas, S.A.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to taxes, including
any schedule or attachment thereto, and including any amendment thereof.
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<PAGE>
"Tax" means any federal, state, local or foreign income, capital
gains, profits, gross receipts, payroll, capital stock, franchise,
employment, withholding, social security, unemployment, disability, real
property, personal property, stamp, excise, occupation, sales, use,
transfer, mining, value-added, investment credit recapture, alternative
or add-on minimum, environmental, estimated or other taxes duties or
assessments of any kind, including interest, penalty and additions
imposed with respect to such amounts.
"Unaudited Financial Statements" means the unaudited pro forma
consolidated Financial Statements of the Company as of and for the six
months ended September 30, 1996, delivered to Purchaser pursuant to
Section 2.01(h).
"Warrantholders" means each of the John Hancock Mutual Life
Insurance Company and John Hancock Life Insurance Company of America.
"Zanzibar Assets" means a 13% ownership interest in Zanzibar
Cigarette Company Limited.
Unless the context of this Agreement otherwise requires, (i) words
of any gender include each other gender; (ii) words using the singular or
plural number also include the plural or singular number, respectively;
(iii) the terms "hereof," "herein," "hereby" and derivative or similar
words refer to this entire Agreement; (iv) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement;
and (v) the phrase "ordinary course of business" refers to the business
of the Company or a Subsidiary. All accounting terms used herein and not
expressly defined herein shall have the meanings given to them under
GAAP. Any representation or warranty contained herein as to the
enforceability of a Contract shall be subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
affecting the enforcement of creditors' rights generally and to general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at Law).
ARTICLE X
MISCELLANEOUS
10.01. Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to have
been duly given only if delivered personally or by facsimile transmission
or mailed (first class postage prepaid) to the parties at the following
addresses or facsimile numbers:
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<PAGE>
If to Purchaser, to:
DIMON Incorporated
512 Bridge Street
Danville, Virginia 24543-0681
Facsimile No.: 804/791-0377
Attn: Mr. Claude B. Owen, Jr.
with a copy to:
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
Facsimile No.: 804/788-8218
Attn: Mr. Thurston R. Moore
If to the Company, to:
Intabex Holdings Worldwide S.A.
Admiral House
16 Shute End
Wokingham Berkshire RG40 1BJ
Facsimile No.: 01734792063
Attn.: Peter M. Tomkinson
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Facsimile No.: 404/572-5100
Attn.: John D. Capers, Jr., Esq.
If to Folium, to:
Maitland & Co.
35 Rue la Boetie
Paris, France 75008
Facsimile No.: 33-1-53-89-1121
Attn.: Steven Georgala
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<PAGE>
with a copy to:
Intabex Holdings Worldwide S.A.
Admiral House
16 Shute End
Wokingham Berkshire RG40 1BJ
Facsimile No.: 01734792063
Attn.: Peter M. Tomkinson
If to Tabacalera, to:
Tabacalera S.A.
Alcala 47
28014 Madrid, Spain
Facsimile No.: (91) 532 6765
Attn.: Calixto Rios
with a copy to:
Tabacalera S.A.
Alcala 47
28014 Madrid, Spain
Facsimile No.: (91) 532 6765
Attn.: Ramiro Sanchez de Lerin
If to LMI, to:
Maitland & Co.
35 Rue la Boetie
Paris, France 75008
Facsimile No.: 33-1-53-89-1121
Attn.: Steven Georgala
with a copy to:
Intabex Holdings Worldwide S.A.
Admiral House
16 Shute End
Wokingham Berkshire RG40 1BJ
Facsimile No.: 01734792063
Attn.: Peter M. Tomkinson
- - 52 -
<PAGE>
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given
upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number as provided in this Section, be deemed given upon
receipt, and (iii) if delivered by mail in the manner described above to
the address as provided in this Section, be deemed given upon receipt (in
each case regardless of whether such notice is received by any other
Person to whom a copy of such notice, request or other communication is
to be delivered pursuant to this Section). Any party from time to time
may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change
to the other party hereto.
10.02. Entire Agreement. This Agreement supersedes all
prior discussions and agreements between the parties with respect to
the subject matter hereof and contains the sole and entire agreement
between the parties hereto with respect to the subject matter hereof;
provided, however, that nothing herein shall affect (i) the validity
of the Confidentiality Agreement and (ii) any other written agreements
or understandings entered into by the parties or their Affiliates
contemporaneously with the execution and delivery of this Agreement, all
of which shall remain in full force and effect.
10.03. Expenses. Except as otherwise expressly provided in
this Agreement, whether or not the transactions contemplated hereby are
consummated, each party will pay its own costs and expenses incurred in
connection with the negotiation, execution and closing of this Agreement
and the transactions contemplated hereby; provided that any costs and
expenses incurred by the Company excluding the costs of preparation of
the Final Financial Statements in excess of $3,500,000 shall be paid by
the Shareholders.
10.04. Public Announcements. At all times at or before the
Closing, the Company, Purchaser and the Shareholders will not issue or
make any reports, statements or releases to the public or generally to
the employees, customers, suppliers or other Persons to whom the Company
and the Subsidiaries sell goods or provide services or with whom the
Company and the Subsidiaries otherwise have significant business
relationships with respect to this Agreement or the transactions
contemplated hereby without the consent of the other, which consent shall
not be unreasonably withheld. The Company, Purchaser and the
Shareholders will also obtain each other party's prior approval of any
press release to be issued immediately following the Closing announcing
the consummation of the transactions contemplated by this Agreement. If
either party is unable to obtain the approval of its public report,
statement or release from the other party and such report, statement or
release is, in the opinion of legal counsel to such party, required by
Law in order to discharge such party's legal or contractual disclosure
obligations, then such party may make or issue the required report,
statement or release and promptly furnish the other party with a copy
thereof.
10.05. Confidentiality. Each party hereto will hold, and
will use all commercially reasonable efforts to cause its Affiliates,
and their respective Representatives to hold, in strict confidence from
any Person (other than any such Affiliate or Representative), all
documents and information concerning the other party or any of its
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<PAGE>
Affiliates furnished to it by the other party or such other party's
Representatives in connection with this Agreement or the
transactions contemplated hereby in accordance with the terms of
the Confidentiality Agreement.
10.06. Further Assurances; Post-Closing Cooperation.
(a) Subject to the terms and conditions of this
Agreement, at any time or from time to time after the Closing, each of
the parties hereto shall execute and deliver such other documents and
instruments, provide such materials and information and take such other
actions as may reasonably be necessary, proper or advisable, to the
extent permitted by Law, to fulfill its obligations under this
Agreement.
(b) Following the Closing, each party will afford the
other party, its counsel and its accountants, during normal business
hours, reasonable access to the books, records and other data relating to
the Business or Condition of the Company in its possession with respect
to periods prior to the Closing and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required by
the requesting party in connection with (i) the preparation of Tax
Returns, (ii) the determination or enforcement of rights and obligations
under this Agreement, (iii) compliance with the requirements of any
Governmental or Regulatory Authority, (iv) the determination or
enforcement of the rights and obligations of any Indemnified Party or (v)
in connection with any actual or threatened Action or Proceeding.
Further, each party agrees for a period extending six (6) years after the
Closing Date not to destroy or otherwise dispose of any such books,
records and other data unless such party shall first offer in writing to
surrender such books, records and other data to the other party and such
other party shall not agree in writing to take possession thereof during
the ten (10) day period after such offer is made.
(c) If, in order properly to prepare its Tax Returns,
other documents or reports required to be filed with Governmental or
Regulatory Authorities or its financial statements or to fulfill its
obligations hereunder, it is necessary that a party be furnished with
additional information, documents or records relating to the Business or
Condition of the Company not referred to in paragraph (b) above, and
such information, documents or records are in the possession or control
of the other party, such other party agrees to use all commercially
reasonable efforts to furnish or make available such information,
documents or records (or copies thereof) at the recipient's request,
cost and expense. Any information obtained by any party in accordance
with this paragraph shall be held confidential by such party in
accordance with Section 10.05. In addition, the Shareholders agree
to furnish to Purchaser all documents its shall reasonably require to
enable it to comply with any and all tax and withholding requirements
in connection with the transactions contemplated hereby and any
dealings after the Closing by the Shareholders with the Purchaser
Common Stock or the Convertible Debentures, including, without
limitation, Forms W-8 or W-9 as applicable and all elections pursuant
to Section 338 of the Internal Revenue Code or similar provisions of
foreign, state or local law.
10.07. Waiver. Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof,
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<PAGE>
but no such waiver shall be effective unless set forth in a written
instrument duly executed by or on behalf of the party waiving such term
or condition. No waiver by any party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this
Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
10.08. Amendment. This Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or
on behalf of each party hereto.
10.09. No Third Party Beneficiary. The terms and
provisions of this Agreement are intended solely for the benefit of each
party hereto and their respective successors or permitted assigns, and it
is not the intention of the parties to confer third-party beneficiary
rights upon any other Person.
10.10. No Assignment; Binding Effect. Neither this
Agreement nor any right, interest or obligation hereunder may be assigned
by any party hereto without the prior written consent of each other party
hereto and any attempt to do so will be void, (a) except for assignments
and transfers by operation of Law and (b) that Purchaser may assign any
or all of its rights, interests and obligations hereunder to a wholly-
owned Subsidiary; provided that any such Subsidiary agrees in writing
to be bound by all of the terms, conditions and provisions of this
Agreement, but no such assignment referred to in clause (b) shall
relieve Purchaser of its obligation hereunder. Subject to the
preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
10.11. Headings. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or
limit the provisions hereof.
10.12. Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any
present or future Law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b)
this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom and (d) in lieu
of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid
or unenforceable provision as may be possible.
10.13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
10.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
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<PAGE>
OR COUNTERCLAIM (WHETHER BASED UPON ANY CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREBY OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR ENFORCEMENT THEREOF.
10.15. Tobacco Industry Generally. The parties acknowledge
that there have been, and are likely to continue to be, developments
affecting the tobacco industry generally which may have an adverse impact
on the Business or Condition of the Company or the Business or Condition
of the Purchaser, including, without limitation, governmental
investigations and proceedings, legislative and regulatory developments
and civil litigation. The parties agree that the representations and
warranties of the Company and the Purchaser contained herein are
qualified in their entirety by reference to such developments affecting
the tobacco industry generally.
10.16. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity for the breach
of any representation, warranty or covenant contained herein.
10.17. Release of Claims. Each Shareholder, for itself and
its successors and assigns, agrees that as of the Closing, it remises,
releases, acquits and forever discharges the Company and its Subsidiaries
and all present or former officers, directors and employees of the
Company and its Subsidiaries in their capacities as such, and each of
them, from any and all actions and causes of action (whether at law or in
equity), losses, damages, costs, expenses, liabilities, obligations and
claims or demand of any kind, including, without limitation, attorneys'
fees and other legal costs and expenses, known and unknown, foreseen and
unforseen, whether now existing or arising at any time in the future,
other than those arising under the terms of this Agreement (collectively,
the "Claims"); provided that Tabacalera may raise claims related to the
Supply Agreement for routine commercial matters after January 1, 1997.
10.18. Consent to Assignment of Supply Agreement. Effective
upon the Closing, Tabacalera shall be deemed to have consented to the
indirect transfer of the Supply Agreement to Purchaser pursuant to this
Agreement.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
11.01. Survival of Representations, Warranties, Covenants
and Agreements. The representations, warranties, covenants and agreements
of Company, Purchaser and the Shareholders contained in this Agreement will
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<PAGE>
survive the Closing (a) indefinitely with respect to the representations
and warranties contained in Sections 2.01(b), 2.01(c) and 2.01(d) (but
only insofar as it relates to the capital 2.01(o)stock or other equity
interests as of the Subsidiaries), 2.01(n), 2.01(o), 2.01(w), the fourth
and fifth sentences of Section 2.02(a), 2.02(b), 2.02(i), 3.02 and 3.10
and the indemnity obligation set forth in Section 12.01(a)(ii); (b) the
longer of three years or the expiration of any applicable statute of
limitations for any underlying tax claim with respect to the
representations and warranties contained in Sections 2.01(i) and 2.01(l);
and (c) until September 30, 1998 in the case of each other
representation, warranty, covenant and agreement, except that any
representation, warranty, covenant or agreement that would otherwise
terminate in accordance with clause (a), (b) or (c) above will continue
to survive if a Claim Notice or Indemnity Notice (as applicable) shall
have been timely given in good faith based on facts reasonably expected
to establish a valid claim under Article XII on or prior to such
termination date, until the related claim for indemnification has been
satisfied or otherwise resolved as provided in Article XII. This Section
shall not limit in any way the survival and enforceability of any
covenant or agreement of the parties hereto which by its terms
contemplates performance after the Closing Date, which shall survive for
the respective periods set forth herein.
ARTICLE XII
INDEMNIFICATION
12.01. Indemnification.
(a) Subject to paragraph (c) and (d) of this Section and
the other Sections of this Article XII, each Shareholder shall severally
indemnify Purchaser and its officers, directors, employees, agents and
Affiliates in respect of, and hold each of them harmless from and
against, any and all Losses suffered, incurred or sustained by any of
them or to which any of them becomes subject, resulting from, arising out
of or relating to (i) any misrepresentation, breach of warranty or breach
of any covenant or agreement on the part of the Company contained in this
Agreement and (ii) the Excluded Items and the Barcelona Building.
(b) Subject to paragraph (c) and (d) of this Section and
the other Sections of this Article XII, Purchaser agrees to indemnify
each Shareholder and their respective officers, directors, employees,
agents and Affiliates in respect of, and hold each of them harmless from
and against, any and all Losses suffered, incurred or sustained by any of
them or to which any of them becomes subject, resulting from, arising out
of or relating to any misrepresentation, breach of warranty or breach of
any covenant or agreement on the part of Purchaser contained in this
Agreement.
(c) Notwithstanding anything to the contrary contained in
this Agreement, no amounts of indemnity shall be payable as a result of
any claim arising under paragraphs (a) and (b) of Section 12.01:
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<PAGE>
(i) with respect to claims arising under
paragraph (a) only, unless, until and then only to the extent that
the Indemnified Parties thereunder have suffered, incurred,
sustained or become subject to Losses referred to in such paragraph
in excess of $3,500,000 in the aggregate (the "Loss Threshold"),
and then to the full extent of such Losses; provided that in
determining whether the Loss Threshold has been met, no Loss under
$10,000 shall be aggregated and provided, further that the
limitations of this clause (i) shall not apply to the Losses
referred to in clause (ii) of paragraph (a), for which indemnity
shall be payable regardless of the amount of the Loss;
(ii) with respect to any claim for indemnification
thereunder, unless the Indemnified Party has given each
Indemnifying Party a Claim Notice or Indemnity Notice, as
applicable, with respect to such claim, setting forth in reasonable
detail the specific facts and circumstances pertaining thereto, (A)
as soon as practical following the time at which Indemnified Party
discovered such claim (except to the extent each Indemnifying Party
is not prejudiced by any delay in the delivery of such notice) and
(B) in any event prior to the applicable Cut-off Date;
(iii) with respect to any Loss resulting from a
misrepresentation, breach of warranty or breach of a covenant or
agreement that is disclosed in a written notice (which shall be
deemed to include the Disclosure Schedules and all other schedules
or exhibits attached hereto), setting forth in reasonable detail
the specific facts and circumstances pertaining thereto and
specifically indicating that such notice is intended to modify the
Disclosure Schedules or other schedule and exhibit attached hereto
or the Purchaser Reports, delivered by the Company or any
Shareholder to Purchaser or by Purchaser to each Shareholder and
the Company after the date of this Agreement and at or prior to the
Closing (regardless of whether the recipient waives such breach or
modification in writing or otherwise);
(iv) with respect to any Loss as to which the
Indemnified Parties had a reasonable opportunity, but failed, in
good faith to mitigate their Loss, including but not limited to
their failure to use commercially reasonable efforts to recover
under a policy of insurance or under a contractual right of set-off
or indemnity; or
(v) with respect to any Loss to the extent it
arises from or was caused solely by actions taken by the
Indemnified Party or any of its Affiliates after the Closing.
(d) Notwithstanding anything to the contrary contained in
this Agreement, neither the Shareholders nor the Purchaser shall be
liable for any amounts under this Article XII in excess of $90 million.
12.02. Method of Asserting Claims. All claims for indemnification
by any Indemnified Party under Section 12.01 will be asserted and
resolved as follows:
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<PAGE>
(a) In the event any claim or demand in respect of which
an Indemnifying Party might seek indemnity under Section 12.01 is asserted
against or sought to be collected from such Indemnified Party by a Person
other than any Shareholder, the Company, any Subsidiary, Purchaser or any
Affiliate of any Purchaser (a "Third Party Claim"), the Indemnified Party
shall deliver a Claim Notice with reasonable promptness to the
Indemnifying Party. The Indemnifying Party will notify the Indemnified
Party as soon as practicable within the Dispute Period whether the
Indemnifying Party disputes its liability to the Indemnified Party under
Section 12.01 and whether the Indemnifying Party desires, at its sole
cost and expense, to defend the Indemnified Party against such Third
Party Claim.
(i) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that the Indemnifying
Party desires to defend the Indemnified Party with respect to the
Third Party Claim pursuant to this Section 12.02(a), then the
Indemnifying Party will have the right to defend, at the sole cost
and expense of the Indemnifying Party, such Third Party Claim by
all appropriate proceedings, which proceedings will be vigorously
and diligently prosecuted by the Indemnifying Party to a final
conclusion or will be settled at the discretion of the Indemnifying
Party (with the consent of the Indemnified Party, which consent
will not be unreasonably withheld). The Indemnifying Party will
have full control of such defense and proceedings, including
(except as provided in the immediately preceding sentence) any
settlement thereof; provided, however, that the Indemnified Party
may, at the sole cost and expense of the Indemnified Party, at any
time prior to the Indemnifying Party's delivery of the notice
referred to in the first sentence of this clause (i), file any
motion, answer or other pleadings or take any other action that the
Indemnified Party reasonably believes to be necessary or
appropriate to protect its interests and not prejudicial to the
Indemnifying Party (it being understood and agreed that, except as
provided in clause (ii) below, if an Indemnified Party takes any
such action that is prejudicial and causes a final adjudication
that is adverse to the Indemnifying Party, the Indemnifying Party
will be relieved of its obligations hereunder with respect to the
portion of such Third Party Claim prejudiced by the Indemnified
Party's action); and provided further, that if requested by the
Indemnifying Party, the Indemnified Party will, at the sole cost
and expense of the Indemnifying Party, cooperate with the
Indemnifying Party and its counsel in contesting any Third Party
Claim that the Indemnifying Party elects to contest, or, if
appropriate and related to the Third Party Claim in question, in
making any counterclaim against the Person asserting the Third
Party Claim, or any cross-complaint against any Person (other than
the Indemnified Party or any of its Affiliates). The Indemnified
Party may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the Indemnifying
Party pursuant to this clause (i), and except as provided in the
preceding sentence, the Indemnified Party will bear its own costs
and expenses with respect to such participation. Notwithstanding
the foregoing, the Indemnified Party may take over the control of
the defense or settlement of a Third Party Claim at any time if it
irrevocably waives its right to indemnity under Section 12.01 with
respect to such Third Party Claim.
- - 59 -
<PAGE>
(ii) If the Indemnifying Party fails to notify the
Indemnified Party within the Dispute Period that the Indemnifying
Party desires to defend the Third Party Claim pursuant to Section
12.02(a), or if the Indemnifying Party gives such notice but fails
to prosecute vigorously and diligently or settle the Third Party
Claim, or if the Indemnifying Party fails to give any notice
whatsoever within the Dispute Period, then the Indemnified Party
will have the right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all appropriate
proceedings, which proceedings will be vigorously and diligently
prosecuted by the Indemnified Party to a final conclusion or will
be settled at the discretion of the Indemnified Party (with the
consent of the Indemnifying Party, which consent will not be
unreasonably withheld). The Indemnified Party will have full
control of such defense and proceedings, including (except as
provided in the immediately preceding sentence) any settlement
thereof; provided, however, that if requested by the Indemnified
Party, the Indemnifying Party will, at the sole cost and expense of
the Indemnifying Party, cooperate with the Indemnified Party and
its counsel in contesting any Third Party Claim which the
Indemnified Party is contesting, or, if appropriate and related to
the Third Party Claim in question, in making any counterclaim
against the Person asserting the Third Party Claim, or any cross-
complaint against any Person (other than the Indemnifying Party or
any of its Affiliates). Notwithstanding the foregoing provisions
of this clause (ii), if the Indemnifying Party has notified the
Indemnified Party within the Dispute Period that the Indemnifying
Party disputes its liability hereunder to the Indemnified Party
with respect to such Third Party Claim and if such dispute is
resolved in favor of the Indemnifying Party, the Indemnifying Party
will not be required to bear the costs and expenses of the
Indemnified Party's defense pursuant to this clause (ii) or of the
Indemnifying Party's participation therein at the Indemnified
Party's request, and the Indemnified Party will reimburse the
Indemnifying Party in full for all reasonable costs and expenses
incurred by the Indemnifying Party in connection with such
litigation. The Indemnifying Party may participate in, but not
control, any defense or settlement controlled by the Indemnified
Party pursuant to this clause (ii), and the Indemnifying Party will
bear its own costs and expenses with respect to such participation.
(b) In the event any Indemnified Party should have a
claim under Section 12.01 against any Indemnifying Party that does not
involve a Third Party Claim, the Indemnified Party shall deliver an
Indemnity Notice with reasonable promptness to the Indemnifying Party.
(c) In the event of any claim for indemnity under
Section 12.01(a), Purchaser agrees to give each Shareholder reasonable
access to the Books and Records and employees of the Company and the
Subsidiaries in connection with the matters for which indemnification is
sought to the extent each Shareholder reasonably deems necessary in
connection with its rights and obligations under this Article XII.
12.03. Method of Calculating Losses. The amount of any
indemnification payable under any of the provisions of this Article XII
shall be (i) net of any tax benefit realized or the then-present value
(based on a discount rate equal to the prime rate as published in The
Wall Street Journal from time to time) of any such income tax benefit
- - 60 -
<PAGE>
reasonably expected to be realized by the Indemnified Party on a
consolidated basis by reason of the facts and circumstances giving rise
to the indemnification, and (ii) increased by the amount of any tax
required to be paid by the Indemnified Party on a consolidated basis as a
result of the accrual or receipt of the indemnification payment.
12.04. Exclusivity. After the Closing, to the extent permitted by
Law, the indemnities set forth in this Article XII shall be the exclusive
remedies of Purchaser and the Shareholders and their respective officers,
directors, employees, agents and Affiliates for any misrepresentation,
breach of warranty or breach of any covenant or agreement contained in
this Agreement, and the parties shall not be entitled to a rescission of
this Agreement or to any further indemnification rights or claims of any
nature whatsoever in respect thereof, all of which the parties hereto
hereby waive.
12.05. Right of Set-Off; Restriction on Transfer of Convertible
Debentures. (a) At Closing, the Shareholders shall designate Convertible
Debentures having an aggregate principal amount of $90 million against
which Purchaser shall be entitled to set-off any amounts due to it from
the Shareholders pursuant to this Article 12 (the "Set-Off Debentures").
The Set-Off Debentures shall be released in accordance with Section
12.05(e). The holders of the Set-Off Debentures agree that, prior to the
final resolution and payment, if required, of all claims or demands by
Purchaser for indemnification pursuant to Section 12.01 made prior to
September 30, 1998 until the relevant Release Date (as defined below) (i)
the Set-Off Debentures may not be transferred or converted except as
provided in Section 12.05(d), and (ii) unless the Set-Off Debentures are
transferred or converted in accordance with this Section 12.05,
certificates representing the Set-Off Debentures shall bear a legend
indicating that they are subject to restrictions on transfer and set-off
pursuant to this Section 12.05.
(b) Notwithstanding the identity of the record or
beneficial owner of the Set-Off Debentures or that the liability of the
Shareholders hereunder may be several and not joint, the Purchaser, at
its sole option, shall be entitled at any time and from time to time to
set-off against any amounts due pursuant to the Set-Off Debentures in
satisfaction of any or all amounts due to it by any of the Shareholders
pursuant to Section 12.01. Notwithstanding the foregoing, Purchaser
shall not be entitled to exercise its rights of set-off in respect of any
claim hereunder until such time as the Shareholders have agreed to pay
such claim or such claim has been reduced to a final, non-appealable
judgment obtained in accordance with Section 13.02, the amount that the
Shareholders agree to pay or the amount of any such judgment is referred
to herein as the "Set-Off Amount". Purchaser shall give the Shareholders
at least five business days written notice of its intention to set-off
pursuant to this Section 12.05, which notice will specify in reasonable
detail the basis for the set-off and the amount thereof (a "Notice of
Set-Off"). At the Purchaser's sole option, such set-off may be made by
reduction of any interest payment due pursuant to the Set-Off Debentures
or by cancellation of Set-Off Debentures having a present principal
amount equal to the Set-Off Amount (or combination thereof). In
determining the principal amount of Set-Off Debentures canceled, accrued,
but unpaid, interest to the date of such cancellation shall be added to
the principal amount of the Set-Off Debentures to be canceled. Except as
provided in the preceding sentence, nothing in this Section 12.05 shall
relieve Purchaser from paying interest on the Set-Off Debentures in
accordance with the terms of the Indenture. Any amounts set-off pursuant
to this Section 12.05 shall be made pro rata among the contributing
- - 61 -
<PAGE>
Shareholders based on the amounts contributed by each such Shareholder.
If Purchaser elects to cancel Set-Off Debentures, within ten business
days of the date of the Company's Notice of Set-Off, the holders thereof
shall submit to the Company for cancellation certificates representing a
principal amount of Set-Off Debentures equal to or exceeding the amount
to be set-off. The Company shall cause to be issued promptly a
certificate representing the excess principal amount of Set-Off
Debentures submitted, registered in such names as the record holder
thereof shall designate.
(c) Purchaser's right of set-off pursuant to this Section
12.05 shall not exceed $90 million. The rights of Purchaser under this
Section 12.05 are in addition to any other rights and remedies that
Purchaser may have.
(d) In the event any Shareholder desires to transfer,
other than to an Affiliate or Related Party, or convert any Set-Off
Debentures, including pursuant to an exercise of rights pursuant to Section
1401 of the Indenture, such Shareholder and Purchaser shall enter into an
escrow agreement having terms substantially identical to this Section 12.05
with an escrow agent domiciled in the United States mutually acceptable to
Purchaser and such Shareholder. Upon any transfer or conversion of Set-
Off Debentures, the Shareholder shall deposit U.S. dollars, Specified
Investments and/or Purchaser Common Stock having a value equal to the
aggregate principal amount of Set-Off Debentures transferred or converted
with the escrow agent. At Purchaser's sole option, any set-off to which
it is entitled under this Section 12.05 may be made against any Set-Off
Debentures as provided in Section 12.05(b) or against the cash or
securities deposited with the escrow agent, or any combination thereof,
subject to the seventh sentence of Section 12.05(b). Shareholders agree
that the amount held in escrow shall be equal to $90 million less amounts
set-off or released and amounts of Set-Off Debentures subject to the
provisions of this Section 12.05. In the event such Shareholder deposits
shares of Purchaser Common Stock or Specified Investments pursuant to the
preceding sentence, Purchaser shall be entitled to determine the value of
such deposited securities on the last Business Day of each month (the
"Calculation Date"). The value shall be determined based on the closing
price of the Specified Investments or Purchaser Common Stock on the
principal national securities exchange are listed or, if the Purchaser
Common Stock is not listed on a national securities exchange, on the
Nasdaq National Market, if authorized for inclusion therein, or if not
listed or included, in such manner as Purchaser and such Shareholder
shall agree. In the event the value of the Specified Investment or
Purchaser Common Stock shall have declined from the last Calculation
Date, such Shareholder shall deposit U.S. dollars or additional Specified
Investments, no later than two business days after notice from Purchaser,
in an amount equal to such decline with the escrow agent. In determining
whether a cash deposit is necessary pursuant to the preceding sentence,
Purchaser shall add any cash amounts previously deposited by such
Shareholder pursuant to such preceding sentence to the value of the
Specified Investments and Purchaser Common Stock held by the escrow
agent. Cash amounts held in escrow shall be invested in Specified
Investments at the direction of the relevant Shareholder. If, on any
Calculation Date the sum of the value of the Purchaser Common Stock,
Specified Investments plus any cash held in escrow, including amounts
invested and earnings thereon, together with the principal amount of Set-
Off Debentures exceeds $90 million less any amounts previously set-off or
- - 62 -
<PAGE>
released, Purchaser shall direct that such excess cash be released to the
Shareholder entitled thereto. The Shareholders may transfer Set-Off
Debentures to an Affiliate or Related Party upon the prior written
consent of Purchaser, which consent shall not be unreasonably withheld;
provided prior to such transfer, such Affiliate or Related Party agrees
in writing to be bound by the terms of this Section 12.05, appoints
CT Corporation System its agent for service of process, as set forth in
Section 13.03 and delivers to Purchaser an opinion of counsel that this
Section 12.05 is enforceable against such Affiliate or Related Party.
(e)(i) On October 1, 1998, any Set-Off Debentures,
cash Specified Investments and Purchaser Common Stock held in escrow
pursuant to Section 12.05(d) in excess of $15 million, plus any amounts
then claimed or demanded by Purchaser pursuant to Section 12.01, shall
be released from the restrictions of Section 12.05 and any escrow. On
and after October 1, 1998, as each claim or demand outstanding on that
date is satisfied or settled, an aggregate amount of Set-Off Debentures,
cash, Specified Investments and Purchaser Common Stock equal to the
amount of such claim shall be set-off or released, as the case may be,
provided, that no such release shall cause the aggregate Set-Off
Debentures, cash, Specified Investments and Purchaser Common Stock
remaining subject to set-off under this Section 12.05 after
October 1, 1998, and prior to the date of the last day of the 27th
month following the Closing Date to be less than $15 million.
(ii) On the first day of the 28th month following
the Closing Date, any Set-Off Debentures, cash, Specified Investments and
Purchaser Common Stock held in escrow pursuant to Section 12.05(d) in
excess of $10 million, plus any amounts then claimed or demanded by
Purchaser pursuant to Section 12.01, shall be released from the
restrictions of Section 12.05 and any escrow. On and after the first day
of the 28th month following the Closing Date, as each claim or demand
outstanding on that date is satisfied or settled, an aggregate amount of
Set-Off Debentures, cash Specified Investments and Purchaser Common Stock
equal to the amount of such claim shall be set-off or released, as the
case may be, provided, that no such release shall cause the aggregate
Set-Off Debentures, cash, Specified Investments and Purchaser Common
stock remaining subject to set-off under this Section 12.05 after such
first day of the 28th month following the Closing Date and prior to the
third anniversary of the Closing Date to be less than $10 million.
(iii) On the third anniversary of the Closing Date,
any Set-Off Debentures, cash, Specified Investments and Purchaser Common
Stock held in escrow in excess of amounts then claimed or demanded by
Purchaser pursuant to Section 12.01 shall be released from the
restrictions of Section 12.05 and any escrow. On and after the third
anniversary of the Closing Date, as each claim or demand outstanding on
that date is satisfied or settled, an amount of Set-Off Debentures, cash,
Specified Investments and Purchaser Common Stock equal to the amount of
such claim shall be set-off or released, as the case may be.
- - 63 -
<PAGE>
(iv) Purchaser, in its sole discretion, shall
determine the proportions of Set-Off Debentures, cash, Specified
Investments and Purchaser Common Stock to be released at any time. Upon
any such release, any legends on the Set-Off Debentures or Purchaser
Common Stock relating to the restrictions of this Article XII shall be
removed. All releases shall be made to the Shareholders pro rata based
upon the amounts contributed by them.
(v) For purposes of this Section 12.05(e), the
value of Set-Off Debentures released shall be equal to their principal
amount and the value of Specified Investments and Purchaser Common Stock
released shall be determined in the manner set forth in Section 12.05(d)
with the Calculation Date being the Business Day immediately prior to the
date of such release.
- - 64 -
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed
and delivered by the duly authorized officer of each party hereto as of
the date first above written.
DIMON INCORPORATED
By: /s/ C. B. Owen, Jr.
Name: C. B. Owen, Jr.
Title: Chairman and
Chief Executive Officer
INTABEX HOLDINGS WORLDWIDE S.A.
By: /s/ P. M. Tomkinson
Name: P. M. Tomkinson
Title: Authorized Agent
INTABEX SHAREHOLDERS:
FOLIUM INC.
By: /s/ P. M. Tomkinson
Name: P. M. Tomkinson
Title: Authorized Agent
TABACALERA S.A.
By: /s/ Calixto Rios
Name: Calixto Rios
Title: Authorized Agent
LEAF MANAGEMENT INVESTMENTS LTD.
By: /s/ P. M. Tomkinson
Name: P. M. Tomkinson
Title: Authorized Agent
- - 65 -
<PAGE>
ARTICLE XIII
GOVERNING LAW AND SUBMISSION TO JURISDICTION
13.01 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable
to a Contract executed and performed in such State without giving effect
to the conflicts of laws principles thereof.
13.02 Dispute Resolution. Each party hereto consents to submit to
the exclusive jurisdiction of the United States District Court for the
Southern District of New York or, in the event (but only in the event)
such court does not have subject matter jurisdiction, of the courts of
the State of New York sitting in the County of New York for any actions,
suits or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby. Each party hereto agrees not to
commence any action, suit or proceeding relating thereto except in such
courts and further agree that service of any process, summons, notice or
document by U.S. registered mail to the address set forth above shall be
effective service of process for any action, suit or proceeding brought
against you in any such court. Each party hereto unconditionally waives
any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby, in
such courts, and waives and agrees not to plead or claim in any such
court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
13.03 Agent for Service of Process. Each of the Shareholders
hereby irrevocably designates, appoints, and empowers CT Corporation
System, at 1633 Broadway, New York, New York 10019, or such other
address where such representative office may be located in New York City,
and its successors and assigns, as its true and lawful agent for service
of process to receive and accept on its behalf service of process in any
actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby. The Shareholders
agree that the failure of such process agent to give any notice of any
service of process to it shall not impair or affect the validity of
service upon such agent or of any judgment based thereon. Purchaser
shall be responsible for all fees and expenses payable to CT Corporation
System.
IN WITNESS WHEREOF, this Article has been duly executed and
delivered by the duly authorized officer of each party hereto as of the
date first above written.
DIMON INCORPORATED
By: /s/ C. B. Owen, Jr.
Name: C. B. Owen, Jr.
Title: Chairman and
Chief Executive Officer
- - 66 -
<PAGE>
INTABEX HOLDINGS WORLDWIDE S.A.
By: /s/ P. M. Tomkinson
Name: P. M. Tomkinson
Title: Authorized Agent
INTABEX SHAREHOLDERS:
FOLIUM INC.
By: /s/ P. M. Tomkinson
Name: P. M. Tomkinson
Title: Authorized Agent
TABACALERA S.A.
By: /s/ Calixto Rios
Name: Calixto Rios
Title: Authorized Agent
LEAF MANAGEMENT INVESTMENTS LTD.
By: /s/ P. M. Tomkinson
Name: P. M. Tomkinson
Title: Authorized Agent
- - 67 -
<PAGE>
Schedule 1.05
Specific Accounting Principles
1. All expenses relating to employees or agents of Intabex or its
Subsidiaries incurred on or prior to the Closing Date shall be
fully provided for in the Final Financial Statements. Such
expenses include, without limitation, compensation expenses such as
salaries, bonuses, commissions (whether or not contingent on the
receipt of customer payment, settlement of claims or similar
matters), employee health and welfare benefits, fringe benefits,
any deferred compensation or expenses and all related taxes, and
all travel and entertainment expenses.
2. All adjustments required to be made by Section 8.1 of the Warrant
to Purchase Common Stock of the Company held by John Hancock Mutual
Life Insurance Company as a result of events occurring on or prior
to the Closing Date, and all expenses relating to any such
adjustments, including, without limitation, fees and expenses of
independent experts, shall be fully provided for in the Final
Financial Statements.
3. Adequate reserve shall be made for all commitments to sell
inventory below cost or to purchase inventory at prices exceeding
its realizable value.
4. The Final Financial Statements shall be supported by an audited
schedule setting forth (i) all tobacco inventories, showing type,
origin, grade, crop year, quantity and book value, and, for
committed inventories, the committed price and material financing
and delivery terms, and (ii) all commitments to purchase or deliver
tobacco, showing type, origin, grade, crop year, quantity, purchase
price and material financing and delivery terms, all as of March
31, 1996.
5. All other accounting methods and principles set forth or described
in the Agreement shall modify or supplement GAAP in the preparation
of the Final Financial Statements.
6. Adjustments in the Final Balance Sheet that would be required by
FAS 52 in connection with the unrecognized gain or loss arising
from the translation of foreign currency financial statements that
are incorporated by reference in the Final Balance Sheet by
consolidation, combination or the equity method of accounting shall
be ignored.
7. The Senior Notes shall be written up to their face amount and any
corresponding write-up recognized as an expense in the Final
Financial Statements.
- - 68 -
<PAGE>
Schedule 6.16
- Folium leads negotiations.
- DIMON will support negotiations until the time when StanCom
takes action to exercise its buyout option or terminate
Intabex's access to facility at which point DIMON shall
assume the lead in negotiations.
- If Intabex must make any payments to acquire StanCom's
waiver or other agreement satisfactory to DIMON, DIMON
will make 50% of the payment up to $500,000.
- DIMON will agree to guarantee Intabex's throughput to the
venture facility for current crop season and will state
current nonbinding intention to continue at same levels in
future. Current levels equal 15.5% of current market.
- Costs paid to get StanCom consent will be paid outside
Intabex.
- - 69 -
<PAGE>
--------------------------------
DIMON Incorporated
TO
LASALLE NATIONAL BANK, Trustee
--------------------------------
INDENTURE
Dated as of April 1, 1997
--------------------------------
$140,000,000*
6-1/4% Convertible Subordinated Debentures due March 31, 2007
--------------------------------
- - 70 -
<PAGE>
DIMON Incorporated
Certain Sections of this Indenture relating to
Sections 310 through 318 of the Trust Indenture Act
of 1939, as amended:
Trust Indenture Indenture
Act Section Section
- ---------------- -------------
* 310(a)(1) . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . 608, 610
* 311(a) . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . Not Applicable
* 312(a) . . . . . . . . . . . . . . . . . . . 701,702(a)
(b) . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . 702(c)
* 313(a) . . . . . . . . . . . . . . . . . . . 703(a)
(b)(1) . . . . . . . . . . . . . . . . . . . Not Applicable
(b)(2) . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . . 703(b)
* 314(a)(1) . . . . . . . . . . . . . . . . . . . 704
(a)(2) . . . . . . . . . . . . . . . . . . . 704
(a)(3) . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . 102
(f) . . . . . . . . . . . . . . . . . . . Not Applicable
* 315(a) . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . 514
* 316(a)(1) . . . . . . . . . . . . . . . . . . . 502, 512, 513
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . 507
* 317(a) . . . . . . . . . . . . . . . . . . . 503, 504
(b) . . . . . . . . . . . . . . . . . . . 1003
* 318(a) . . . . . . . . . . . . . . . . . . . 107
_____________________
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.
- - 71 -
<PAGE>
TABLE OF CONTENTS
Page
------
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions. . . . . . . . . . . . . . . . 1
Act. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . 2
Cash Equivalent. . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . . . . . . . 3
Company. . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request. . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . 3
corporation. . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . 3
Holder . . . . . . . . . . . . . . . . . . . . . . . . 3
Indenture. . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date. . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . 4
NASD . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate. . . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . . 4
Outstanding. . . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . . . 5
Predecessor Security . . . . . . . . . . . . . . . . . 5
Redemption Date. . . . . . . . . . . . . . . . . . . . 5
- - 72 -
<PAGE>
Redemption Price . . . . . . . . . . . . . . . . . . . 5
Regular Record Date. . . . . . . . . . . . . . . . . . 5
Responsible Officer. . . . . . . . . . . . . . . . . . 5
Securities . . . . . . . . . . . . . . . . . . . . . . 6
Security Register. . . . . . . . . . . . . . . . . . . 6
Senior Indebtedness. . . . . . . . . . . . . . . . . . 6
Special Record Date. . . . . . . . . . . . . . . . . . 6
Stated Maturity. . . . . . . . . . . . . . . . . . . . 6
Subsidiary . . . . . . . . . . . . . . . . . . . . . . 6
Trustee. . . . . . . . . . . . . . . . . . . . . . . . 6
Trust Indenture Act. . . . . . . . . . . . . . . . . . 6
Vice President . . . . . . . . . . . . . . . . . . . . 6
SECTION 102. Compliance Certificates and Opinions . . . 7
SECTION 103. Form of Documents Delivered to Trustee.. . 7
SECTION 104. Acts of Holders; Record Dates. . . . . . . 8
SECTION 105. Notices, Etc., to Trustee and Company. . . 9
SECTION 106. Notice to Holders; Waiver. . . . . . . . . 9
SECTION 107. Conflict with Trust Indenture Act. . . . . 10
SECTION 108. Effect of Headings and Table of Contents . 10
SECTION 109. Successors and Assigns . . . . . . . . . . 10
SECTION 110. Separability Clause. . . . . . . . . . . . 10
SECTION 111. Benefits of Indenture. . . . . . . . . . . 10
SECTION 112. Governing Law. . . . . . . . . . . . . . . 10
SECTION 113. Legal Holidays . . . . . . . . . . . . . . 11
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally. . . . . . . . . . . . . . 11
SECTION 202. Form of Face of Security . . . . . . . . . 11
SECTION 203. Form of Reverse of Security. . . . . . . . 13
SECTION 204. Form of Trustee's Certificate
of Authentication. . . . . . . . . . . . . 17
SECTION 205. Form of Conversion Notice. . . . . . . . . 17
ARTICLE THREE
The Securities
SECTION 301. Title and Terms. . . . . . . . . . . . . . 18
SECTION 302. Denominations. . . . . . . . . . . . . . . 19
SECTION 303. Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . . . 19
SECTION 304. Temporary Securities . . . . . . . . . . . 20
SECTION 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . 20
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<PAGE>
SECTION 306. Mutilated, Destroyed, Lost and
Stolen Securities . . . . . . . . . . . . . 22
SECTION 307. Payment of Interest; Interest
Rights Preserved. . . . . . . . . . . . . . 22
SECTION 308. Persons Deemed Owners. . . . . . . . . . . 24
SECTION 309. Cancellation . . . . . . . . . . . . . . . 24
SECTION 310. Computation of Interest. . . . . . . . . . 24
ARTICLE FOR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture. . 25
SECTION 402. Application of Trust Money . . . . . . . . 26
ARTICLE FIVE
Remedies
SECTION 501. Events of Default. . . . . . . . . . . . . 26
SECTION 502. Acceleration of Maturity; Rescission
and Annulment. . . . . . . . . . . . . . . 28
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . 29
SECTION 504. Trustee May File Proofs of Claim . . . . . 30
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities. . . . . . . . . . 30
SECTION 506. Application of Money Collected . . . . . . 31
SECTION 507. Limitation on Suits. . . . . . . . . . . . 31
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest
and to Convert . . . . . . . . . . . . . . 32
SECTION 509. Restoration of Rights and Remedies . . . . 32
SECTION 510. Rights and Remedies Cumulative . . . . . . 33
SECTION 511. Delay or Omission Not Waiver . . . . . . . 33
SECTION 512. Control by Holders . . . . . . . . . . . . 33
SECTION 513. Waiver of Past Defaults. . . . . . . . . . 34
SECTION 514. Undertaking for Costs. . . . . . . . . . . 34
SECTION 515. Waiver of Stay or Extension Laws . . . . . 34
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities. . . . 35
SECTION 602. Notice of Defaults . . . . . . . . . . . . 35
SECTION 603. Certain Rights of Trustee. . . . . . . . . 35
SECTION 604. Not Responsible for Recitals or
Issuance of Securities. . . . . . . . . . 36
SECTION 605. May Hold Securities. . . . . . . . . . . . 37
SECTION 606. Money Held in Trust. . . . . . . . . . . . 37
SECTION 607. Compensation and Reimbursement . . . . . . 37
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<PAGE>
SECTION 608. Disqualification; Conflicting Interests. . 38
SECTION 609. Corporate Trustee Required; Eligibility. . 38
SECTION 610. Resignation and Removal;
Appointment of Successor . . . . . . . . . 38
SECTION 611. Acceptance of Appointment by Successor . . 40
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . 40
SECTION 613. Preferential Collection of Claims
Against Company. . . . . . . . . . . . . . 40
SECTION 614. Appointment of Authenticating Agent. . . . 41
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders. . . . . . . . . . 42
SECTION 702. Preservation of Information:
Communications to Holders . . . . . . . . . 43
SECTION 703. Reports by Trustee . . . . . . . . . . . . 43
SECTION 704. Reports by Company . . . . . . . . . . . . 43
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only
on Certain Terms . . . . . . . . . . . . . 44
SECTION 802. Successor Substituted. . . . . . . . . . . 45
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without
Consent of Holders . .. . . . . . . . . . . 45
SECTION 902. Supplemental Indentures with Consent
of Holders. . . . . . . . . . . . . . . . . 46
SECTION 903. Execution of Supplemental Indentures . . . 47
SECTION 904. Effect of Supplemental Indentures. . . . . 47
SECTION 905. Conformity with Trust Indenture Act. . . . 47
SECTION 906. Reference in Securities to
Supplemental Indentures . . . . . . . . . 47
SECTION 907. Subordination Unimpaired . . . . . . . . . 47
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium
and Interest . . . . . . . . . . . . . . . 48
SECTION 1002. Maintenance of Office or Agency. . . . . . 48
SECTION 1003. Money for Security Payments to be
Held in Trust. . . . . . . . . . . . . . . 48
SECTION 1004. Existence. . . . . . . . . . . . . . . . . 50
SECTION 1005. Statement by Officers as to Default. . . . 50
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<PAGE>
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption. . . . . . . . . . . . 50
SECTION 1102. Applicability of Article . . . . . . . . . 50
SECTION 1103. Election to Redeem; Notice to Trust. . . . 51
SECTION 1104. Selection by Trustee of Securities
to Be Redeemed. . . . . . . . . . . . . . 51
SECTION 1105. Notice of Redemption . . . . . . . . . . . 51
SECTION 1106. Deposit of Redemption Price. . . . . . . . 52
SECTION 1107. Securities Payable on Redemption Date. . . 52
SECTION 1108. Securities Redeemed in Part. . . . . . . . 53
ARTICLE TWELVE
Conversion of Securities
SECTION 1201. Conversion Privilege and Conversion
Price. . . . . . . . . . . . . . . . . . . 53
SECTION 1202. Exercise of Conversion Privilege . . . . . 54
SECTION 1203. Fractions of Shares. . . . . . . . . . . . 55
SECTION 1204. Adjustment of Conversion Price.. . . . . . 55
SECTION 1205. Notice of Adjustments of Conversion Price. 61
SECTION 1206. Notice of Certain Corporate Action . . . . 62
SECTION 1207. Company to Reserve Common Stock. . . . . . 63
SECTION 1208. Taxes on Conversion. . . . . . . . . . . . 63
SECTION 1209. Covenant as to Common Stock. . . . . . . . 63
SECTION 1210. Cancellation of Converted Securities . . . 64
SECTION 1211. Provisions in Case of Consolidation,
Merger or Sale of Assets. . . . . . . . . . 64
ARTICLE THIRTEEN
Subordination of Securities
SECTION 1301. Securities Subordinated to Senior
Indebtedness . . . . . . . . . . . . . . . 65
SECTION 1302. Priority and Payment Over Upon
Insolvency and Dissolution. . . . . . . . . 66
SECTION 1303. Prior Payment to Senior Indebtedness
Upon Acceleration of the Securities . . . 67
SECTION 1304. Payment on Securities Suspended
When Senior Indebtedness is in Default . . 68
SECTION 1305. Obligation to Pay Securities Not
Impaired; Provisions Solely to Define
Relative Rights . . . . . . . . . . . . . . 69
SECTION 1306. Payment Permitted if No Default. . . . . . 69
SECTION 1307. Subrogation. . . . . . . . . . . . . . . . 70
SECTION 1308. Trustee to Effectuate Subordination. . . . 70
SECTION 1309. Changes. . . . . . . . . . . . . . . . . . 70
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<PAGE>
SECTION 1310. Notice to Trustee. . . . . . . . . . . . . 71
SECTION 1311. Reliance on Judicial Order or
Certificate of Liquidating Agent . . . . . 71
SECTION 1312. Trustee Not Fiduciary for Holders of
Senior Indebtedness . . . . . . . . . . . . 72
SECTION 1313. Rights of Trustee as Holder of
Senior Indebtedness; Preservation of
Trustee's Rights. . . . . . . . . . . . . . 72
SECTION 1314. Article Applicable to Paying Agents. . . . 72
SECTION 1315. Certain Conversions Deemed Payment . . . . 73
SECTION 1316. Continued Effectiveness. . . . . . . . . . 73
SECTION 1317. Right of Holders of Senior
Indebtedness Not Impaired . . . . . . . . . 73
SECTION 1318. Continuing Agreement.. . . . . . . . . . . 73
ARTICLE FOURTEEN
Repurchase of Securities at the Option of the Holder
Upon a Change of Control
SECTION 1401. Right to Require Repurchase. . . . . . . . 74
SECTION 1402. Notices; Method of Exercising
Repurchase Right, Etc. . . . . . . . . . . 74
SECTION 1403. Deposit of Cash Sufficient to Pay
Repurchase Price . . . . . . . . . . . . . 76
SECTION 1404. Securities Not Repurchased on
Repurchase Date. . . . . . . . . . . . . . 76
SECTION 1405. Securities Repurchased in Part . . . . . . 76
SECTION 1406. Certain Definitions. . . . . . . . . . . . 76
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SIGNATURES AND SEALS. . . . . . . . . . . . . . . . . . . . . . 88
ACKNOWLEDGEMENTS. . . . . . . . . . . . . . . . . . . . . . . 89
- - 77 -
<PAGE>
INDENTURE, dated as of April 1, 1997, between DIMON
Incorporated, a corporation duly organized and existing under the laws of
the Commonwealth of Virginia (herein called the "Company"), having its
principal office at 512 Bridge Street, Danville, Virginia 24541, and
LaSalle National Bank, a banking corporation duly organized and existing
under the laws of the United States of America, as Trustee (herein called
the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its 6-1/4% Convertible Subordinated Debentures due March 31, 2007 (herein
called the "Securities") of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed
by the Company and authenticated and delivered hereunder and duly issued
by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular;
(2) all other terms used herein which are defined in
the Trust Indenture Act, either directly or by reference
therein, have the meanings assigned to them therein;
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<PAGE>
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles, and, except as
otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date
of this instrument; and
(4) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
Certain terms, used principally in Articles Six, Thirteen
and Fifteen, are defined in those Articles.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"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 the purposes of
this definition, when used with respect to any specified Person,
"control" means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee to act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in
The City of Chicago are authorized or obligated by law or executive order
to close.
"Cash Equivalent" shall mean any U.S. Treasury security with
a known market value and, when acquired, a maturity of less than three
months.
- - 79 -
<PAGE>
"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities Exchange Act
of 1934, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties at
such time.
"Common Stock" includes any stock of any class of the
Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which is not subject to
redemption by the Company. However, subject to the provisions of
Section 1211, shares issuable on conversion of Securities Section 1403
shall include only shares of the class designated as Common Stock of
the Company at the date of this instrument or shares of any class or
classes resulting from any reclassification or reclassifications thereof
and which have no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such Successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board,
its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business
shall be administered, which at the date hereof is located at 135 South
LaSalle Street, 18th Floor, Chicago, Illinois 60603-3499.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in Section
307.
"Event of Default" has the meaning specified in Section 501.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
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<PAGE>
"Indenture" means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any
such supplemental indenture, the provisions of the Trust Indenture Act
that are deemed to be a part of and govern this instrument and any such
supplemental indenture, respectively.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Maturity", when used with respect to any Security, means
the date on which the principal of such Security becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, obligation to
repurchase or otherwise.
"NASD" means the National Association of Securities Dealers,
Inc.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1005
shall be the principal executive, financial or accounting officer of the
Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, and who shall be reasonably acceptable to
the Trustee.
"Outstanding," when used with respect to Securities, means,
as of the date of determination, all Securities theretofore authenticated
and delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment, redemption or
repurchase money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; provided that, if such Securities
are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made;
(iii) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to
- - 81 -
<PAGE>
this Indenture, other than any such Securities in respect of
which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations
of the Company; and
(iv) Securities converted into Common Stock pursuant to
Article 12.
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be
so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities
on behalf of the Company.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, trust, association,
joint-stock company, unincorporated organization or government or any
agency or political subdivision thereof.
"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Security
to be redeemed, means the price at which it is to be redeemed pursuant to
this Indenture.
"Regular Record Date" for the Interest payable on any
Interest Payment Date means the March 15, June 15, September 15, or
December 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date.
"Responsible Officer," when used with respect to the
Trustee, means any officer assigned to and working in the corporate trust
- - 82 -
<PAGE>
department 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 any particular
corporate matter, any other officer to whom such matter is referred
because of his or her knowledge of and familiarity with the particular
subject.
"Securities" shall have the meaning set forth in the
recitals hereto.
"Security Register" and "Security Registrar" shall have the
respective meanings specified in Section 305.
"Senior Indebtedness" shall have the meaning set forth in
Section 1301.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any installment of interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or
such installment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by
the Company or by one or more other Subsidiaries, or by the Company and
one or more other Subsidiaries. For the purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"Trading Day" shall have the meaning set forth in Section
1407.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so
amended.
"Vice President", when used with respect to the Trustee,
means any vice president of the Trustee, whether or not designated by a
number or a word or words added before or after the title "vice
president," and when used with respect to the Company, means any
Executive Vice President, any Senior Vice President, the Vice President
and Treasurer and the Vice President-Controller of the Company.
- - 83 -
<PAGE>
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the
Company shall furnish to the Trustee such certificates and opinions as may
be required under the Trust Indenture Act. Each such certificate or
opinion shall be given in the form of an Officers' Certificate, if to be
given by an officer of the Company, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the Trust
Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such
individual, he 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, including any conditions precedent, has been
complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant, including any conditions
precedent, has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or covered
by only one document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
- - 84 -
<PAGE>
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
opinion of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with
respect to such factual matters is in the possession of the Company,
unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in
person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it
is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgements of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Where such execution is by a signer acting in
a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The Company may set a record date in the
circumstances permitted by the Trust Indenture Act for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or
to vote on any action, authorized or permitted to be given or taken by
Holders. If not set by the Company prior to the first solicitation of
a Holder in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list
of Holders required to be provided pursuant to Section 701) prior to
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<PAGE>
such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant
action.
(d) The ownership of Securities shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security shall
bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer or in exchange therefor
or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or
not notation of such action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted
by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing
to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice.
In any case where notice to Holders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled
to receive such notice, either before or after the event, and such waiver
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<PAGE>
shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval
of the Trustee shall constitute a sufficient notification for every
purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
a provision of the Trust Indenture Act that is required under such Act to
be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the
Company shall bind its successor and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities
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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and
their successors hereunder, the holders of Senior Indebtedness and the
Holders of Securities, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
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<PAGE>
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security or the last date on which a Holder has
the right to convert his Securities shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) or
conversion of the Securities need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, or on such last day for conversion, provided that no
interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of
authentication shall be in substantially the forms set forth in this
Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with
the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by
their execution of the Securities.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel
engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed,
all as determined by the officers executing such Securities, as evidenced
by their execution of such Securities.
SECTION 202. Form of Face of Security.
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<PAGE>
DIMON Incorporated
6-1/4% Convertible Subordinated Debenture
due March 31, 2007
No. ____________ $___________
DIMON Incorporated, a corporation duly organized and
existing under the laws of the Commonwealth of Virginia (herein called
the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises
to pay to _________________, or registered assigns, the principal sum
of ____________________ Dollars in cash on March 31, 2007, and to pay
interest thereon from ____________ ___, 1997 or from the most recent
Interest Payment Date to which interest has been paid or duly provided
for, quarterly on March 31, June 30, September 30 and December 31 in each
year, commencing _______________, 1997, at the rate of 6-1/4% per annum,
until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record
Date for such interest, which shall be the March 15, June 15, September
15 or December 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security(or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than 10 days
prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said
Indenture. Payment of the principal of (and premium, if any) and
interest on this Security will be made at the principal corporate trust
office of the Trustee and at any other office or agency maintained by the
Company for such purpose, 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; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated:
DIMON Incorporated
By:
Attest:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of
Securities of the Company designated as its 6-1/4% Convertible Subordinated
Debentures due April 1, 2007 (herein called the "Securities"), limited in
aggregate principal amount to $140,000,000, issued and to be issued under
an Indenture dated as of April 1, 1997 (herein called the "Indenture"),
between the Company and LaSalle National Bank, as Trustee (herein called
the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the holders of Senior Indebtedness and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled, at his option, at any
time on or before the close of business on April 1, 2007, or in case this
Security or a portion hereof is called for redemption or is delivered for
repurchase, then in respect of this Security or such portion hereof until
and including, but (unless the Company defaults in making the payment due
upon redemption or repurchase) not after, the close of business on the
Business Day prior to the Redemption Date, or the Trading Day preceding
the Repurchase Date, as the case may be, to convert this Security (or any
portion of the principal amount hereof which is $1,000 or an integral
multiple thereof), at the principal amount hereof, or of such portion,
into fully paid and non-assessable shares (calculated as to each
conversion to the nearest 1/100 of a share) of Common Stock of the
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<PAGE>
Company at a conversion price equal to $28.77 aggregate principal amount
of Securities for each share of Common Stock (or at the current adjusted
conversion price if an adjustment has been made as provided in the
Indenture). Such conversion shall be made by surrender of this Security,
duly endorsed or assigned to the Company or in blank, at the principal
corporate trust office of the Trustee or at any other office or agency
maintained by the Company for such purpose, accompanied by written notice
to the Company that the Holder hereof elects to convert this Security, or
if less than the entire principal amount hereof is to be converted, the
portion hereof to be converted, and, in case such surrender shall be made
during the period from the close of business on any Regular Record Date
next preceding any Interest Payment Date to the opening of business on
such Interest Payment Date (the "Interest Period"), also accompanied by
payment in New York Clearing House Funds or other funds acceptable to the
Company of an amount equal to the interest payable on such Interest
Payment Date on the principal amount of this Security then being
converted. Notwithstanding the foregoing, in the case of Securities or
portions thereof that have been called for redemption and, pursuant to
Section 1301 of the Indenture, as a result of such redemption the right
to convert such Securities terminates during the Interest Period, any
such Securities surrendered for conversion during such Interest Period
shall be accompanied by payment, in New York Clearing House Funds or
other funds acceptable to the Company, of an amount equal to the
difference between (i) the interest on the principal amount of such
Securities payable on such Interest Payment Date and (ii) the amount of
accrued interest on the principal amount of such Securities to but not
including the Redemption Date. Subject to the aforesaid requirements for
payment and, in the case of a conversion after the Regular Record Date
next preceding any Interest Payment Date and on or before such Interest
Payment Date, to the right of the holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest (with certain exceptions provided in the
Indenture), no payment or adjustment is to be made on conversion for
interest accrued hereon or for dividends on the Common Stock issued upon
conversion. No fractions of shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional
interest the Company shall pay a cash adjustment as provided in the
Indenture. The conversion price is subject to adjustment as provided in
the Indenture. In addition, the Indenture provides that in case of
certain consolidations or mergers to which the Company is a party or the
transfer of substantially all of the assets of the Company, the Indenture
shall be amended, without the consent of any Holders of Securities, so
that this Security, if then outstanding, will be convertible as specified
above, only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or transfer by a
holder of the number of shares of Common Stock into which this Security
might have been converted immediately prior to such consolidation, merger
or transfer (assuming such holder of Common Stock failed to exercise any
rights of election and received per share the kind and amount of
securities, cash and other property received per share by a plurality of
non-electing shares).
The Securities are subject to redemption upon not less than
30 days' notice by mail at any time on or after April 1, 2000, as a whole
or in part, at the election of the Company, at the following Redemption
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<PAGE>
Prices (expressed as percentages of the principal amount): If redeemed
during the 12-month period beginning April 1 of the years indicated,
Redemption Redemption
Year Price Year Price
2000 104.375% 2004 101.875%
2001 103.750 2005 101.25
2002 103.125 2006 100.625
2003 102.500
and thereafter at a Redemption Price equal to 100% of the principal
amount, together in the case of any such redemption with accrued interest
to the Redemption Date. Any interest installments having a Stated
Maturity on or prior to such Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of
record at the close of business on the relevant Record Dates referred to
on the face hereof, all as provided in the Indenture. The Redemption
Price shall be paid in cash.
In certain circumstances involving the occurrence of a
Change of Control (as defined in the Indenture), each Holder shall have the
right at such Holder's option, but subject to the conditions in the
Indenture, to require the Company to repurchase all or part of the
Securities at 100% of their principal amount plus accrued interest. The
Repurchase Price shall be paid in cash.
In the event of a redemption or conversion of this Security
in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness, and
this Security is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided
and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
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<PAGE>
obligations of the Company and the rights of the Holders of the
Securities under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security
and of any Security issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of
(and premium, if any) and interest on this Security at the times, place
and rate, and in the coin or currency, herein prescribed or to convert
this Security as provided in the Indenture.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this Security for
registration of transfer at the principal corporate trust office of the
Trustee or at any other office or agency maintained by the Company for
such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar
duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued
to the designated transferee or transferees.
Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Securities are exchangeable for a like aggregate principal amount
of Securities of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
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<PAGE>
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within-
mentioned Indenture.
LASALLE NATIONAL BANK,
as Trustee
By
Authorized Officer
SECTION 205. Form of Conversion Notice.
To DIMON Incorporated:
The undersigned owner of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which
is $1,000 or an integral multiple thereof) below designated, into shares
of Common Stock of DIMON Incorporated in accordance with the terms of the
Indenture referred to in this Security, and directs that the certificate
or certificates for the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and
any Securities representing any unconverted principal amount hereof, be
issued in the name of and delivered to the undersigned, unless a
different name has been indicated below. If shares are to be issued in
the name of a person other than the undersigned, the undersigned will pay
any transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest accompanies this
Security.
Principal Amount to be converted
(in an integral multiple of $1,000, if less than all):
$_______________
FILL IN FOR REGISTRATION OF SHARES:
_________________________________________________________________________
Name
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<PAGE>
_________________________________________________________________________
Address
_________________________________________________________________________
Please print name and address (including zip code)
Please Insert Social Security or
Other Taxpayer Identifying
Number
__________________
__________________
Dated:______________ Signature_________________________
(must conform in all respects
to name of Holder appearing on
face hereof)
Fill in for registration of shares of Common Stock and
Securities if to be issued otherwise than to the Holder:
_____________________________ Social Security or Other
(Name) Taxpayer Identifying Number:
_____________________________ ________________________________
(Name)
_____________________________
Please print name and address
(including zip code)
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
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<PAGE>
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is limited to
$140,000,000, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Sections 304, 305, 306, 906, 1108 or 1202.
The Securities shall be known and designated as the "6-1/4%
Convertible Subordinated Debentures due April 1, 2007" of the Company.
Their Stated Maturity shall be March 31, 2007, and they shall bear
interest at the rate of 6-1/4% per annum, from April 1, 1997 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable quarterly on March 31, June 30,
September 30, and December 31, commencing June 30, 1997, until the
principal thereof is paid or made available for payment.
The principal of (and premium, if any) and interest on the
Securities shall be payable at the Corporate Trust Office of the Trustee
and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
The Securities shall be redeemable as provided in Article
Eleven.
The Securities shall be convertible as provided in Article
Twelve.
The Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Thirteen.
The Securities shall be subject to repurchase by the
Company, at the option of the Holders, as provided in Article Fourteen.
SECTION 302. Denominations.
The Securities shall be issuable only in fully registered
form without coupons and only in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these officers
on the Securities may be manual or facsimile.
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<PAGE>
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such
Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed
by the Company to the Trustee for authentication, together with a Company
Order for the authentication and delivery of such Securities; and the
Trustee in accordance with such Company Order shall authenticate and
deliver such Securities as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears
on such Security a certificate of authentication substantially in the
form provided for herein executed by the Trustee by manual signature, and
such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and
delivered hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the
Company may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in
lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing
such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After
the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to
Section 1002, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities the Company shall
execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as
definitive Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
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<PAGE>
The Company shall keep or cause to be kept a register (the
register maintained either at the Corporate Trust Office of the Trustee
or in any other office or agency designated pursuant to Section 1002
being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities
and of transfers of Securities. Any such register shall be in written
form or in any other form capable of being converted into written form
within a reasonable time. The Trustee is hereby appointed a "Security
Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any Security
at an office or agency of the Company designated pursuant to Section 1002
for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations
and of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate
and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar
duly executed, by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Sections 304,
906, 1108 or 1202 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities selected for redemption under Section 1104 and
ending at the close of business on the day of such mailing, or (ii) to
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<PAGE>
register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of
any Security and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute and
upon its request the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Security, a new Security of like tenor
and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in
its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent permitted by applicable law) all other rights and
remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to
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the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable
to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities
(or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following Clause
(2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the
Securities may be listed and any applicable requirements of
the NASD, and upon such notice as may be required by such
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exchange or by the NASD, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried
by such other Security.
In the case of any Security which is converted after any
Regular Record Date but on or before the next Interest Payment Date,
interest with a Stated Maturity on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion,
and such interest (whether or not punctually paid or duly provided for)
shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on such
Regular Record Date.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Security is registered as
the absolute owner of such Security for the purpose of receiving payment
of principal of (and premium, if any) and (subject to Section 307)
interest on such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to
the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or conversion shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and
shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled Securities held
by the Trustee shall be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest.
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Interest on the Securities shall be computed on the basis of
a 360-day year of twelve 30-day months.
ARTICLE FOR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except
as to any surviving rights of conversion, registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee,
on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture,
when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or
paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest to the date of such deposit (in the
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case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614
and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall
survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall
be held in trust and applied by it, in accordance with the provisions of
the Securities and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such
money has been deposited with the Trustee. All moneys deposited with the
Trustee pursuant to Section 401 (and held by it or any Paying Agent) for
the payment of Securities subsequently converted shall be returned to the
Company upon Company Request.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of
the following events (whatever the reason for such Event of Default and
whether it shall be occasioned by the provisions of Article Thirteen or
be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
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(1) default in the payment of any interest upon any
Security when it becomes due and payable, whether or not such
payment is prohibited by the provisions of Article Thirteen,
and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or
premium, if any, on) any Security at its Maturity whether or
not such payment is prohibited by the provisions of Article
Thirteen; or
(3) default in the payment of the Repurchase Price
(as defined in Section 1401) in respect of any Security on
the Repurchase Date (as defined in Section 1401) therefor in
accordance with the provisions of Article Fourteen, whether
or not such payment is prohibited by the provisions of
Article Thirteen; or
(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other
than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period
of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities a
written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of
the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of
the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary
case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a
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bankruptcy or insolvent, or the consent by it to the entry of
a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or
relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its
property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company in
furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in
every such case the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Outstanding Securities may declare the
principal of all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by
Holders), and upon any such declaration, such principal shall become
immediately due and payable.
At any time after such a declaration of acceleration has
been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities, by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(A) all Defaulted Interest on all
Securities,
(B) the principal of (and premium, if
any, on) any Securities which have become due
otherwise than by such declaration of
acceleration and interest thereon at the rate
borne by the Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue
interest at the rate borne by the Securities, and
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(D) all sums paid or advanced by the
Trustee hereunder and the reasonable
compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
and
(2) all Events of Default, other than the nonpayment
of the principal of Securities which have become due solely
by such declaration of acceleration, having been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon. Upon receipt by the Trustee of written notice
declaring such an acceleration, or any rescission and annulment of any
such declaration, pursuant to this Section 502 with respect to the
Securities, a record date shall automatically and without any other
action by any Person be set for the purpose of determining the Holders of
Outstanding Securities entitled to join in such declaration, or
rescission and annulment, as the case may be, which record date shall be
the close of business on the day the Trustee receives such notice. The
Holders of Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in
such declaration, or rescission and annulment, as the case may be,
whether or not such Holders remain Holders after such record date;
provided that, unless such declaration, or rescission and annulment, as
the case may be, shall have become effective by virtue of Holders of the
requisite principal amount of Outstanding Securities on such record date,
(or their duly appointed agents) having joined therein on or prior to the
90th day after such record date, such declaration, or rescission and
annulment, as the case may be, shall automatically and without any action
by any Person be canceled and of no further effect.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on
any Security when such interest becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of the principal
of (or premium, if any, on) any Security at the Maturity
thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest, and,
to the extent that payment of such interest shall be legally enforceable,
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interest on any overdue principal (and premium, if any) and on any
overdue interest, at the rate borne by the Securities, and, in addition
thereto, 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.
If the Company fails to pay such amounts immediately upon
such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums
so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor
upon the Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company
or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the
rights of the Holders by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company
(or any other obligor upon the Securities), its property or its
creditors, the Trustee regardless of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the company for the payment of overdue principal
or interest shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the
Trust Indenture Act in order to have claims of the Holders and the
Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official 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 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
607.
No provision of this Indenture 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 Securities or the rights of any Holder thereof
or to authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding; provided that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar
official and be a member of a creditors or other similar committee.
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SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Subject to Article Thirteen, any money collected by the
Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any)
or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully
paid:
FIRST: To the payment of all amounts due the Trustee
under Section 607; and
SECOND: To the payment of the amounts then due and
unpaid for principal of (and premium, if any) and interest on
the Securities in respect of which or for the benefit of
which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and
premium, if any) and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute
any action, suit or proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless
(1) such Holder has previously given written notice
to the Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect
of such Event of Default in its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to
institute any such action, suit or proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in aggregate principal
amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have
any right in any manner whatever by virtue of, or by availing itself of,
any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders, or to obtain or to seek to obtain priority
or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest and to Convert.
Notwithstanding any other provision in this Indenture, but
subject to the provisions of Article Thirteen, the Holder of any Security
shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section
307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption or repurchase,
on the Redemption Date, Repurchase Date) and to convert such Security in
accordance with Article Twelve and to institute suit for the enforcement
of any such payment and right to convert, and none of the rights
described in this Section 508 shall be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had
been instituted.
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SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal amount of
the Outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee,
provided that
(1) such direction shall not be in conflict with any
applicable rule of law or with this Indenture, and
(2) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
Upon receipt by the Trustee of any such direction with
respect to the Securities, a record date shall automatically and without
any other action by any Person be set for determining the Holders of
Outstanding Securities entitled to join in such direction, which record
date shall be the close of business on the day the Trustee receives such
direction. The Holders of Outstanding Securities on such record dates
(or their duly appointed agents), and only such Persons, shall be
entitled to join in such direction, whether or not such Holders remain
Holders after such record date; provided that, unless such direction
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shall have become effective by virtue of holders of the requisite
principal amount of Outstanding Securities on such record date (or their
duly appointed agents) having joined therein on or prior to the 90th day
after such record date, such direction shall automatically and without
any action by any Person be canceled and of no further effect.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of (or premium,
if any) or interest on any Security, or
(2) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended
without the consent of the Holder of each Outstanding
Security affected.
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 514. 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,
suffered or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against such party litigant, in the manner and
to the extent provided in the Trust Indenture Act; provided, that this
Section shall have no application to any suit instituted by the Company
or for the enforcement of the right to convert any Security in accordance
with Article Twelve.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim to take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly
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waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default
hereunder as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character
specified in Section 501(6), no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default. On
the same date the Trustee gives the Holders any notice under this Section
602, the Trustee also shall give such notice to any holder of Senior
Indebtedness which has made a written request to the Trustee for notice
under this Section 602 and provided the Trustee with its address.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document
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believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request
or Company Order and any resolution of the Board of Directors
may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) 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 in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) 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
pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
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The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities. The
Trustee shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 608 and 613, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Authenticating
Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money received by
it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to
its negligence or bad faith;
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the
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exercise or performance of any of its powers or duties
hereunder; and
(4) that the Company's obligation under this Section
607 to compensate the Trustee and to pay and reimburse the
Trustee for such expenses, disbursements and advances shall
not be subordinate to the payment of Senior Indebtedness of
the Company pursuant to Article Thirteen and shall constitute
additional indebtedness.
The Company's payment obligations pursuant to this Section 607 shall
survive the discharge of this Indenture. When the trustee incurs
expenses after the occurrence of an Event of Default specified in Section
501(6) or (7), the expenses are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act
and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall
be a Person that is eligible pursuant to the Trust Indenture Act to act
as such and has a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by Federal, State or District
of Columbia authority. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee
under Section 611.
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(b) The Trustee may resign subject to the provisions of
Section 310 of the Trust Indenture Act at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608
after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee, or (ii) subject to Section 514, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee
for any cause, the Company, by a Board Resolution, shall promptly appoint
a successor Trustee. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee
by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided such corporation shall
be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had
itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
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If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
which shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon original issue and upon exchange, registration of
transfer, partial conversion or partial redemption or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be subject to acceptance by the Company and
shall at all times be a corporation organized and doing business under
the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority.
If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with
the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall (unless the agency is terminated by the
Trustee) continue to be an Authenticating Agent, provided such
corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Company.
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Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee
may appoint a successor Authenticating Agent which shall be subject to
acceptance by the Company and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall
become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating
Agent. No successor Authenticating Agent shall be appointed unless
eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section,
and the Trustee shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 607.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of authentication
in the following form:
This is one of the Securities described in the within-
mentioned Indenture.
LASALLE NATIONAL BANK,
as Trustee
By____________________________________________________
As Authenticating Agent
By____________________________________________________
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee:
(a) quarterly, not more than 15 days after each
Regular Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders
as of such Regular Record Date, and
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(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of
any such request, a list of similar form and content as of a
date not more than 15 days prior to the time such list is
furnished;
excluding from any such list names and addresses received by the Trustee
in its capacity as Security Registrar.
SECTION 702. Preservation of Information: Communications to Holders.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders contained in
the most recent list furnished to the Trustee as provided in Section 701
and the names and addresses of Holders received by the Trustee in its
capacity as Security Registrar. To the extent permitted by applicable
law, the Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and duties of the Trustee, shall
be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to the names
and addresses of Holders made pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and with the
Company and, if required by any applicable rule or regulation, with the
NASD. The Company will notify the Trustee when the Securities are listed
on any stock exchange.
SECTION 704. Reports by Company.
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The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports,
and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such
Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 shall be filed with the Trustee within 15
days after the same is so required to be filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(1) the person formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
Person organized and validly existing under the laws of the
United States of America, any state thereof or the District
of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered by such Person to
the Trustee, in form satisfactory to the trustee, the due and
punctual payment of the principal of (and premium, if any)
and interest on all the Securities and the performance of
every covenant of this Indenture on the part of the Company
to be performed or observed and shall have provided for
conversion rights in accordance with Section 1211;
(2) immediately after giving effect to such
transaction, no Event of Default, and no event which, after
notice or lapses of time or both, would become an Event of
Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture
comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been
complied with.
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For purposes of this Section and Section 802, a conveyance,
transfer or lease of the properties and assets of the Company
"substantially as an entirety" shall mean a conveyance, transfer of lease
of properties and assets of the Company representing 80% or more of the
fair value (as determined in good faith by the board of Directors) of all
of the properties and assets of the Company on the date of such
conveyance, transfer or lease.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety in
accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, 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, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto,
in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power
herein conferred upon the Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the conversion
rights of Holders pursuant to the requirements of Article
Twelve; or
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(5) to cure any ambiguity, to correct or supplement
any provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with
respect to matters or questions arising under this Indenture,
provided such action pursuant to this Clause (5) shall not
adversely affect the interests of the Holders.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority
in aggregate principal amount of the Outstanding Securities, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of
the Holders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of,
or any installment of interest on, any Security, or reduce
the principal amount thereof or the rate of interest thereon
or any premium payable upon the redemption thereof, or change
the place of payment where, or the coin or currency in which,
any Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after
the Redemption Date) or, in the case of a repurchase pursuant
to Article Fourteen, on or after the Repurchase Date, or
adversely affect the right to convert any Security as
provided in Article Twelve (except as permitted by Section
901(4)), or modify the provisions of this Indenture with
respect to the subordination of the Securities in a manner
adverse to the Holders, or
(2) reduce the percentage in aggregate principal
amount of the Outstanding Securities, the consent of whose
Holders is required for any such supplemental indenture, or
the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided
for in this Indenture, or
(3) modify any of the provisions of this Section or
Section 513, except to increase any such percentage or to
provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby.
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It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully
protected in relying upon, an Opinion of Counsel stating at the execution
of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture which, in the Trustee's sole discretion,
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee
as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities so modified as to conform, in
the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated
and delivered by the Trustee in exchange for Outstanding Securities.
SECTION 907. Subordination Unimpaired.
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No provision in any supplemental indenture which adversely
affects the superior position of the holders of Senior Indebtedness shall
be effective against holders of Senior Indebtedness who have not
consented thereto.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of
(and premium, if any) and interest on the Securities in accordance with
the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency where
Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange, where
Securities may be surrendered for conversion and where notices and
demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company hereby initially appoints the
Trustee as its agent to receive all such presentations, surrenders,
notices and demands at its Corporate Trust Office. If at any time the
appointment of the Trustee as the Company's agent for such purposes shall
have been terminated and 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, and the Company hereby
appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations. The Company will 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.
SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying
Agent, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Securities, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal (and premium, if any) or interest so
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becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents,
it will, prior to each due date of the principal of (and premium, if any)
or interest on any Securities, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the
Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so
to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (i) comply with the provisions
of the Trust Indenture Act applicable to it as a Paying Agent and (ii)
during the continuance of any default by the Company (or any other
obligor upon the Securities) in the making of any payment in respect of
the Securities, upon the written request of the Trustee, forthwith pay to
the Trustee all sums held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall be released from
all further liability with respect to such money.
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
(and premium, if any) or interest on any Security and remaining unclaimed
for two years after such principal (and premium, if any) or interest has
become due and payable shall, subject to applicable escheat and abandoned
property law, be paid to the Company on Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, 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 a newspaper published in the English language,
customarily published on each Business Day and of general circulation in
The Borough of Manhattan, The City of New York, 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 publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
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SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect
its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Holders.
SECTION 1005. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company ending after the date
hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions
of this Indenture (without regard to any period of grace or requirement
of notice provided hereunder) and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which
they may have knowledge.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
The Securities may be redeemed otherwise than at the option
of the Holder as provided in Article Fourteen at the election of the
Company, as a whole or from time to time in part, at any time on or after
April 1, 2000, at the Redemption Prices specified in the form of Security
hereinbefore set forth for redemptions, together with accrued interest to
the Redemption Date. The Redemption Price shall be paid in cash.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture,
shall be made in accordance with such provision and this Article.
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SECTION 1103. Election to Redeem; Notice to Trust.
The election of the Company to redeem any Securities
pursuant to Section 1101 shall be evidenced by a Board Resolution. In
case of any redemption at the election of the Company of less than all the
Securities, the Company shall, at least 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory
to the Trustee), notify the Trustee of such Redemption Date and of the
principal amount of Securities to be redeemed.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $1,000 or any integral
multiple thereof) of the principal amount of Securities of a denomination
larger than $1,000.
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such
Security shall be deemed (so far as may be) to be the portion selected
for redemption. Securities which have been converted during a selection
of Securities to be redeemed shall be treated by the Trustee as
Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each
Security Registrar in writing of the Securities selected for redemption
and, in the case of any Securities selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Securities which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of Redemption shall be given by first-class mail,
postage prepaid, mailed not less than 10 nor more than 60 days prior to
the Redemption Date, to each Holder of Securities to be redeemed, at his
latest address appearing in the Security Register.
All notices of redemption shall state:
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(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are
to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price
will become due and payable upon each such Security to be
redeemed and that interest thereon will cease to accrue on
and after said date,
(5) the conversion price, the date on which the right
to convert the principal of the Securities to be redeemed
will terminate and the place or places where such Securities
may be surrendered for conversion, and
(6) the place or places where such Securities are to
be surrendered for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the
Company.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section
1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date
other than any Securities called for redemption on that date which have
been converted prior to the date of such deposit.
If any Security called for redemption is converted, any
money deposited with the Trustee or with any Paying Agent or so segregated
and held in trust for the redemption of such Security shall (subject to
any right of the Holder of such Security or any Predecessor Security to
receive interest as provided in the last paragraph of Section 307) be
paid to the Company upon Company Request or, if then held by the Company,
shall be discharged from such trust.
SECTION 1107. Securities Payable on Redemption Date.
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Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified, and from and after
such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to
bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company
at the Redemption Price, together with accrued interest to the Redemption
Date; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if
any) shall, until paid, bear interest from the Redemption Date at the
rate borne by the Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that
purpose pursuant to Section 1002 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Conversion of Securities
SECTION 1201. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any portion
of the principal amount thereof which is $1,000 or an integral multiple
of $1,000 may be converted at the principal amount thereof, or of such
portion thereof, into fully paid and nonassessable shares (calculated as
to each conversion to the nearest 1/100 of a share) of Common Stock of
the Company, at the conversion price, determined as hereinafter provided,
in effect at the time of conversion. Such conversion right shall expire
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at the close of business on March 31, 2007. In case a Security or
portion thereof is called for redemption or is delivered for repurchase,
such conversion right in respect of the Security or portion so called
shall expire at the close of business on the Business Day prior to the
Redemption Date, or the Trading Day preceding the Repurchase Date (as
such terms are defined in Article Fourteen), as the case may be, unless
the Company defaults in making the payment due upon redemption or
repurchase.
The price at which shares of Common Stock shall be delivered
upon conversion (herein called the "conversion price") shall be initially
$28.77 per share of Common Stock. The conversion price shall be adjusted
in certain instances as provided in Section 1204.
SECTION 1202. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of
any Security to be converted shall surrender such Security, duly endorsed
or assigned to the Company or in blank, at any office or agency of the
Company maintained for that purpose pursuant to Section 1002, accompanied
by written notice to the Company at such office or agency that the Holder
elects to convert such Security or, if less than the entire principal
amount thereof is to be converted, the portion thereof to be converted.
Securities surrendered for conversion during the period from the close of
business on any Regular Record Date next preceding any Interest Payment
Date to the opening of business on such Interest Payment Date (the
"Interest Period") shall be accompanied by payment of an amount equal to
the interest payable on such Interest Payment Date on the principal
amount of Securities being surrendered for conversion, except that in the
case of Securities or portions thereof that have been called for
redemption and, pursuant to Section 1201 hereof, as a result of such
redemption, the right to convert such Securities terminates during the
Interest Period, any such Securities surrendered for conversion during
such Interest Period shall be accompanied by payment in an amount equal
to the difference between (i) the interest on the principal amount of
such Securities payable on such Interest Payment Date and (ii) the amount
of accrued interest on the principal amount of such Securities to, but
not including, the Redemption Date. Except as provided in the preceding
sentence and subject to the fourth paragraph of Section 307, no payment
or adjustment shall be made upon any conversion on account of any
interest accrued on the Securities surrendered for conversion or on
account of any dividends on the Common stock issued upon conversion. All
payments required by this paragraph to be made by Holder upon the
surrender of Securities for conversion shall be made in New York Clearing
House funds or other funds acceptable to the Company.
Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of
such Securities for conversion in accordance with the foregoing
provisions, and at such time the rights of the Holders of such
Securities as Holders shall cease, and the Person or Persons entitled
to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock
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at such time. As promptly as practicable on or after the conversion
date, the Company shall issue and shall deliver at such office or agency
a certificate or certificates for the number of full shares of Common
Stock issuable upon conversion, together with payment in lieu of any
fraction of a share, as provided in Section 1203.
In the case of any Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the
Company, a new Security or Securities of authorized denominations in
aggregate principal amount equal to the unconverted portion of the
principal amount of such Security.
SECTION 1203. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon
conversion of Securities. If more than one Security shall be surrendered
for conversion at one time by the same Holder, the number of full shares
which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or specified
portions thereof) so surrendered. Instead of any fractional share of
Common Stock which would otherwise be issuable upon conversion of any
Security or Securities (or specified portions thereof); the Company shall
pay a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the market price per share of Common Stock (as
determined by the Board of Directors or in any manner prescribed by the
Board of Directors) at the close of business on the day of conversion.
SECTION 1204. Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or
other distribution on any class of capital stock of the Company
exclusively in Common Stock, the conversion price in effect at the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such conversion price by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (1), the number of
shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Company.
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(2) Subject to the last sentence of paragraph (7) of
this Section, in case the Company shall issue rights, options or
warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the current market price per share (determined as provided in
paragraph (8) of this Section) of the Common Stock on the date fixed for
the determination of stockholders entitled to receive such rights or
warrants, the conversion price in effect at the opening of business on
the day following the date fixed for such determination shall be reduced
by multiplying such conversion price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for subscription or
purchase would purchase at such current market price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such
reduction to become effective immediately after the opening of business
on the day following the date fixed for such determination. For the
Purposes of this paragraph (2), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not issue any rights or warrants in respect of shares of
Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
conversion price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of
Common Stock, the conversion price in effect at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, shares of any class of capital stock, cash or assets
(including securities, but excluding any (i) rights or warrants referred
to in paragraph (2) of this Section, (ii) any dividend or distribution
paid exclusively in cash, (iii) any dividend or distribution referred to
in paragraph (1) of this Section and (iv) any distribution or dividend
paid upon a merger or consolidation to which Section 1211 applies), the
conversion price shall be adjusted so that the same shall equal the price
determined by multiplying the conversion price in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which
the numerator shall be the current market price per share (determined as
provided in paragraph (8) of this Section) of the Common Stock on the
date fixed for such determination less the then fair market value (as
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determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee),
of the portion of the assets, shares, cash or evidences of indebtedness
so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common
Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. If
the Board of Directors determines the fair market value of any
distribution for purposes of this paragraph (4) by reference to the
actual or when issued trading market for any securities comprising such
distribution, it must in doing so consider the prices in such market over
the same period used in computing the current market price per share
pursuant to paragraph (8) of this Section if such prices are available in
such market for such period. For purposes of this paragraph (4), any
dividend or distribution that includes shares of Common Stock, rights or
warrants to subscribe for or purchase shares of Common Stock or other
securities convertible into or exchangeable for shares of Common Stock
shall be deemed instead to be (a) a dividend or distribution of the
evidences of indebtedness, cash, assets or shares of capital stock other
than such shares of Common Stock, such rights or warrants or such other
convertible or exchangeable securities (making any conversion price
reduction required by this paragraph (4)) immediately followed by (b) in
the case of such shares of Common Stock or such rights or warrants, a
dividend or distribution thereof (making any further conversion price
reduction required by paragraph (1) or (2) of this Section, except (i)
the Reference Date of such dividend or distribution as defined in this
paragraph (4) shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraphs
(1) and (2) of this Section and (ii) any shares of Common Stock included
in such dividend or distribution shall not be deemed "outstanding at the
close of business on the date fixed for such determination" within the
meaning of paragraph (1) of this Section) or (c) in the case of such
other convertible or exchangeable securities, a dividend or distribution
of such number of shares of Common Stock as would then be issuable upon
the conversion exchange thereof, whether or not the conversion or
exchange of such securities is subject to any conditions (making any
further conversion price reduction required paragraph (1) of this
Section, except (i) the Reference Date of such dividend or distribution
as defined in this paragraph (4) shall be substituted as "the date fixed
for the determination of stockholders entitled to receive such
distribution" and "the date fixed for such determination" and (ii) the
shares deemed to constitute such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination," each within the meaning of paragraph (1) of this
Section). Notwithstanding the foregoing, in the event that the Company
shall distribute rights or warrants (other than those referred to in
paragraph (2) of this Section) ("Rights") pro rata to holders of Common
Stock, the Company shall make proper provision so that each Holder of a
Security who converts such Security (or any portion thereof) after the
record date for such distribution and prior to the expiration or
redemption of the Rights shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion (the "Conversion Shares"), a number of Rights to be determined
as follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates evidencing
such Rights (the "Distribution Date"), the same number of Rights to which
a holder of a number of shares of Common Stock equal to the number of
Conversion Shares is entitled at the time of such conversion in
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accordance with the terms and provisions of and applicable to the Rights,
and (ii) if such conversion occurs after the Distribution Date, the same
number of Rights to which a holder of the number of shares of Common
Stock into which the principal amount of the Security so converted was
convertible immediately prior to the Distribution Date would have been
entitled on the Distribution Date in accordance with the terms and
provisions of and applicable to the Rights.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed upon a merger or consolidation to which Section 1211
applies or as part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with (I) the
aggregate amount of any other distributions to all holders of its Common
Stock made exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment
pursuant to this paragraph (5) has been made and (II) the aggregate of
any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) of any other consideration payable in respect of any
tender offer by the Company or any of its subsidiaries for all or any
portion of the Common Stock concluded within the 12 months preceding the
date of payment of such distribution and in respect of which no
adjustment pursuant to paragraph (6) of this Section has been made,
exceeds 12.5% of the product of the current market price per share of the
Common Stock on the Calculation Date (as defined below) times the number
of shares of Common Stock outstanding on such Calculation Date, then, and
in each such case, immediately after the close of business on such
Calculation Date, the conversion price shall be adjusted so that the same
shall equal the price determined by multiplying the conversion price in
effect immediately prior to the close of business on the Calculation Date
by a fraction (i) the numerator of which shall be equal to the current
market price per share (determined as provided in paragraph (8) of this
Section) of the Common Stock on the Calculation Date less an amount equal
to the quotient of (x) the excess of such combined amount over such 12.5%
and (y) the number of shares of Common Stock outstanding on such
Calculation Date and (ii) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8)
of this Section) of the Common Stock on such Calculation Date. As used
in this paragraph (5), "Calculation Date" means, in the case of a
dividend, the date of declaration of such dividend and, in the case of
any other type of distribution, the date for the determination of holders
of shares of Common Stock entitled to receive such distribution.
(6) In case a tender offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and
such tender offer (as amended upon the expiration thereof) shall require
the payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as
defined below)) of an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose determination shall be
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conclusive and described in a Board Resolution) that combined together
with (I) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of
such tender offer, of any other consideration payable in respect of any
other tender offer by the Company or any Subsidiary for all or any
portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to this paragraph (6) has been made and (II) the aggregate
amount of any distributions to all holders of the Company's Common Stock
made exclusively in cash within the 12 months preceding the expiration of
such tender offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section has been made, exceeds 12.5% of the product
of the current market price per share of the Common Stock (determined as
provided in paragraph (8) of this Section) as of the last time (the
"Expiration Time") tenders could have been made pursuant to such tender
offer (as it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time,
then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the conversion price
shall be adjusted so that the same shall equal the price determined by
multiplying the conversion price immediately prior to close of business
on the date of the Expiration Time by a fraction (i) the numerator of
which shall be equal to (A) the product of (I) the current market price
per share of the Common Stock (determined as provided in paragraph (8) of
this Section) on the date of the Expiration Time and (II) the number of
shares of Common Stock outstanding (including any tendered shares) as of
the Expiration Time less (B) the amount of cash plus the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares, and (ii) the denominator
of which shall be equal to the product of (A) the current market price
per share of the Common Stock (determined as provided in paragraph (8) of
this Section) as of the Expiration Time and (B) the number of shares of
Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so accepted up to
any such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 1211 applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to
all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraph
(4) of this Section), and (b) a subdivision or combination, as the case
may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination
becomes effective", as the case may be, and "the day upon which such
subdivision or combination becomes effective" within the meaning of
paragraph (3) of this Section). Rights or warrants issued by the Company
to all holders of its Common Stock entitling the holders thereof to
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subscribe for or purchase shares of Common Stock, which rights or
warrants (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of
future issuances of Common Stock, in each case in clauses (i) through
(iii) until the occurrence of a specified event or events ("Trigger
Event"), shall for purposes of this Section 1204 not be deemed issued
until the occurrence of the earliest Trigger Event.
(8) For the purpose of any computation under this
paragraph and paragraphs [(2), (4) and (5)] of this Section, the current
market price per share of Common Stock on any date shall be deemed to be
the average of the daily Closing Prices for the 5 consecutive Trading
Days selected by the Company commencing not more than 20 Trading Days
before, and ending not later than, the date in question provided,
however, that (i) if the "ex" date for any event (other than the issuance
or distribution requiring such computation) that requires an adjustment
to the conversion price pursuant to paragraph (1), (2), (3), (4), (5)
or (6) above occurs on or after the 20th Trading Day prior to the day in
question and prior to the "ex" date for the issuance or distribution
requiring such computation, the Closing Price for each Trading Day prior
to the "ex" date for such other event shall be adjusted by multiplying
such Closing Price by the same fraction by which the conversion price is
so required to be adjusted as a result of such other event, (ii) if the
"ex" date for any event (other than the issuance of distribution
requiring such computation) that requires an adjustment to the conversion
price pursuant to paragraph (1), (2), (3), (4), (5) or (6) above occurs
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on or after the "ex" date for the issuance or distribution requiring such
computation and on or prior to the day in question, the Closing Price for
each Trading Day on and after the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the reciprocal of the
fraction by which the conversion price is so required to be adjusted as a
result of such other event, and (iii) if the "ex" date for the issuance
or distribution requiring such computation is on or prior to the day in
question, after taking into account any adjustment required pursuant to
clause (ii) of this proviso, the Closing Price for each Trading Day on or
after such "ex" date shall be adjusted by adding thereto the amount of
any cash and the fair market value on the day in question (as determined
by the Board of Directors in a manner consistent with any determination
of such value for purposes of paragraph (4), or (5) of this Section,
whose determination shall be conclusive and described in a Board
Resolution) of the evidences of indebtedness, shares of capital stock or
assets being distributed applicable to one share of Common Stock as of
the close of business on the day before such "ex" date. For the purpose
of any computation under paragraph (6) of this Section, the current
market price per share of Common Stock on any date shall be deemed to be
the average of the daily Closing Prices for the 5 consecutive Trading
Days selected by the Company commencing on or after the latest (the
"Commencement Date") of (i) the date 20 Trading Days before the date in
question, (ii) the date of commencement of the tender offer requiring
such computation and (iii) the date of the last amendment, if any, of
such tender offer involving a change in the maximum number of shares for
which tenders are sought or a change in the consideration offered, and
ending not later than the Expiration time of such tender offer; provided,
however, that if the "ex" date for any event (other than the tender offer
requiring such computation) that requires an adjustment to the conversion
price pursuant to paragraph (1), (2), (3), (4), (5) or (6) above occurs
on or after the Commencement Date and prior to the Expiration Time for
the tender offer requiring such computation, the Closing Price for each
Trading Day prior to the "ex" date, for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by which
the conversion price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, (i)
when used with respect to any issuance or distribution, means the first
date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the closing Price was
obtained without the right to receive such issuance or distribution, (ii)
when used with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective, and (iii) when Stock
trades regular way on such exchange or in such market after the
Expiration Time of such tender offer.
(9) The Company may make such reductions in the
conversion price, in addition to those required by paragraphs (1), (2),
(3), (4), (5) and (6) of this Section, as it considers to be advisable
in order that any event treated for Federal income tax purposes as a
dividend of stock or stock rights shall not be taxable to the
recipients.
(10) No adjustment in the conversion price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the conversion price; provided, however, that any adjustments
which by reason of this paragraph (10) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
(11) Notwithstanding any other provision of this Section
1204, no adjustment to the conversion price shall reduce the conversion
price below the then par value per share of the Common Stock, and any
such purported adjustment shall instead reduce the conversion price to
such par value. The Company hereby covenants not to take any action (i)
to increase the par value per share of the Common Stock or (ii) that
would or does result in any adjustment in the conversion price that, if
made without giving effect to the previous sentence, would cause the
conversion price to be less than the then par value per share of the
Common Stock; provided, that the covenant in this sentence shall be
suspended if within 10 days of determining in good faith that such action
would result in such adjustment (but not later than the Business Day
following the effectiveness of such adjustment), the Company gives a
notice under Section 1103 and effects the redemption referred to in such
notice on the Redemption Date referred to therein, but shall be
retroactively reinstated if such notice or redemption does not occur.
SECTION 1205. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein
provided:
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(a) the Company shall compute the adjusted conversion
price in accordance with Section 1204 and shall prepare a
certificate signed by the Treasurer of the Company setting
forth the adjusted conversion price and showing in reasonable
detail the facts upon which such adjustment is based, and
such certificate shall forthwith be filed with the Trustee
and at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the conversion price has
been adjusted and setting forth the adjusted conversion price
shall forthwith be required, and as soon as practicable after
it is required, such notice shall be mailed by the Company to
all Holders at their last addresses as they shall appear in
the Security Register.
SECTION 1206. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable (i) otherwise
than exclusively in cash or (ii) exclusively in cash in an
amount that would require any adjustment pursuant to Section
1204; or
(b) the Company shall authorize the granting to the
holders of its Common Stock of rights, options or warrants to
subscribe for or purchase any shares of capital stock of any
class or of any other rights; or
(c) of any reclassification of the Common Stock of
the Company (other than a subdivision or combination of its
outstanding shares of Common Stock), or of any consolidation
or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or
of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company or any Subsidiary shall commence a
tender offer for all or a portion of the Company's
outstanding shares of Common Stock (or shall amend any such
tender offer);
then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to
Section 1002, and shall cause to be mailed to all Holders at their last
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addresses as they shall appear in the Security Register, at least 20 days
(or 10 days in any case specified in clause (a) or (b) above) prior to
the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights, options or warrants, or, if a record
is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights, options or
warrants are to be determined, (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date
as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities, cash
or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up, or (z)
the date on which such tender offer commenced, the date on which such
tender offer is scheduled to expire unless extended, the consideration
offered and the other material terms thereof (or the material terms of
any amendment thereto). Neither the failure to give such notice nor any
defect herein shall affect the legality or validity of the proceedings
described in clauses (a) through (e) of this Section 1206.
SECTION 1207. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available,
free from pre-emptive rights, out of its authorized but unissued Common
Stock, for the purpose of effecting the conversion of Securities, the
full number of shares of Common Stock then issuable upon the conversion
of all outstanding Securities.
SECTION 1208. Taxes on Conversion.
The Company will pay any and all taxes that may be payable
in respect of the issue or delivery of shares of Common Stock on conversion
of Securities pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name
other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless and until
the Person requesting such issue has paid to the Company the amount of
any such tax, or has established to the satisfaction of the Company that
such tax has been paid.
SECTION 1209. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Securities will upon issue be fully paid
and nonassessable and, except as provided in Section 1208, the Company
will pay all taxes, liens and charges with respect to the issue thereof.
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SECTION 1210. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered
to the Trustee to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 309.
SECTION 1211. Provisions in Case of Consolidation, Merger or Sale of
Assets.
In case of any consolidation of the Company with or merger
of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock of the Company) or any sale or transfer of all or
substantially all of the assets of the Company, the Person formed by such
consolidation or resulting from such merger or which acquires such
assets, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
outstanding shall have the right thereafter, during the period such
Security shall be convertible as specified in Section 1201, to convert
such Security only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by
a holder of the number of shares of Common Stock of the Company into
which such Security might have been converted immediately prior to such
consolidation, merger, sale or transfer, assuming such holder of Common
Stock of the Company (i) is not a Person with which the Company
consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be
("constituent Person"), or an Affiliate of a constituent Person and (ii)
failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each share of
Common Stock of the Company held immediately prior to such consolidation,
merger, sale or transfer by other than a constituent Person or an
Affiliate thereof and in respect of which such rights of election shall
not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by each non-
electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of the non-electing shares). Such supplemental
indenture shall provide for adjustments which, for events subsequent to
the effective date of such supplemental indenture, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Article. The above provisions of this Section shall similarly apply to
successive consolidations, mergers, sales or transfers.
ARTICLE THIRTEEN
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Subordination of Securities
SECTION 1301. Securities Subordinated to Senior Indebtedness.
All Securities issued under this Indenture shall be issued
subject to the following provisions, and each Holder of any Security
whether upon original issue or upon transfer or assignment thereof
accepts and agrees to be bound by such provisions.
All Securities issued hereunder shall, to the extent and in
the manner hereinafter set forth, be subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness as
defined in this Section. The term "Senior Indebtedness" shall mean (a)
all indebtedness of the Company, including the principal of and premium,
if any, and interest (including interest accrued before and after the
filing of any petition seeking reorganization, arrangement, adjustment,
or composition of or in respect of the Company) on such indebtedness
whether outstanding on the date of this Indenture or thereafter created,
(i) for borrowed money, including all fees, expenses, reimbursements,
indemnities and other amounts payable under any credit document or note
evidencing money borrowed from banks, (ii) money borrowed by others and
guaranteed, directly or indirectly, by the Company, (iii) constituting
purchase money indebtedness for the payment of which the Company is
directly or contingently liable, (iv) constituting reimbursement
obligations under bank letters of credit, (v) under interest rate and
currency swaps, caps, floors, collars or similar agreements or
arrangements intended to protect the Company against fluctuations in
interest or currency rates, or (vi) under any lease of any real or
personal property, whether outstanding on the date of execution of this
Indenture or thereafter created, incurred or assumed, which obligations
are capitalized on the books of the Company in accordance with generally
accepted accounting principles, unless, in any such case, by the terms of
the instrument creating or evidencing such indebtedness it is provided
that such indebtedness is not superior in right of payment to the
Securities or to other indebtedness which is pari passu with, or
subordinated to, the Securities, and (b) any amendments, supplements,
refinancings, modifications, refundings, deferrals, renewals or
extensions of any such Senior Indebtedness, or securities, notes or other
evidences of indebtedness issued in exchange for such Senior
Indebtedness. As used in the preceding sentence the term "purchase money
indebtedness" shall mean indebtedness evidenced by a note, debenture,
bond or other similar instrument (whether or not secured by any lien or
other security interest) given in connection with the acquisition of any
business, properties or assets of any kind acquired by the Company or any
Subsidiary; provided, however, that, without limiting the generality of
the foregoing, the term "purchase money indebtedness" shall not include
any conditional sale contract or any account payable or any other
indebtedness created or assumed by the Company in the ordinary course of
business in connection with the obtaining of inventories or services
(such proviso not being intended to exclude from "Senior Indebtedness"
any indebtedness for borrowed money incurred by the Company under working
capital lines of credit).
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<PAGE>
SECTION 1302. Priority and Payment Over Upon Insolvency and Dissolution.
In the event of (i) any insolvency or bankruptcy case' or
proceeding or any receivership, liquidation, reorganization or similar
case or proceeding in connection therewith relative to the Company or its
creditors as such or to its assets, or (ii) any liquidation, dissolution
or other winding up of the Company, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (iii) any
assignment for the benefit' of creditors or other marshalling of assets
and liabilities of the Company, then and in any such event the holders of
the Senior Indebtedness shall be entitled to receive payment in full in
cash or Cash Equivalents of all amounts due or to become due on or in
respect of all Senior Indebtedness before the Trustee or the Holders of
the Securities shall be entitled to receive and retain any payment in
respect of the principal, premium, if any, interest or other amounts due
or to become due on the Securities, and to that end the holders of the
Senior Indebtedness shall be entitled to receive, for application to the
payment of the Senior Indebtedness (pro rata to each such holder on the
basis of the respective amounts of Senior Indebtedness held by such
holder as its interest may appear), any payment or distribution of any
kind or character, whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by
reason of the payment of any other indebtedness of the Company which is
subordinated to the payment of the Securities, which may be payable or
deliverable in respect of the Securities in any such case, proceeding,
dissolution, liquidation or other winding up or event. Accordingly, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, which would otherwise
have been made to the Trustee or the Holders of the Securities but for
the provisions of this Section 1302 shall instead be made by the Company
or by the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution
of assets of the Company directly to the holders of the Senior
Indebtedness for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness
in full in cash or Cash Equivalents after giving effect to any concurrent
payment or distribution to or for the benefit of the holders of the
Senior Indebtedness.
If, notwithstanding the foregoing provisions of this Section
1302, the Trustee or any Holder of the Securities shall have received any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company which is
subordinated to the payment of the Securities, before all amounts due or
to become due on or in respect of all Senior Indebtedness have been paid
in full in cash or Cash Equivalents, and if such fact shall, at or prior
to the time of such payment or distribution, have been made known to the
Trustee in accordance with and as required by Section 1310 or otherwise
or, as the case may be, such Holder, then and in such event such payment
or distribution shall be held in trust for the benefit of and shall, to
the extent permitted by applicable law, be paid over or delivered to the
holders of such Senior Indebtedness or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any
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<PAGE>
instruments evidencing any of such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the
payment of all Senior Indebtedness remaining unpaid (pro rata to each
such holder on the basis of the respective amounts of Senior Indebtedness
held by such holder as its interest may appear) to the extent necessary
to pay all Senior Indebtedness in full after effect to any concurrent
payment or distribution to or for the holders of the Senior Indebtedness.
For purposes of this Article Thirteen only, the words "cash,
property or securities" shall not be deemed to include shares of stock of
the Company as reorganized or readjusted, or unsecured debt securities of
the Company or any other corporation provided for by a plan of
reorganization or readjustment which are subordinated in right of payment
to all Senior Indebtedness which may at the time be outstanding to the
same or a greater extent than the Securities are subordinated as provided
for in this Article Thirteen; provided that the rights of the holders of
Senior Indebtedness at the time outstanding are not adversely altered by
the payment or distribution of such shares of stock or unsecured debt
securities to the Trustee or the Holders of the Securities.
The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the
Company following the conveyance or transfer of its assets substantially
as an entirety to another Person upon terms and conditions set forth in
Article Eight shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of
assets and liabilities of the Company for purposes of this Section 1302
if the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer such
property and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article Eight. Notwithstanding
the foregoing, no merger in which the Company is the surviving entity
shall be deemed to be a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of
assets and liabilities of the Company within the meaning of Article
Thirteen.
SECTION 1303. Prior Payment to Senior Indebtedness Upon Acceleration of
the Securities.
If any Security is declared due and payable before the date
specified therein as the fixed date on which the principal thereof is due
and payable, then and in such event the holders of the Senior
Indebtedness shall be entitled to receive payment in full in cash or Cash
Equivalents of all amounts due or to become due on or in respect of the
Senior Indebtedness before the Trustee or the Holders of the Securities
shall be entitled to receive and retain any payment (including any such
payment which may be payable by reason of the payment of any other
indebtedness of the Company which is subordinated to the payment of the
Securities) by the Company on account of the principal of (or premium, if
any), interest on or any other amount due or to become due on the
Securities or on account of the purchase or other acquisition of the
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<PAGE>
Securities. Accordingly, any payment by the Company of any amount which
the Trustee or the Holders of the Securities would have been entitled to
receive and retain but for the provisions of this Section 1303 shall
instead be made by the Company directly to the holders of the Senior
Indebtedness for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness
in full in cash or Cash Equivalents after giving effect to any concurrent
payment or distribution to or for the holders of the Senior Indebtedness.
If, notwithstanding the foregoing provisions of this Section
1303, the Company shall make any payment or distribution to the Trustee
or the Holder of any Security prohibited by the foregoing provisions of
this Section 1303, and if such fact shall, at or prior to the time of
such payment, have been made known to the Trustee in accordance with and
as required by Section 1310 or otherwise or, as the case may be, such
Holder, then and in every such event such payment or distribution shall
be forthwith paid over or delivered to the Company for application to the
payment of all Senior Indebtedness remaining unpaid as provided in the
immediately preceding paragraph of this Section 1303.
The provisions of this Section 1303 shall not apply to any
payment or distribution with respect to which Section 1302 would be
applicable.
SECTION 1304. Payment on Securities Suspended When Senior Indebtedness is
in Default.
In the event and during the continuation of any default in
the payment of principal of (premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto or,
in the event that any event of default with respect to any Senior
Indebtedness shall have occurred and be continuing which would permit the
holders of the Senior Indebtedness (or a Person or Persons acting on
their behalf) to declare such Senior Indebtedness to be due and payable
prior to the date on which it would otherwise have become due and
payable, then unless and until such event of default shall have been
cured or waived or shall have ceased to exist and any such acceleration,
shall have been rescinded or annulled, or in the event any judicial
proceeding shall be pending with respect to any such default, then no
payment (including any payment which may be payable by reason of the
payment of any other indebtedness of the Company which is subordinated to
the payment of the Securities) shall be made by the Company on account of
the principal of (or premium, if any) or interest or any other amount on
the Securities or on account of the purchase or other acquisition by it
of the Securities; provided, however, that nothing in this Section 1304
shall prevent the payment of the Repurchase Price of the Securities
pursuant to Article Fourteen by delivery of shares of Common Stock having
a fair market value equal to the Repurchase Price or payments in respect
of fractional shares of Common Stock pursuant to Section 1403(b).
If, notwithstanding the foregoing provisions of this Section
1304, the Company shall make any payment or distribution to the Trustee
or the Holder of any Security prohibited by the foregoing provisions of
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this Section 1304, and if such fact shall, at or prior to the time of
such payment, have been made known to the Trustee or, as the case may be,
such Holder, then and in every such event such payment or distribution
shall be held in trust for the benefit of and shall, to the extent
permitted by applicable law, be paid over or delivered to the holders of
such Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness may have been issued, as their
respective interests may appear.
The provisions of this Section 1304 shall not apply to any
payment with respect of which Section 1302 or 1303 would be applicable.
SECTION 1305. Obligation to Pay Securities Not Impaired; Provisions Solely
to Define Relative Rights.
The provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the Holders of the
Securities on the one hand and the holders of the Senior Indebtedness on
the other hand. It is and shall be the intent of the parties that this
Article shall constitute a present assignment by the Holders of the
Securities of their rights to receive payments or distributions of cash,
property and securities of the Company otherwise payable to the Holders
of the Securities in the circumstances described in Sections 1302 and
1303 hereof. Nothing contained in this Article Thirteen or elsewhere in
this Indenture shall (i) impair or affect, as among the Company, its
creditors (other than the holders of the Senior Indebtedness) and the
Holders of the Securities, the obligation of the Company, which is
absolute and unconditional (and which is intended to rank equally with
all other general obligations of the Company), to pay the Holders of the
Securities the principal of (and premium, if any) and interest on the
Securities as and when the same shall become due and payable in
accordance with their terms, subject to the rights under this Article
Thirteen of the holders of the Senior Indebtedness, or (ii) affect the
relative rights against the Company of the Holders of the Securities and
the creditors of the Company (other than the holders of the Senior
Indebtedness), or (iii) prevent the Trustee or any Holder of any
Securities from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any,
under this Article Thirteen of the holders of the Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to
the Trustee or such Holder.
SECTION 1306. Payment Permitted if No Default.
Nothing contained in this Article Thirteen or elsewhere in
this Indenture shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other
winding up, assignment for the benefit of creditors or other marshalling
of assets and liabilities of the Company referred to in Section 1302 or
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under the conditions described in Section 1303 or 1304 from making
payments at any time of principal of (and premium, if any) or interest on
the Securities.
SECTION 1307. Subrogation.
Subject to the payment in full in cash or Cash Equivalents
of all Senior Indebtedness, the Holders of the Securities shall be
subrogated to the extent of the payments or distributions made to the
holders of the Senior Indebtedness pursuant to the provisions of this
Article Thirteen to the rights of the holders of such Senior Indebtedness
to receive payments and distributions of cash, property and securities
applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full.
For purposes of the such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to
which the Holders of the Securities or the Trustee would be entitled but
for the provisions of this Article Thirteen, and no payments over
pursuant to the provisions of Sections 1302 or 1303 to the holders of the
Senior Indebtedness by the Trustee or Holders of the Securities shall, as
among the Company, its creditors (other than the holders of Senior
Indebtedness) and the Holders of the Securities, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
SECTION 1308. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such actions as
may be necessary or appropriate to effectuate the subordination provided
in this Article Thirteen and appoints the Trustee his attorney-in-fact
for any and all such purposes.
SECTION 1309. Changes.
The holders of the Senior Indebtedness or a trustee on
behalf thereof or other representative thereof may at any time, and from
time to time, without the consent of or notice to the Trustee or any
Holder of the Securities, without incurring responsibility to the
Trustee or such Holder, and without impairing or releasing any of
the rights of the holders of the Senior Indebtedness, or any of the
obligations of the Trustee or the Holders of the Securities hereunder:
(i) change the time, amount, manner, place or
terms of payment, or change or extend the time of payment of,
or renew or otherwise amend or alter, any other instrument or
agreement evidencing any Senior Indebtedness or securing
payment thereof or relating to the Senior Indebtedness in any
manner;
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(ii) sell, exchange, release or otherwise deal
with any collateral for all or any of the Senior Indebtedness
(whether or not in a commercially reasonable manner);
(iii) release anyone liable in any manner for the
payment or collection of any Senior Indebtedness;
(iv) exercise or refrain from exercising any
rights against the Company or others (including the Holders
of the Securities); and
(v) apply any sums received by them, by
whomsoever paid and however realized, to the payment of the
Senior Indebtedness in such manner as the holders thereof, in
their sole discretion, shall deem appropriate.
SECTION 1310. Notice to Trustee.
The Company shall give prompt written notice to the Trustee,
of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article Thirteen or any other
provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making
of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company, any Holder, any Paying Agent or the holder or representative of
any class of Senior Indebtedness; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 601,
shall be entitled in all respects to assume that no such facts exist.
Subject to the provisions of Section 601, the Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee therefor). In the event that the
Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article
Thirteen, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Thirteen,
and if such evidence is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 1311. Reliance on Judicial Order or Certificate of Liquidating
Agent.
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<PAGE>
Upon any payment or distribution of assets of the Company
referred to in this Article Thirteen, the Trustee, subject to the
provisions of Section 601, and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of
competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or
similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities,
for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of the Senior Indebtedness 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 Thirteen.
SECTION 1312. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not owe any duty to the holders of Senior
Indebtedness, except as expressly provided in this Article Thirteen and
subject to Section 6.01.
SECTION 1313. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article Thirteen with respect to any
Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article Thirteen shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 607.
SECTION 1314. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder,
the term "Trustee" as used in this Article Thirteen shall in such case
(unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article Thirteen
in addition to or in place of the Trustee; provided, however, that
Section 1313 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
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SECTION 1315. Certain Conversions Deemed Payment.
For the purposes of this Article only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance
with Article Twelve shall not be deemed to constitute a payment or
distribution on account of the principal or premium or interest on
Securities or on account of the purchase or other acquisition of
Securities, and (2) the payment, issuance or delivery of cash, property
or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section, the term
"junior securities" means (a) shares of any stock of any class of the
Company and (b) securities of the Company which are subordinated in right
of payment to all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to the same extent as, or
to a greater extent than, the Securities are so subordinated as provided
in this Article Thirteen. Nothing contained in this Article Thirteen or
elsewhere in this Indenture or in the Securities is intended to or shall
impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the right, which is
absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with Article Twelve.
SECTION 1316. Continued Effectiveness.
The terms of this Article Thirteen shall continue to be
effective or be reinstated, as the case may be, if at any time any
payment of any of the Senior Indebtedness is rescinded or must otherwise
be returned by any holder of the Senior Indebtedness upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, all as though
such payment had been due but not made at such time.
SECTION 1317. Right of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of any Senior
Indebtedness to enforce the subordination provisions contained in this
Article Thirteen shall at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by
any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof that any such
holder may have or be otherwise charged with.
SECTION 1318. Continuing Agreement.
The provisions of this Article Thirteen constitute a
continuing agreement and shall (i) remain in full force and effect until
the Senior Indebtedness shall have been paid in full, (ii) be binding
upon the Holders and the Trustee, the Company and each of their
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respective successors and assigns and (iii) inure to the benefit of and
be enforceable by each holder of Senior Indebtedness and its
representatives, successors, transferees and assigns. Without limiting
the generality of the foregoing clause (iii), any holder of Senior
Indebtedness may assign or otherwise transfer any note or other evidence
of indebtedness held by it to any other person, and such other person
shall thereupon become vested with all the rights in respect thereof
granted to such holder herein or otherwise.
ARTICLE FOURTEEN
Repurchase of Securities at the Option
of the Holder Upon a Change of Control
SECTION 1401. Right to Require Repurchase.
In the event that a Change of Control (as hereinafter
defined) shall occur, then each Holder shall have the right, at such
Holder's option, to require the Company to repurchase, and upon the
exercise of such right, the Company shall, subject to the provisions of
Section 1304, repurchase, all of such Holder's Securities, or any portion
of the principal amount thereof that is an integral multiple of $1,000,
on the date (the "Repurchase Date") that is 45 days after the date of the
Company Notice (as defined in Section 1402) at a purchase price equal to
100% of the principal amount of the Securities to be repurchased (the
"Repurchase Price"), together in each case with accrued and unpaid
interest to the Repurchase Date. Such right to require the repurchase of
the Securities shall not continue after a discharge of the Company from
its obligations with respect to the Securities in accordance with Article
Four, unless a Change of Control shall have occurred prior to such
discharge. The Repurchase Price shall be paid in cash.
SECTION 1402. Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for
redemption all the outstanding Securities, on or before the 30th day
after the occurrence of a Change of Control, the Company or, at the
request of the Company, the Trustee, shall mail to all Holders a notice
(the "Company Notice") of the occurrence of the Change of Control and of
the repurchase right set forth herein arising as a result thereof. The
Company shall also deliver a copy of such Company Notice to the Trustee
prior to or promptly after the mailing of such Company Notice and cause a
copy of such Company Notice, or a summary of the information contained
therein, to be published in a newspaper of general circulation in the
Borough of Manhattan, The City of New York promptly after such mailing.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be
exercised,
(3) the Repurchase Price,
(4) a description of the procedure which a Holder
must follow to exercise a repurchase right including a form
of the irrevocable written notice referred to in Section
1402(b), and
(5) the conversion price then in effect, the date on
which the right to convert the principal amount of the
Securities to be repurchased will terminate and the place or
places where such Securities may be surrendered for
conversion.
No failure of the Company to give the foregoing notice or
defect therein shall limit any Holder's right to exercise a repurchase
right or affect the validity of the proceedings for the repurchase of
Securities.
If any of the foregoing provisions are inconsistent with
applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall
deliver to the Trustee on or before the 30th day after the date of the
Company Notice (i) irrevocable written notice of the Holder's exercise of
such right, which notice shall set forth the name of the Holder, the
principal amount of the Securities to be repurchased, a statement that an
election to exercise the repurchase right is being made thereby, and, in
the event that the Repurchase Price shall be paid in shares of Common
Stock, the name or names (with addresses) in which the certificate or
certificates for shares of Common Stock shall be issued, and (ii) the
Securities with respect to which the repurchase right is being exercised,
duly endorsed for transfer to the Company. Securities held by a
securities depositary may be delivered in such other manner as may be
agreed to by such securities depositary and the Trustee. Such written
notice shall be irrevocable, except that the right of the Holder to
convert the Securities with respect to which the repurchase right is
being exercised shall continue until the close of business on the
second Trading Day preceding the Repurchase Date.
(c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be
paid the Repurchase Price in cash or shares of Common Stock, as provided
above, to the Holder on the Repurchase Date (or, if shares of Common
Stock are to be paid, as promptly after the Repurchase Date as possible)
together with accrued and unpaid interest to the Repurchase Date payable
with respect to the Securities as to which the repurchase right has been
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exercised; provided, however, that installments of interest that mature
on or prior to the Repurchase Date shall be payable in cash to the
Holders of such Securities, or one or more predecessor Securities,
registered as such at the close of business on the relevant Regular
Record Date according to the terms and provisions of Article Three.
SECTION 1403. Deposit of Cash Sufficient to Pay Repurchase Price.
Prior to the Repurchase Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section
1003) an amount of money sufficient to pay the Repurchase Price of any
Securities which are to be repaid in cash on the Repurchase Date.
SECTION 1404. Securities Not Repurchased on Repurchase Date.
If any Security surrendered for repurchase shall not be so
paid on the Repurchase Date, such Security shall, until paid, continue to
bear interest to the extent permitted by applicable law from the
Repurchase Date at the same rate borne by the Security. The Company
shall pay to the Holder of such Security the additional amounts provided
for in this Section 1404 at the same time it pays the Repurchase Price.
Each Security shall remain convertible into Common Stock until the
Repurchase Price plus any additional amounts owing on such Security shall
have been paid or duly provided for.
SECTION 1405. Securities Repurchased in Part.
Any Security which is to be repurchased only in part shall
be surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the holder
thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Security so surrendered.
SECTION 1406. Certain Definitions.
For purposes of this Article:
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<PAGE>
(a) the term "beneficial owner" shall be determined An
accordance with Rule 13d-3, as in effect on the date of the original
execution of this Indenture, promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended;
(b) the term "Capital Stock" shall mean capital stock of
the Company that does not rank prior, as to the payment of dividends or
as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, to shares of
capital stock of any other class of the Company;
(c) a "Change of Control" shall be deemed to have
occurred at such time after the original issuance of the Securities as:
(i) any Person (other than the Company, any
Subsidiary or any current or future employee or director
benefit plan of the Company or any Subsidiary or any entity
holding capital stock of the Company for or pursuant to the
terms of such plan, or an underwriter engaged in a firm
commitment underwriting in connection with a public offering
of capital stock of the Company) is or becomes the beneficial
owner, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of transactions, of
shares of capital stock of the Company entitling such Person
to exercise 50% or more of the total voting power of all
shares of capital stock of the Company entitled to vote
generally in elections of directors (any shares of voting
stock of which such person or group is the beneficial owner
that are not then outstanding being deemed outstanding for
purposes of calculating such percentage); or
(ii) any consolidation of the Company with, or merger
of the Company into, any other Person, any merger of another
Person into the Company, or any sale or transfer of all or
substantially all of the assets of the Company to another
Person (other than a merger (x) which does not result in any
reclassification, conversion, exchange or cancellation of
outstanding shares of Capital Stock, (y) which is effected
solely to change the jurisdiction of incorporation of the
Company and results in a reclassification, conversion or
exchange of outstanding shares of Common Stock into solely
shares of Common Stock, or (z) a transaction in which the
stockholders of the Company immediately prior to such
transaction owned, directly or indirectly, immediately
following such transactions a majority of the combined voting
power of the voting capital stock of the corporation
resulting from the transaction, such stock to be owned by
such stockholders in substantially the same proportion as
their ownership of the voting stock of the Company
immediately prior to such transaction; or
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<PAGE>
(iii) the Common Stock is the subject of a completed
"Rule 13e-3 transaction" as defined under the Exchange Act.
(d) the term "Fair Market Value" shall mean on any date,
(i) as to any security which is listed or admitted to trading on any
national securities exchange or quoted on the National Association of
Securities Dealers Automated Quotations National Market System or traded
in the over-the-courter market on such date, the average of the Quoted
Prices with respect to such security for the 10 consecutive Trading Days
ending on such date (or, if such date is not a Trading Day, on the next
preceding Trading Day) and (ii) as to any security not so listed,
admitted, quoted or traded on such date or any other property, the fair
value thereof on such date as determined in good faith by the Board of
Directors or any duly authorized committee thereof and evidenced by a
Board Resolution. For purposes of this Article, "Trading Day" means each
Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on
which securities are not traded on such exchange or in such market;
(e) the term "Person" shall include any syndicate or
group which would be deemed to be a "person" under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, as in effect on the date of
the original execution of this Indenture; and
(f) the term "Quoted Price" of the Common Stock shall
mean: the last sale price regular way or, in case no such sale takes
place on such day, the average of the closing bid and asked prices
regular way, in each case on the Nasdaq National Market as reported by
Nasdaq, or, if the Common Stock is not authorized for quotation on the
Nasdaq National Market, on the New York Stock Exchange Composite Tape
(the "Composite Tape"), or, if the Common Stock is not listed or
admitted to trading on such Exchange, on the national securities exchange
in or nearest The City of New York on which the Common Stock is listed
or admitted to trading, or if the Common Stock is not listed or admitted
to trading on any national securities exchange, the last sale price
regular way or, in case no such sale takes place on such day, the average
of the highest reported bid and lowest reported asked prices as furnished
by the National Association of Securities Dealers, Inc. through Nasdaq
or a similar organization if Nasdaq is no longer reporting such
information, or if on any such trading day the Common Stock is not quoted
by any such organization, the fair value of a share of Common Stock on
such day, as determined by the Board of Directors of the Company.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and
the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
DIMON Incorporated
[Seal]
By /s/ Brian J. Harker
Name: Brian J. Harker
Title: Executive Vice
President and Chief
Financial Officer
Attest:
By /s/ James A. Cooley
Name: James A. Cooley
Title: Vice President and
Treasurer
/s/ John O. Hunnicutt, III
Name: John O. Hunnicutt, III
Title: Vice President Administration-
Corporate Secretary
LASALLE NATIONAL BANK,
as Trustee
[Seal]
By /s/ Laura H. Mackey
Name: Laura H. Mackey
Title: Assistant Vice
President
Attest:
/s/ Erik R. Benson
Name: Erik R. Benson
Title: Assistant Secretary
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<PAGE>
Commonwealth of Virginia) ss.:
City of Danville )
On the 26th day of March, 1997, before me personally
came Brian J. Harker/James A. Cooley, to me known who, being by me
duly sworn, did depose and say that he is Executive Vice Pres./Chief
Financial Officer of DIMON Incorporated, one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by
like authority.
/s/ Kayre W. Starkey
Notary Public
My Commission Expires: 06/30/97
State of Illinois) ss.:
City of Chicago)
On the ____ day of ______________, 1997, before me
personally came ____________________, to me known who, being by me
duly sworn, did depose and say that such person is a Corporate Trust
Officer of LaSalle National Bank, the Trustee under the foregoing
instrument; that such person knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and
that such person signed their name thereto by like authority.
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<PAGE>
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT, dated as of April 1, 1997, by and
between INTABEX S.A. (ZUG), a company organized under the laws of
Switzerland ("Intabex") (including its subsidiaries "Intabex"), and
FOLIUM INC., a company organized under the laws of the British Virgin
Islands (including its subsidiaries "Folium").
RECITALS
A. Pursuant to a Stock Purchase Agreement, dated as of
February 14, 1997 (the "Stock Purchase Agreement"), by and among DIMON
Incorporated, a Virginia corporation (including its subsidiaries
"DIMON"), Intabex, and the shareholders of Intabex, DIMON has purchased
all of the issued and outstanding shares of capital stock of Intabex.
B. To induce DIMON to enter into the Stock Purchase Agreement,
Folium has agreed not to compete, and has agreed to cause each other
member of Folium Group (hereinafter defined) not to compete, with Intabex
or any of its affiliates (the "Intabex Group") upon the terms and
conditions set forth herein; and
C. In consideration for such agreement not to compete, Intabex
has agreed to make certain payments to Folium as set forth herein.
NOW, THEREFORE, in consideration of the recitals and the mutual
covenants, conditions and agreements contained herein and for other good
and valuable consideration, the receipt and sufficiency of which hereby
are acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Definitions. All capitalized terms used and not otherwise
defined herein shall have the meanings given such terms in the Stock
Purchase Agreement.
2. Term. This Agreement shall be effective beginning on the
date hereof and shall continue for a period of five (5) years; provided,
however, that in the event of any breach hereunder by Folium or any other
member of Folium Group, the term of this Agreement shall be extended for
a period equal to the period of such breach.
3. Noncompetition Agreement. Folium covenants and agrees that
during the term hereof Folium shall not, and that Folium shall cause each
affiliate designated by Intabex and agreed to by Folium (Folium and each
such affiliate being referred to herein as "Folium Group") not to,
directly or indirectly, engage in or accept employment with (as a
consultant or otherwise), own any interest in, or otherwise give
assistance to, whether or not for compensation, any person or entity
engaged in the ownership or management of any business involving the
purchase, sale or processing of leaf tobacco anywhere in the world
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<PAGE>
outside of the United States of America and Zimbabwe and their respective
territories and possessions (which business the parties agree will not
include any business involving growing tobacco, warehousing tobacco or
the manufacture or sale of cigarettes); provided that this Section 3
shall not prevent any member of Folium Group from (i) owning any capital
stock or indebtedness of any member of Intabex Group, (ii) acting as a
consultant to or director of Intabex or any other member of Intabex
Group, (iii) owning, operating or selling the tobacco assets set forth on
Schedule 3 hereto in accordance with such schedule, or (iv) owning less
than 5% of the capital stock of any corporation that is publicly traded
on a generally recognized national securities exchange or inter-dealer
quotation system. In the event that any provision of this Section 3 is
determined to be invalid or overbroad by any court or other entity of
competent jurisdiction, the provisions of this Section 3 shall be deemed
to have been amended, and the parties hereto agree to execute all
documents necessary to evidence such amendment, so as to eliminate or
modify any such invalid or overbroad provision so as to carry out the
intent of this Section 3 as far as possible and to render the terms of
this Section 3 enforceable in all respects as so modified. Folium
acknowledges that a violation of this Section 3 by it or any other member
of Folium Group may cause irreparable harm to Intabex Group.
Accordingly, Folium hereby grants Intabex the right to seek and be
granted injunctive relief for any such violation, in addition to any
other legal remedies that may be available to Intabex.
4. Confidential Information. Except as specifically authorized
by Intabex in writing, from the date hereof and continuing forever,
Folium agrees not to, and to cause each other member of Folium Group not
to, (i) disclose any Confidential Information (as defined below) to any
individual or entity, or otherwise knowingly permit any person or entity
to obtain or disclose any Confidential Information, or (ii) use any
Confidential Information, whether individually or on behalf of another
individual or entity, except pursuant to the performance by any member of
Folium Group of its duties under any consulting agreement with a member
of Intabex Group or as a director of any member of Intabex Group. For
purposes hereof, "Confidential Information" means any and all information
relating to any part of the business of Intabex Group (including, without
limitation, Intabex), provided to Folium or to which Folium has had
access (whether before or after the date hereof), which information is
not a matter of public record or generally known to the tobacco industry,
including, without limitation: (i) financial and operating information
regarding Intabex Group; (ii) personnel data, including compensation
arrangements, relating to any employee of Intabex Group; (iii) internal
plans, practices and procedures of Intabex Group; (iv) the names,
addresses and requirements of any customers of Intabex Group; (v) the
terms and conditions of any supply agreements, customer or vendor
commitments and other agreements, documents and instruments to which any
member of Intabex Group is party; and (vi) any other information
expressly known by Folium to be confidential. Folium acknowledges that
it has had access to and has become familiar with or obtained
Confidential information in the course of its dealings with Intabex
Group, and that a violation of this Section 4 by it would cause
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<PAGE>
irreparable harm to Intabex Group. Accordingly, Folium hereby grants
Intabex Group the right to seek and be granted injunctive relief for any
such violation, in addition to any other legal remedies that may be
available to Intabex Group.
In the event that Folium or any other member of Folium Group is
requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, Folium will, and will cause such other member of Folium
Group to, notify Intabex promptly of the request or requirement and
cooperate with Intabex in seeking an appropriate protective order or
waive compliance with the provisions of this Section 4; provided, if
prior to the issuance of a protective order or the receipt of a waiver
hereunder, Folium or such other member of Folium Group is, on the advice
of counsel, compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, Folium or such other member
of Folium Group shall be permitted to make such disclosure without any
responsibility or liability to Intabex Group but shall use its best
efforts to obtain, at the request of and at the expense of Intabex Group,
an Order or other assurance that confidential treatment will be accorded
to such portion of the Confidential Information required to be disclosed
as Intabex Group shall designate.
5. Transition. Folium agrees that it will use, and that it
will cause each other member of Folium Group to use, its commercially
reasonable efforts to assist Intabex Group in preserving and retaining
all business relationships between Intabex Group and its customers,
suppliers and employees. Folium will not take, and will cause each other
member of Intabex Group not to take, any action that is designed or
intended to have the effect of discouraging any lessor, licensor,
customer, supplier or other business associate of Intabex Group from
maintaining the same business relationships with Intabex Group after the
Closing as it maintained with Intabex Group prior to the Closing.
6. Payment. In consideration of the agreements of Folium
contained in this Agreement, Intabex hereby delivers to Folium the sum of
U.S. $17,000,000 by wire transfer of immediately available funds and
Folium hereby acknowledges receipt of such payment.
7. Miscellaneous.
(a) Governing Law; Jurisdiction and Venue; Waiver of Jury Trial.
(i) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to the conflicts
of law rules or principles thereof.
(ii) Each party hereto consents to submit to the exclusive
jurisdiction of the United States District Court for the Southern
District of New York or in the event (but only in the event) such court
does not have subject matter jurisdiction, of the State Courts of New
York sitting in New York City, for any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions
contemplated hereby. Each party hereto agrees not to commence any
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<PAGE>
action, suit or proceeding relating thereto except in such courts. Each
party hereto unconditionally waives any objection to the laying of venue
of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby, in such courts, and waives and agrees
not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient
forum.
(iii) EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
ANY CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
(b) Remedies. Folium acknowledges that a violation of this
Agreement may cause irreparable harm to the business of Intabex and
Intabex Group. Accordingly, Folium hereby grants Intabex the right to
seek and be granted injunctive relief for any such violation, in addition
to any other legal remedies that may be available to Intabex. Folium
shall not in any event be liable or responsible to Intabex Group for any
indirect or consequential damages to Intabex Group (including lost
profits).
(c) Agent for Service of Process. Folium hereby irrevocably
designates, appoints, and empowers CT Corporation System, at 1633
Broadway, New York, New York 10019, or such other address where such
representative office may be located in New York City, and its successors
and assigns, as its true and lawful agent for service of process to
receive and accept on its behalf service of process in any actions, suits
or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby. Folium agrees that the failure of such
process agent to give any notice of any service of process to it shall
not impair or affect the validity of service upon such agent or of any
judgment based thereon.
(d) Severability. If any provision, clause or part of this
Agreement, or the application thereof under certain circumstances is held
invalid or unenforceable for any reason, the remainder of this Agreement,
or the application of such provision, clause or part under other
circumstances shall not be affected thereby.
(e) Entire Agreement; Amendment. This Agreement contains all of
the understandings and representations between the parties hereto
pertaining to the subject matter hereof and supersedes all undertakings
and agreements, whether oral or in writing, if any, previously entered
into by them with respect thereto. This Agreement may not be amended
otherwise than by a writing signed by the parties hereto.
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<PAGE>
(f) Notices. All communications, notices and disclosures required
or permitted by this Agreement shall be in writing and shall be deemed to
have been given when delivered personally or by messenger or by overnight
delivery service, or when received via telecopy, telex or other
electronic transmission, in all cases addressed to the person for whom it
is intended at the address set forth on the signature page hereof or to
such other address as a party shall have designated by notice in writing
to the other party in the manner provided by this Section.
(g) Counterparts; Headings. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original, but both
of which together shall constitute one and the same instrument. The
Article and Section headings in this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
(h) Successors and Assigns. Folium acknowledges that Intabex may
assign this Agreement, in whole or in part, to any of its subsidiaries or
affiliates, without its consent, and agrees that this Agreement shall be
binding upon, inure to the benefit of and be enforceable by Intabex and
its successors and assigns. At the request of Intabex, Folium will cause
each other member of Folium Group to execute and deliver to Intabex a
written agreement pursuant to which such member of Folium Group agrees
that it is bound by the terms of this Agreement as if such member were
expressly named as a party hereto.
(i) Confidentiality. Except for information that is otherwise
publicly available, each party agrees to keep confidential and not to
disclose, and to cause each of its affiliates not to disclose, this
Agreement or any terms hereof, except as required by law.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed, or caused
this Agreement to be executed by their duly authorized officers, all as
of the day and year first above written.
INTABEX S.A. (ZUG)
By: /s/ C. V. Parker
Its: Director
Address: Grenzache Strasse 30/32
CH-4058 Basel
Switzerland
FOLIUM, INC.
By: /s/ P. M. Tomkinson
Its: Authorized Agent
Address: Maitland & Co.
35 rue La Boetie
Paris, France 75008
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April 1, 1997 by and
among DIMON Incorporated, a Virginia corporation (the "Company"), and
each of the shareholders listed on the signature pages hereof (each, a
"Shareholder" and collectively the "Shareholders"). Capitalized terms
not otherwise defined herein shall have the meanings set forth in the
Stock Purchase Agreement, dated the date hereof, between the Company and
the Shareholders (the "Stock Purchase Agreement").
(1) Demand Registration
(a) Tabacalera S.A. At any time on or after April 1,
1998, and prior to March 31, 2001 (as extended as provided herein, the
"Registration Period"), but not more than twice, Tabacalera S.A.
("Tabacalera") shall have the right to require the Company to register
under the Securities Act of 1933, as amended (the "1933 Act"), such
number of shares of the DIMON Common Stock (as defined below) ("Common
Stock") or such principal amount of the DIMON Incorporated 6-1/4%
Convertible Subordinated Debentures due 2007 ("Convertible Debentures"),
in each case issued to Tabacalera at the Closing pursuant to the Stock
Purchase Agreement, or such number of shares of Common Stock issued upon
the conversion of any such Convertible Debentures, as it may request,
subject to the terms and condition of this Agreement. For purposes of
this Agreement, "Common Stock" means the Common Stock, no par value, of
DIMON Incorporated, or any other shares of capital stock of DIMON
Incorporated into which such stock shall be reclassified or changed (by
operation of law or otherwise). If the Common Stock has been so
reclassified or changed, or if DIMON Incorporated pays a dividend or
makes a distribution on its Common Stock in shares of capital stock, or
subdivides (or combines) its outstanding shares of Common Stock into a
greater (or smaller) number of shares of Common Stock, a share of Common
Stock shall be deemed to be such number of shares of capital stock and
amount of other securities to which a holder of a share of Common Stock
outstanding immediately prior to such reclassification, exchange,
dividend, distribution, subdivision or combination would be entitled.
(b) Folium Inc. At any time during the Registration
Period, but not more than twice, Folium Inc. ("Folium") shall have the
right to require the Company to register under the 1933 Act such number
of shares of Common Stock or such principal amount of the Convertible
Debentures, in each case issued to Folium at the Closing pursuant to the
Stock Purchase Agreement, or such number of shares of Common Stock issued
upon the conversion of any such Convertible Debentures, as it may
request, subject to the terms and condition of this Agreement.
(c) Notice of Request for Registration. Any request for
registration pursuant to Section 1(a) or (b) (a "Notice of Demand") shall
be made to the Company in writing specifying the amount of securities
requested to be registered and the proposed method of disposition. The
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Company shall promptly notify all other Shareholders in writing of the
receipt of any Notice of Demand and any Shareholder may elect (by written
notice sent to the Company within ten business days from the date of such
notice) to have such Shareholder's shares of Common Stock or Convertible
Debentures, as the case may be, included in such registration
(Tabacalera, Folium and any such Shareholders, and any shareholders
exercising registration rights pursuant to Section 2 hereof, being
hereinafter referred to as "Selling Shareholders").
(d) Registration. As expeditiously as possible, the
Company will use its reasonable best efforts to prepare and file a
registration statement under the 1933 Act for the purpose of registering
the offering and sale of all shares of Common Stock or Convertible
Debentures, as the case may be, designated in such request(s) (the
"Securities") and cause the same to be declared effective by the
Securities and Exchange Commission (the "SEC") as promptly as
practicable; provided, that (i) the Company and the Selling Shareholders
are entitled to register the Securities on Form S-3 (or a successor form)
or would be eligible to use such form but for the failure by the Company
to timely file all reports required to be filed by it under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), (ii) the
Company has not commenced or completed, whether for itself or a holder of
securities of the Company, within the previous six months an underwritten
public offering, and (iii) the Company's Board of Directors shall not
have determined in its good faith judgment (evidenced by a two-thirds
vote of the directors of the Company then in office) that the offering of
such Securities would be detrimental to the Company or its shareholders.
(e) Minimum Amounts. The Company will not be required to
register pursuant to any Notice of Demand (i) less than 1,000,000 shares
of Common Stock or shares of Common Stock having a market value of less
than $20 million, or (ii) less than $35 million in aggregate principal
amount of Convertible Debentures. The fair market value of Common Stock
shall be the closing price of Common Stock on the New York Stock
Exchange, Inc. (or other exchange or automated quotation system on which
the Common Stock is then listed or quoted) on the trading day immediately
following the Company's receipt of the Notice of Demand.
(f) Notwithstanding any other provision of this Agreement
to the contrary, a registration will not be deemed to have been effected by
this Section 1 if the underwriters in connection with such registration
shall have elected to terminate the applicable underwriting agreement in
accordance with its terms, provided that in no circumstances will the
Company be obligated to pay the fees and expenses associated with more
than four registrations pursuant to Section 1.
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2. Piggyback Registration
(a) During the Registration Period, if the Company shall
at any time propose to file on its own behalf and/or the behalf of any
other holders of Common Stock pursuant to this Agreement or otherwise a
registration statement under the 1933 Act of an offering of Common Stock
solely for cash on a form that would also permit registration of shares
of Common Stock held by the Shareholders, the Company shall give notice
of such proposed registration to each Shareholder as promptly as
possible, but in any event, at least 45 days before the initial filing
with the SEC of such registration statement, which notice shall set forth
the intended method of disposition of the shares proposed to be
registered by the Company. The notice shall offer to include in such
filing such number of shares of Common Stock as the Shareholders may
request (not to exceed the aggregate number of shares received by the
Shareholders pursuant to the Stock Purchase Agreement, less the number of
shares as to which the Shareholders have previously exercised
registration rights pursuant to this Agreement), subject to Section 2(b).
Each Shareholder desiring to have Common Stock registered under this
Section 2(a) shall advise the Company in writing within ten business days
after receipt of notice of such offer from the Company, setting forth the
number of shares of such Common Stock for which registration is
requested. The Company shall thereupon include in such filing the number
of shares of Common Stock for which registration is so requested, subject
to the provisions of Section 2(b), and shall use its best efforts to
effect registration under the 1933 Act of such shares.
(b) Notwithstanding the foregoing if the offering is of
shares by the Company: (i) the Company shall not be required to give
notice or to include shares in any such registration if the proposed
registration is primarily (A) a registration of a dividend reinvestment,
stock option, employee benefit or compensation plan or of securities
issued or issuable pursuant to any such plan or (B) a registration of
securities proposed to be issued in exchange for securities or assets of,
or in connection with a merger or consolidation with, another entity;
(ii) if the Company is advised in writing by its underwriters that the
inclusion of all or any portion of such shares would in their opinion
jeopardize the success of the proposed offering, the Company may exclude
all or such portion of such shares from registration; (iii) the offering
of such shares by the Selling Shareholders shall be on the same terms as
the offering by the Company; (iv) in the event other parties have similar
registration rights at the time of the offering, the number of shares to
be registered may be limited by the Company pursuant to clause (ii) of
this Section 2(b) on a pro rata basis according to the total amount of
shares owned by such parties or on such other basis as may be agreed upon
by such parties; provided, that no limitation shall apply to shares
offered by the Company for its own account; (v) the Company may, without
the consent of the Selling Shareholders, withdraw such registration
statement and abandon the proposed offering in which such persons had
requested to participate; and (vi) the Company shall be under no
obligation to any Selling Shareholder pursuant to Section 2(a) unless
such persons accept the terms of underwriting agreed upon by the Company
and its underwriters.
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(c) Notwithstanding the foregoing if the offering is of
shares by other holders of Common Stock: (i) if the Company or such other
holders is advised in writing by its underwriters that the inclusion of
all or any portion of such shares would in their opinion jeopardize the
success of the proposed offering, the Company or such other holders may
exclude all or such portion of such shares from registration; (ii) the
offering of such shares by the Selling Shareholders shall be on the same
terms as the offering by the other holders of Common Stock; (iii) in the
event other parties have similar registration rights at the time of the
offering, the number of shares to be registered may be limited by the
Company or such other holders pursuant to clause (i) of this Section 2(c)
on a pro rata basis according to the total amount of shares owned by such
parties or on such other basis as may be agreed upon by such parties;
provided that no limitation shall apply to shares offered by the
shareholder initiating the registration; (iv) the Company may, without
the consent of the Selling Shareholders, withdraw such registration
statement and abandon the proposed offering in which such persons had
requested to participate; and (v) the Company shall be under no
obligation to any Selling Shareholder pursuant to Section 2(a) unless
such persons accept the terms of underwriting agreed upon by the Company
and its underwriters.
3. Obligations of the Company
(a) If the Company is required by the provisions of this
Agreement to use its best efforts to effect the registration of any of
the Securities under the 1933 Act, the Company will, as expeditiously as
possible:
(i) prepare and file with the SEC a registration
statement with respect to the Securities and use its best efforts
to cause such registration statement to become and remain effective
for a period of time (not to exceed 180 days) required for the
disposition of the Securities by the Selling Shareholders;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions
of the 1933 Act with respect to the sale or other disposition of
all Securities covered by such registration statement until the
earlier of such time as all of such Securities have been disposed
of in a public offering or the expiration of 180 days;
(iii) furnish to the Selling Shareholders such number of
copies of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the
1933 Act, and such other documents, as such Selling Shareholders
may reasonably request;
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(iv) notify the Selling Shareholder promptly and (if
requested by any such person) confirm such notice in writing, (i)
when a prospectus or prospectus supplement or post-effective
amendment has been filed, and, with respect to a registration
statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the SEC for amendments or
supplements to a registration statement or related prospectus or
for additional information regarding such Shareholder, (iii) of the
issuance by the SEC of any stop order suspending the effectiveness
of a registration statement or the initiation of any proceedings
for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose, and (v) of the happening of any event that
requires the making of any changes in such registration statement,
prospectus or documents so that they will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein no misleading;
(v) use commercially reasonable efforts to prevent the
issuance of any order suspending the effectiveness of a
registration statement, or the lifting of any suspension of the
qualification or exemption from qualification of any of the
securities for sale in any jurisdiction in the United States and,
if any such order is issued, to obtain the withdrawal of such order
as soon as practicable;
(vi) if requested by the Selling Shareholder, furnish to
the Selling Shareholder and counsel for the Selling Shareholder,
without charge, one conformed copy of each registration statement
as declared effective by the SEC and of each post-effective
amendment thereto, in each case including financial statements and
schedules and all exhibits and reports incorporated or deemed to be
incorporated therein by reference; and such number of copies of the
preliminary prospectus, each amended preliminary prospectus, each
final prospectus and each post-effective amendment or supplement
thereto, as the selling holder may reasonably request in order to
facilitate the disposition of the Securities covered by each
registration statement in conformity with the requirements of the
1933 Act;
(vii) use its best efforts to register or qualify the
Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United
States and Puerto Rico as each Selling Shareholder shall request
(provided, however, that the Company shall not be obligated to
qualify as a foreign corporation to do business under the laws of
any jurisdiction in which it is not then qualified or to file any
general consent to service of process), and do such other
reasonable acts and things as may be required of it to enable such
Selling Shareholder to consummate the disposition in such
jurisdiction of the Securities covered by such registration
statement;
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(viii) prepare a supplement or post-effective amendment to
each registration statement or related prospectus or any document
incorporated or deemed to be incorporated therein by reference or
file any other required document so that, as thereafter delivered
to the purchasers of the Securities being sold thereunder, such
prospectus will not contain an untrue statement of a material fact
or omit any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made not misleading;
(ix) furnish, at the request of any Selling Shareholder:
(1) an opinion, dated the date of the closing, of the independent
counsel representing the Company for the purposes of such
registration, addressed to the underwriters and the Selling
Shareholders, or if the Securities are not being sold through
underwriters, then to the Selling Shareholders making such request,
in each case, customary for the type of offering and including
without limitation, that the registration statement, the related
prospectus, and each amendment or supplement thereto, comply as to
form in all material respects with the requirements of the 1933 Act
and the applicable rules and regulations of the SEC thereunder; and
(2) a letter, dated the date of the closing, from the independent
certified public accountants of the Company, addressed to the
underwriters, or if such Securities are not being sold through
underwriters, then to the Company and, if feasible, to the Selling
Shareholders making such request, substantially to the effect that
they are independent certified public accountants within the
meaning of the 1933 Act and that, in the opinion of such
accountants, the financial statements and other financial data of
the Company included in the registration statement or the
prospectus, or any amendment or supplement thereto, comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act. Such opinion of counsel shall
additionally cover such other legal matters with respect to the
registration as the underwriters and the Selling Shareholders may
reasonably request. Such letter from the independent certified
public accountants shall additionally cover such other financial
matters (including information as to the period ending not more
than five (5) business days prior to the date of such letter) with
respect to the registration in respect of which such letter is
being given may reasonably request;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to
its Selling Shareholders, as soon as reasonably practicable, but
not later than 18 months after the effective date of the
registration statement, an earning statement covering the period of
at least 12 months beginning with the first full month after the
effective date of such registration statement, which earning
statements shall satisfy the provisions of Section 11(a) of the
1933 Act; and
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<PAGE>
(xi) cause all Securities covered by the registration
statement to be listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed.
4. Additional Terms and Obligations
(a) The obligations of the Company under this Agreement
are subject to the following terms and limitations:
(i) the Company shall be entitled to postpone for up to
three months in any 12-month period the filing of any registration
statement otherwise required to be prepared and filed by it
hereunder if, at the time it receives a request for such
registration, its Board of Directors determines, in its reasonable
good faith judgment (evidenced by a two-thirds vote of the
directors of the Company then in office), that such registration
and sale would materially interfere with any financing,
acquisition, corporate reorganization or other material transaction
involving the Company then under consideration;
(ii) the Company shall not be required to effect the
registration of (i) any Securities received by the Shareholders
other than pursuant to the Stock Purchase Agreement or upon the
conversion of the Convertible Debentures received by such
Shareholder pursuant to the Stock Purchase Agreement or (ii)
subject to Section 5 hereof, any Securities for which registration
rights have been exercised pursuant to Section 1;
(iii) in the event of a request for registration under
Section 1 hereof, sales shall be made through a nationally
recognized investment banking firm selected by the Company which
shall act as managing underwriter;
(iv) the Company shall pay all fees and expenses
associated with the registration and offering of shares pursuant
to this Agreement, including, without limitation, (i) all
registration and filing fees, (ii) fees and expenses of compliance
with federal or state securities or blue sky laws, (iii) printing
expenses (including, without limitation, expenses of printing of
prospectuses if the printing of prospectuses is requested by the
holders of a majority of the Securities included in any
registration statement), (iv) fees and disbursements of counsel for
the Company and (v) fees and disbursements of all independent
certified public accountants of the Company and all other persons
retained by the Company in connection with the registration
statement, except that the Company shall not be obligated to pay
any underwriting fees, commissions or expenses, including, without
limitation, the fees and expenses of counsel for underwriters,
applicable to the registration or offering of any Securities
pursuant to a registration statement provided for in this
Agreement, which fees, commissions and expenses shall be borne by
the Selling Shareholders; provided, however, that in the event of a
registration under Section 1 hereof, the Company shall not be
obligated to pay the costs related to the preparation of any
audited financial statements included in any registration statement
required to be prepared and filed by it pursuant to Section 1
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hereof as of any date other than June 30 (or the end of its
fiscal year, if other than June 30). Or for any audited or
unaudited financial statements for any period of less than
12 months or ending on any date other than June 30 (or the
end of its fiscal year, if other than June 30), or for any
audited or unaudited financial statements for any period of
less than 12 months or ending on any date other than June 30
(or the end of its fiscal year, if other than June 30);
(v) the Company shall not be obligated to provide more
than four registrations pursuant to Section 1 hereof or more than
two registrations pursuant to Section 2 hereof; provided, that in
the event any shares are excluded in an initial registration
pursuant to Section 2 or in the event such registration is
withdrawn or abandoned by the Company, the Shareholders, subject to
Section 5 hereof, shall have additional registration rights
pursuant to such section until such time as the shares originally
proposed to be registered thereunder have been registered pursuant
to this Section each prospectus included in a registration
statement filed pursuant to Section 1 shall be deemed to constitute
a separate demand;
(vi) the Company, the Selling Shareholders and any
underwriter of an offering pursuant to any registration statement
provided for in this Section shall have entered into an
underwriting agreement which shall contain customary terms and
conditions for such transactions including indemnification of the
aforementioned parties in connection with the preparation and use
of such registration statement and shall be in form and substance
satisfactory to the Company and such underwriter;
(vii) it shall be a condition precedent to the
obligations of the Company under this Agreement that the Selling
Shareholders shall furnish to the Company such information
regarding the Selling Shareholders, the Securities proposed to be
sold and the intended method of disposition of such Securities as
the Company shall reasonably request;
(viii) the registration rights provided herein may not be
assigned, directly or indirectly, by operation of law or otherwise,
to any other person, except that Tabacalera and Folium may transfer
their rights to demand registration under Sections 1(a) and (b) and
their piggyback registration rights under Section 2 of this
Agreement with respect to Convertible Debentures and Common Stock
issuable upon conversion of Convertible Debentures, provided,
however, that no more than one holder of record may be assigned the
right to require any single demand registration to which Tabacalera
or Folium may be entitled under Section 1(a) or (b). The Company
shall have no obligations under this Agreement with respect to any
such transferee until it shall have received 10 business days
written notice of such transfer. Any such transferee shall be
bound by the provisions of this Agreement as though such transferee
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were a signatory hereto and, as a condition to affording the
benefits of this Agreement to such transferee, the Company may
require the transferee to execute a counterpart hereof; and
(ix) If, pursuant to Section 1(d) or Section 4(a)(i),
the Company has failed to file a registration statement for a
period of 90 consecutive days or more, then, in each such
instance, the Registration Period shall be extended by an equal
number of days, provided that in the event of such a failure to
file occurring after December 31, 2000 for any number of days,
the expiration of the Registration Period shall be tolled by an
equal number of days.
5. Withdrawal. Any Shareholder participating in a registration
pursuant to this Agreement shall be permitted to withdraw all or part of
its Securities from such registration at any time prior to the effective
date of the registration statement covering such Securities; provided,
that, in the event of a withdrawal from a registration effected pursuant
to Section 1, such registration shall be deemed to have been effected for
purposes of Section 1 unless (i) the participating Shareholders shall
have paid or reimbursed the Company for all out-of-pocket fees and
expenses paid by the Company hereunder or (ii) Tabacalera or Folium, as
the case may be, elect to terminate such registration due to the
occurrence of a Material Adverse Change (as hereinafter defined);
provided, however, that during the term of this Agreement only one such
withdrawal under clause (i) shall be permitted pursuant to the preceding
proviso. "Material Adverse Change" means (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States of America, (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States of
America, (iii) the commencement of a war, armed hostilities or other
international or national calamity involving the United States of
America, (iv) any limitation (whether or not mandatory) by any
governmental authority on, or any other event which materially affects
the extension of credit by banks or other financial institutions, (v) any
material adverse change in the Company's business, condition (financial
or otherwise) or prospects or (vi) a 20% or more decline in the Dow Jones
Industrial average or the Standard and Poor's Index of 400 Industrial
Companies, in each case from the date a Notice of Demand is made.
6. Underwriting Requirements. In connection with any offering
involving an underwriting of Securities being issued by the Company under
Section 2, the Company shall not be required to include any of the
Securities in such underwriting unless the Selling Shareholders
participating in such offering accept the terms of the underwriting as
agreed upon between the Company and the underwriters.
7. Delay of Registration. No Shareholder shall have any right
to take any action to restrain, enjoin or otherwise delay any
registration as the result of any controversy that might arise with
respect to the interpretation or implementation of these registration
rights.
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8. Indemnification. In the event any Securities are included
in a registration statement filed pursuant to Section 1 or Section 2 of
this Agreement:
(a) to the extent permitted by law, the Company will
indemnify and hold harmless each Shareholder requesting or joining in a
registration, any underwriter (as defined in the 1933 Act) for it and
each person, if any, who controls such holder or underwriter within the
meaning of the 1933 Act, against any losses, claims, damages or
liabilities, joint or several, to which they may become subject under the
1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based on
any untrue or alleged untrue statement of any material fact contained in
such registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements
thereto, or arise out of or are 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 or arise out
of any violation by the Company of any rule or regulation promulgated
under the 1933 Act applicable to the Company and relating to action or
inaction required of the Company in connection with any such
registration; and will reimburse each such holder, such underwriter or
controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 8(a) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Company nor shall
the Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in connection with such registration statement, preliminary
prospectus, final prospectus, or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such
holder, underwriter or controlling person;
(b) to the extent permitted by law, each Shareholder
requesting or joining in a registration will indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed
the registration statement, each person, if any, who controls the Company
within the meaning of the 1933 Act and each agent and any underwriter for
the Company (within the meaning of the 1933 Act) against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, controlling person, agent or underwriter may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or
alleged omission to state therein a fact required to be stated therein or
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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 such
registration statement, preliminary or final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with information
furnished by such holder expressly for use in connection with such
registration; and each such holder will reimburse any legal or other
expenses incurred by the Company or any such director, officer,
controlling person, agent or underwriter in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 8(b)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of such holder; and
(c) promptly after receipt by an indemnified party under
this paragraph of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this paragraph, notify the
indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
prejudicial to his ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
paragraph, but the omission so to notify the indemnifying party will not
relieve him of any liability that he may have to any indemnified party
otherwise than under this paragraph.
9. Lockup Agreement. In consideration for the Company agreeing
to its obligations under this Agreement, the Shareholders agree in
connection with any registration of the Company's securities that, upon
the request of the Company or the underwriters managing any underwritten
offering of the Company's securities, not to sell, make any short sale
of, loan, grant any option for the purchase of or otherwise dispose of
any Securities (other than those included in the registration) without
the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the
consummation of the sale of such shares as the Company or the
underwriters may specify. The Company agrees not to effect any public
sale or distribution of its equity securities or securities convertible
into or exchangeable or exercisable for any such securities during the
ten days before, or, if required by the underwriters in connection with
such registration, during a period of up to 90 days after, any
underwritten registration pursuant to Section 1 or 2 has become
effective, except as part of such underwritten registration and except
pursuant to registrations on Form S-4 or S-8, or any successor or similar
forms thereto or otherwise pursuant to a dividend reinvestment plan or
stock purchase plan.
10. Amendments and Waivers. This Agreement may be amended,
supplemented or modified at any time; provided that each of the
Shareholders and the Company has provided its written consent to such
amendment, supplement or modification. Any term or condition of this
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Agreement may be waived at any time by the party that is entitled to the
benefit thereof, but no such waiver shall be effective unless set forth
in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or
condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same term or condition of
this Agreement on any future occasion.
11. Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the
subject matter hereof and contains the sole and entire agreement between
the parties hereto with respect to the subject matter hereof.
12. Nominees for Beneficial Owners. In the event that any
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder
of such Securities for purposes of request or other action by any
Shareholder pursuant to this Agreement or any determination of any amount
of shares of Shares or Convertible Debentures held by any Shareholder or
contemplated by this Agreement. If the beneficial owner of any
Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such
Securities. For purposes of this Agreement, "beneficial ownership" and
"beneficial owner" refer to beneficial ownership as defined in Rule 13d-3
without regard to the 60-day provision in paragraph (d)(1)(i) thereof)
under the 1934 Act.
13. Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given
only if 21 delivered personally, 22 by facsimile transmission, 23 by
electronic mail at the electronic addresses, if any, provided below, 24
by DHL, PS Next Day Air or other internationally recognized courier
service or 25 mailed (first class postage prepaid) to the parties at the
following addresses or facsimile numbers:
If to the Company, to:
DIMON Incorporated
512 Bridge Street
Danville, Virginia 24543
Attention: Claude B. Owen, Jr.
with a copy to:
Hunton & Williams
951 E. Byrd Street
Riverfront Plaza, East Tower
Richmond, Virginia 23219-4074
Attention: Thurston R. Moore, Esq.
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If to Shareholders, at their respective addresses set
forth on the signature pages hereof with a copy to:
King & Spalding
191 Peachtree Street
Suite 4900
Atlanta, Georgia 30303
Attention: John D. Capers, Jr., Esq.
14. Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for
convenience of reference only and do not define or limit the provisions
hereof or otherwise affect the meaning hereof.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
[signatures appear on following pages]
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
DIMON INCORPORATED
By: /s/ James A. Cooley
Name: James A. Cooley
Title: Vice President
and Treasurer
SHAREHOLDERS:
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Sandeep Alva
Name: Sandeep Alva
Title: Senior Investment
Officer
Address: 200 Clarendon Street
Boston, Massachusetts 02117
Facsimile No. (617)572-1605
Attention: Bond and Corporate
Finance Department, T-57
JOHN HANCOCK LIFE INSURANCE COMPANY OF
AMERICA
By: /s/ Sandeep Alva
Name: Sandeep Alva
Title: Senior Investment
Officer
Address: 200 Clarendon Street
Boston, Massachusetts 02117
Facsimile No. (617)572-1605
Attention: Bond and Corporate
Finance Department, T-57
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<PAGE>
SHAREHOLDERS:
TABACALERA S.A.
By: /s/ Calixto Rios
Name: Calixto Rios
Title: Authorized Agent
Address: Alcala 47
28014 Madrid Spain
Attention: Ramiro Sanchez
DeLerin
FOLIUM INC.
By: /s/ P.M. Tomkinson
Name: P.M. Tomkinson
Title: Authorized Agent
Address: Maitland & Co.
35 rue La Boetie
Paris France 75008
Attention: Steven Georgala
LEAF MANAGEMENT INVESTMENTS LTD.
By: /s/ P.M. Tomkinson
Name: P.M. Tomkinson
Title: Authorized Agent
Address: Maitland & Co.
35 rue La Boetie
Paris France 75008
Attention: Steven Georgala
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<PAGE>
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, made and entered into on the 1st
day of April, 1997, to be effective as of the 1st day of April, 1997, by
and between INTABEX S.A. (ZUG) ("Intabex"), and Anthony C.B. Taberer (the
"Consultant"). Terms not otherwise defined herein shall have the
meanings assigned thereto in the Stock Purchase Agreement, dated
February 14, 1997, by and among DIMON INCORPORATED, a Virginia
corporation ("DIMON"), Intabex and the shareholders of Intabex (the
"Stock Purchase Agreement"). DIMON joins in this Agreement for the
purposes provided in Section 9 hereof.
R E C I T A L S
DIMON and its affiliates are engaged in the business of
purchasing, processing, storing and selling leaf tobacco (the "Tobacco
Business"). Pursuant to the Stock Purchase Agreement, DIMON acquired all
of the outstanding capital stock of Intabex, an international company
also engaged in the Tobacco Business. The Consultant had heretofore been
employed by Intabex as its Chairman. Effective as of the Closing Date,
the Consultant will cease active employment and become non-executive
Chairman of the Board of Intabex. Because of his prior employment with
Intabex, the Consultant is experienced in, and knowledgeable concerning,
the Tobacco Business. Intabex desires to engage the Consultant as an
independent contractor to Intabex and its affiliates (the "Intabex
Group") for the purpose of providing certain advisory services related to
the Tobacco Business, and the Consultant desires to provide such services
to Intabex Group on the terms and for the fees and other remuneration set
forth herein.
NOW THEREFORE, in consideration of the mutual covenants and
obligations herein and the fees and other remuneration Intabex agrees
herein to pay the Consultant, and of other good and valuable
consideration, the receipt of which is hereby acknowledged, Intabex and
the Consultant agree as follows:
1. Engagement. Intabex hereby engages the Consultant as a
consultant to perform the Services (as defined below) for the Intabex
Group subject to the terms and conditions of this Agreement, and the
Consultant hereby accepts such engagement for and in consideration of the
compensation hereinafter provided and agrees to use his best efforts in
performing the Services. The Consultant shall perform his obligations
hereunder in compliance with the terms of this Agreement and any and all
applicable laws and regulations.
2. Services. At the request of Intabex, the Consultant agrees
to render consulting and advisory services to Intabex Group with respect
to business matters within the special competence, knowledge and
experience of the Consultant gained during his prior employment with
Intabex and which services are appropriate to and consistent with his
office as non-executive Chairman of the Board of Intabex (the
"Services"). The Consultant shall devote such portion of his
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<PAGE>
professional time as reasonably shall be necessary to the performance of
the Services, provided, however, that the parties acknowledge that the
Consultant will have other business interests during the term of this
Agreement and will not devote the entirety of his professional time to
the provision of the Services. Consultant shall not be required to
perform the Services in the United States. Intabex shall give Consultant
reasonable advance notice of any request for Services which require
travel by Consultant away from his primary residence.
3. Limitations. Nothing in this Agreement shall be construed
to give the Consultant authority to represent Intabex or any other member
of the Intabex Group before any court or governmental or regulatory agency
without the express prior written authorization of Intabex. In addition,
all files, books, accounts, records and other information of any nature,
however recorded or stored, and related to Intabex Group (the "Records")
shall at times belong to Intabex Group and to the extent possessed by the
Consultant hereunder, such possession shall be for the benefit of Intabex
Group. The Consultant's possession of the Records is at the will of
Intabex and is solely for the purpose of enabling the Consultant to
perform his obligations hereunder. The Records shall be readily
separable from the records of the Consultant.
4. Term. The initial term of this Agreement shall commence on
the Closing Date and shall continue thereafter through October 31, 2000,
unless terminated earlier pursuant to Section 10 hereof. Following the
expiration of the initial term, the term of this Agreement shall
automatically be extended for consecutive one-year terms unless either
party shall elect to terminate it upon written notice delivered not less
than 10 days prior to the expiration of the then-current term.
5. Fee, Expenses and Taxes.
5.1 Fee. As compensation for the performance of the
Services, the Consultant shall be paid a fee of $370,000 per
year (the "Fee"), payable in arrears in four equal
installments of $92,500 on the last Business Day of each
calendar quarter.
5.2 Expenses. The Consultant shall be reimbursed for
all expenses incurred by him on behalf of Intabex or any
other member of the Intabex Group in accordance with the
policies from time to time in effect for Intabex Group.
5.3 Taxes. Except as required by law or otherwise
agreed by the parties, neither Intabex nor any other member
of Intabex Group will withhold from any fees or other
remuneration paid to the Consultant any amounts for any
income taxes or other contributions for the Consultant, nor
will Intabex or any other member of Intabex Group pay any
Social Security, Medicare, unemployment or similar tax with
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<PAGE>
respect to the Consultant. The Consultant acknowledges that
such taxes are his sole responsibility.
6. Notices. All communications, notices and disclosures
required or permitted by this Agreement shall be in writing and shall be
deemed to have been given when delivered personally or by messenger or by
overnight delivery service (or when refused by the addressee upon
presentation thereof), or when received via telecopy, telex or other
electronic transmission, in all cases addressed to the person for whom it
is intended at the address set forth on the signature page hereof or to
such other address as a party shall have designated by notice in writing
to the other party in the manner provided by this Section.
7. Independent Contractor. In the performance of his work,
duties and obligations, it is mutually understood and agreed that the
Consultant is at all times acting and performing as an independent
contractor. Intabex shall neither have nor exercise any control or
direction over the methods by which the Consultant shall perform his work
and functions, the sole interest and responsibility of Intabex is to
assure that the Services shall be performed and rendered in a competent,
diligent and timely manner satisfactory to Intabex. Except to the extent
Intabex needs to specify that the Consultant meet with Intabex personnel
or others in connection with the Services, Intabex shall not control the
number of hours the Consultant devotes to the Services covered under this
Agreement. The Consultant shall not be construed to be an employee or
officer of Intabex or any other member of Intabex Group.
8. Standard of Care. (a) The Consultant warrants that he will
perform the Services in a competent, diligent and timely manner in
compliance with all applicable laws and regulations, the internal
policies and procedures of Intabex Group known to Consultant and the
highest professional and ethical standards. In addition, the Consultant
represents and warrants that any information which he may supply Intabex
Group during the term of this Agreement (i) to the knowledge of
Consultant, will have been obtained by the Consultant lawfully and from
publicly available sources, and (ii) to the knowledge of Consultant, will
not be confidential or proprietary to any third person. Nothing in this
Agreement shall be construed as authorizing or encouraging the Consultant
to obtain information for Intabex Group in violation of applicable laws
or regulations or any third party's rights to copyright or trade secret
protection.
(b) Consultant shall not be required to take any action
hereunder which Consultant reasonably believes to be in violation of
applicable laws or regulations or the internal policies or procedures of
Intabex Group.
9. Indemnification.
9.1 Indemnification by Consultant. The Consultant
shall defend, release, indemnify and hold Intabex Group and
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<PAGE>
its directors, officers, stockholders, affiliates, employees
and agents and the personal representatives and assigns of
each, harmless from and against any and all claims, suits,
liability, costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, arising out of or
resulting from any act of gross negligence or willful
misconduct committed by the Consultant with respect to the
performance by the Consultant of the Services (an "Indemnity
Event"); provided, however, that the foregoing obligation
does not apply to any liability arising out of gross
negligence of or willful misconduct by any member of Intabex
Group or any of their respective officers, directors,
stockholders, affiliates, employees, independent contractors
or agents. The Consultant shall not, however, be required to
make any reimbursement to any member of Intabex Group or
their respective directors, officers, stockholders,
affiliates, employees or agents for any claims, losses,
damages, costs or expenses which are reimbursed to such
person by insurance or otherwise.
9.2 Indemnification by Intabex Group. In
consideration of the Services to be provided by Consultant to
the Intabex Group, Intabex Group shall defend, release,
indemnify and hold the Consultant and his estate, heirs and
representatives harmless from and against any and all claims,
suits, liability, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses,
resulting from, arising out of or in any way connected with
the conduct of the business or operations of Intabex Group or
the conduct of any of the officers, directors, stockholders,
affiliates, employees, independent contractors or agents of
any member of Intabex Group or any of the products of any
member of Intabex Group or by reason of the fact that he is
or was a consultant to Intabex Group to the same extent as if
Consultant was an officer or director of DIMON; provided,
however, that the foregoing obligation does not apply to any
liability arising out of or resulting from any act of gross
negligence or willful misconduct by the Consultant. DIMON
shall not, however, be required to make any reimbursement to
the Consultant or his estate, heirs or representatives for
any claims, losses, damages, costs or expenses which are
reimbursed to the Consultant or his estate, heirs or
representatives by insurance or otherwise.
9.3 Claims Procedure. The party seeking
indemnification pursuant to this Section 9.3 (the
"Indemnification Obligee") shall give reasonable notice to
the party from whom indemnification is sought (the
"Indemnification Obligor") after the Indemnification Obligee
has knowledge of any Indemnity Event or the commencement of
any Indemnity Event, provided that any delay in giving any
such notice shall not relieve the Indemnification Obligor
from its responsibilities hereunder, except to the extent
that it is prejudiced by such delay. If required by the
Indemnification Obligee, the Indemnification Obligor shall
assume the defense of any Indemnity Event by engaging counsel
reasonably satisfactory to the Indemnification Obligee. The
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<PAGE>
Indemnification Obligee shall not be bound by any settlement
of any claim without its prior written consent.
9.4 Limitations on Liability. Except with respect to
any breach of the provisions of Section 11 of this Agreement,
the Indemnification Obligor shall not in any event be liable
or responsible to the Indemnification Obligee for any
indirect or consequential damages (including lost profits).
10. Termination. (a) Intabex may elect, at any time and
without notice to Consultant, to terminate its obligations hereunder, with
or without "cause," provided that Intabex shall give Consultant sixty (60)
days prior written notice of any termination without "cause." Except as
provided by applicable law or pursuant to this Section 10, upon
termination of this Agreement, all obligations of Intabex and all other
members of Intabex Group to the Consultant hereunder shall cease
immediately. For purposes of this Section 10 "cause" shall mean the
following:
(i) any willful misconduct of the Consultant in
connection with the performance of any of his duties,
including, without limitation, misappropriation of funds or
property of Intabex Group or securing or attempting to secure
any personal profit in connection with any transaction
entered into on behalf of Intabex Group;
(ii) any personal dishonesty of the Consultant, any
willful and continued failure to perform the Services, any
willful violation of any law, rule, regulation (other than
traffic violations or similar offenses) and any willful act
or failure to act of the Consultant, which in any such case
results in injury to the business or reputation of Intabex
Group;
(iii) any willful breach by or default of the
Consultant of the terms of or under this Agreement (other
than a breach resulting from Consultant's illness or injury);
or
(iv) for breach of each of the letters binding
Consultant to the terms of the Noncompetition Agreements each
dated as of April 1, 1997 by and between Intabex and Folium
Inc.
No act, or failure to act, by Consultant hereunder shall be considered
"willful" unless committed without good faith and without a reasonable
belief that the act or omission was in the best interest of Intabex
Group.
(b) In the event of termination for cause, the Consultant shall
be entitled to receive any earned but unpaid compensation under Section 3
hereof through the date of termination; provided, however, that any such
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<PAGE>
compensation so to be paid to the Consultant shall be reduced by the
amount of any damages or expenses payable by the Consultant pursuant to
Section 9.1 as a result of the event giving rise to the termination for
cause.
(c) In the event of termination without cause, Intabex shall be
obligated to pay Consultant the full amount of any unpaid Fee relating to
the then-current term of this Agreement.
(d) This Agreement shall terminate automatically upon the death
of Consultant or his complete disability. "Complete disability" shall be
deemed to have occurred when, as a result of illness, disease or injury,
Consultant cannot or is unable to perform the Services for a period of 60
consecutive days or longer. Upon termination pursuant to this Section
10(d), the Consultant or his estate shall be entitled to receive any
earned but unpaid compensation under Section 3 hereof through the date of
termination.
(e) Consultant may elect, upon sixty (60) days prior written
notice to Intabex, to terminate his obligations hereunder. In the event
of any termination of this Agreement by Consultant, Intabex shall be
obligated to pay Consultant any earned but unpaid compensation under
Section 3 hereof through the date of termination.
11. Confidential Information. Except as specifically authorized
by Intabex in writing, from the date hereof and continuing forever,
Consultant agrees not to (i) disclose any Confidential Information (as
defined below) to any individual or entity, or otherwise knowingly permit
any person or entity to obtain or disclose any Confidential Information,
or (ii) use any Confidential Information, whether individually or on
behalf of another individual or entity, except pursuant to the
performance of his duties under this Agreement or as a director of any
member of the Intabex Group. For purposes hereof, "Confidential
Information" means any and all information relating to any part of the
business of Intabex Group, provided to Consultant or to which Consultant
has had access in connection with his duties under this Agreement, which
information is not a matter of public record or generally known to the
tobacco industry, including, without limitation: (i) financial and
operating information regarding Intabex Group; (ii) personnel data,
including compensation arrangements, relating to any employee of Intabex
Group; (iii) internal plans, practices and procedures of Intabex Group;
(iv) the names, addresses and requirements of any customers of Intabex
Group; (v) the terms and conditions of any supply agreements, customer or
vendor commitments and other agreements, documents and instruments to
which any member of Intabex Group is party; and (vi) any other
information expressly known by Consultant to be confidential. Consultant
acknowledges that a violation of this Section 11 by him would cause
irreparable harm to Intabex Group. Accordingly, Consultant hereby grants
Intabex Group the right to seek and be granted injunctive relief for any
such violation, in addition to any other legal remedies that may be
available to Intabex Group.
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<PAGE>
In the event that Consultant is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand or similar process)
to disclose any Confidential Information, Consultant will notify Intabex
promptly of the request or requirement and will cooperate with Intabex in
seeking an appropriate protective order or waive compliance with the
provisions of this Section 11; provided that, if prior to the issuance of
a protective order or the receipt of a waiver hereunder, Consultant is,
on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal or else stand liable for contempt, Consultant
shall be permitted to make such disclosure without any responsibility or
liability to Intabex Group, but shall use his best efforts to obtain, at
the request and at the expense of DIMON, an order or other assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as DIMON shall
designate.
12. Miscellaneous.
12.1 Amendment. The provisions of this Agreement may
be waived, altered, amended or repealed, in whole or in part,
only on the written consent of Intabex and the Consultant.
12.2 Headings. Section headings and numbers used in
this Agreement are included for convenience of reference
only, and, if there is any conflict between any such numbers
and headings, and the text of this Agreement, the text shall
control. Each of the statements set forth in the premises of
this Agreement is incorporated into the Agreement is a valid
and binding representation of the party or parties to whom it
relates.
12.3 Choice of Law; Jurisdiction; Waiver of Jury
Trial.
(a) This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without
reference to the choice of law principles thereof.
(b) Each party hereto consents to submit to the
exclusive jurisdiction of the United States District Court
for the Southern District of New York or in the event (but
only in the event) such court does not have subject matter
jurisdiction, of the State Courts of New York sitting in New
York City, for any actions, suits or proceedings arising out
of or relating to this Agreement and the transactions
contemplated hereby. Each party hereto agrees not to
commence any action, suit or proceeding relating thereto
except in such courts. Each party hereto unconditionally
waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the
transactions contemplated hereby, in such courts, and waives
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<PAGE>
and agrees not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) Consultant hereby irrevocably designates,
appoints, and empowers CT Corporation System, at 1633
Broadway, New York, New York 10019, or such other address
where such representative office may be located in New York
City, and its successors and assigns, as its true and lawful
agent for service of process to receive and accept on its
behalf service of process in any actions, suits or
proceedings arising out of or relating to this Agreement and
the transactions contemplated hereby. Consultant agrees that
the failure of such process agent to give any notice of any
service of process to it shall not impair or affect the
validity of service upon such agent or of any judgment based
thereon.
(d) EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON ANY CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREBY OR IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
12.4 Counterparts. This Agreement may be executed in
two counterparts, each of which shall be deemed an original,
but both of which together shall constitute one and the same
instrument.
12.5 Trademarks. Neither party shall have the right
under this Agreement to use the name, trademark or trade
names of the other, unless prior written approval has been
obtained. Any such approval or authorization shall cease
upon termination of this Agreement.
12.6 Injunction. In the event of a breach or
threatened breach by either party of the provisions of this
Agreement, the nonbreaching party shall, in addition to any
other rights and remedies available to it or him, at law or
otherwise, be entitled to an injunction to be issued by any
court of competent jurisdiction enjoining and restraining the
breaching party from committing any present violation or
future violation of this Agreement.
12.7 Waiver. Failure to insist upon strict compliance
with any provision hereof shall not be deemed a waiver of
such provision or any other provision hereof.
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<PAGE>
12.8 Binding Effect; Assignment.
(a) This Agreement shall be binding upon, and inure to
the benefit of the Consultant and his heirs, executors,
administrators and legal representatives and Intabex and
DIMON and their respective successors and assigns.
(b) Neither this Agreement or any interest herein or
any rights hereunder shall be sold or assigned by the
Consultant, Intabex or DIMON, nor shall any of the duties of
the Consultant hereunder be delegated to any person, firm or
corporation, without prior written notice to and consent of
Intabex.
12.9 Confidentiality. Except for information that is
otherwise publicly available, each party agrees to keep
confidential and not to disclose the existence of this Agreement
or any terms hereof, except as required by applicable law.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Consulting Agreement as of the date and year first above written.
DIMON INCORPORATED
By: /s/ Claude B. Owen, Jr.
Chairman and Chief
Executive Officer
DIMON Incorporated
512 Bridge Street
Danville, Virginia 24543
INTABEX S.A. (ZUG)
By: /s/ C. V. Parker
Title: Director
Address: Grenzache Strasse 30/32
CG-4058 Basel
Switzerland
CONSULTANT
/s/ Anthony C.B. Taberer
Address: Avontuur Wine Estate
(Pty) Ltd
Winery Road Intersection
Stellenbosch Road
Somerset West
Cape Provence
South Africa
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<PAGE>
EXECUTION COPY
ASSET PURCHASE AGREEMENT
between
DIBRELL BROTHERS ZIMBABWE (PRIVATE) LIMITED
and
TABEX (PRIVATE) LIMITED
As of February 14, 1997
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<PAGE>
TABLE OF CONTENTS
ARTICLE I ASSET PURCHASE AND SALE . . . . . . . . . . . . . . . . 1
Section 1.1. Agreement to Sell. . . . . . . . . . 1
Section 1.2. Included Assets. . . . . . . . . . . 1
Section 1.3. The Purchase Price . . . . . . . . . 2
Section 1.4. Closing. . . . . . . . . . . . . . . 2
Section 1.5. Tabex Burley Option. . . . . . . . . 2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . 3
Section 2.1. Corporate Existence of Seller . . . 3
Section 2.2. Authority. . . . . . . . . . . . . . 3
Section 2.3. No Conflicts. . . . . . . . . . . . 3
Section 2.4. Consents . . . . . . . . . . . . . . 4
Section 2.5. Taxes. . . . . . . . . . . . . . . . 4
Section 2.6. Legal Proceedings. . . . . . . . . . 4
Section 2.7. Employee Benefit Plans . . . . . . . 4
Section 2.8. Brokers. . . . . . . . . . . . . . . 5
Section 2.9. Real Property. . . . . . . . . . . . 5
Section 2.10. Ownership of Assets
and Related Matters. . . . . . . . . 5
Section 2.11. Environmental Matters. . . . . . . . 6
Section 2.12. Labor Matters. . . . . . . . . . . . 6
Section 2.13. Accuracy of Information. . . . . . . 7
Section 2.14. Employees. . . . . . . . . . . . . . 7
Section 2.15. Contracts. . . . . . . . . . . . . . 7
Section 2.16. Insolvency Act . . . . . . . . . . . 7
Section 2.17. No Other Representations . . . . . . 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . 8
Section 3.1. Organization . . . . . . . . . . . . 8
Section 3.2. Authorization. . . . . . . . . . . . 8
Section 3.3. No Conflicts. . . . . . . . . . . . 8
Section 3.4. Governmental Approvals and Filings . 9
Section 3.5. Legal Proceedings. . . . . . . . . . 9
Section 3.6. Inspection By Purchaser. . . . . . . 9
Section 3.7. Brokers. . . . . . . . . . . . . . . 9
Section 3.8. Financing. . . . . . . . . . . . . . 9
Section 3.9. Tobacco Buyer's Licenses . . . . . . 9
Section 3.10. Collective Bargaining Agreement. . . 9
ARTICLE IV COVENANTS OF SELLER. . . . . . . . . . . . . . . . . . 10
Section 4.1. Regulatory and Other Approvals . . . 10
Section 4.2. Investigation by Purchaser . . . . . 10
Section 4.3. No Solicitations . . . . . . . . . . 10
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Section 4.4. Conduct of Business. . . . . . . . . 11
Section 4.5. Fulfillment of Conditions. . . . . . 11
Section 4.6. Employees. . . . . . . . . . . . . . 11
Section 4.7. Tobacco Buyer's Licenses . . . . . . 11
Section 4.8. Insurance. . . . . . . . . . . . . . 12
ARTICLE V COVENANTS OF PURCHASER. . . . . . . . . . . . . . . . . 12
Section 5.1. Regulatory and Other Approvals . . . 12
Section 5.2. Employees. . . . . . . . . . . . . . 12
Section 5.3. Payment of Fees and Expenses . . . . 13
Section 5.4. Fulfillment of Conditions. . . . . . 13
ARTICLE VI CONDITIONS TO OBLIGATIONS OF PURCHASER . . . . . . . . 13
Section 6.1. Representations and Warranties . . . 13
Section 6.2. Performance. . . . . . . . . . . . . 13
Section 6.3. Officers' Certificates . . . . . . . 13
Section 6.4. Orders and Laws. . . . . . . . . . . 14
Section 6.5. Regulatory Consents and Approvals. . 14
Section 6.6. Third Party Consents . . . . . . . . 14
Section 6.7. Opinion of Counsel . . . . . . . . . 14
Section 6.8. Settlement of Accounts . . . . . . . 14
ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLER . . . . . . . . . 14
Section 7.1. Representations and Warranties . . . 15
Section 7.2. Performance. . . . . . . . . . . . . 15
Section 7.3. Officers' Certificates . . . . . . . 15
Section 7.4. Orders and Laws. . . . . . . . . . . 15
Section 7.5. Regulatory Consents and Approvals. . 15
Section 7.6. Third Party Consents . . . . . . . . 15
Section 7.7. Opinion of Counsel . . . . . . . . . 15
ARTICLE VIII TERMINATION. . . . . . . . . . . . . . . . . . . . . 15
Section 8.1. Termination. . . . . . . . . . . . . 15
Section 8.2. Effect of Termination. . . . . . . . 16
ARTICLE IX MISCELLANEOS. . . . . . . . . . . . . . . . . . . . . .17
Section 9.1. Notices. . . . . . . . . . . . . . . 17
Section 9.2. Entire Agreement. . . . . . . . . . 18
Section 9.3. Expenses . . . . . . . . . . . . . . 18
Section 9.4. Public Announcements . . . . . . . . 18
Section 9.5. Confidentiality. . . . . . . . . . . 19
Section 9.6. Further Assurances;
Post-Closing Cooperation. . . . . . 19
Section 9.7. Waiver . . . . . . . . . . . . . . . 20
Section 9.8. Amendment. . . . . . . . . . . . . . 20
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Section 9.9. No Third Party Beneficiary . . . . . 20
Section 9.10. No Cession or Assignment;
Binding Effect . . . . . . . . . . . 20
Section 9.11. Headings . . . . . . . . . . . . . . 20
Section 9.12. Invalid Provisions . . . . . . . . . 20
Section 9.13. Governing Law. . . . . . . . . . . . 21
Section 9.14. Counterparts . . . . . . . . . . . . 21
Section 9.15. Survival of Representations
or Warranties. . . . . . . . . . . . 21
Section 9.16. Specific Performance . . . . . . . . 21
ARTICLE X INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 22
Section 10.1. Indemnification. . . . . . . . . . . 22
Section 10.2. Method of Asserting Claims . . . . . 23
Section 10.3. Method of Calculating Losses . . . . 25
Section 10.4. Exclusivity. . . . . . . . . . . . . 25
ARTICLE XI DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . 25
Section 11.1. Definitions . . . . . . . . . . . . 25
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<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated as of February 14,
1997 (the "Agreement"), is made and entered into by and between Dibrell
Brothers Zimbabwe (Private) Limited, a Zimbabwe company ("Purchaser"),
and Tabex (Private) Limited, a Zimbabwe company ("Seller");
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business of purchasing
and processing leaf tobacco in Zimbabwe and selling processed tobacco and
other consumer tobacco products (the "Business");
WHEREAS, Seller and Purchaser desire to enter into this
Agreement pursuant to which Seller proposes to sell to Purchaser and
Purchaser proposes to purchase from Seller certain assets related to the
Business and Purchaser proposes to assume certain of the liabilities of the
Seller related to the Business.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
ASSET PURCHASE AND SALE
Section 1.1. Agreement to Sell. At the Closing (as
hereinafter defined) and except as otherwise specifically provided in
this Article I, Seller shall grant, sell, convey, cede, assign, transfer
and deliver to Purchaser, upon and subject to the terms and conditions of
this Agreement, all right, title and interest of Seller in and to the
Included Assets (as hereinafter defined) as of the Closing Date (as
hereinafter defined), free and clear of all Liens (as hereinafter defined)
of any nature whatsoever except Permitted Liens (as hereinafter defined)
and Assumed Liabilities (as hereinafter defined).
Section 1.2. Included Assets. The Included Assets
shall comprise the following assets, properties and rights of Seller as of
the Closing Date (collectively referred to as "Included Assets"):
(a) All real property, machinery, equipment,
business machines, vehicles, furniture, fixtures,
leasehold and building improvements and other tangible
property of Seller listed on Schedule 1.2(a) hereto;
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(b) All right, title and interest of Seller in
the contracts, agreements, licenses and other
instruments listed on Schedule 1.2(b) hereto;
(c) All of Seller's right, title and interest
in and to Tabex Dibrell Processors (Private) Limited
("TDP");
(d) All Books and Records;
(e) All warranties and other contractual
rights related to the Included Assets;
(f) All of Seller's right, title and interest
in Seller's name, "Tabex (Private) Limited" and any
derivation thereof; and
(g) All of Seller's right, title and interest
in and to the luxury boat known as "Tabacqua".
The "Immovable Property" shall mean the Included Assets listed in item 1 on
Schedule 1.2(a). The "Movable Property" shall mean the Included Assets
listed in items 2, 3 and 4 on Schedule 1.2(a) and, on Schedule 1.2(b) and
described in Sections 1.2(c) and (g) hereto. The Included Assets shall be
valued in accordance with the allocations to be mutually agreed to by the
parties and to be provided separately by Seller to Purchaser.
Section 1.3. The Purchase Price. The aggregate
purchase price for the Included Assets (the "Purchase Price") is U.S.
$12,000,000, payable in cash, in, at the option of Seller, U.S. dollars,
to the extent permitted by Law, or the Zimbabwe dollar equivalent received
by Purchaser upon conversion on the Closing Date through bankers of
Seller's choice in the manner provided in Section 1.4. Property taxes,
utilities, rents and similar items shall be prorated among the parties as
of the Closing Date and the net amount of such prorations added to, or
subtracted from, the Purchase Price.
Section 1.4. Closing. The Closing shall take
place at the offices of King & Spalding, 191 Peachtree Street, Atlanta,
Georgia 30303, or at such other place as Purchaser and Seller shall
mutually agree, at 10:00 A.M. local time, on the Closing Date. At the
Closing, Purchaser will pay the Purchase Price by wire transfer of
immediately available funds to such accounts as Seller may reasonably
direct by written notice delivered to Purchaser by Seller at least two (2)
Business Days before the Closing Date. Simultaneously, Seller will assign
and transfer to Purchaser good and valid title in and to the Included
Assets, subject to Sections 2.4, 6.5 and 6.6 herein, free and clear of all
Liens, except Permitted Liens, and Purchaser shall assume and agree to
pay, discharge or perform, as appropriate, all liabilities and obligations
of Seller as of the Closing Date listed on Schedule 1.4 hereto
(collectively referred to as the "Assumed Liabilities") related to the
Included Assets. At the Closing, there shall also be delivered to Seller
and Purchaser the documents, certificates and opinions to be delivered
under Articles VI and VII. Purchaser shall not assume any liabilities or
obligations of Seller, whether known or unknown, fixed or contingent,
asserted or unasserted, or otherwise, except as expressly set forth on
Schedule 1.4.
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Section 1.5. Tabex Burley Option. Seller hereby grants
to Purchaser the right to purchase on and after November 1, 1997 on ten
(10) days written notice all of Seller's right, title and interest
in and to Tabex Burley nit (Private) Limited ("Tabex Burley") with such
transfer to take place in accordance with the terms and conditions set
forth on Schedule 1.5(a) and for no consideration in addition to the
Purchase Price (the "Tabex Burley Option"). All of the fixed assets as of
October 31, 1996 and long term loans and employees, as of the date of
this Agreement, of Tabex Burley and the Tabex Burley Balance Sheet as of
November 1, 1997 are listed on Schedules 1.5(b), 1.5(c), 1.5(d) and
1.5(e) respectively. Purchaser agrees that the assets, liabilities and
employees of Tabex Burley may change in the ordinary course of business
prior to Purchaser's exercise of the Tabex Burley Option.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as
follows:
Section 2.1. Corporate Existence of Seller. Seller is
a resident corporation validly existing and in good standing under the Laws
of Zimbabwe. Seller has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby, including without
limitation to own, hold, sell and transfer (pursuant to this Agreement)
the Included Assets.
Section 2.2. Authority. The execution, by the
individual signing below on behalf of Seller, and the delivery by Seller
of this Agreement and the performance by Seller of its obligations
hereunder have been duly and validly authorized by the Board of Directors
of Seller and, to the extent required by Law, by the stockholders of
Seller, no other corporate action on the part of Seller or its stockholders
being necessary except for any filings that may be necessary in
terms of Section 136(1) of the Companies Act (Chap 24:03). This Agreement
has been duly and validly executed and delivered by Seller and constitutes
the legal, valid and binding obligation of Seller enforceable against
Seller in accordance with its terms.
Section 2.3. No Conflicts. The execution and delivery
by Seller of this Agreement do not, and the performance by Seller of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby will not:
(a) conflict with or result in a violation or
breach of any of the certificate or articles of incorporation or bylaws or
other comparable organizational and other documents governing the
operation of Seller;
(b) subject to obtaining the consents,
approvals and actions, making the filings and giving any notices disclosed
in Schedule 2.4, conflict with or result in a violation or breach of any
Law or Order applicable to Seller, or any of its Assets and Properties; or
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(c) except as disclosed in Schedule 2.3(c),
(i) conflict with or result in a violation or breach of, (ii) constitute
(with or without notice or lapse of time or both) a default under, (iii)
require Seller to obtain any consent, approval or authorization of, make
any filing with or give any notice to any Person as a result or under the
terms of, or (iv) result in the creation or imposition of any Lien upon
Seller, the Included Assets or any of Seller's Assets and Properties under,
any Contract or License to which Seller is a party or by which any of
its Assets and Properties is bound.
Section 2.4. Consents. Except as listed on Schedule
2.4, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of Seller is required in
connection with the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby.
Section 2.5. Taxes. Seller has filed all Tax Returns
that it was required to file, and has paid all Taxes shown thereon as
owing, related to or affecting any of the Included Assets. The Tax
Returns so filed are true and complete in all material respects, and there
is no amount of unpaid Tax related to or affecting any of the Included
Assets incurred by Seller or by any other Person that is or could become a
Lien on any of the Included Assets. Seller has not waived any statute of
limitation in respect of Taxes, or agreed to any extension of time with
respect to a Tax assessment or deficiency, related to or affecting any of
the Included Assets. Seller is not a party to any Tax allocation or
sharing agreement related to or affecting any of the Included Assets.
Section 2.6. Legal Proceedings. Except as disclosed on
Schedule 2.6, there are no Actions or Proceedings pending or, to the
Knowledge of Seller, threatened against, relating to or affecting any of
the Included Assets which could reasonably be expected to result in the
issuance of an Order restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by
this Agreement.
Section 2.7. Employee Benefit Plans. Schedule 2.7
lists each Employee Benefit Plan that Seller maintains or to which Seller
contributes for any employee of Seller listed on Schedule 4.6 hereto (true
and complete copies of such Plans, together with all amendments and
supplements thereto, have been delivered to Purchaser prior to the
execution of this Agreement). Each such Employee Benefit Plan (and each
related trust, insurance contract or fund) complies in form and in
operation in all respects with the applicable requirements of the Laws of
the jurisdiction in which the Employee Benefit Plan is in effect. All
employer contributions and contributions withheld by employer on behalf of
employees which are due or have accrued with respect to service prior to
the Closing Date have been or will be paid to each Employee Benefit Plan
prior to the Closing Date. Seller has filed or caused to be filed on a
timely basis returns, reports, statements, notices, declarations and other
documents required by any Governmental or Regulatory Authority with respect
to each such Employee Benefit Plan. Each trust, insurance contract or fund
related to an Employee Benefit Plan which is transferred by Seller for
the benefit of Purchaser is or will be at the Closing Date funded such that
at the Closing Date, the assets available to Purchaser under the applicable
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<PAGE>
trust, insurance contract or fund related to such Employee Benefit Plan
will be sufficient to discharge all liabilities arising under the
respective Employee Benefit Plan accrued as of, or related to service prior
to, the Closing Date as they become due. Schedule 1.2(b) contains a true
and complete list of all such trusts, insurance contracts and funds.
Section 2.8. Brokers. All negotiations relative to
this Agreement and the transactions contemplated hereby have been carried
out by Seller directly with Purchaser without the intervention of any
Person on behalf of Seller in such manner as to give rise to any valid
claim by any Person against Seller or Purchaser for a finder's fee,
brokerage commission or similar payment.
Section 2.9. Real Property. Part I of Schedule 2.9
sets forth a list of each of Seller's factories and Seller's headquarters
which are included in the Included Assets (each, a "Facility") and
the location of such Facility. With respect to each such Facility, except
as set forth in Part II of Schedule 2.9:
(a) there are no pending or, to the Knowledge
of Seller, threatened condemnation proceedings, lawsuits or administrative
actions relating to the Facility or other matters materially adversely
affecting the current use, occupancy or value thereof;
(b) each Facility has received all approvals
of Governmental or Regulatory Authorities (including permits) required in
connection with the ownership, occupation or current operation thereof and
has been operated and maintained in accordance with material applicable
Laws;
(c) there are no leases, subleases, licenses,
concessions or other agreements, written or oral, granting to any Person
the right of use or occupancy of any portion of a Facility and no Person
other than Seller or TDP is in possession of any Facility or part thereof;
(d) there are no outstanding options or rights
of first refusal to purchase a Facility or interest therein; and
(e) each Facility is supplied with utilities
and other services necessary and adequate for the current operation of the
Facility, and each Facility is located on, or has irrevocable access to, a
public road.
Seller has provided Purchaser true and complete copies of all leases
governing any part of the Facilities.
Section 2.10. Ownership of Assets and Related Matters.
Seller owns good and marketable title to or a valid leasehold in all of the
Included Assets, free and clear of any and all Liens other than such
encumbrances or imperfections of title as are set forth in Part II of
Schedule 2.9 hereto. The Liens described in Part II of Schedule 2.9
are referred to as "Permitted Liens." On the Closing Date, Seller shall
transfer and vest in Purchaser good and marketable title to all of the
Included Assets, subject to only the Permitted Liens. The Included Assets
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include all assets of Seller that are used by Seller or necessary in the
current operation of the Business. All of the Included Assets are
free from material defects and are in good operating condition and repair
(subject to normal wear and tear, maintenance and obsolescence) and
are usable in the regular and ordinary course of business and conform to
all applicable Laws relating thereto.
Section 2.11. Environmental Matters.
(a) Except as set forth on Schedule 2.11, (i)
Seller has not used, stored, treated, transported, manufactured, refined,
handled, produced or disposed of any Hazardous Materials or
Petroleum Products on, under, at, from or in any way affecting any of the
Facilities in any manner which at the time of the action in question
violated any Environmental Law governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or disposal
of Hazardous Materials or Petroleum Products, and (ii) to the Knowledge of
Seller, no prior owner of any of the Facilities, TDP or any tenant,
subtenant, prior tenant or prior subtenant thereof has used Hazardous
Materials or Petroleum Products on, from or in any way affecting any of the
Included Assets, in any manner which at the time of the action in question
violated any Environmental Law governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or disposal
of Hazardous Materials or Petroleum Products.
(b) Except as set forth on Schedule 2.11,
Seller has no obligations or liabilities, whether absolute or contingent,
accrued or unaccrued, asserted or unasserted, that could have a material
adverse effect on any of the Facilities and no pending claims have been
made, or presently outstanding citations or notices have been issued,
against Seller, that could have a material adverse effect on any of the
Included Assets and that in the case of the foregoing have been or are
imposed by reason of or based upon any provision of any Environmental Laws,
including, without limitation, any such obligations or liabilities relating
to or arising out of or attributable, in whole or in part, to the
manufacture, processing, distribution, use, treatment, storage, release,
disposal, arranging for disposal, transport or handling of any Hazardous
Materials or Petroleum Products by Seller or, to the Knowledge of Seller,
by any prior owner of any of the Facilities, TDP or any other
Person.
(c) Seller has received all Permits as may be
required under applicable Environmental Laws to conduct its present
business at the Facilities, and Seller is in compliance in all
material respects with the terms and conditions of all such Permits.
Section 2.12. Labor Matters. Schedule 2.12 lists all
employment, consultancy, collective bargaining or other similar agreements
to which Seller and any employee of Seller listed on Schedule
4.6 hereto are parties. Except as set forth in Schedule 2.12, with respect
to any employee of Seller listed on Schedule 4.6 hereto:
(a) Seller is and has been in compliance in
all material respects with all applicable Laws respecting employment and
employment practices, terms and conditions of employment and wages and
hours;
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(b) no grievance or any arbitration proceeding
arising out of or under collective bargaining or similar agreements is
pending and, to the Knowledge of Seller, no claims therefor exist or
have been threatened;
(c) there is no litigation, arbitration
proceeding, governmental investigation, citation or action of any kind
pending or, to the Knowledge of Seller, proposed or threatened against
Seller relating to employment, employment practices, terms and conditions
of employment or wages and hours; and
(d) to the Knowledge of Seller, Seller's
relations with such employees are satisfactory.
Section 2.13. Accuracy of Information. This Agreement
and all other documents provided by Seller to Purchaser in connection with
the transactions contemplated herein, taken as a whole, do not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading.
Section 2.14. Employees. All employees of Seller listed
on Schedule 4.6 are employed by Seller in connection with Seller's current
operation of its Business, and all such employees devote at least a
majority of their time to the Business or to the maintenance or operation
of the KingAir 200 aircraft registered as "TAB-X" or the boat identified in
Section 1.2(g). The wage, salary and benefits that each employee listed on
Schedule 4.6 is paid by Seller as of the Closing Date, and the commencement
date of service with Seller of each such employee provided separately to
Purchaser is true and correct.
Section 2.15. Contracts. Those contracts, leases,
agreements, licenses and other instruments listed on Schedule 1.2(b)
(collectively, the "Tabex Contracts") are legal, valid and binding
obligations of Seller enforceable against Seller in accordance with their
terms and are in full force and effect. No event has occurred
that would, with the passage of time or compliance with any applicable
notice requirements, constitute a default by Seller or, to the Knowledge of
Seller, any other party under any of such Tabex Contracts, and, to the
Knowledge of Seller, no party to any such Tabex Contract intends to cancel,
terminate or exercise any option under any of such Tabex Contracts.
Section 2.16. Insolvency Act. The execution of this
Agreement and the consummation of the transactions contemplated hereby (a)
are not being undertaken with the intent of hindering, delaying or
defrauding creditors; (b) will result in Seller receiving reasonably
equivalent value or fair consideration for the Included Assets; (c)
are not being undertaken at a time when Seller is insolvent; (d) will not
render Seller insolvent; (e) will not result in Seller being engaged in a
business for which its remaining assets constitute unreasonably small
capital; and (f) will not result in Seller having debts beyond its ability
to pay as they mature (as the foregoing terms are defined in or interpreted
under the Insolvency Act [Chapter 6:04] or similar laws.)
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Section 2.17. No Other Representations. Notwithstanding
anything to the contrary contained in this Agreement, it is the explicit
intent of each party hereto that Seller is making no representation or
warranty whatsoever, express or implied, except those representations
and warranties contained in this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as
follows:
Section 3.1. Organization. Purchaser is a resident
corporation validly existing and in good standing under the Laws of
Zimbabwe. Purchaser has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby, including without
limitation to own, hold and purchase (pursuant to this Agreement) the
Included Assets.
Section 3.2. Authorization. The execution, by the
individual signing below on behalf of Purchaser, and the delivery by
Purchaser of this Agreement and the performance by Purchaser of its
obligations hereunder have been duly and validly authorized by the Board of
Directors of Purchaser and to the extent required by Law, of the
stockholders of Purchaser, no other corporate action on the part of
Purchaser or its stockholders being necessary except for any filings that
may be necessary in terms of Section 136(1) of the Companies Act (Chap
24:03). This Agreement has been duly and validly executed and
delivered by Purchaser and constitutes the legal, valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with
its terms.
Section 3.3. No Conflicts. The execution and delivery
by Purchaser of this Agreement do not, and the performance by Purchaser of
its obligations under this Agreement and the consummation of the
transactions contemplated hereby will not:
(a) conflict with or result in a violation or
breach of any of the certificate or articles of incorporation or bylaws or
other comparable organizational and other documents governing the operation
of Purchaser;
(b) subject to obtaining the consents,
approvals and actions, making the filings and giving the notices disclosed
in Schedule 3.4 hereto, conflict with or result in a violation or breach of
any Law or Order applicable to Purchaser or any of its Assets and
Properties; or
(c) except as disclosed in Schedule 3.3(c)
hereto, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default
under, (iii) require Purchaser to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or
under the terms of, or (iv) result in the creation or imposition of any
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Lien upon Purchaser or any of its Assets or Properties under, any Contract
or License to which Purchaser is a party or by which any of its Assets and
Properties is bound; other than such conflicts, violations, defaults,
breaches, consents, approvals, authorizations, filings or notices referred
to in paragraph (a), (b) or (c) which could not in the aggregate
reasonably be expected to materially adversely affect the validity or
enforceability of this Agreement.
Section 3.4. Governmental Approvals and Filings.
Except as disclosed in Schedule 3.4 hereto, no consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority
on the part of Purchaser is required in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except where the failure to obtain any
such consent, approval or action to make any such filing or to give any
such notice could not reasonably to expected to materially adversely affect
the validity or enforceability of this Agreement.
Section 3.5. Legal Proceedings. Except as disclosed in
Schedule 3.5, there are no Actions or proceedings pending or, to the
Knowledge of Purchaser, threatened against, relating to or affecting
Purchaser or any of its Assets and Properties which could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement.
Section 3.6. Inspection By Purchaser. Purchaser agrees
that the Immovable Property is sold by Seller and purchased by Purchaser
subject to any servitudes, encumbrances, terms, restrictive covenants, data
and other conditions (collectively the "Conditions") reflected on or
referred to in Seller's title deeds for the Immovable Property or contained
in any town planning scheme, or approval of sub-division, related to the
Immovable Property, and Purchaser is fully acquainted with all such
Conditions.
Section 3.7. Brokers. All negotiations relative to
this Agreement and the transactions contemplated hereby have been carried
out by Purchaser directly with the Seller without the intervention of any
Person on behalf of Purchaser in such manner as to give rise to any valid
claim by any Person against Seller for a finder's fee, brokerage commission
or similar payment.
Section 3.8. Financing. Purchaser has or will have on
the Closing Date, in U.S. dollars, sufficient cash and/or available credit
facilities (and has provided Seller with evidence thereof) to pay the
Purchase Price and to make all other necessary payments of fees and
expenses in connection with the transactions contemplated by this
Agreement.
Section 3.9. Tobacco Buyer's Licenses. Purchaser
acknowledges that Seller has submitted applications to the Tobacco
Marketing Board for Class A buyer's licenses for Burley Tobaccos for the
1997 season and Class A buyer's licenses for Flue-Cured Tobaccos for the
1997 season (collectively, the "Licenses"). Purchaser acknowledges that
Seller has agreed to use Seller's commercially reasonable efforts
to obtain the Licenses in the name of Seller prior to the Closing Date, to
the extent allowed by Law. Purchaser further acknowledges that Seller has
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made no representation or warranty as to the transferability, marketability
or validity of any Licenses obtained in Seller's name, the ability of
Purchaser to obtain the Licenses in Purchaser's name or the consequences of
any failure of Purchaser to obtain the Licenses in Purchaser's name.
Section 3.10. Collective Bargaining Agreement.
Purchaser agrees that it is Purchaser's responsibility, and not the
responsibility of Seller, for Purchaser to negotiate any collective
bargaining or other similar agreement with any of those employees listed on
Schedule 4.6.
ARTICLE IV
COVENANTS OF SELLER
Seller covenants and agrees with Purchaser that, at all
times from and after the date hereof until the Closing, Seller will comply
with all covenants and provisions of this Article IV applicable to Seller,
except to the extent Purchaser may otherwise consent in writing.
Section 4.1. Regulatory and Other Approvals. Seller
will (a) use all commercially reasonable efforts and proceed diligently and
in good faith as promptly as practicable to obtain all consents,
approvals or actions of, to make all filings with and to give all notices
to Governmental or Regulatory Authorities or any other Person required
of Seller to consummate the transactions contemplated hereby, (b) provide
such other information and communications to such Governmental or
Regulatory Authorities or other Persons as such Governmental or Regulatory
Authorities or other Persons may reasonably request and (c) provide
reasonable cooperation to Purchaser in obtaining all consents,
approvals or actions of, making all filings with and giving all notices to
Governmental or Regulatory Authorities or other Persons required of
Purchaser to consummate the transactions contemplated hereby. Seller will
provide prompt notification to Purchaser when any such consent, approval,
action, filing or notice referred to in clause (a) above is obtained,
taken, made or given, as applicable, and will advise Purchaser of any
communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by
this Agreement.
Section 4.2. Investigation by Purchaser. Seller will
(a) provide Purchaser and its officers, employees, counsel, accountants,
financial advisors, consultants and other representatives (together,
"Representatives") with access, upon reasonable prior notice and during
normal business hours, to all officers, employees, agents and accountants
of Seller regarding the Included Assets and Books and Records regarding
the Included Assets as Purchaser or any such Representative may reasonably
request, but only to the extent that such access does not unreasonably
interfere with the business and operations of Seller and (b) furnish
Purchaser and any such Representative with all such information and data
(including without limitation copies of Contracts, Employee Benefit Plans
and other Books and Records) regarding the Included Assets as Purchaser
or any such Representative reasonably may request in connection with such
investigation, but only to the extent that furnishing any such information
or data would not violate any Law, Order, Contract, or License applicable
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to Seller or by which any of its Assets and Properties is bound; provided
that Seller has identified such information or data that it is unable to
furnish pursuant to the preceding clause in Schedule 4.2.
Section 4.3. No Solicitations. Seller will not take
(or authorize or permit any investment banker, financial advisor, attorney,
accountant or other Person retained by or acting for or on
behalf of Seller to take), directly or indirect, any action to initiate,
assist, solicit, receive, negotiate, encourage or accept any offer
or inquiry from any Person (a) to engage in any purchase or transfer of the
Included Assets, (b) to reach any agreement for, or otherwise
attempt to consummate, any purchase or transfer of the Included Assets or
(c) to furnish or cause to be furnished any information with respect to
the Included Assets to any Person (other than as contemplated by Section
4.2).
Section 4.4. Conduct of Business. Seller will use
commercially reasonable efforts to (a) keep available (subject to
dismissals and retirements in the ordinary course of business) the
services of the key officers and employees of Seller listed on Schedule 4.6
in all material respects, (b) maintain the Included Assets in good
working order and condition, ordinary wear and tear excepted and (c)
maintain the goodwill of customers and suppliers of the Business.
Section 4.5. Fulfillment of Conditions. Seller will
use all commercially reasonable efforts and proceed diligently and in good
faith to satisfy each condition to the obligations of Purchaser contained
in this Agreement and will not take any action that could reasonably be
expected to result in the nonfulfillment of any such condition.
Section 4.6. Employees. Seller agrees that, effective
as of the Closing Date, the employees listed on Schedule 4.6 hereto shall
cease to be employees of Seller and, unless any such employee voluntarily
terminates employment, or is deceased, prior to the Closing Date, shall
be and become employees of Purchaser and that Purchaser shall be
responsible and assume liability for all compensation, salary, pension,
severance and other employee benefits, taxes and costs, including
contributions to and maintenance of any Employee Benefits Plans identified
in Schedule 2.7, and all other obligations arising out of employment,
consultancy, collective bargaining or other similar agreements or letters
of employment identified in Schedule 2.12, which become due to, accrue to
the benefit of, or with respect to, such employees after the Closing Date
and with respect to services provided to Purchaser after the Closing Date.
Seller further acknowledges and agrees that (i) it shall not, and shall not
represent that it has authority to, give any assurances as to continued
employment with Purchaser after the Closing Date of those employees of
Seller listed on Schedule 4.6 and (ii) Purchaser's obligations to
employ such employees are only as expressly set forth in this Agreement.
Seller shall pay (a) to Purchaser, within ten (10) days after
written notice from Purchaser, any amount which Purchaser is legally
obligated to pay, upon termination of employment, to any employee listed on
Schedule 4.6 in respect of compensation, salary, pension, severance
or other employee benefits, taxes or costs payable under applicable Law in
effect on the Closing Date, contributions to and maintenance of
any Employee Benefit Plans identified in Schedule 2.7 as such plans are in
effect immediately prior to the Closing Date, or in respect of any other
obligations arising out of any employment, consultancy, collective
bargaining or other similar agreement or letter of employment identified on
Schedule 2.12 as such agreements or letters are in effect immediately prior
to the Closing Date, if and to the extent that any such amount relates to
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service of such employee to Seller prior to the Closing Date;
provided that any claim by Purchaser against Seller for any such amount
shall be made not later than the last day of the calendar month which is
eighteen (18) months after the Closing Date and (b) on or prior to the
Closing Date, to each employee listed on Schedule 4.6 an amount equal to
pay in lieu of vacation or leave accrued but not taken through the Closing
Date (any such amount payable by Seller to Purchaser or each such employee
pursuant to this Section 4.6 being referred to herein as a "Pre-Closing
Employee Liability").
Section 4.7. Tobacco Buyer's Licenses. Subject to the
provisions of Sections 3.9 and 10.1(e), Seller shall use its commercially
reasonable efforts to obtain, prior to the Closing Date, the Licenses in
the name of Seller, to the extent allowed by Law.
Section 4.8. Insurance. Seller shall procure or
maintain policies of insurance effective up to the Closing Date in
commercially reasonable amounts on those Included Assets listed on
Schedule 1.2(a), to the extent Seller has an insurable interest in such
Included Assets, and shall add Purchaser as an additional named insured
on such policies.
ARTICLE V
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Seller that, at all
times from and after the date hereof until the Closing Purchaser will
comply with all covenants and provisions of this Article V, except to the
extent Seller may otherwise consent in writing.
Section 5.1. Regulatory and Other Approvals. Purchaser
will (a) use all commercially reasonable efforts and proceed diligently and
in good faith as promptly as practicable to obtain all consents, approvals
or actions of, to make all filings with and to give all notices to
Governmental or Regulatory Authorities or any other Person required
of Purchaser to consummate the transactions contemplated hereby, including
without limitation those described in Schedules 3.3(c) and 3.4 hereto, (b)
provide such other information and communications to such Governmental or
Regulatory Authorities or other Persons as such Governmental or Regulatory
Authorities or other Persons may reasonably request and (c) provide
reasonable cooperation to Seller in obtaining all consents, approvals or
actions of, making all filings with and giving all notices to Governmental
or Regulatory Authorities or other Persons required of Seller to consummate
the transactions contemplated hereby. Purchaser will provide prompt
notification to Seller when any such consent, approval, action, filing or
notice referred to in clause (a) above is obtained, taken, made or given,
as applicable, and will advise Seller of any communications (and, unless
precluded by Law, provide copies of any such communications that are in
writing) with any Governmental or Regulatory Authority or other Person
regarding any of the transactions contemplated by this Agreement.
Section 5.2. Employees. (a) Purchaser agrees that,
effective of the Closing Date, the employees listed on Schedule 4.6 hereto
shall cease to be employees of Seller and, unless any such employee
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voluntarily terminates employment or is deceased, as of the Closing Date.
shall be and become employees of Purchaser and that, except as provided in
Section 4.6, Purchaser shall be responsible and assume liability for all
compensation, salary, pension, severance and other employee benefits, taxes
and costs, including contributions to and maintenance of any Employee
Benefits Plans identified in Schedule 2.7, and all other obligations
arising out of employment, consultancy, collective bargaining or other
similar agreements or letters of employment identified in Schedule 2.12,
which become due to, accrue to the benefit of, or with respect to, such
employees after the Closing Date and with respect to services provided to
Purchaser after the Closing Date; (b) except as otherwise provided by any
Employee Benefit Plans identified in Schedule 2.7 or by any employment,
consultancy, collective bargaining or other similar agreements or letters
of employment identified in Schedule 2.12, Purchaser shall (i) pay the
employees listed on Schedule 4.6 an initial wage or salary not less than
the wage or salary that each such employee received from Seller as of the
Closing Date as shown on Schedule 4.6, and with any adjustments thereto
made by Seller in accordance with Seller's normal wage and salary
adjustment policies; (ii) employ the employees listed on Schedule 4.6 in
positions comparable to the positions in which such employees are
employed by Seller as of the Closing Date; and (iii) effective on the
Closing Date provide each such employee with medical, severance, pension,
insurance, leave and other employee benefits not less than (x) those which
the employee was eligible to receive from Seller on or before the Closing
Date and (y) those available to similarly-situated employees of Purchaser;
and (c) except with respect to those benefits for which such employees
shall immediately vest pursuant to this Section 5.2, Purchaser shall give
each such employee full credit for length of service with Seller when
determining eligibility for employee benefits. Purchaser shall be under no
obligation, except as required by applicable Law, to continue after the
Closing Date the employment of any of the employees listed on Schedule 4.6;
provided that to the extent Purchaser continues such employment, it shall
be on the terms provided in this Section 5.2.
Section 5.3. Payment of Fees and Expenses. Purchaser
will pay the Purchase Price when due as set forth in Section 1.4 and will
pay when due all other necessary payments of transfer fees and duties
and stamp duties related to the transfer of ownership of the Included
Assets, except as otherwise provided in Section 10.1 hereto.
Section 5.4. Fulfillment of Conditions. Purchaser will
use all commercially reasonable efforts and proceed diligently and in good
faith to satisfy each condition to the obligations of Seller contained in
this Agreement and will not take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any such
condition.
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ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder are
subject to the fulfillment, at or before the Closing, of each of the
following conditions (all or any of which may be waived in whole or in part
by Purchaser in its sole discretion):
Section 6.1. Representations and Warranties. The
representations and warranties made by Seller in this Agreement taken as a
whole shall be true and correct in all material respects on and as of the
Closing Date as though made on and as of the Closing Date or, in the case
of representations and warranties made as of a specified date earlier than
the Closing Date, on and as of such earlier date.
Section 6.2. Performance. Seller shall have performed
and complied with, in all material respects, the agreements, covenants and
obligations required by this Agreement to be so performed or complied with
by Seller at or before the Closing.
Section 6.3. Officers' Certificates. Seller shall have
delivered to Purchaser a certificate, dated the Closing Date and executed
by any authorized officer of Seller, substantially in the form and to the
effect of Exhibit A hereto, and a certificate, dated the Closing Date and
executed by the Secretary or any Assistant Secretary of Seller,
substantially in the form and to the effect of Exhibit B hereto.
Section 6.4. Orders and Laws. There shall not be in
effect on the Closing Date any Order or Law restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any
of the transactions contemplated by this Agreement.
Section 6.5. Regulatory Consents and Approvals. All
consents, approvals and actions of, filings with and notices to any
Governmental or Regulatory Authority necessary to permit Purchaser
and Seller to perform their obligations under this Agreement and to
consummate the transactions contemplated hereby which are listed on
Part I of Schedule 6.5 hereto, shall have been duly obtained, made or given
and shall be in full force and effect, and all terminations or expirations
of waiting periods imposed by any Governmental or Regulatory Authority
necessary for the consummation of the transactions contemplated by this
Agreement shall have occurred, except for those filings and notices listed
on Part II of Schedule 6.5 which shall have been duly made or given but for
which waiting periods imposed by any Governmental or Regulatory Authority
shall not have terminated or expired.
Section 6.6. Third Party Consents. The consents (or in
lieu thereof waivers) listed in Schedule 6.6 hereto shall have been
obtained and shall be in full force and effect.
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Section 6.7. Opinion of Counsel. Purchaser shall have
received the opinion of Winterton, Holmes & Hill, counsel to Seller, dated
the Closing Date, substantially in the form and to the effect of Exhibit C
hereto, with such changes as are reasonably acceptable to Purchaser.
Section 6.8. Settlement of Accounts. All amounts owed
by or to Seller by Purchaser or any Affiliates of Purchaser shall have been
paid in full. All amounts owed by or to the Seller by any Related Party of
Seller shall have been paid in full (including any amounts due from or owed
to Intabex). A Related Party of Seller is (a) any record or beneficial
owner of 5% or more of the voting securities of Seller, (b) any
director, officer or employee of Seller or any of Seller's Subsidiaries,
(c) any person, firm or corporation that directly or indirectly controls,
is controlled by or is under common control with, Seller or any of its
Subsidiaries or (d) any member of the immediate families of any such
persons.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller hereunder are subject
to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by Seller
in its sole discretion):
Section 7.1. Representations and Warranties. The
representations and warranties made by Purchaser in this Agreement taken
as a whole shall be true and correct in all material respects on and as
of the Closing Date as though made on and as of the Closing Date.
Section 7.2. Performance. Purchaser shall have
performed and complied with, in all material respects, the agreements,
covenants and obligations required by this Agreement to be so performed or
complied with by Purchaser at or before the Closing.
Section 7.3. Officers' Certificates. Purchaser shall
have delivered to Seller a certificate, dated the Closing Date and
executed by any authorized officer of Purchaser, substantially in the
form and to the effect of Exhibit D hereto, and a certificate, dated the
Closing Date and executed by the Secretary or Assistant Secretary of
Purchaser, substantially in the form and to the effect of Exhibit E
hereto.
Section 7.4. Orders and Laws. There shall not be in
effect on the Closing Date any Order or Law restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement.
Section 7.5. Regulatory Consents and Approvals. All
consents, approvals and actions of, filings with and notices to any
Governmental or Regulatory Authority necessary to permit Seller and
Purchaser to perform their obligations under this Agreement and to
consummate the transactions contemplated hereby, which are listed on
Schedule 7.5 hereto, shall have been duly obtained, made or given and
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shall be in full force and effect, and all terminations or expirations
of waiting periods imposed by any Governmental or Regulatory Authority
necessary for the consummation of the transactions contemplated by this
Agreement shall have occurred.
Section 7.6. Third Party Consents. The consents (or
in lieu thereof waivers) listed in Schedule 7.6 shall have been obtained
and shall be in full force and effect.
Section 7.7. Opinion of Counsel. Seller shall have
received the opinion of Coghlan, Welsh & Guest, counsel to Purchaser,
dated the Closing Date, substantially in the form and to the effect of
Exhibit F hereto, with such changes as are reasonably acceptable to
Seller.
ARTICLE VIII
TERMINATION
Section 8.1. Termination. This Agreement may be
terminated, and the transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by
mutual written agreement of Seller and Purchaser;
(b) at any time before the Closing, by
Seller or Purchaser, in the event that any Order or Law becomes
effective restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by
this Agreement or materially adversely affecting the business of
purchasing and processing leaf tobacco or selling processed tobacco
and other consumer tobacco products in Zimbabwe, upon notification
of the non-terminating party by the terminating party; provided
that the terminating party has used its best efforts to have any
such Order removed;
(c) at any time before the Closing, in the
event that either party breaches any of the terms and conditions
hereof and fails to rectify such breach within twenty-one (21) days
of the date of receipt of written notice from the non-breaching party
calling upon the breaching party to rectify such breach, upon
notification of the breaching party by the non-breaching party;
(d) at any time before the Closing, by
Seller or Purchaser if Seller is denied issuance of the Licenses by
the Tobacco Marketing Board or another Governmental or Regulatory
Authority; and
(e) at any time after June 30, 1997 by
Seller or Purchaser upon notification of the non-terminating party
by the terminating party if the Closing shall not have occurred on
or before such date and such failure to consummate is not caused by
a breach of this Agreement by the terminating party.
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Section 8.2. Effect of Termination. If this
Agreement is validly terminated pursuant to Section 8.1, this
Agreement will forthwith become null and void, and there will be
no liability or obligation on the part of Seller or Purchaser
(or any of their respective officers, directors, employees,
agents or other representatives or Affiliates), except that the
provisions with respect to expenses in Section 9.3 and
confidentiality in Section 9.5 will continue to apply following any
such termination. Notwithstanding any other provision in this
Agreement to the contrary, upon termination of this Agreement
pursuant to Section 8.1(b) or (c), Seller will remain liable to
Purchaser for any willful breach of Section 4.5 of this Agreement
by Seller existing at the time of such termination, and Purchaser
will remain liable to Seller for any willful breach of Section
5.4 of this Agreement by Purchaser existing at the time of such
termination, and Seller or Purchaser may seek such remedies,
including damages and fees of attorneys, against the other with
respect to any such willful breach as are provided in this
Agreement or as are otherwise available at Law or in equity.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. All notices, requests
and other communications hereunder must be in writing and will
be deemed to have been duly given only if delivered personally
or by facsimile transmission (with postage prepaid mail
confirmation) or mailed (postage prepaid with an internationally
recognized overnight courier service) to the parties at the
following addresses or facsimile numbers:
If to Purchaser, to:
Dibrell Brothers Zimbabwe (Private) Limited
91 Plymouth Rd.
Corner of Manchester Rd.
P.O. Box 1339
Southerton Harare
Facsimile No.: 263-4-621724
Attn.: Iain Bell
with copies to:
Coghlan, Welsh & Guest
Executive Chambers
George Silundika Avenue
Post Office Box 53 or 2093
Harare, Zimbabwe
Facsimile No.: 756268
Attn.: Christopher C. Sedden
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Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
Facsimile No.: 804/788-8218
Attn.: Thurston R. Moore
If to Seller, to:
Winterton, Holmes & Hill
7 Beverly Place
Selous Avenue
Harare, Zimbabwe
Facsimile No.: 727353
Attn.: Alwyn Pichanick/Ray Passaportis
with a copy to:
King & Spalding
191 Peachtree Street
Suite 4500
Atlanta, Georgia 30303
Facsimile No.: 404/572-5145
Attn.: John D. Capers, Jr.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given
upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number as provided in this Section, be deemed given upon
receipt, and (iii) if delivered by an internationally recognized
overnight courier in the manner described above to the address as
provided in this Section, be deemed given upon the earlier of (x) the
second business day after the date of mailing or (y) the date of actual
receipt (in each case regardless of whether such notice is received by
any other Person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section). Any party
from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice
specifying such change to the other party hereto.
Section 9.2. Entire Agreement. This Agreement
supersedes all prior discussions and agreements between the parties
with respect to the subject matter hereof and contains the sole and
entire agreement between the parties hereto with respect to the
subject matter hereof; provided that nothing herein shall affect (i)
the validity of the Confidentiality Agreement and (ii) any other
written agreements or understandings entered into by the parties or
their affiliates contemporaneously with the execution and delivery
of this Agreement, all of which shall remain in full force and
effect.
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Section 9.3. Expenses. Except as otherwise
expressly provided in this Agreement, whether or not the transactions
contemplated hereby are consummated, each party will pay its own
costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions
contemplated hereby.
Section 9.4. Public Announcements. At all times
at or before the Closing, Seller and Purchaser will not issue or
make any reports, statements or releases to the public or generally
to the employees, customers, suppliers or other Persons to whom the
Seller sell goods or provide services or with whom the Seller
otherwise have significant business relationships with respect to this
Agreement or the transactions contemplated hereby without the consent
of the other, which consent shall not be unreasonably withheld. If
either party is unable to obtain the approval of its public report,
statement or release from the other party and such report, statement
or release is, in the opinion of legal counsel to such party,
required by Law in order to discharge such party's legal or
contractual disclosure obligations, then such party may make or
issue the required report, statement or release and promptly furnish
the other party with a copy thereof. Seller and Purchaser will also
obtain the other party's prior approval of any press release to be
issued immediately following the Closing announcing the consummation
of the transactions contemplated by this Agreement.
Section 9.5. Confidentiality. Each party hereto
will hold, and will use all commercially reasonable efforts to cause
its Affiliates, and their respective Representatives to hold, in
strict confidence from any Person (other than any such Affiliate or
Representative), all documents and information concerning the other
party or any of its Affiliates furnished to it by the other party
or such other party's Representatives in connection with this
Agreement or the transactions contemplated hereby. In addition, each
party hereto agrees that it will not, and that it will use all
commercially reasonable efforts to cause its Affiliates and their
respective Representatives not to, disclose the existence of this
Agreement or any of the terms hereof. Notwithstanding the foregoing,
no party shall be required hereunder to keep confidential that
information that (i) is required to be disclosed by applicable Law,
(ii) is of a public nature or has previously been disclosed through
no fault of such party, or (iii) in the case of DIMON or any DIMON
Affiliate, is necessary to be disclosed in connection with any
financings, provided that any such disclosure shall be in accordance
with the terms of the transactions contemplated herein. This
section shall be in addition to and shall not modify the terms of
any other agreement between the parties governing the confidentiality
of such documents and information.
Section 9.6. Further Assurances; Post-Closing
Cooperation. (a) Subject to the terms and conditions of this
Agreement, at any time or from time to time after the Closing, each
of the parties hereto shall execute and deliver such other documents
and instruments, provide such materials and information and take
such other actions as may reasonably be necessary, proper or advisable,
to the extent permitted by Law, to fulfill its obligations under
this Agreement.
(b) Following the Closing, each party
will afford the other party, its counsel and its accountants, during
normal business hours, reasonable access to the books, records and other
data relating to the Included Assets in its possession with respect to
periods prior to the Closing and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required by
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the requesting party in connection with (i) the preparation of Tax
Returns, (ii) the determination or enforcement of rights and obligations
under this Agreement, (iii) compliance with the requirements of any
Governmental or Regulatory Authority, (iv) the determination or
enforcement of the rights and obligations of any Indemnified Party or
(v) in connection with any actual or threatened Action or Proceeding.
Further, each party agrees for a period extending six (6) years after
the Closing Date not to destroy or otherwise dispose of any such books,
records and other data unless such party shall first offer in writing to
surrender such books, records and other data to the other party and such
other party shall not both (i) within twenty-one (21) days after such
offer is made agree in writing to take possession thereof and (ii) take
possession, during the regular business hours of the offering party, of
any such books, records and other data within twenty-eight (28) days
after such offer is made.
(c) If, in order properly to prepare its Tax
Returns, other documents or reports required to be filed with Governmental
or Regulatory Authorities or its financial statements or to fulfill its
obligations hereunder, it is necessary that a party be furnished with
additional information, documents or records relating to the Included
Assets not referred to in paragraph (b) above, and such information,
documents or records are in the possession or control of the other party,
such other party agrees to use all commercially reasonable efforts to
furnish or make available such information, documents or records (or
copies thereof) at the recipient's request, cost and expense. Any
information obtained by Seller in accordance with this paragraph shall
be held confidential by Seller in accordance with Section 9.5.
Section 9.7 Waiver. Any term or condition
of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective
unless set forth in a written instrument duly executed by or on behalf
of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other
term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by Law or otherwise afforded,
will be cumulative and not alternative.
Section 9.8. Amendment. This Agreement may be
amended, supplemented or modified only by a written instrument duly
executed by or on behalf of each party hereto.
Section 9.9. No Third Party Beneficiary. The terms
and provisions of this Agreement are intended solely for the benefit of
each party hereto and their respective successors or permitted assigns,
and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person.
Section 9.10. No Cession or Assignment; Binding
Effect. This Agreement or any right, interest or obligation hereunder
may not be ceded or assigned by any party hereto without the prior
written consent of the other party hereto and any attempt to do so
will be void, except (a) for cessions, assignments and transfers by
operation of Law and (b) that Purchaser may cede or assign any or
all of its rights, interests and obligations hereunder to a wholly-
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owned Zimbabwe-resident corporation, provided that any such
subsidiary agrees in writing to be bound by all of the terms,
conditions and provisions contained herein, but no such cession or
assignment referred to in clause (b) shall relieve Purchaser of
its obligations hereunder. Subject to the preceding sentence, this
Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors
and assigns.
Section 9.11. Headings. The headings used in
this Agreement have been inserted for convenience of reference only
and do not define or limit the provisions hereof.
Section 9.12. Invalid Provisions. If any
provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights
or obligations of any party hereto under this Agreement will not
be materially and adversely affected thereby, (a) such provision
will be fully severable, (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (c) the remaining provisions
of this Agreement will remain in full force and effect and will
not be affected by the illegal, invalid or unenforceable provision
or by its severance here from and (d) in lieu of such illegal,
invalid or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
Section 9.13. Governing Law. This Agreement
shall be governed by and construed in accordance with the Laws of
Zimbabwe.
Section 9.14. Counterparts. This Agreement may
be executed in any number of counterparts, each of which will be
deemed an original, but all of which together will constitute one
and the same instrument.
Section 9.15. Survival of Representations or
Warranties. The representations, warranties, covenants and
agreements of Seller and Purchaser contained in this Agreement
will survive the Closing (a) indefinitely with respect to the
representations and warranties contained in Sections 2.2, 2.8,
3.2 and 3.7 and the indemnification obligations pursuant to
Section 10.1(a)(ii), (b) the longer of three years or the
expiration of any applicable statute of limitations for any
underlying tax claim with respect to the representations and
warranties contained in Section 2.5, (c) three years with respect
to the representations and warranties contained in Section 2.16
and (d) until September 30, 1998 in the case of each other
representation, warranty, covenant and agreement, except that
any representation, warranty, covenant or agreement that would
otherwise terminate in accordance with clause (a), (b), (c) or
(d) above will continue to survive if a Claim Notice or Indemnity
Notice (as applicable) shall have been timely given in good faith
based on facts reasonably expected to establish a valid claim
under Article X on or prior to such termination date, until
the related claim for indemnification has been satisfied or
otherwise resolved as provided in Article X. This Section shall
not limit in any way the survival and enforceability of any
covenant or agreement of the parties hereto which by its terms
contemplates performance after the Closing Date, which shall
survive for the respective periods set forth herein.
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Section 9.16. Specific Performance. The parties
hereto agree that irreparable damage would occur in the event any of
the provisions of this Agreement were not performed in accordance
with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other
remedy at law or equity for the breach of any representation, warranty,
or covenant contained herein.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnification.
(a) Subject to paragraphs (c), (d) and (e)
of this Section and the other Sections of this Article X, (i) Seller
shall indemnify Purchaser and its officers, directors, employees, agents
and Affiliates in respect of, and hold each of them harmless from and
against, any and all Losses suffered, incurred or sustained by any of
them or to which any of them becomes subject, resulting from, arising
out of or relating to any misrepresentation, breach of warranty or breach
of any covenant or agreement on the part of the Company contained in
this Agreement and (ii) Seller shall indemnify Purchaser for all Losses
resulting from, arising out of or relating to (x) any Pre-Closing
Employee Liability to the extent provided in Section 4.6, (y) any
liabilities with respect to the Included Assets that do not constitute
Assumed Liabilities, and (z) Seller's use of the Included Assets in the
operation of the Business prior to the Closing Date.
(b) Subject to paragraphs (c) and (d) of
this Section and the other Sections of this Article X, Purchaser agrees
to indemnify Seller and its officers, directors, employees, agents and
Affiliates in respect of, and hold each of them harmless from and against,
any and all Losses suffered, incurred or sustained by any of them or
to which any of them becomes subject, resulting from, arising out of or
relating to any misrepresentation, breach of warranty or breach of any
covenant or agreement on the part of Purchaser contained in this
Agreement.
(c) Notwithstanding anything to the contrary
contained in this Agreement, no amounts of indemnity shall be payable as
a result of any claim arising under paragraphs (a) and (b) of Section
10.1:
(i) with respect to claims arising
under paragraph (a) only, unless, until and then only to the extent
that the Indemnified Parties thereunder have suffered, incurred,
sustained or become subject to Losses referred to in such paragraph
in excess of U.S. $466,667 in the aggregate (the "Loss Threshold"),
and then to the full extent of such Losses; provided that in
determining whether the Loss Threshold has been met, no Loss under
U.S.$10,000 shall be aggregated; provided further that any claim for
indemnification pursuant to Section 10.1(a)(ii) shall not be subject
to the limitations contained in this Section 10(c)(i).
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(ii) with respect to any claim for
indemnification thereunder, unless the Indemnified Party has given the
Indemnifying Party a Claim Notice or Indemnity Notice, as applicable,
with respect to such claim, setting forth in reasonable detail the
specific facts and circumstances pertaining thereto, (A) as soon as
practical following the time at which the Indemnified Party discovered
such claim (except to the extent the Indemnifying Party is not
prejudiced by any delay in the delivery of such notice) and (B) in
any event prior to the applicable Cut-off Date;
(iii) with respect to any Loss
resulting from a misrepresentation, breach of warranty or breach of
a covenant or agreement that is disclosed in a written notice (which
shall be deemed to include the schedules and exhibits hereto), setting
forth in reasonable detail the specific facts and circumstances
pertaining thereto and specifically indicating that such notice is
intended to modify the schedules and exhibits hereto, delivered by
Seller to Purchaser or by Purchaser to Seller after the date of this
Agreement and at or prior to the Closing (regardless of whether
Purchaser waives such breach or modification in writing or otherwise);
(iv) with respect to any Loss as to
which the Indemnified Parties had a reasonable opportunity, but failed,
in good faith to mitigate their Loss, including but not limited to
their failure to use commercially reasonable efforts to recover under
a policy of insurance or under a contractual right of set-off or
indemnity; or
(v) with respect to any Loss to
the extent it arises from or was caused solely by actions taken by
the Indemnified Party or any of its Affiliates after the Closing.
(d) Notwithstanding anything to the
contrary contained in this Agreement, neither Seller nor Purchaser
shall be liable for any amounts under Sections 10.1(a)(i) and 10.1(b)
in excess of U.S. $12,000,000.
(e) Notwithstanding any thing to the
contrary contained in this Agreement, Seller shall not be liable to, or
hold harmless, Purchaser or Purchaser's officers, directors, employees,
agents or Affiliates from or against any Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to the Licenses or Seller's
applications therefor, including but not limited any lack of validity,
marketability or transferability of the Licenses or Seller's applications
therefor, or to any failure or inability of Purchaser to obtain the
Licenses.
Section 10.2 Method of Asserting Claims. All claims
for indemnification by any Indemnified Party under Section 10.1 will be
asserted and resolved as follows:
(a) In the event any claim or demand in
respect of which an Indemnifying Party might seek indemnity under
Section 10.1 is asserted against or sought to be collected from such
Indemnified Party by a Person other than Seller, Purchaser or any
Affiliate of Seller or Purchaser (a "Third Party Claim"), the
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Indemnified Party shall deliver a Claim Notice with reasonable
promptness to the Indemnifying Party. The Indemnifying Party will
notify the Indemnified Party as soon as practicable within the Dispute
Period whether the Indemnifying Party disputes its liability to the
Indemnified Party under Section 10.1 and whether the Indemnifying Party
desires, at its sole cost and expense, to defend the Indemnified Party
against such Third Party Claim.
(i) If the Indemnifying Party
notifies the Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Indemnified Party with
respect to the Third Party Claim pursuant to this Section 10.2(a),
then the Indemnifying Party will have the right to defend, at the
sole cost and expense of the Indemnifying Party, such Third Party
Claim by all appropriate proceedings, which proceedings will be
vigorously and diligently prosecuted by the Indemnifying Party to
a final conclusion or will be settled at the discretion of the
Indemnifying Party (with the consent of the Indemnified Party,
which consent will not be unreasonably withheld). The
Indemnifying Party will have full control of such defense and
proceedings, including (except as provided in the immediately
preceding sentence) any settlement thereof; provided, however,
that the Indemnified Party may, at the sole cost and expense of
the Indemnified Party, at any time prior to the Indemnifying
Party's delivery of the notice referred to in the first sentence
of this clause (i), file any motion, answer or other pleadings
or take any other action that the Indemnified Party reasonably
believes to be necessary or appropriate to protect its interests
and not prejudicial to the Indemnifying Party (it being understood
and agreed that, except as provided in clause (ii) below, if an
Indemnified Party takes any such action that is prejudicial and
causes a final adjudication that is adverse to the Indemnifying
Party, the Indemnifying Party will be relieved of its obligations
hereunder with respect to the portion of such Third Party Claim
prejudiced by the Indemnified Party's action); and provided
further, that if requested by the Indemnifying Party, the
Indemnified Party will, at the sole cost and expense of the
Indemnifying Party, cooperate with the Indemnifying Party and
its counsel in contesting any Third Party Claim that the
Indemnifying Party elects to contest, or, if appropriate and
related to the Third Party Claim in question, in making any
counterclaim against the Person asserting the Third Party Claim,
or any cross-complaint against any Person (other than the
Indemnified Party or any of its Affiliates). The Indemnified
Party may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the Indemnifying
Party pursuant to this clause (i), and except as provided in the
preceding sentence, the Indemnified Party will bear its own costs
and expenses with respect to such participation. Notwithstanding
the foregoing, the Indemnified Party may take over the control of
the defense or settlement of a Third Party Claim at any time if it
irrevocably waives its right to indemnity under Section 10.1 with
respect to such Third Party Claim.
(ii) If the Indemnifying Party fails
to notify the Indemnified Party within the Dispute Period that
the Indemnifying Party desires to defend the Third Party Claim
pursuant to Section 10.2(a), or if the Indemnifying Party
gives such notice but fails to prosecute vigorously and
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diligently or settle the Third Party Claim, or if the Indemnifying
Party fails to give any notice whatsoever within the Dispute Period,
then the Indemnified Party will have the right to defend, at the
sole cost and expense of the Indemnifying Party, the Third Party
Claim by all appropriate proceedings, which proceedings will be
vigorously and diligently prosecuted by the Indemnified Party to
a final conclusion or will be settled at the discretion of the
Indemnified Party (with the consent of the Indemnifying Party,
which consent will not be unreasonably withheld). The Indemnified
Party will have full control of such defense and proceedings,
including (except as provided in the immediately preceding sentence)
any settlement thereof; provided, however, that if requested by
the Indemnified Party, the Indemnifying Party will, at the sole
cost and expense of the Indemnifying Party, cooperate with the
Indemnified Party and its counsel in contesting any Third Party
Claim which the Indemnified Party is contesting, or, if appropriate
and related to the Third Party Claim in question, in making any
counterclaim against the Person asserting the Third Party Claim,
or any cross-complaint against any Person (other than the
Indemnifying Party or any of its Affiliates). Notwithstanding
the foregoing provisions of this clause (ii), if the Indemnifying
Party has notified the Indemnified Party within the Dispute
Period that the Indemnifying Party disputes its liability
hereunder to the Indemnified Party with respect to such Third
Party Claim and if such dispute is resolved in favor of the
Indemnifying Party, the Indemnifying Party will not be required
to bear the costs and expenses of the Indemnified Party's
defense pursuant to this clause (ii) or of the Indemnifying
Party's participation therein at the Indemnified Party's request,
and the Indemnified Party will reimburse the Indemnifying Party
in full for all reasonable costs and expenses incurred by the
Indemnifying Party in connection with such litigation. The
Indemnifying Party may participate in, but not control, any
defense or settlement controlled by the Indemnified Party
pursuant to this clause (ii), and the Indemnifying Party will
bear its own costs and expenses with respect to such
participation.
(b) In the event any Indemnified Party
should have a claim under Section 10.1 against any Indemnifying Party
that does not involve a Third Party Claim, the Indemnified Party shall
deliver an Indemnity Notice with reasonable promptness to the
Indemnifying Party.
(c) In the event of any claim for
indemnity under Section 10.1(a), Purchaser agrees to give Seller
reasonable access to the Books and Records and employees of Seller in
connection with the matters for which indemnification is sought to the
extent Seller reasonably deems necessary in connection with its rights
and obligations under this Article X.
Section 10.3 Method of Calculating Losses. The
amount of any indemnification payable under any of the provisions of
this Article X shall be (i) net of any tax benefit realized or the
then-present value (based on a discount rate equal to the prime rate
as published in The Wall Street Journal from time to time) of any
such income tax benefit reasonably expected to be realized by the
Indemnified Party on a consolidated basis by reason of the facts and
circumstances giving rise to the indemnification, and (ii) increased
by the amount of any tax required to be paid by the Indemnified
Party on a consolidated basis as a result of the accrual or receipt
of the indemnification payment.
Section 10.4 Exclusivity. After the Closing, to
the extent permitted by Law, the indemnities set forth in this
Article X shall be the exclusive remedies of Purchaser and Seller and
their respective officers, directors, employees, agents and Affiliates
for any misrepresentation, breach of warranty or breach of any
covenant or agreement contained in this Agreement, and the parties
shall not be entitled to a rescission of this Agreement or to any
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further indemnification rights or claims of any nature whatsoever
in respect thereof, all of which the parties hereto hereby waive.
ARTICLE XI
DEFINITIONS
Section 11.1. Definitions. (a) As used in
this Agreement, the following defined terms shall have the meanings
indicated below:
"Actions or Proceedings" means any action,
suit, proceeding, arbitration or Governmental or Regulatory Authority
investigation.
"Affiliate" means any Person that directly,
or indirectly through one of more intermediaries, controls or is
controlled by or is under common control with the Person specified.
For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by Contract or otherwise and, in
any event and without limitation of the previous sentence, any Person
owning more than fifty (50%) of the voting securities of a second
Person shall be deemed to control that second Person.
"Agreement" means this Asset Purchase
Agreement and the Exhibits and the Schedules hereto and the
certificates delivered in accordance with Sections 6.3 and 7.3, as
the same shall be amended from time to time.
"Assets and Properties" of any Person means
all assets and properties, including the Included Assets, of every kind,
nature, character and description (whether real, personal or mixed,
whether tangible or intangible, and wherever situated), operated,
owned or leased by such Person which are material to the business,
financial condition or results of operations of such Person and its
subsidiaries taken as a whole.
"Books and Records" means all files,
documents, instruments, papers, books and records relating to the
Included Assets and the Business, including without limitation
financial statements, Tax Returns and related work papers and letters
from accountants, budgets, pricing guidelines, ledgers, journals, deeds,
title policies, minute books, stock certificates and books, stock
transfer ledgers, Contracts, Licenses, customer lists, computer files
and programs, retrieval programs, operating data and plans and
environmental studies and plans.
"Business Day" means a day other than
Saturday, Sunday or any day on which banks located in Harare, Zimbabwe,
London, England and Danville, Virginia are authorized or obligated
to close.
"Claim Notice" means written notification
pursuant to Section 10.2(a) of a Third Party Claim as to which
indemnity under Section 10.1 is sought by an Indemnified Party,
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enclosing a copy of all papers served, if any, and specifying the
nature of and basis for such Third Party Claim and for the Indemnified
Party's claim against the Indemnifying Party under Section 10.1,
together with the amount or, if not then reasonably ascertainable,
the estimated amount, determined in good faith, of such Third Party
Claim.
"Closing" means the closing of the
transactions contemplated by Section 1.4.
"Closing Date" means (a) the fifth Business
Day after the day on which the last of the consents, approvals, actions,
filings, notices or waiting periods described in or related to the
filings described in Sections 6.5 and 6.6 and Sections 7.5 and 7.6 has
been obtained, made or given or has expired, as applicable, or (b) such
other date as Purchaser and Seller mutually agree upon in writing.
"Contract" means any agreement, lease,
evidence of Indebtedness, mortgage, indenture, security agreement or
other contract.
"Cut-off Date" means, with respect to any
representation, warranty, covenant or agreement contained in this
Agreement, the date on which such representation, warranty, covenant
or agreement ceases to survive as provided in Section 9.15.
"Dispute Period" means the period ending
fifteen (15) calendar days following receipt by an Indemnifying Party
of either a Claim Notice or an Indemnity Notice.
"Employee Benefit Plan" means any plan,
program, policy or arrangement to, or on behalf of, one, or more than
one, current or former employee or director or any of their dependents.
"Environmental Laws" shall mean any and all
national, federal, state, provincial, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Governmental or Regulatory Authority regulating,
relating to or imposing liability or standards of conduct concerning
any Hazardous Materials or Petroleum Products or environmental protection
as now or at any time hereafter in effect, together with any amendment
or re-authorization thereto or thereof.
"Governmental or Regulatory Authority" means
any court, tribunal, arbitrator, authority, agency, commission, official
or other instrumentality of any country, state, province, county, city
or other political subdivision.
"Hazardous Materials" shall mean any
hazardous material, hazardous waste, infectious medical waste, hazardous
or toxic substance defined or regulated as such in any or under any
Environmental Law, including without limitation, materials exhibiting
the characteristics of ignitability, corrosivity, reactivity or
extraction procedure toxicity, as such terms are now or hereafter
defined in connection with hazardous materials or hazardous wastes or
hazardous or toxic substances in any Environmental Law.
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"Indebtedness" of any Person means all
obligations of such Person (i) for borrowed money, (ii) evidenced by
notes, bonds, debentures or similar instruments, (iii) for the deferred
purchase price of goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) under
capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"Indemnity Notice" means written notification
pursuant to Section 10.2(b) of a claim for indemnity under Article X by
an Indemnified Party, specifying the nature of and basis for such claim,
together with the amount or, if not then reasonably ascertainable, the
estimated amount, determined in good faith, of such claim.
"Indemnified Party" means any Person claiming
indemnification under any provision of Article X.
"Indemnifying Party" means any Person against
whom a claim for indemnification is being asserted under any provision
of Article X.
"Knowledge of Purchaser" means the actual
knowledge of the officers and employees of Purchaser listed on
Schedule 11.1.
"Knowledge of Seller" means the actual
knowledge of the officers and employees of Seller listed in
Schedule 11.2.
"Laws" means all laws, statutes, rules,
regulations, ordinances and other pronouncements having the effect of
law of any country, state, province, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge,
assessment, security interest, lease, lien, adverse claim, levy,
charge, restriction or other encumbrance.
"Loss" means any and all damages, fines,
penalties, deficiencies, losses and expenses (including without
limitation interest, court costs, reasonable fees of attorneys,
accountants and other experts or other reasonable expenses of
litigation or other proceedings or of any claim, default or assessment)
and any amounts incurred in mitigation of the foregoing.
"Order" means any writ, judgment, decree,
injunction or similar order of any Governmental or Regulatory
Authority (in each such case whether preliminary or final).
"Permits" means permits, licenses and
governmental authorizations, registrations and approvals.
"Permitted Liens" has the meaning ascribed to
it in Section 2.10.
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"Person" means any natural person, corporation,
general partnership, limited partnership, limited liability company
proprietorship, other business organization, trust, union, association
or Governmental or Regulatory Authority.
"Petroleum Products" shall mean gasoline,
diesel fuel, motor oil, waste or used oil, heating oil, kerosene and
other petroleum products.
"Purchase Price" has the meaning ascribed to
it in Section 1.3.
"Purchaser" has the meaning ascribed to it
in the forepart of this Agreement.
"Representatives" has the meaning ascribed
to it in Section 4.2.
"Seller" has the meaning ascribed to it in
the forepart of this Agreement.
"Subsidiary" means any corporation or limited
liability company in which Seller or Purchaser directly or indirectly
through subsidiaries or otherwise, beneficially owns 50% or more of
the outstanding equity interests or other interests having the right
to elect directors or managers or which Seller or Purchaser, directly
or indirectly, otherwise controls or has the right to control, and
each partnership, joint venture or other entity which is not a
corporation or limited liability company in which Seller or Purchaser
has an interest.
"Tax Return" means any return, declaration,
report, claim for refund, or information return or statement relating
to taxes, including any schedule or attachment thereto, and including
any amendment thereof.
"Tax" means any federal, state, local or
foreign income, capital gains, profits, gross receipts, payroll,
capital stock, franchise, employment, withholding, social security,
unemployment, disability, real property, personal property, stamp,
excise, occupation, sales, use, transfer, mining, value-added,
investment credit recapture, alternative or add-on minimum,
environmental, estimated or other taxes duties or assessments of any
kind, including interest, penalty and additions imposed with respect
to such amounts.
(b) Unless the context of this Agreement
otherwise requires, (i) words of any gender include each other gender;
(ii) words using the singular or plural number also include the plural
or singular number, respectively; (iii) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement;
(iv) the terms "Article" or "Section" refer to the specified Article or
Section of this Agreement; and (v) the phrase "ordinary course of
business" refers to the business of Seller. Any representation or
warranty contained herein as to the enforceability of a Contract shall
be subject to the effect of any bankruptcy, insolvency, reorganization,
moratorium or other similar law affecting the enforcement of creditors'
rights generally and to general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at Law).
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the date first above written.
DIBRELL BROTHERS ZIMBABWE
(PRIVATE) LIMITED
By: /s/ Richard Brian Peale
Name: Richard Brian Peale
Title: Managing Director
TABEX (PRIVATE) LIMITED
By: /s/ C. Taberer
Name: C. Taberer
Title: Managing Director
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<PAGE>
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT, dated as of April 1, 1997 by
and between INTABEX S.A. (ZUG), a company organized under the laws of
Switzerland ("Intabex") (including its subsidiaries "Intabex"), and
FOLIUM INC., a company organized under the laws of the British Virgin
Islands (including its subsidiaries "Folium").
RECITALS
A. Pursuant to a Stock Purchase Agreement,
dated as of February 14, 1997, (the "Stock Purchase Agreement"), by
and among DIMON Incorporated, a Virginia corporation (including its
subsidiaries "DIMON"), Intabex, and the shareholders of Intabex, DIMON
has purchased all of the issued and outstanding shares of capital
stock of Intabex.
B. To induce DIMON to enter into the Stock
Purchase Agreement, Folium has agreed not to compete, and has agreed
to cause each other member of Folium Group (hereinafter defined) not
to compete, with Intabex or any of its affiliates (the "Intabex Group")
upon the terms and conditions set forth herein; and
C. In consideration for such agreement not to
compete, Intabex has agreed to make certain payments to Folium as set
forth herein.
NOW, THEREFORE, in consideration of the recitals
and the mutual covenants, conditions and agreements contained herein
and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Definitions. All capitalized terms used and
not otherwise defined herein shall have the meanings given such terms
in the Stock Purchase Agreement.
2. Term. This Agreement shall be effective
beginning on the date hereof and shall continue for a period of five
(5) years; provided, however, that in the event of any breach hereunder
by Folium or any other member of Folium Group, the term of this
Agreement shall be extended for a period equal to the period of such
breach.
3. Noncompetition Agreement. Folium covenants
and agrees that during the term hereof Folium shall not, and that
Folium shall cause each affiliate designated by Intabex and agreed to
by Folium (Folium and each such affiliate being referred to herein as
"Folium Group") not to, directly or indirectly, engage in or accept
employment with (as a consultant or otherwise), own any interest in,
or otherwise give assistance to, whether or not for compensation, any
person or entity engaged in the ownership or management of any business
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involving the purchase, sale or processing of leaf tobacco anywhere in
Zimbabwe and its territories and possessions (which business the
parties agree will not include any business involving growing tobacco,
warehousing tobacco or the manufacture or sale of cigarettes); provided
that this Section 3 shall not prevent any member of Folium Group from
(i) owning any capital stock or indebtedness of any member of Intabex
Group, (ii) acting as a consultant to or director of Intabex or any
other member of Intabex Group, (iii) owning, operating or selling the
tobacco assets set forth on Schedule 3 hereto in accordance with such
schedule, or (iv) owning less than 5% of the capital stock of any
corporation that is publicly traded on a generally recognized national
securities exchange or inter-dealer quotation system. In the event
that any provision of this Section 3 is determined to be invalid or
overbroad by any court or other entity of competent jurisdiction, the
provisions of this Section 3 shall be deemed to have been amended, and
the parties hereto agree to execute all documents necessary to evidence
such amendment, so as to eliminate or modify any such invalid or
overbroad provision so as to carry out the intent of this Section 3
as far as possible and to render the terms of this Section 3 enforceable
in all respects as so modified. Folium acknowledges that a violation of
this Section 3 by it or any other member of Folium Group may cause
irreparable harm to Intabex Group. Accordingly, Folium hereby grants
Intabex the right to seek and be granted injunctive relief for any
such violation, in addition to any other legal remedies that may be
available to Intabex.
4. Confidential Information. Except as
specifically authorized by Intabex in writing, from the date hereof
and continuing forever, Folium agrees not to, and to cause each other
member of Folium Group not to, (i) disclose any Confidential Information
(as defined below) to any individual or entity, or otherwise knowingly
permit any person or entity to obtain or disclose any Confidential
Information, or (ii) use any Confidential Information, whether
individually or on behalf of another individual or entity, except
pursuant to the performance by any member of Folium Group of its duties
under any consulting agreement with a member of Intabex Group or as a
director of any member of Intabex Group. For purposes hereof,
"Confidential Information" means any and all information relating to
any part of the business of Intabex Group (including, without limitation,
Intabex), provided to Folium or to which Folium has had access (whether
before or after the date hereof), which information is not a matter of
public record or generally known to the tobacco industry, including,
without limitation: (i) financial and operating information regarding
Intabex Group; (ii) personnel data, including compensation arrangements,
relating to any employee of Intabex Group; (iii) internal plans,
practices and procedures of Intabex Group; (iv) the names, addresses
and requirements of any customers of Intabex Group; (v) the terms and
conditions of any supply agreements, customer or vendor commitments
and other agreements, documents and instruments to which any member
of Intabex Group is party; and (vi) any other information expressly
known by Folium to be confidential. Folium acknowledges that it has
had access to and has become familiar with or obtained Confidential
information in the course of its dealings with Intabex Group, and
that a violation of this Section 4 by it would cause irreparable harm
to Intabex Group. Accordingly, Folium hereby grants Intabex Group the
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<PAGE>
right to seek and be granted injunctive relief for any such violation,
in addition to any other legal remedies that may be available to
Intabex Group.
In the event that Folium or any other member of
Folium Group is requested or required (by oral question or request
for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand or similar process) to disclose
any Confidential Information, Folium will, and will cause such other
member of Folium Group to, notify Intabex promptly of the request or
requirement and cooperate with Intabex in seeking an appropriate
protective order or waive compliance with the provisions of this
Section 4; provided, if prior to the issuance of a protective order
or the receipt of a waiver hereunder, Folium or such other member of
Folium Group is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for
contempt, Folium or such other member of Folium Group shall be
permitted to make such disclosure without any responsibility or
liability to Intabex Group but shall use its best efforts to obtain,
at the request of and at the expense of Intabex Group, an Order or
other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed
as Intabex Group shall designate.
5. Transition. Folium agrees that it will
use, and that it will cause each other member of Folium Group to use,
its commercially reasonable efforts to assist Intabex Group in
preserving and retaining all business relationships between Intabex
Group and its customers, suppliers and employees. Folium will not
take, and will cause each other member of Intabex Group not to take,
any action that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier or other
business associate of Intabex Group from maintaining the same
business relationships with Intabex Group after the Closing as it
maintained with Intabex Group prior to the Closing.
6. Payment. In consideration of the
agreements of Folium contained in this Agreement, Intabex hereby
delivers to Folium the sum of U.S.$1,000,000 by wire transfer of
immediately available funds and Folium hereby acknowledges receipt
of such payment.
7. Miscellaneous.
(a) Governing Law; Jurisdiction and Venue; Waiver
of Jury Trial. (i) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York
without regard to the conflicts of law rules or principles thereof.
(ii) Each party hereto consents to submit to the
exclusive jurisdiction of the United States District Court for the
Southern District of New York or in the event (but only in the event)
such court does not have subject matter jurisdiction, of the State
Courts of New York sitting in New York City, for any actions, suits
or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby. Each party hereto agrees not to
commence any action, suit or proceeding relating thereto except in
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such courts. Each party hereto unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby, in such
courts, and waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
(iii) EACH PARTY HERETO IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON ANY CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY
OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
(b) Remedies. Folium acknowledges that a
violation of this Agreement may cause irreparable harm to the business
of Intabex and Intabex Group. Accordingly, Folium hereby grants
Intabex the right to seek and be granted injunctive relief for any
such violation, in addition to any other legal remedies that may be
available to Intabex. Folium shall not in any event be liable or
responsible to Intabex Group for any indirect or consequential damages
to Intabex Group (including lost profits).
(c) Agent for Service of Process. Folium hereby
irrevocably designates, appoints, and empowers CT Corporation System,
at 1633 Broadway, New York, New York 10019, or such other address
where such representative office may be located in New York City, and
its successors and assigns, as its true and lawful agent for service
of process to receive and accept on its behalf service of process in
any actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby. Folium agrees
that the failure of such process agent to give any notice of any
service of process to it shall not impair or affect the validity of
service upon such agent or of any judgment based thereon.
(d) Severability. If any provision, clause or part
of this Agreement, or the application thereof under certain
circumstances is held invalid or unenforceable for any reason, the
remainder of this Agreement, or the application of such provision,
clause or part under other circumstances shall not be affected thereby.
(e) Entire Agreement; Amendment. This Agreement
contains all of the understandings and representations between the
parties hereto pertaining to the subject matter hereof and supersedes
all undertakings and agreements, whether oral or in writing, if any,
previously entered into by them with respect thereto. This Agreement
may not be amended otherwise than by a writing signed by the parties
hereto.
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(f) Notices. All communications, notices and
disclosures required or permitted by this Agreement shall be in
writing and shall be deemed to have been given when delivered
personally or by messenger or by overnight delivery service, or
when received via telecopy, telex or other electronic transmission,
in all cases addressed to the person for whom it is intended at the
address set forth on the signature page hereof or to such other
address as a party shall have designated by notice in writing to
the other party in the manner provided by this Section.
(g) Counterparts; Headings. This Agreement may
be executed in two counterparts, each of which shall be deemed to be
an original, but both of which together shall constitute one and the
same instrument. The Article and Section headings in this Agreement
are inserted for convenience of reference only and shall not
constitute a part hereof.
(h) Successors and Assigns. Folium acknowledges
that Intabex may assign this Agreement, in whole or in part, to any
of its subsidiaries or affiliates, without its consent, and agrees
that this Agreement shall be binding upon, inure to the benefit of and
be enforceable by Intabex and its successors and assigns. At the
request of Intabex, Folium will cause each other member of Folium
Group to execute and deliver to Intabex a written agreement pursuant
to which such member of Folium Group agrees that it is bound by the
terms of this Agreement as if such member were expressly named as a
party hereto.
(i) Confidentiality. Except for information that
is otherwise publicly available, each party agrees to keep
confidential and not to disclose, and to cause each of its affiliates
not to disclose, this Agreement or any terms hereof, except as required
by law.
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IN WITNESS WHEREOF, the parties hereto have executed, or
caused this Agreement to be executed by their duly authorized officers,
all as of the day and year first above written.
INTABEX S.A. (ZUG)
By: /s/ C. V. Parker
Its: Director
Address: Grenzache Strasse 30/32
CH-4058 Basel
Switzerland
FOLIUM, INC.
By: /s/ Brian J. Harker
Its: Authorized Agent
Address: Maitland & Co.
35 rue LaBoerte
Paris, France 75008
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