-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fk4v2CAmDm+m44JY5uuLZN3AvwIFvulOR2/iLs3NzM6P6biRA76lrUfxO1l+0STh WrzlUF1ibZmaofXFmaRwCw== 0000950137-01-503105.txt : 20010816 0000950137-01-503105.hdr.sgml : 20010816 ACCESSION NUMBER: 0000950137-01-503105 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUTLER MANUFACTURING CO CENTRAL INDEX KEY: 0000015840 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 440188420 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12335 FILM NUMBER: 1714055 BUSINESS ADDRESS: STREET 1: BMA TOWER PENN VALLEY PARK STREET 2: P O BOX 419917 CITY: KANSAS CITY STATE: MO ZIP: 64141 BUSINESS PHONE: 8169683000 MAIL ADDRESS: STREET 1: BMA TOWER PENN VALLEY MALL STREET 2: P O BOX 419917 CITY: KANSAS CITY STATE: MO ZIP: 64141 10-Q 1 c64595e10-q.txt FORM 10-Q FOR QUARTER ENDED JUNE 30, 2001 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File No. 001-12335 FOR THE QUARTER ENDED JUNE 30, 2001 BUTLER MANUFACTURING COMPANY Incorporated in State of Delaware BMA Tower - Penn Valley Park Post Office Box 419917 Kansas City, Missouri 64141-0917 Phone: (816) 968-3000 I.R.S. Employer Identification Number: 44-0188420 Shares of common stock outstanding at JUNE 30, 2001: 6,282,783 The name, address and fiscal year of the Registrant have not changed since the last report. The Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. 2 INDEX
PART I. - FINANCIAL INFORMATION Page Number ITEM 1. Financial Statements (1) Consolidated Financial Statements (unaudited): Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2001 and 2000. 3 Consolidated Statements of Comprehensive Income for the Six Month Periods Ended June 30, 2001 and 2000. 4 Consolidated Balance Sheets as of June 30, 2001 and December 31, 2000. 5 Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2001 and 2000. 6 (2) Notes to Consolidated Financial Statements 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 ITEM 3. Quantitative and Qualitative Disclosure About Market Risk. 11 PART II. - OTHER INFORMATION ITEM 2. Changes in Securities and Use of Proceeds. 12 ITEM 4. Submission of Matters to a Vote of Security Holders 12 ITEM 6. Exhibits and Reports on Form 8-K 12 Signatures 13 Exhibits Index 14
Page 2 3 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the three and six month periods ended June 30, 2001 and 2000 (unaudited) ($000's omitted except for per share data)
Three months ended Six months ended June 30, June 30, ----------------------------- ----------------------------- 2001 2000 2001 2000 ----------- ----------- ----------- ----------- Net sales $ 213,672 $ 244,036 $ 408,531 $ 463,225 Cost of sales 180,014 201,879 350,108 386,354 ----------- ----------- ----------- ----------- Gross profit 33,658 42,157 58,423 76,871 Selling, general and administrative expenses 27,131 30,482 55,318 59,979 Restructuring charge (credit) - (441) - (441) ----------- ----------- ----------- ----------- Operating income 6,527 12,116 3,105 17,333 Other income (expense) net 220 (132) 706 (371) ----------- ----------- ----------- ----------- Earnings before interest and taxes 6,747 11,984 3,811 16,962 Interest expense 1,594 1,405 3,073 2,672 ----------- ----------- ----------- ----------- Pretax earnings 5,153 10,579 738 14,290 Income tax expense 1,728 3,936 116 5,432 ----------- ----------- ----------- ----------- Net earnings $ 3,425 $ 6,643 $ 622 $ 8,858 =========== =========== =========== =========== Basic earnings per common share $ 0.55 $ 1.01 $ 0.10 $ 1.33 =========== =========== =========== =========== Diluted earnings per common share $ 0.54 $ 1.01 $ 0.10 $ 1.32 =========== =========== =========== =========== Basic weighted average number of shares 6,282,620 6,598,922 6,278,123 6,676,980 Diluted weighted average number of shares 6,290,487 6,609,374 6,282,057 6,688,477
See Accompanying Notes to Consolidated Financial Statements. Page 3 4 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the six month periods ended June 30, 2001 and 2000 (unaudited) ($000's omitted, except for per share data)
Six months ended June 30, 2001 2000 ------- ------- Net earnings $ 622 $ 8,858 Other comprehensive income: Foreign currency translation and other comprehensive income (501) (118) (loss) adjustments ------- ------- Comprehensive income $ 121 $ 8,740 ======= =======
See Accompanying Notes to Consolidated Financial Statements. Page 4 5 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 2001 and December 31, 2000 (unaudited) ($000's omitted)
2001 2000 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 18,270 $ 16,855 Receivables, net 138,275 138,347 Inventories: Raw materials 22,917 22,059 Work in process 11,019 10,685 Finished goods 33,409 38,686 Lifo reserve (10,127) (9,926) ------------ ------------ Total inventory 57,218 61,504 Real estate developments in progress 42,491 52,623 Deferred tax assets 10,587 10,586 Other current assets 6,475 11,855 ------------ ------------ Total current assets 273,316 291,770 Investments and other assets 42,004 35,000 Assets held for sale 3,832 3,832 Property, plant and equipment, at cost 280,894 274,432 Less accumulated depreciation (154,948) (157,036) ------------ ------------ Net property, plant and equipment 125,946 117,396 ------------ ------------ $ 445,098 $ 447,998 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $ 2,037 $ 35,155 Current maturities of long-term debt 5,586 5,563 Accounts payable 73,475 86,232 Dividends payable 1,069 1,064 Accrued liabilities 72,620 77,434 Taxes on income 8,793 7,461 ------------ ------------ Total current liabilities 163,580 212,909 Deferred tax liabilities 1,409 1,409 Other noncurrent liabilities 12,567 14,666 Long-term debt, less current maturities 103,274 53,298 Shareholders' equity: Common stock, no par value, authorized 20,000,000 Shares, issued 9,088,200 shares, at stated value 12,623 12,623 Cumulative foreign currency translation and other (1,978) (1,477) comprehensive income (loss) adjustments Retained earnings 218,546 220,113 ------------ ------------ 229,191 231,259 Less cost of common stock in treasury, 2,805,417 shares in 2001 and 2,832,338 shares in 2000 64,923 65,543 ------------ ------------ Total shareholders' equity 164,268 165,716 ------------ ------------ $ 445,098 $ 447,998 ============ ============
See Accompanying Notes to Consolidated Financial Statements Page 5 6 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the six month periods ended June 30, 2001 and 2000 (unaudited) ($000's omitted)
2001 2000 -------- -------- Cash flows from operating activities: Net earnings $ 622 $ 8,858 Adjustments to reconcile net earnings to net cash provided (used) in operating activities: Depreciation and amortization 8,282 7,804 Restructuring charge - (441) Equity earnings on joint ventures (19) (91) Change in asset and liabilities Receivables 72 (21,972) Inventories 4,286 2,192 Real estate developments in progress 10,132 (14,332) Other current assets 5,379 5,443 Current liabilities excluding short-term debt (16,239) 123 -------- -------- Net cash provided (used) in operating activities 12,515 (12,416) Cash flows from investing activities: Capital expenditures (18,656) (14,950) Other, net (5,161) (988) -------- -------- Net cash (used) by investing activities (23,817) (15,938) Cash flows from financing activities: Payment of dividends (2,131) (2,168) Proceeds from issuance of long-term debt 50,523 58 Repayment of long-term debt (547) (249) Net increase (decrease) in short-term debt (33,095) 6,155 Sale and issuance of treasury stock 639 547 Purchase of treasury stock (19) (11,566) Other, net (2,152) 471 -------- -------- Net cash provided (used) by financing activities 13,218 (6,752) Effect of exchange rate and comprehensive income changes on cash (501) (326) -------- -------- Net increase (decrease) in cash and cash equivalents 1,415 (35,432) Cash and cash equivalents at beginning of year 16,855 52,951 -------- -------- Cash and cash equivalents at June 30 $ 18,270 $ 17,519 ======== ========
See Accompanying Notes to Consolidated Financial Statements. Page 6 7 BUTLER MANUFACTURING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the accounting policies described in the consolidated financial statements and related notes included in Butler Manufacturing Company's 2000 Form 10-K. It is suggested that those consolidated statements be read in conjunction with this report. The year-end financial statements presented were derived from the company's audited financial statements. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments necessary for a fair presentation of the financial position of Butler Manufacturing Company and the results of its operations. NOTE 2 - NEW ACCOUNTING PRONOUNCEMENT In July 2001, the Financial Accounting Standards Board (SFAS), issued Statement No. 141, "Business Combinations, and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires all future acquisitions after June 30, 2001, to be accounted for under the purchase method of accounting. In addition, if further clarifies the criteria for recognition of intangible assets separately from goodwill. SFAS No. 142 provides guidance on the accounting and reporting for goodwill and intangible assets. Goodwill will no longer be amortized over its estimated useful life, but will be assessed annually for impairment using a fair value based test. The Company will adopt these new standards on January 1, 2002. At the end of the second quarter the company had goodwill of $6.0 million. The Company is in the process of evaluating the application of these pronouncements. NOTE 3 - BUSINESS SEGMENTS The Company groups its operations into five business segments: North American Building Systems, International Building Systems, Architectural Products, Construction Services, and Real Estate. The North American Building Systems segment includes the North American metal buildings and the wood buildings businesses. These business units supply steel and wood frame pre-engineered building systems for a wide variety of commercial, community, industrial, and agricultural applications. The International Buildings Systems segment includes the Company's Asian and European metal buildings businesses. These businesses supply pre-engineered metal buildings for commercial, community, industrial, and agricultural applications primarily for the Chinese and European markets. The Architectural Products segment includes the operations of the Vistawall Group. The group's businesses design, manufacture, and market architectural aluminum systems for nonresidential construction, including curtain wall, storefront systems, windows, doors, skylights, and roof accessories. The Construction Services segment provides comprehensive design and construction planning, execution, and management services for major purchasers of construction. Projects are usually executed in conjunction with the dealer representatives of other Butler divisions. The Real Estate segment provides real estate build-to-suit-to-lease development services in cooperation with Butler dealers. Page 7 8 The accounting policies for the segments are the same as those described in the summary of significant accounting policies as included in the company's 2000 form 10-K. Butler Manufacturing Company's reportable segments are strategic business units that offer products and services for different markets. They are managed separately because each business requires different technology and expertise. The Other classification represents unallocated corporate expenses and unallocated assets, including corporate offices, deferred taxes, pension accounts, interest expense, and intersegment eliminations.
Three Months Six Months NET SALES Ended June 30, Ended June 30, (Thousands of dollars) 2001 2000 2001 2000 - ---------------------------------------------------------------------------------------------- North American Building Systems $ 110,703 $ 127,624 $ 201,776 $ 249,642 International Building Systems 19,327 17,865 35,131 33,532 Architectural Products 57,728 55,744 115,999 109,694 Construction Services 33,155 44,306 51,388 76,534 Real Estate 0 7,152 15,953 7,366 Other (7,241) (8,655) (11,716) (13,543) --------------------------------------------------------- $ 213,672 $ 244,036 $ 408,531 $ 463,225 ---------------------------------------------------------
Net sales represent revenues from sales to affiliated and unaffiliated customers before elimination of intersegment sales, which is included in Other. Intersegment eliminations are primarily sales between North American Building Systems and Architectural Products segments to the International Building Systems and Construction Services segments.
Three Months Six Months PRETAX EARNINGS (LOSSES) Ended June 30, Ended June 30, (Thousands of dollars) 2001 2000 2001 2000 - ---------------------------------------------------------------------------------------------- North American Building Systems $ 3,891 $ 8,473 $ (754) $ 11,528 International Building Systems 245 470 (404) 347 Architectural Products 3,864 4,756 7,445 8,586 Construction Services 337 771 732 1,290 Real Estate 1,064 814 2,555 1,190 Other (4,248) (4,705) (8,836) (8,651) --------------------------------------------------------- $ 5,153 $ 10,579 $ 738 $ 14,290 ---------------------------------------------------------
TOTAL ASSETS June 30, December 31, (Thousands of dollars) 2001 2000 - ---------------------------------------------------------------------------------------------- North American Building Systems $139,755 $156,002 International Building Systems 63,149 62,563 Architectural Products 117,109 108,688 Construction Services 36,817 31,231 Real Estate 44,640 55,331 Other 43,628 34,183 -------------------------------- $445,098 $447,998 --------------------------------
Assets represent both tangible and intangible assets used by each business segment. Other represents cash and cash equivalents, assets held for sale, corporate equipment, and miscellaneous other assets which are not related to a specific business segment. In prior periods, the North American Building Systems and International Building Systems were reported as a single segment. Because of reorganization and management changes, two segments were formed. Page 8 9 NOTE 4 - RESTRUCTURING AND ASSET IMPAIRMENT CHARGES In December 1998, the company's board of directors approved a restructuring of the South American and European metal buildings businesses. As a result, the company recorded a $7.1 million pretax charge in connection with the restructuring. In addition, the company recorded a $6.5 million pretax charge for the impairment of certain assets. The actions leading to the restructuring charge were the closing of manufacturing operations in Brazil and repositioning of European operations. Estimates of realizable asset sales values were obtained from outside appraisals and the company's experience in selling redundant assets. During the first quarter of 1999, the company recorded an additional $1.5 million restructuring charge for currency translation losses on its remaining Brazilian net asset exposure. At the end of the first quarter 2000, $.9 million of the restructuring accrual remained. Final activities related to restructuring were completed in the second quarter 2000, resulting in a $.4 million reversal of the remaining accrual. NOTE 5 - CHANGE IN ACCOUNTING FOR PENSION COSTS Effective January 2001, the company changed its method for the recognition of deferred gains and losses considered in the calculation of the annual net pension expense for its base retirement pension plan under SFAS 87, "Employers' Accounting for Pensions. " The company has changed from the market value method of asset valuation to the market-related value method. Under the previous accounting method all gains and losses, subject to a ten-percent corridor, were recognized and amortized in determining the net periodic pension costs. The new method recognizes and amortizes 20 percent of the cumulative investment gains or losses in determining net periodic pension costs. The new method is commonly used by the manufacturing sector and is preferable because it more accurately matches expense to accounting periods for which benefits are earned. The new method also improves year-to-year comparability of net period costs for this plan. Adoption of this change reduced income from operations and net income for the three months ending June 30 and March 31, 2001 by $.2 million and $.1 million, respectively. The per share impact on each quarter was $.02. The effect on net earnings if these changes were adopted in prior years is immaterial. The company also changed effective April 1, 2001, the period used to amortize prior service costs associated with retroactive amendments of benefits for its hourly pension plans. Previously, the effect of these amendments was amortized over the average future working lifetime of those expected to receive benefits. The new period used for amortization of prior service costs attributed to the amendments is the number of years in which the benefit is earned. The effect of this change is to increase net periodic pension costs and decrease income from continuing operations by $.2 million for the three months ending June 30, 2001. NOTE 6 - INDEBTEDNESS The company entered into a new $50 million bank credit facility and issued $50 million of senior unsecured notes pursuant to a note agreement at the end of June, allowing domestic bank borrowings to be reduced to zero. The new credit agreement was entered into with the Bank of America, N.A. as administrative lender and certain other lenders. Interest on advances under the new credit facility are based on either (a) the higher of the federal funds rate plus .50% or the Administrative Lender's prime rate, which is payable quarterly, or (b) LIBOR, which is payable at the end of periods ranging from one to six months. The new credit agreement provides for a commitment fee on unused advances ranging from .20% to .30%. Commitments under the new credit facility expire on June 30, 2004, at which time any outstanding advances are payable. The agreement contains certain operating covenants, including restrictions on liens, investments, acquisitions, asset sales and mergers. The agreement also requires the Company to maintain a capitalization ratio, as defined, of .5 to 1, a fixed charge coverage ratio, as defined, of 1.7 to 1, and a leverage ratio, as defined of 3.25 to 1 through June 30, 2002 and 3.0 to 1 thereafter. The senior notes bear interest, payable semi-annually on June 30 and December 30, at the rate of 7.91% per annum. Principal of the Senior Notes is payable in annual installments of $4.55 million on December 30th of each year, commencing December 30, 2006, with the balance due on the December 30, 2016 maturity date. The Note Agreement contains certain operating covenants, including restrictions on liens, additional indebtedness and asset sales, and requires the Company to maintain adjusted consolidated net worth, as defined, of $125 million plus the cumulative sum of 50% of consolidated net income for each fiscal quarter after March 31, 2001 and a fixed charge coverage ratio, as defined, of 1.5 to 1.0. Page 9 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net sales for the second quarter were $214 million, down 12% for the same period a year ago primarily due to lower sales in the North America Building Systems, Construction Services, and Real Estate segments. The North American Building Systems segment sales, which includes the pre-engineered steel and wood buildings businesses, declined 13% in the second quarter compared to the prior year. This segment continues to be effected by a weakening U.S. economy and poorer weather through most of the second quarter, resulting in lower non-residential building sales. Construction Services segment sales declined 25% during the second quarter 2001 compared to the prior year as anticipated, due to the decision to focus this business primarily on material-erect opportunities. Real Estate segment sales decreased from a year ago, due to lower project sales. Architectural Products segment sales increased 4% in the second quarter 2001 compared with the same period a year ago as demand for storefront and curtain-wall products remained strong. The International Building Systems segment, which includes the Chinese and European metal buildings businesses, was reported separately for the first time in the second quarter 2001. These businesses were previously reported with domestic pre-engineered steel and wood buildings businesses. Their second quarter sales increased 8% compared with the prior year primarily due to somewhat stronger pre-engineered metal buildings sales in the Asian markets. For the six months ended June 30, 2001 net sales were $409 million compared with $463 million in 2000, a decrease of 12%. Declining sales in the North American Building Systems and Construction Services segments make up most of the six month decline in sales, offset somewhat by improved sales in the Architectural Products, Real Estate and International Building Systems segment. Pretax earnings for the quarter ended June 30, 2001 were $5.2 million compared with $10.6 million, a year ago. For the six months ended June 30, 2001, pretax earnings were $.7 million versus $14.3 million in 2000. The sluggish U.S. economy, and slowing China and European markets, have resulted in competitive pricing which has unfavorably effected pretax earnings in all business segments. LIQUIDITY AND CAPITAL RESOURCES Since December 2000, cash and equivalents increased $1.4 million. Capital expenditures, the payment of dividends and short-term debt were the primary uses of cash. Sources of cash were from operations, including a decrease in working capital, and an increase in long-term debt relate to the new $50 million bank credit facility. For the six months ended June 30, 2001, domestic short-term borrowings averaged $40 million for 181 days compared to $11 million for 108 days in 2000. The company entered into a new $50 million bank credit facility and signed a new $50 million private placement agreement at the end of June allowing domestic bank borrowings to be reduced to zero. The company's foreign operations maintain separate lines of credit with local banks of approximately $7 million, with $2 million utilized at current exchange rates at June 30, 2001. Management believes the company's operating cash flow, along with the bank credit lines, are sufficient to meet future liquidity requirements. Capital expenditures were $19 million for the first six months of 2001 compared to $15 million for the same period in 2000. Total capital expenditures for 2001 are expected to be $54 million. It is estimated that approximately $26 million will be used to construct the Company's new headquarters building. Other expenditures include costs to complete the installation of process lines in the new Vistawall extrusion plant in Tennessee and expansion of the Shanghai, China office facility. Cash paid for taxes and interest totaled $.4 million and $1.3 million in the second quarter 2001, compared with $3.9 million and $1.1 million for the same period a year ago. Cash paid for taxes and interest for the six month period were $1.8 million and $3.0 million, compared with $4.8 million and $2.3 million for the same period a year ago. During the second quarter of 2001, treasury stock purchases were minimal compared with the prior year, and dividends paid totaled $1 million. Total backlog of $342 million increased 2% from comparable backlog of a year ago. Higher margin product backlog was equal to a year ago and construction backlog increased 10% for the same period. Page 10 11 MARKET PRICE RISK The company's principal exposure to market risk is from changes in commodity prices, interest rates, and currency exchange rates. To limit exposure and to manage volatility related to these risks, the company enters into select commodity and currency hedging transactions, as well as forward purchasing arrangements. The company does not use financial instruments for trading purposes. Commodity Price Exposure: The company's primary commodities are steel, aluminum, and wood. Steel is the company's largest purchased commodity. The company enters into forward steel purchase arrangements in its metal buildings business for periods of less than one year duration to protect against potential price increases. To the extent there are increases in the company's steel costs, they are generally recaptured in the company's product sales prices. Aluminum hedge contracts of less than one year duration are purchased to hedge the engineered products backlog of the Vistawall group against potential losses caused by increases in aluminum costs. This product line is sensitive to material cost movements due to the longer lead times from project quoting to manufacture. Gains or losses recorded on hedge contracts are offset against the actual aluminum costs incurred. The change in fair value of aluminum contracts and their associated risk are immaterial. The company's wood frame building business enters into forward purchase arrangements for commercial grade lumber for periods of less than one year duration. Lumber costs are generally more volatile than steel costs. To offset increases in lumber costs, the company adjusts product prices accordingly. Interest Rates: The majority of the company's long-term debt carries a fixed interest rate, therefore the company's interest expense is relatively stable and not influenced by changes in market interest rates. Foreign Currency Fluctuation: The majority of the company's business is transacted in U.S. dollars, therefore limiting the company's exposure to foreign currency fluctuations. Where the company has foreign-based operations, the local currency has been adopted as the functional currency. As such, the company has both transaction and translation foreign exchange exposure in those operations. Due to relative cost and limited availability, the company does not hedge its foreign net asset exposure. The company does hedge short-term foreign currency transaction exposures related to sales activity in Canada. Forward Canadian dollar sale contracts of less than one year duration are purchased to cover the exposure. The change in fair value of such contracts are immaterial. OTHER The company announced that Donald H. Pratt, chairman of the board will retire at the end of the year. John J. Holland, president and chief executive officer, will succeed Mr. Pratt. Ronald E. Rutledge, currently executive vice president, will become president and chief operating officer. FORWARD LOOKING INFORMATION This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which may include statements concerning projection of revenues, income or loss, capital expenditures, capital structure, or other financial items, statements regarding the plans and objectives of management for future operations, statements of future economic performance, statements of the assumptions underlying or relating to any of the forgoing statements, and other statements which are other than statements of historical fact. These statements appear in a number of places in this report and include statements regarding the intent, belief, or current expectations of the company and its management with respect to (i) the cost and timing of the completion of new or expanded facilities, (ii) the company's competitive position, (iii) the supply and price of materials used by the company, (iv) the demand and price for the company's products and services, or (v) other trends affecting the company's financial condition or results of operations, including changes in manufacturing capacity utilization and corporate cash flow in both domestic and international markets. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially as a result of these various factors. For additional comments, refer to the July 17, 2001 letter to shareholders, which is attached as exhibit 19. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There are no material changes to the disclosure made in the Annual Report on Form 10-K for the year ended December 31, 2000 regarding this matter. See discussion about market risk under Item 2. Management Discussion and Analysis on page 11 above. Page 11 12 PART II. - OTHER INFORMATION ITEM 2. CHANGES OF SECURITIES AND USE OF PROCEEDS On June 27, 2001 the Company issued $50.0 million of its 7.87% Senior Notes due December 30, 2016 pursuant to a note purchase agreement dated as of June 20, 2001. It requires the Company to maintain adjusted consolidated net worth, as defined, of $125 million plus the cumulative sum of 50% of consolidated net income for each fiscal quarter after March 31, 2001, and a consolidated income available for fixed charges to fixed charge ratio, as defined, of 1.5 to 1.0. At June 30, 2001, the Company's adjusted consolidated net worth as defined under the Note Purchase Agreement was $275 million. The Company's credit agreement, which was entered into as of June 20, 2001, requires the Company to maintain a capitalization ratio, as defined, of .5 to 1, a fixed charge coverage ratio, as defined, of 1.7 to 1 and a leverage ratio, as defined of 3.25 to 1 through June 30, 2002 and 3.0 to 1 thereafter. The fixed charge coverage ratio is based on the ratio of (a) EBITDAR (pre tax net income (excluding extraordinary gains and losses) plus interest expense, depreciation and amortization, rent expense in respect of synthetic lease obligations and operating lease expense) to (b) fixed charges, consisting of interest and lease expense and cash dividends. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Company held its Annual Meeting of Shareholders on April 17, 2001. Three Class C Directors were elected at the Annual Meeting. In the election of directors, there were 5,178,601 votes cast "for" K. Dane Brooksher and 73,342 votes withheld, 5,178,413 votes cast "for" Susan F. Davis and 73,530 votes withheld, and 5,176,135 votes cast "for" Robert J. Novello and 75,808 votes withheld. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 4.1 Credit Agreement among the Company, certain lenders party thereto and Bank of America, N.A.;, as Administrative Lender, dated June 20, 2001. 4.2 Note Purchase Agreement dated as of June 20, 2001 relating to the Company's 7.87% Senior Notes due December 30, 2016 (b) Accountants Preferability Letter (re: Change in Accounting Principle) (b) July 17, 2000 Letter to Shareholders. (b) Reports on Form 8-K The Company has not filed any reports on Form 8-K during the quarter ended June 30, 2001. Page 12 13 SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BUTLER MANUFACTURING COMPANY August 14, 2001 /s/ Larry C. Miller - ------------------- --------------------------------- Date Larry C. Miller Vice President - Finance, and Chief Financial Officer August 14, 2001 /s/ John W. Huey - ------------------- -------------------------- Date John W. Huey Vice President, General Counsel and Secretary Page 13 14 EXHIBIT INDEX Exhibit Number Description - --------- ----------------------------------- 4.1 Credit Agreement among the Company, certain lenders party thereto and Bank of America, N.A.; as Administrative Lender, dated June 20, 2001. 4.2 Note Purchase Agreement dated as of June 20, 2001 relating to the Company's 7.91% Senior Notes due December 30, 2016 18 Accountants Preferability Letter 19 July 17, 2000 Letter to Shareholders Page 14 EX-4.1 3 c64595ex4-1.txt CREDIT AGREEMENT DATED JUNE 20, 2001 1 EXHIBIT 4.1 ================================================================================ $65,000,000 CREDIT AGREEMENT AMONG BUTLER MANUFACTURING COMPANY CERTAIN LENDERS AND BANK OF AMERICA, N.A., AS ADMINISTRATIVE LENDER June 20, 2001 ================================================================================ BANC OF AMERICA SECURITIES LLC, AS LEAD ARRANGER AND SOLE BOOK MANAGER 2 TABLE OF CONTENTS
Section Page ------- ---- Article 1 Definitions............................................................................................1 Section 1.1 Defined Terms.........................................................................1 Section 1.2 Other Interpretive Provisions........................................................13 Section 1.3 Accounting Terms.....................................................................13 Section 1.4 Rounding.............................................................................13 Section 1.5 References to Agreements and Laws....................................................13 Article 2 Advances..............................................................................................13 Section 2.1 Advances.............................................................................13 Section 2.2 Borrowings, Conversions and Continuations of Advances................................14 Section 2.3 Interest.............................................................................14 Section 2.4 Commitment Fee.......................................................................15 Section 2.5 Prepayment...........................................................................16 Section 2.6 Reduction and Termination of Commitment..............................................16 Section 2.7 Non-Receipt of Funds by the Administrative Lender....................................16 Section 2.8 Payment of Principal of Advances.....................................................17 Section 2.9 Reimbursement........................................................................17 Section 2.10 Manner of Payment....................................................................17 Section 2.11 LIBOR Lending Offices................................................................18 Section 2.12 Sharing of Payments..................................................................18 Section 2.13 Calculation of LIBOR Rate............................................................18 Section 2.14 Booking Advances.....................................................................18 Section 2.15 Taxes................................................................................18 Section 2.16 Letters of Credit....................................................................19 Article 3 Conditions Precedent..................................................................................22 Section 3.1 Conditions Precedent to Initial Credit Extension.....................................22 Section 3.2 Conditions Precedent to All Credit Extensions and Conversions and Continuations......23 Article 4 Representations and Warranties........................................................................23 Section 4.1 Representations and Warranties.......................................................23 Section 4.2 Survival of Representations and Warranties, etc......................................26 Article 5 General Covenants.....................................................................................27 Section 5.1 Preservation of Existence and Similar Matters........................................28 Section 5.2 Business; Compliance with Applicable Law.............................................28 Section 5.3 Maintenance of Properties............................................................28 Section 5.4 Accounting Methods and Financial Records.............................................28 Section 5.5 Insurance............................................................................28 Section 5.6 Payment of Taxes and Claims..........................................................28 Section 5.7 Visits and Inspections...............................................................28 Section 5.8 Payment of Debt......................................................................29 Section 5.9 Use of Proceeds......................................................................29 Section 5.10 Indemnity............................................................................29 Section 5.11 Material Subsidiary Guaranty.........................................................29 Section 5.12 ERISA................................................................................29 Article 6 Information Covenants.................................................................................30
3 Section 6.1 Quarterly Financial Statements and Information.......................................31 Section 6.2 Annual Financial Statements and Information; Certificate of No Default...............31 Section 6.3 Compliance Certificate...............................................................31 Section 6.4 Notice of Litigation, Default and Other Matters......................................31 Article 7 Negative Covenants....................................................................................31 Section 7.1 Capitalization Ratio.................................................................32 Section 7.2 Fixed Charge Coverage Ratio..........................................................32 Section 7.3 Leverage Ratio.......................................................................32 Section 7.4 Guaranties...........................................................................32 Section 7.5 Liens................................................................................32 Section 7.6 Investments..........................................................................32 Section 7.7 Acquisitions.........................................................................32 Section 7.8 Merger, etc..........................................................................33 Section 7.9 Dispositions.........................................................................33 Section 7.10 Transactions with Affiliates.........................................................33 Section 7.11 Business.............................................................................33 Section 7.12 Sales and Leasebacks.................................................................33 Section 7.13 Debt.................................................................................33 Section 7.14 Prepayment of Debt...................................................................33 Article 8 Default...............................................................................................33 Section 8.1 Events of Default....................................................................33 Section 8.2 Remedies.............................................................................34 Article 9 Changes In Circumstances..............................................................................35 Section 9.1 LIBOR Rate Determination Inadequate..................................................35 Section 9.2 Illegality...........................................................................35 Section 9.3 Increased Costs......................................................................36 Section 9.4 Effect On Base Rate Advances.........................................................36 Section 9.5 Capital Adequacy.....................................................................37 Section 9.6 Survival.............................................................................37 Article 10 Agreement Among Lenders..............................................................................37 Section 10.1 Agreement Among Lenders..............................................................37 Section 10.2 Lender Credit Decision...............................................................39 Section 10.3 Notice of Default....................................................................39 Section 10.4 Benefits of Article..................................................................39 Article 11 Miscellaneous........................................................................................39 Section 11.1 Notices..............................................................................39 Section 11.2 Expenses.............................................................................41 Section 11.3 Waivers..............................................................................41 Section 11.4 Determination by the Lenders Conclusive and Binding..................................41 Section 11.5 Set-Off..............................................................................41 Section 11.6 Successors and Assigns...............................................................42 Section 11.7 Counterparts.........................................................................44 Section 11.8 Severability.........................................................................44 Section 11.9 Interest and Charges.................................................................44 Section 11.10 Headings....................................................................44 Section 11.11 Amendment and Waiver........................................................44 Section 11.12 Exception to Covenants......................................................44 Section 11.13 No Liability of Issuing Bank................................................44 Section 11.14 Payments Set Aside..........................................................45 Section 11.15 No Strict Construction......................................................45
ii 4 Section 11.16 Foreign Lenders.............................................................45 Section 11.17 CONFIDENTIALITY.............................................................46 Section 11.18 GOVERNING LAW...............................................................46 Section 11.19 WAIVER OF JURY TRIAL........................................................46 Section 11.20 ENTIRE AGREEMENT............................................................46 SIGNATURES.....................................................................................S-1
iii 5 Schedules and Exhibits Schedule 1.1(a) LIBOR Lending Offices Schedule 1.1(b) Existing Liens Schedule 1.1(c) Existing Letters of Credit Schedule 4.1(a) Subsidiaries Schedule 4.1(h) Existing Litigation Schedule 4.1(q) Environmental Matters Exhibit A Revolving Credit Note Exhibit B Subsidiary Guaranty Exhibit C Assignment Agreement Exhibit D Compliance Certificate Exhibit E Advance Notice iv 6 CREDIT AGREEMENT THIS CREDIT AGREEMENT is dated as of June 20, 2001, among BUTLER MANUFACTURING COMPANY, a Delaware corporation (the "Borrower"), the lenders from time to time party hereto (collectively, the "Lenders" and individually, a "Lender"), and BANK OF AMERICA, N.A., a national banking association, as Administrative Lender for the Lenders (the "Administrative Lender"). BACKGROUND The Borrower has requested that the Lenders make available to the Borrower a three-year credit facility in the maximum principal amount of $65,000,000. The Lenders have agreed to do so, subject to the terms and conditions set forth below. In consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration hereby acknowledged, the parties hereto agree as follows: DEFINITIONS DEFINED TERMS. For purposes of this Agreement: "Acquisition Liens" means Liens existing on Property (a) of a Person at the time it becomes a Subsidiary or (b) of an on-going business acquired by the Borrower or any Subsidiary after the Agreement Date, so long as in each case such Lien (i) was not placed on such Property, and does not secure Debt created, incurred, issued or assumed, contemporaneously with, or in any manner in contemplation of, the acquisition of the equity interest of such Person, or such Property, by the Borrower or such Subsidiary, and (ii) does not extend to any other Property of the Borrower or any Subsidiary after such acquisition. "Acquisitions" means any transaction pursuant to which the Borrower or any of its Subsidiaries, (i) whether by means of a capital contribution or purchase or other acquisition of stock or other securities or other equity participation or interest, (A) acquires more than 50% of the voting or equity interest in any Person pursuant to a solicitation by the Borrower or such Subsidiary of tenders of equity securities of such Person, or through one or more negotiated block, market, private or other transactions not involving a tender offer, or a combination of any of the foregoing, (B) causes any Person, other than a Subsidiary of the Borrower or such Subsidiary, to be merged into the Borrower or such Subsidiary or causes any Subsidiary to be merged into any other Person which does become a Subsidiary of the Borrower thereby, or (C) agrees to purchase all or substantially all of the assets of any Person, pursuant to a merger, purchase of assets or other reorganization providing for the delivery or issuance to the holders of such Person's then outstanding securities, in exchange for such securities, of cash or securities of the Borrower or such Subsidiary, or any combination thereof, or (ii) purchases all or substantially all of the business or assets of any Person or of any operating division of any Person. "Administrative Lender" means Bank of America, N.A., a national banking association, as Administrative Lender for Lenders, or such successor Administrative Lender appointed pursuant to Section 10.1(b) hereof. "Advance" means any amount advanced by the Lenders to the Borrower pursuant to Section 2.1 hereof which either may be a Base Rate Advance or a LIBOR Advance. "Advance Notice" means the Advance Notice substantially in the form of Exhibit E hereto. "Affiliate" means any Person (other than a Guarantor) (i) who is a director or executive officer of the Borrower or any Subsidiary, (ii) which directly or indirectly through one or more intermediaries Controls, or is Controlled By, or is Under Common Control with, the Borrower, (iii) which beneficially owns or holds securities representing 5% or more of the combined voting power of the voting stock of the Borrower or any Subsidiary or (iv) of which securities representing 5% or more of the combined voting power of the voting stock (or in the case of a Person which is not a corporation, 5% or more of the equity) are beneficially owned or held by the Borrower or a Subsidiary. "Agreement" means this Credit Agreement, as amended, modified, supplemented or restated from time to time. "Agreement Date" means the date of this Agreement. 7 "Applicable Environmental Laws" means applicable laws pertaining to health or the environment, including without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (as amended from time to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid Waste Disposal Act or any other similar state Law in any other jurisdiction in which the Borrower or any Subsidiary transacts business or owns property. "Applicable Law" means (a) in respect of any Person, all provisions of constitutions, statutes, rules, regulations and orders of governmental bodies or regulatory agencies applicable to such Person and its properties, including, without limiting the foregoing, all orders and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party, and (b) in respect of contracts relating to interest or finance charges that are made or performed in the State of Texas, "Applicable Law" means the laws of the United States of America, including without limitation 12 USC ss.ss. 85 and 86(a), as amended from time to time, and any other statute of the United States of America now or at any time hereafter prescribing the maximum rates of interest on loans and extensions of credit, and the laws of the State of Texas, and any other statute of the State of Texas now or at any time hereafter prescribing maximum rates of interest on loans and extensions of credit; provided that the parties hereto agree that the provisions of Chapter 303 of the Texas Finance Code, as amended, shall not apply to Advances, this Agreement, the Revolving Credit Notes or any other Loan Documents. "Applicable Margin" means the following per annum percentages, applicable in the following situations:
Base Rate LIBOR Rate Applicability Advances Advances ------------- -------- -------- (a) If the Capitalization Ratio is greater than or equal to 0.40 0.250 1.500 to 1 (b) If the Capitalization Ratio is greater than or equal to 0.30 0.000 1.250 to 1 but less than 0.40 to 1 (c) If the Capitalization Ratio is greater than or equal to 0.20 0.000 1.000 to 1 but less than 0.30 to 1 (d) If the Capitalization Ratio is less than 0.20 to 1 0.000 0.750
The Applicable Margin payable by the Borrower on the Advances outstanding hereunder shall be subject to reduction or increase, as applicable and as set forth in the table above, on a quarterly basis according to the performance of the Borrower as tested using the Capitalization Ratio for the most recent fiscal quarter; provided, that each adjustment in the LIBOR Rate or the Base Rate, as the case may be, shall be effective with respect to LIBOR Advances or Base Rate Advances (i) made following the Financial Statement Due Date, on the date of making of such LIBOR Advance or Base Rate Advance and (ii) outstanding on the Financial Statement Due Date, on the Financial Statement Due Date. If the financial statements are not received by the Lenders on the Financial Statement Due Date, the Applicable Margin shall be determined as if the Capitalization Ratio is greater than or equal to 0.40 to 1 until such time as such financial statements are received. Until the Financial Statement Due Date for the Borrower's financial statements for the fiscal quarter ending June 30, 2001, the Applicable Margin shall be determined as if the Capitalization Ratio is greater than or equal to 0.30 to 1 but less than 0.40 to 1. "Approved Fund" shall have the meaning ascribed thereto in Section 11.6(h) hereof. "Assignment Agreement" means an Assignment Agreement substantially in the form of Exhibit C hereto. "Attributable Indebtedness" means, on any date, (a) in respect of any Capitalized Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease; provided, however, if such Person has a Guaranty Obligation with respect to any Synthetic Lease Obligation, Attributable Indebtedness with 2 8 respect to such Synthetic Lease Obligation means the lesser of (a) the capitalized amount of the remaining lease payments under the relevant lease that would appear on the balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease and (b) the amount of the Guaranty Obligation of such Person in respect of such Synthetic Lease Obligation. "Authorized Signatory" means such senior personnel of the Borrower as may be duly authorized and designated in writing by the Borrower to execute documents, agreements and instruments on behalf of the Borrower, and to request Advances and Letters of Credit hereunder. "Bank of America" means Bank of America, N.A. "Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced by Bank of America as its "prime rate". Such rate is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. "Base Rate Advance" means any Advance that bears interest based on the Base Rate. "Borrower" means Butler Manufacturing Company, a Delaware corporation. "Borrowing" means a borrowing consisting of simultaneous Advances of the same Type and having the same Interest Periods by each of the Lenders pursuant to Section 2.1 hereof. "Business Day" means a day on which banks are open for the transaction of business in Dallas, Texas and, with respect to any LIBOR Advance, in London, England. "Capitalization Ratio" means, for any date of determination, the ratio of (a) Total Funded Debt as of such date to (b) Total Capital as of such date. "Capitalized Lease Obligations" means that portion of any obligation of the Borrower or any Subsidiary as lessee under a lease which at the time would be required to be capitalized on a balance sheet prepared in accordance with GAAP. "Change of Control" means, with respect to any Person, an event or series of events by which: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such Person or its subsidiaries, or any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 50% or more of the equity interests of such Person; or (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body. "Code" means the Internal Revenue Code of 1986, as amended. "Commitment" means $65,000,000, as reduced from time to time pursuant to Section 2.6 hereof. "Control" or "Controlled" or "Controlled By" or "Under Common Control" means possession, directly or indirectly, of power to direct or cause the direction of management or policies of a Person (whether through ownership of voting stock, by contract or otherwise). 3 9 "Controlled Group" means as of the applicable date, as to any Person, all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) which are under common control with such Person and which, together with such Person, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code; provided, however, that the Subsidiaries of the Borrower shall be deemed to be members of the Borrower's Controlled Group. "Credit Extension" means each of the following: (a) a Borrowing and (b) a Letter of Credit Extension. "Debt" means, as to any Person at a particular time, all of the following (but without duplication): (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) any direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), banker's acceptances, bank guaranties, surety bonds and similar instruments; (c) net aggregate obligations under Swap Contracts calculated (i) with respect to Swap Contracts which have been closed out, the termination value thereof, and (ii) with respect to Swap Contracts which have not been closed out, the mark-to-market value thereof determined on the basis of readily available quotations provided by any recognized dealer in such Swap Contracts; (d) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services, and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (e) Capitalized Lease Obligations and Synthetic Lease Obligations; (f) any Redeemable Stock of such Person; and (g) all Guaranty Obligations of such Person in respect of any of the foregoing. For all purposes hereof, the Debt of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer to the extent there is recourse to such Person for such Indebtedness. The amount of any Capitalized Lease Obligations or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date. "Debtor Relief Laws" means any applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar debtor relief Laws affecting the rights of creditors generally from time to time in effect. "Default" means an Event of Default and/or any of the events specified in Section 8.1, regardless of whether there shall have occurred any passage of time or giving of notice that would be necessary in order to constitute such event an Event of Default. "Default Rate" means a simple per annum interest rate equal to the lesser of (a) the Highest Lawful Rate, or (b) the sum of the Base Rate plus two percent. "Determining Lenders" means, on any date of determination (a) prior to the issuance of at least $40,000,000 in aggregate principal amount of the 2001 Private Placement Notes, the Lender(s) whose Specified Percentages aggregate more than 50% and (b) after the issuance of at least $40,000,000 in aggregate principal amount of the 2001 Private Placement Notes, at least two Lenders whose Specified Percentages aggregate more than 50%; provided, however, that following the termination of the Commitment, "Determining Lenders" means the Lender(s) having more than 50% of the aggregate amount of the Advances then outstanding. "Disposition" has the meaning given to it in Section 7.9 hereof. 4 10 "Dividend" means, (i) as to the Borrower, any declaration or payment of any dividend (other than a stock dividend) on, or the making of any distribution to any holder of, any shares of capital stock or other ownership interests of the Borrower (other than salaries, bonuses and other compensation paid in the ordinary course of business) and (ii) as to any Subsidiary, any declaration or payment of any dividend (other than a stock dividend) on, or the making of any distribution to any holder of, any shares of capital stock or other ownership interests of such Subsidiary (other than salaries and bonuses paid in the ordinary course of business) to any Person other than the Borrower or a Subsidiary of the Borrower. "Dollar" or "$" means lawful currency of the United States of America. "Domestic Subsidiary" means any Subsidiary which is not a Foreign Subsidiary. "EBITDA" means, for any period, determined in accordance with GAAP on a consolidated basis for the Borrower and its Subsidiaries, the sum of (a) pre-tax net income (excluding therefrom, to the extent included in determining pre-tax net income, any items of extraordinary gain, including net gains on the sale of assets other than asset sales in the ordinary course of business, and any non-recurring, non-cash credits, and adding thereto, to the extent including in determining pre-tax net income, any items of extraordinary loss, including net losses on the sale of assets other than asset sales in the ordinary course of business, any non-recurring, non-cash charges), plus (b) interest expense (including interest expense pursuant to Capitalized Lease Obligations), plus (c) depreciation and amortization, in each case for the four consecutive fiscal quarters immediately preceding the date of determination, plus (d) (without duplication and to the extent included in determining pre-tax net income) rent expense in respect of any Synthetic Lease Obligations. "EBITDAR" means, for any period, determined in accordance with GAAP on a consolidated basis for the Borrower and its Subsidiaries, the sum of (a) EBITDA, plus (b) lease expense pursuant to Operating Leases. "Eligible Assignee" has the meaning given to it in Section 11.6(h) hereof. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any regulation promulgated thereunder. "ERISA Affiliate" means the Borrower and (i) any corporation that is a member of a controlled group of corporations within the meaning of Section 414(b) of the Code of which the Borrower is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Code of which the Borrower is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Code of which the Borrower, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. "ERISA Event" means, with respect to the Borrower and its Subsidiaries, (a) a Reportable Event (other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under regulations issued under Section 4043 of ERISA), (b) the withdrawal of any such Person or any member of its Controlled Group from a Plan subject to Title IV of ERISA during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate under Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e) the failure to make required contributions which could result in the imposition of a lien under Section 412 of the Code or Section 302 of ERISA, or (f) any other event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or the imposition of any liability under Title IV of ERISA other than PBGC premiums due but not delinquent under Section 4007 of ERISA. "Event of Default" means any of the events specified in Section 8.1, provided that any requirement for notice or lapse of time has been satisfied. "Existing Credit Agreement" means that certain Credit Agreement, dated as of June 2, 1995, among the Borrower, the lenders party thereto and Bank of America, N.A., as Administrative Lender, as amended, modified or supplemented from time to time. "Existing Private Placement Notes" means, collectively, those certain (a) 8.02% Senior Notes of the Borrower in $35,000,000 aggregate principal amount, due December 30, 2003 and (b) 6.57% Senior Notes of the Borrower in $35,000,000 aggregate principal amount, due March 20, 2013. 5 11 "Existing Letters of Credit" means the letters of credit set forth on Schedule 1.1(c). "Facility Sale and Leaseback" means the sale and leaseback (including the purchase and resale by the Borrower or a Subsidiary of bonds secured by such facility) by the Borrower or a Subsidiary of a plant or headquarters facility used in their respective businesses, including facilities located in Newman, Georgia and Greenville, Tennessee. "Federal Funds Rate" means, for any day, the rate per annum (rounded upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of Dallas on the Business Day next succeeding such day, provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Lender on such day on such transactions as determined by Administrative Lender. "Financial Statement Due Date" means each date that the financial statements referred to Section 6.1 or 6.2 hereof, as applicable, are required to be delivered to the Lenders pursuant thereto. "Fixed Charges" means, for any period, determined in accordance with GAAP on a consolidated basis for the Borrower and its Subsidiaries, the sum of (without duplication) (a) interest expense (including interest expense pursuant to Capitalized Lease Obligations), plus (b) lease expense pursuant to Operating Leases, plus (c) Restricted Payments (other than Treasury Stock Purchases) declared or paid (without duplication). "Fixed Charge Coverage Ratio" means, as of any date of determination, the ratio of (a) EBITDAR for the period of four consecutive fiscal quarters ending on such date to (b) Fixed Charges for the period of four consecutive fiscal quarters ending on such date. "Foreign Lender" has the meaning given to it in Section 11.16 hereof. "Foreign Subsidiary" means any Subsidiary which is organized or established outside of the United States of America. "Fund" has the meaning given to it in Section 11.6(h) hereof. "Future Headquarters" means that certain corporate headquarters building of the Borrower to be located in the West Bottoms, Kansas City, Missouri. "Future Headquarters Sale and Leaseback" means the sale and leaseback (including the purchase and resale by the Borrower of bonds secured by such facility) by the Borrower of the Future Headquarters. "GAAP" means generally accepted accounting principles as in effect in the United States as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination, consistently applied. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Determining Lenders shall so request, the Administrative Lender, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Determining Lenders); provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the Borrower shall provide to the Administrative Lender and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP "Governmental Authority" means (a) the government of (i) the United States of America and any State or other political subdivision thereof or (ii) any jurisdiction in which the Borrower or any Subsidiary conducts all or any part of its business or owns any Property or (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government. "Guarantor" means each Subsidiary which has executed a Subsidiary Guaranty. 6 12 "Guaranty Obligation" means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guarantying or having the economic effect of guarantying any Debt or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligees in respect of such Debt or other obligation of the payment or performance thereof or to protect such obligees against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Debt or other obligation of any other Person, whether or not such Debt or other obligation is assumed by such Person; provided, however, that the term "Guaranty Obligation" shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guarantying Person in good faith. "Hazardous Substance" means any and all pollutants, contaminants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which is or shall be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, ureaformaldehyde foam insulation and polychlorinated biphenyls). "Highest Lawful Rate" means at the particular time in question the maximum rate of interest which, under Applicable Law, any Lender is then permitted to charge on the Obligations. If the maximum rate of interest which, under Applicable Law, any Lender is permitted to charge on the Obligations shall change after the date hereof, the Highest Lawful Rate shall be automatically increased or decreased, as the case may be, from time to time as of the effective time of each change in the Highest Lawful Rate without notice to the Borrower. For purposes of determining the Highest Lawful Rate under Applicable Law, the indicated rate ceiling shall be the lesser of (a)(i) the "weekly ceiling", as that expression is defined in Section 303.003 of the Texas Finance Code, as amended, or (ii) if available in accordance with the terms thereof and at the Administrative Lender's option after notice to the Borrower and otherwise in accordance with the terms of Section 303.103 of the Texas Finance Code, as amended, the "annualized ceiling" and (b)(i) if the amount outstanding under this Agreement is less than $250,000, twenty-four percent (24%), or (ii) if the amount under this Agreement is equal to or greater than $250,000, twenty-eight percent (28%) per annum. "Indemnitees" has the meaning given to it in Section 5.10(a) hereof. "Information" has the meaning given to it in Section 11.17 hereof. "Initial Guarantors" means BMC Real Estate, Inc., a Delaware corporation, BUCON, Inc., a Delaware corporation, Butler Holdings, Inc., a Delaware corporation, Butler Real Estate, Inc., a Delaware corporation, Lester Buildings, Inc., a Minnesota corporation, Butler Pacific, Inc., a Delaware corporation, Moduline Windows, Inc., a Wisconsin corporation, and Liberty Building Systems, Inc., a Delaware corporation. "Interest Period" means as to each LIBOR Advance, the period commencing on the date such LIBOR Advance is disbursed or converted to or continued as a LIBOR Advance and ending on the date one, two, three or six months thereafter (or ending on such other dates if available to all Lenders), as selected by the Borrower in its Advance Notice, as the case may be; provided that: (i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a LIBOR Advance, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day; 7 13 (ii) any Interest Period pertaining to a LIBOR Advance that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (iii) no Interest Period shall extend beyond the scheduled Maturity Date. "Investment" means any transaction pursuant to which the Borrower or any of its Subsidiaries whether by means of a capital contribution or purchase or other acquisition of stock or other securities or other equity participation or interest acquires 50% or less of the voting or equity interest in any Person, or any direct or indirect loan, advance or capital contribution to, or investment in any other Person other than a Domestic Subsidiary which is not an Acquisition, including without limitation the incurrence or sufferance by the Borrower or any Domestic Subsidiary of Debt of any other Person, or the purchase of accounts receivable of any other Person that are not current assets or do not arise in the ordinary course of business, excluding, however, (i) all such loans, advances, capital contributions and investments existing on the Agreement Date and any subsequent recharacterizations or exchanges thereof, and (ii) Guaranty Obligations with respect to which the obligor is not in default. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment. "Issuing Bank" means any Lender, in its capacity as issuer of a Letter of Credit. "Laws" means any statute, law, ordinance, regulation, rule, order, writ, injunction or decree of any Governmental Authority. "Lender" means each financial institution shown on the signature pages hereof so long as such financial institution maintains a Commitment or is owed any part of the Obligations (including the Administrative Lender in its individual capacity), and each Assignee that hereafter becomes party hereto pursuant to Section 11.6 hereof. "Lender Affiliate" means any Person that, directly or indirectly through one or more Persons, Controls or is Controlled By or Under Common Control with a Lender. "L/C Related Documents" has the meaning given to it in Section 2.16(e) hereof. "Letter of Credit" has the meaning given to it in Section 2.16(a) hereof. "Letter of Credit Agreement" has the meaning given to it in Section 2.16(b)(i) hereof. "Letter of Credit Extension" means, with respect to any Letter of Credit, the issuance thereof or the extension of the expiration date thereof, or the renewal or increase of the amount thereof. "Letter of Credit Facility" means the amount of Letters of Credit the Issuing Bank may issue pursuant to Section 2.16(a) hereof. "Leverage Ratio" means, as of any date of determination, the ratio of (a) Total Funded Debt as of such date to (b) EBITDA for the period of four consecutive fiscal quarters ending on such date. For purposes of calculating the Leverage Ratio, EBITDA shall include (exclude) the trailing four quarters of EBITDA attributable to any assets acquired (disposed of) during such period, as determined by a method prepared by the Borrower and which is reasonably satisfactory to the Determining Lenders. "LIBOR Advance" means an Advance which the Borrower requests to be made as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance with the provisions of Section 2.2 hereof. "LIBOR Lending Office" means, with respect to a Lender, the office designated as its LIBOR Lending Office on Schedule 1.1(a) attached hereto, and such other office of the Lender or any of its affiliates hereafter designated by notice to the Borrower and the Administrative Lender. "LIBOR Rate" means, for any Interest Period the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "LIBOR Rate" means, for any LIBOR Advance for any Interest Period therefor, the rate per annum (rounded 8 14 upwards, if necessary, to the nearest 1/100th of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100th of 1%). "Lien" means, with respect to any property, any mortgage, lien, pledge, collateral assignment, hypothecation, charge, security interest, title retention agreement, levy, execution, seizure, attachment, garnishment or other encumbrance of any kind in respect of such property, whether or not choate, vested or perfected. "Loan Documents" means this Agreement, the Revolving Credit Notes, the Subsidiary Guaranty, any Swap Contract entered into with any Lender or any Lender Affiliate and any other document or agreement executed or delivered from time to time by the Borrower or any Subsidiary in connection herewith or as security for the Obligations. "Material Adverse Effect" means any act or circumstance or event that (a) causes a Default, (b) is material and adverse to (i) the consolidated financial condition, Properties, results of operations or business of the Borrower and its Subsidiaries taken as a whole or (ii) the ability of the Borrower to perform its obligations under the Loan Documents, or (c) in any manner whatsoever materially and adversely affects the validity or enforceability of any Loan Documents. "Material Subsidiary" means each Domestic Subsidiary (a) the gross revenues of which for the then most recently completed four fiscal quarters (or, with respect to any Domestic Subsidiary acquired during such four fiscal quarters, would have constituted had the gross revenues of such Subsidiary been included for such period) 5% or more of the consolidated gross revenues of the Borrower and its Subsidiaries for such period or (b) the assets of which as of the end of any fiscal quarter constituted 5% or more of the consolidated assets of the Borrower and its Subsidiaries as of the end of such fiscal quarter. "Maturity Date" means June 20, 2004, or the earlier date of termination in whole of the Commitment pursuant to Sections 2.6 or 8.2 hereof. "Maximum Amount" means the maximum amount of interest which, under Applicable Law, the Lenders are permitted to charge on the Obligations. "Multiemployer Plan" means, as to any Person, at any time, a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to which such Person or any member of its Controlled Group is making, or is obligated to make contributions or has made, or been obligated to make, contributions. "Necessary Authorization" means any right, franchise, license, permit, consent, approval or authorization from, or any filing or registration with, any governmental or other regulatory authority necessary or appropriate to enable the Borrower or any Subsidiary to maintain and operate its business and properties. "Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower or any Subsidiary arising under any Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising. Without limiting the generality of the foregoing, "Obligations" includes all amounts which would be owed by the Borrower or any Subsidiary to Administrative Lender, Lenders or any Lender Affiliate under any Loan Document, but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Borrower or any Subsidiary (including all such amounts which would become due or would be secured but for the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding of the Borrower or any Subsidiary under any Debtor Relief Law). "Operating Lease" means any operating lease, as defined in the Financial Accounting Standard Board Statement of Financial Accounting Standards No. 13, dated November, 1976 or otherwise in accordance with GAAP. "Other Taxes" has the meaning given to it in Section 2.15(b) hereof. "Participant" has the meaning given to it in Section 11.6(d) hereof. "Payment Date" means the last day of the Interest Period for any LIBOR Advance. 9 15 "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Permitted Liens" means, as applied to any Person, any or all of the following: (a) any Lien in favor of the Lenders to secure the Obligations hereunder; (b) (i) Liens on real estate for real estate taxes, assessments, governmental charges, levies, payments in lieu of taxes, impact fees, payments due under declarations and covenants, water and sewer charges, and dues or assessments of association, levy, management or similar districts that are not yet delinquent, (ii) Liens created by lease agreements to secure the payments of rental amounts and other sums not yet due thereunder, (iii) Liens on leasehold interests created by the lessor in favor of any mortgagee of the leased premises, and (iv) Liens for taxes, assessments, governmental charges, levies or claims that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on such Person's books, but only so long as no foreclosure, restraint, sale or similar proceedings have been commenced with respect thereto and the payment thereof is not at the time required by Section 5.6 hereof; (c) Liens of carriers, warehousemen, mechanics, laborers and materialmen and other similar Liens incurred in the ordinary course of business for sums not yet due or being contested in good faith, if such reserve or appropriate provision, if any, as shall be required by GAAP shall have been made therefor; (d) Liens incurred in the ordinary course of business in connection with worker's compensation, unemployment insurance or similar legislation; (e) Easements, right-of-way, restrictions and other similar encumbrances on the use of real property which do not interfere with the ordinary conduct of the business of such Person; (f) Purchase Money Liens if, after giving effect thereto and to any concurrent transactions (i) each such Purchase Money Lien secures an amount not exceeding 100% of the cost of the particular Property to which it relates; provided, such Property is purchased in the ordinary course of business and (ii) such Purchase Money Lien encumbers only Property (A) purchased after the Agreement Date, (B) acquired with the proceeds of the Debt secured thereby or credit extended by the seller of the Property and (C) immediately after, and after giving effect thereto, no Default or Event of Default would exist; (g) Any Liens existing on the Agreement Date which are described on Schedule 1.1(b) hereto, and Liens resulting from the refinancing of the related Debt, provided that the Debt secured thereby shall not be increased and the Liens shall not cover additional assets of the Borrower; (h) Acquisition Liens; (i) Liens on Property of a Subsidiary, provided that (i) such Lien is of a type described in clauses (a) through (h), or (ii) other Liens which secure obligations of that Subsidiary owing to the Borrower or a Subsidiary; (j) Liens on cash advanced, together with earnings and proceeds thereof, as collateral for reimbursement obligations under bank letters of credit, which Liens arise only upon a default in the agreements providing for such letters of credit, so long as the cash advanced as collateral with respect thereto does not exceed $7,000,000 in aggregate amount; (k) any attachment or judgment Lien, unless the judgment it secures shall not, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 30 days after the expiration of any such stay; and 10 16 (l) Liens not otherwise described in clauses (a) through (k) above securing Debt in an aggregate amount of $20,000,000, determined for the Borrower and its Subsidiaries on a consolidated basis. "Person" means an individual, corporation, partnership, trust or unincorporated organization, or a government or any agency or political subdivision thereof. "Plan" means any employee pension benefit plan, as defined in Section 3(2) of ERISA, that has been established by, or contributed to, or is maintained by the Borrower or any ERISA Affiliate. "Prohibited Transaction" has the meaning specified therefor in Section 4975 of the Code or Section 406 of Title I of ERISA. "Property" means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible. "Purchase Money Lien" means a Lien held by any Person (whether or not the seller of such assets) on tangible property acquired or constructed by the Borrower or any Subsidiary after the date hereof (other than tangible property acquired to replace, repair, upgrade or alter tangible Property owned by the Borrower or any Subsidiary on the date hereof), which Lien secured all or a portion of the related purchase price or construction costs of such tangible property and which Lien is created contemporaneously with, or within one hundred eighty (180) days of, such acquisition or construction; provided that, in each such case such Lien does not extend to any other Property of the Borrower or any other Subsidiary. "Quarterly Date" means the last day of each March, June, September and December, beginning June 30, 2001. "Redeemable Stock" means any capital stock or other equity interest of the Borrower or any of its Subsidiaries which prior to July 30, 2004 is (a) unilaterally redeemable (by seeking final or similar payments or otherwise) upon the occurrence of certain events or otherwise, (b) redeemable at the option of the holder thereof or (c) convertible into Debt. "Register" has the meaning given to it in Section 11.6(c) hereof. "Regulatory Change" has the meaning given to it in Section 2.16(d) hereof. "Reimbursement Obligations" means, in respect of any Letter of Credit as at any date of determination, the sum of (a) the maximum aggregate amount which is then available to be drawn under such Letter of Credit plus (b) the aggregate amount of all drawings under such Letter of Credit and not theretofore reimbursed by the Borrower. "Release Date" means the date on which the Revolving Credit Notes have been paid, all other Obligations due and owing have been paid and performed in full, and the Commitment has been terminated. "Reportable Event" has the meaning set forth in Section 4043(b) of ERISA. "Request for Credit Extension" means (a) with respect to a Borrowing, conversion or continuation of an Advance, an Advance Notice and (b) with respect to a Letter of Credit Extension, a Request for Issuance. "Request for Issuance" has the meaning given to it in Section 2.16(b) hereof. "Restricted Payments" means, with respect to any Person, (a) Dividends and (b) Treasury Stock Purchases. "Revolving Credit Note" means each Promissory Note of the Borrower evidencing Advances hereunder, substantially in the form of Exhibit A hereto, together with any extension, renewal or amendment thereof, or substitution therefor. "San Marcos Bonds" means those certain City of San Marcos Industrial Development Corporation Industrial Development Revenue Bonds in aggregate principal amount of $6,250,000, due 2015. "Securities Act" means the Securities Act of 1933, as amended. "Shareholder's Equity" means the consolidated shareholder's equity of the Borrower and its Subsidiaries, determined in accordance with GAAP. "Solvent" means, with respect to any Person, that the fair value of the assets of such Person is, on the date of determination, greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such 11 17 Person as of such date and that, as of such date, such Person is able to pay all liabilities of such Person as such liabilities mature and such Person does not have unreasonably small capital with which to carry on its business. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability discounted to present value at rates believed to be reasonable by such Person. "Special Counsel" means the law firm of Donohoe, Jameson & Carroll, P.C., or such other legal counsel as the Administrative Lender may select. "Specified Percentage" means, as to any Lender, the percentage indicated beside its name on the signature pages hereof, or if applicable, specified in its most recent Assignment Agreement or the most recent amendment of this Agreement, as adjusted as a result of any Commitment reductions that are applied to Bank of America only as provided in Sections 2.6(a) and 2.6(b) hereof. "Subsidiary" means (a) any corporation of which more than 50% of the outstanding stock (other than directors' qualifying shares) having ordinary voting power to elect a majority of its board of directors, regardless of the existence at the time of a right of the holders of any class of securities of such corporation to exercise such voting power by reason of the happening of any contingency, is at the time owned by the Borrower, directly or through one or more intermediaries, and (b) any other entity which is Controlled by the Borrower, directly or through one or more intermediaries. "Subsidiary Guaranty" means the Subsidiary Guaranty of even date herewith, executed by certain Domestic Subsidiaries of the Borrower, guarantying payment and performance of the Obligations, substantially in the form of Exhibit C hereto, as such agreement may be amended, modified, supplemented or restated from time to time and each Subsidiary Guaranty hereafter executed and delivered by a Material Subsidiary pursuant to Section 5.11 hereof. "Swap Contract" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, any cancellations, buy backs, reversals, terminations or assignments of any of the foregoing, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement. "Synthetic Lease Obligation" means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment). "Taxes" has the meaning given to it in Section 2.15(a) hereof. "Total Assets" means, as of any date of determination, the consolidated assets of the Borrower and its Subsidiaries determined in accordance with GAAP. "Total Capital" means, as of any date of determination, the sum of (i) Shareholder's Equity as of such date plus (ii) Total Funded Debt as of such date. "Total Funded Debt" means, as of any date of determination, determined on a consolidated basis for the Borrower and its Subsidiaries, all Debt of the Borrower and its Subsidiaries of the type described in clauses (a) through (f) of the definition of "Debt" herein (provided that (y) Debt of the type described in clause (b) of the definition of "Debt" herein shall only be deemed to be Total Funded Debt to the extent that obligations are outstanding as a result of draws or claims made against such instruments and (z) the bonds secured by the Future Headquarters Sale and Leaseback or a Facility Sale and Leaseback, and Borrower's obligations to reimburse insurance providers for third 12 18 party claims filed under any insurance program therewith sponsored by the Borrower or its Subsidiaries, shall not be considered Total Funded Debt). "Treasury Stock Purchases" means, with respect to any Person, any purchase, redemption or other acquisition or retirement for value of any shares of capital stock or other ownership interests of such Person by such Person, but not including any such purchase or acquisition in connection with the exercise of stock options with respect to stock of the Borrower. "2001 Private Placement Notes" means those certain private placement notes of the Borrower in an aggregate amount up to $50,000,000 to be arranged by Banc of America Securities LLC and to be issued on or about June 29, 2001. "Type" means with respect to an Advance, its character as a Base Rate Advance or a LIBOR Advance. "UCC" means the Uniform Commercial Code of Texas, as amended from time to time. OTHER INTERPRETIVE PROVISIONS. THE MEANINGS OF DEFINED TERMS ARE EQUALLY APPLICABLE TO THE SINGULAR AND PLURAL FORMS OF THE DEFINED TERMS. (i) The words "herein" and "hereunder" and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof. (ii) Unless otherwise specified herein, Article, Section, Exhibit and Schedule references are to this Agreement. (iii) The term "including" is by way of example and not limitation. (iv) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced. IN THE COMPUTATION OF PERIODS OF TIME FROM A SPECIFIED DATE TO A LATER SPECIFIED DATE, THE WORD "FROM" MEANS "FROM AND INCLUDING;" THE WORDS "TO" AND "UNTIL" EACH MEAN "TO BUT EXCLUDING;" AND THE WORD "THROUGH" MEANS "TO AND INCLUDING." SECTION HEADINGS HEREIN AND THE OTHER LOAN DOCUMENTS ARE INCLUDED FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT AFFECT THE INTERPRETATION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. ACCOUNTING TERMS. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. ROUNDING. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number). REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly provided herein, (a) references to agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law. ADVANCES ADVANCES. Each Lender severally agrees, upon the terms and subject to the conditions of this Agreement, to make Advances to the Borrower from time to time in an aggregate amount not to exceed its Specified Percentage of the 13 19 Commitment, provided that at no time shall the aggregate outstanding principal amount of all Advances, together with the aggregate outstanding principal amount of Reimbursement Obligations, exceed the Commitment. Subject to Section 2.9 hereof, Advances may be repaid and then reborrowed. Any Advance shall, at the option of the Borrower as provided in Section 2.2 hereof (and, in the case of LIBOR Advances, subject to availability and to the provisions of Article 9 hereof), be made as a Base Rate Advance or a LIBOR Advance; provided that there shall not be outstanding to any Lender, at any one time, more than ten LIBOR Advances under the Commitment. On the Maturity Date unless sooner paid as provided herein, the outstanding Advances shall be repaid in full. Borrowings, conversions and continuations of advances. NOTICES. Each Borrowing, each conversion of Advances from one Type to the other, and each continuation of Advances as the same Type shall be made upon the Borrower's irrevocable notice to the Administrative Lender, which may be given by telephone. Each such notice must be received by the Administrative Lender not later than (i) 10:00 a.m., Dallas Texas time three Business Days prior to the requested date of any Borrowing of, conversion toor continuation of LIBOR Advances, and (ii) 12:00 noon, Dallas, Texas time on the requested date of any Borrowing of Base Rate Advances or of any conversion of LIBOR Advances to Base Rate Advances. Each such telephonic notice must be confirmed promptly by delivery to the Administrative Lender of a written Advance Notice, appropriately completed and signed by an Authorized Signatory. Each Borrowing of, conversion to or continuation of LIBOR Advances shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Borrowing of or conversion to Base Rate Advances shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof. Each Advance Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a conversion of Advances from one Type to the other, or a continuation of Advances as the same Type, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Advances to be borrowed, converted or continued, (iv) the Type of Advances to be borrowed or to which existing Advances are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Advances shall be made or continued as, or converted to, Base Rate Advances. Any such automatic conversion to Base Rate Advances shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Advance. If the Borrower requests a Borrowing of, conversion to, or continuation of LIBOR Advances in any such Advance Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. LIBOR ADVANCES. Except as otherwise provided herein, a LIBOR Advance may be continued or converted only on the last day of the Interest Period for such LIBOR Advance. During the existence of a Default or Event of Default, no Advances may be requested as, converted to or continued as a LIBOR Advance without the consent of the Determining Lenders, and the Determining Lenders may demand that any or all of the then outstanding LIBOR Advances be converted immediately to Base Rate Advances. INTEREST RATE DETERMINATION. The Administrative Lender shall promptly notify the Borrower and the Lenders of the interest rate applicable to any LIBOR Advance upon determination of such interest rate. The determination of the LIBOR Rate by the Administrative Lender shall be conclusive in the absence of manifest error. FUNDING. The Administrative Lender shall promptly notify the Lenders of each Advance Notice received from the Borrower pursuant to this Section. Each Lender shall, not later than 1:00 p.m., Dallas, Texas time, on the date of any Advance, deliver to the Administrative Lender, at its address set forth herein, such Lender's Specified Percentage of such Advance in immediately available funds in accordance with the Administrative Lender's instructions. Prior to 2:00 p.m., Dallas, Texas time, on the date of any Advance hereunder, the Administrative Lender shall, subject to satisfaction of the conditions set forth in Article 3, disburse the amounts made available to the Administrative Lender by the Lenders by (i) transferring such amounts by wire transfer pursuant to the Borrower's instructions, or (ii) in the absence of such instructions, transferring such amounts by wire transfer to the account of the Borrower maintained with Bank of America, N.A., Dallas, Texas, ABA No. 111000012, in favor of Butler Manufacturing Company, Account No. 375-0953077. INTEREST ON BASE RATE ADVANCES. (v) The Borrower shall pay interest on the outstanding unpaid principal amount of each Base Rate Advance, from the date such Advance is made until it is due (whether at maturity, by reason of 14 20 acceleration, by scheduled reduction, or otherwise) or repaid, at an interest rate per annum equal to the lesser of (x) the Base Rate plus the Applicable Margin or (y) the Highest Lawful Rate. (vi) Subject to Section 11.9 hereof, interest on each Base Rate Advance shall be computed on the basis of a 365-day year for the number of days actually elapsed, and shall be payable in arrears on each Quarterly Date and on the Maturity Date, commencing on the first Quarterly Date immediately following the Agreement Date. ON LIBOR ADVANCES. (vii) The Borrower shall pay interest on the unpaid principal amount of each LIBOR Advance, from the date such Advance is made until it is due (whether at maturity, by reason of acceleration, by scheduled reduction, or otherwise) or repaid, at a rate per annum equal to the lesser of (x) the LIBOR Rate for such Advance plus the Applicable Margin or (y) the Highest Lawful Rate. The LIBOR Rate shall, with respect to LIBOR Advances subject to reserve or deposit requirements be subject to premiums therefor assessed by each Lender, which are payable directly to each Lender. (viii) Subject to Section 11.9 hereof, interest on each LIBOR Advance shall be computed on the basis of a 360-day year for the actual number of days elapsed, and shall be payable in arrears on the applicable Payment Date and on the Maturity Date; provided, that for each LIBOR Advance with an Interest Period of six months, interest shall also be paid on the day which is three months after the beginning of such Interest Period. INTEREST AFTER AN EVENT OF DEFAULT. (i) After an Event of Default (other than an Event of Default specified in Section 8.1(f) or (g) hereof) and during any continuance thereof, at the option of Determining Lenders, and (ii) after an Event of Default specified in Section 8.1(f) or (g) hereof and during any continuance thereof, automatically and without any action by the Administrative Lender or any Lender, the Obligations shall bear interest at a rate per annum equal to the Default Rate. Such interest shall be payable on the earlier of demand or the Maturity Date, and shall accrue until the earlier of (i) waiver or cure (to the satisfaction of the Determining Lenders) of the applicable Event of Default, (ii) agreement by the Lenders to rescind the charging of interest at the Default Rate, or (iii) payment in full of the Obligations. The Lenders shall not be required to accelerate the maturity of the Advances, to exercise any other rights or remedies under the Loan Documents, or to give notice to the Borrower of the decision to charge interest at the Default Rate. The Lenders will undertake to notify the Borrower, after the effective date, of the decision to charge interest at the Default Rate, provided, however, the failure of the Lenders to provide such notice shall not preclude the Lenders from charging interest at the Default Rate. COMMITMENT FEE. Subject to Section 11.9 hereof, the Borrower agrees to pay to the Administrative Lender, for the ratable account of the Lenders, a commitment fee on the daily average unused portion of the Commitment at the following per annum percentages, applicable in the following situations (for purposes of calculation of the daily average unused portion of such commitment fee, the Commitment shall be deemed to be utilized by the aggregate face amount of Letters of Credit outstanding from time to time):
Applicability Percentage ------------- ---------- (a) If the Capitalization Ratio is greater than or equal to 0.40 to 1 0.300 (b) If the Capitalization Ratio is greater than or equal to 0.30 to 1 but less 0.250 than 0.40 to 1 (c) If the Capitalization Ratio is less than 0.30 to 1 0.200
Such fee shall be (i) payable in arrears on each Quarterly Date and on the Maturity Date (commencing on the second Quarterly Date immediately following the Agreement Date), fully earned when due and, subject to Section 11.9 hereof, non-refundable when paid and (ii) subject to Section 11.9 hereof, computed on the basis of a 360-day year, for the actual number of days elapsed. The fee shall be subject to reduction or increase, as applicable and as set forth in the table above, on a quarterly basis according to the performance of the Borrower as tested using the 15 21 Capitalization Ratio for the most recent fiscal quarter; provided, that each adjustment in the fee shall be effective on the Financial Statement Due Date. If the financial statements are not received by the Lenders on the Financial Statement Due Date, the fee payable in respect of the Commitment shall be determined as if the Capitalization Ratio is greater than or equal to 0.40 to 1 until such time as such financial statements are received. Until the Financial Statement Due Date for the Borrower's financial statements for the fiscal quarter ending June 30, 2001, the fee payable in respect of the Commitment shall be determined as if the Capitalization Ratio is greater than or equal to 0.30 to 1 but less than 0.40 to 1. PREPAYMENT. VOLUNTARY PREPAYMENTS. The Borrower may, upon notice to the Administrative Lender, at any time or from time to time voluntarily prepay Advances in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Lender not later than 10:00 a.m., Dallas, Texas time, (A) three Business Days prior to any date of prepayment of LIBOR Advances, and (B) on the date of prepayment of Base Rate Advances; (ii) any prepayment of LIBOR Advances shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Advances shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Advances to be prepaid. The Administrative Lender will promptly notify each Lender of its receipt of each such notice, and of such Lender's pro rata share of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a LIBOR Advance shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 2.9 hereof. MANDATORY PREPAYMENT. On or before the date of any reduction of the Commitment, the Borrower shall prepay applicable outstanding Advances in an amount necessary to reduce the same to an amount less than or equal to the Commitment as so reduced. The Borrower shall first prepay all Base Rate Advances and shall thereafter prepay LIBOR Advances. To the extent that any prepayment requires that a LIBOR Advance be repaid on a date other than the last day of its Interest Period, the Borrower shall reimburse each Lender in accordance with Section 2.9 hereof. To the extent that outstanding Advances exceed the Commitment after any reduction thereof, the Borrower shall repay any such excess amount and all accrued interest thereon on the date of such reduction. REDUCTION AND TERMINATION OF COMMITMENT. VOLUNTARY REDUCTION. The Borrower shall have the right, upon not less than 10 Business Days' notice by an Authorized Signatory to the Administrative Lender (if telephonic, to be confirmed by telex or in writing on or before the date of reduction or termination), which shall promptly notify the Lenders, to terminate or reduce the Commitment, in whole or in part. Each partial termination shall be in an aggregate amount which is at least $5,000,000 and which is an integral multiple of $1,000,000, and no voluntary reduction in the Commitment shall cause any LIBOR Advance to be repaid prior to the last day of its Interest Period. Any voluntary reduction of the Commitment shall first be applied to reduce Bank of America's portion of the Commitment to $15,000,000. Thereafter, any voluntary reductions of the Commitment shall reduce the commitment of each Lender pro rata in accordance with their Specified Percentage in effect at such time. MANDATORY REDUCTION. Concurrently with the receipt of the net proceeds by the Borrower from the issuance of the 2001 Private Placement Notes, the Commitment shall be reduced to $50,000,000, which amount shall be allocated to reduce Bank of America's portion of the Commitment to $20,000,000. On the Maturity Date, the Commitment shall be automatically reduced to zero. GENERAL REQUIREMENTS. Upon any reduction of the Commitment pursuant to this Section, the Borrower shall immediately make a repayment of applicable Advances in accordance with Section 2.5(b) hereof. The Borrower shall reimburse each Lender for any loss or reasonable and necessary out-of-pocket expense incurred by each Lender in connection with any such payment, as set forth in Section 2.9 hereof to the extent applicable. The Borrower shall not have any right to rescind any termination or reduction. Once reduced, the Commitment may not be increased or reinstated. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE LENDER. Unless the Administrative Lender shall have been notified by a Lender prior to the date of any proposed Advance (which notice shall be effective upon receipt) that such Lender does not intend to make the proceeds of such Advance available to the Administrative Lender, the Administrative Lender may assume that such Lender has made such proceeds available to the Administrative Lender on such date, and the Administrative Lender may in reliance upon such assumption (but shall not be required to) 16 22 make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Lender by such Lender, the Administrative Lender shall be entitled to recover such amount on demand from such Lender (or, if such Lender fails to pay such amount forthwith upon such demand, from the Borrower) together with interest thereon in respect of each day during the period commencing on the date such amount was available to the Borrower and ending on (but excluding) the date the Administrative Lender receives such amount from the Lender, with interest thereon at a per annum rate equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal Funds Rate. No Lender shall be liable for any other Lender's failure to fund an Advance or participate in a Letter of Credit hereunder. PAYMENT OF PRINCIPAL OF ADVANCES. The Borrower agrees to pay the principal amount of the Advances to the Administrative Lender for the account of the Lenders as follows: END OF INTEREST PERIOD. The principal amount of each LIBOR Advance hereunder shall be due and payable on its Payment Date, unless such LIBOR Advance is continued as a LIBOR Advance or converted to a Base Rate Advance. COMMITMENT REDUCTION. On the date of reduction of the Commitment pursuant to Section 2.6 hereof, the aggregate amount of the Advances outstanding on such date of reduction in excess of the Commitment as reduced shall be due and payable. MATURITY DATE. To the extent not otherwise required to be paid earlier hereunder, the unpaid outstanding principal amount of the Advances outstanding on the Maturity Date, all accrued interest and fees thereon, and all other Obligations related thereto, shall be due and payable in full on the Maturity Date. REIMBURSEMENT. Whenever any Lender shall sustain or incur any losses or reasonable and necessary out-of-pocket expenses in connection with (a) failure by the Borrower to borrow any LIBOR Advance after having given an Advance Notice in accordance with Section 2.2 hereof (whether by reason of the Borrower's election not to proceed or the non-fulfillment of any of the conditions set forth in Article 3 hereof), or (b) any prepayment for any reason of any LIBOR Advance in whole or in part (including a prepayment pursuant to Section 9.3(b) hereof), the Borrower agrees to pay to any such Lender, upon its demand, an amount sufficient to compensate such Lender for all such losses and out-of-pocket expenses, subject to Section 11.9 hereof. Such Lender's good faith determination of the amount of such losses or out-of-pocket expenses, calculated in its usual fashion, absent manifest error, shall be binding and conclusive. Such losses shall include, without limiting the generality of the foregoing, lost profits and reasonable expenses incurred by such Lender in connection with the re-employment of funds prepaid, repaid, converted or not borrowed, converted or paid, as the case may be. Upon request of the Borrower, such Lender shall provide a certificate setting forth the amount to be paid to it by the Borrower hereunder and which shall include, in reasonable detail, the basis for demand for additional compensation, the method of calculation, and the calculations therefor. MANNER OF PAYMENT. Each payment (including prepayments) by the Borrower of the principal of or interest on the Advances, fees, and any other amount owed under this Agreement or any other Loan Document shall be made not later than 12:00 noon (Dallas, Texas time) on the date specified for payment under this Agreement to the Administrative Lender at the Administrative Lender's office, in lawful money of the United States of America constituting immediately available funds. If any payment under this Agreement or any other Loan Document shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day, unless such Business Day falls in another calendar month, in which case payment shall be made on the preceding Business Day. Any extension of time shall in such case be included in computing interest and fees, if any, in connection with such payment. The Borrower agrees to pay principal, interest, fees and all other amounts due under the Loan Documents without deduction for set-off or counterclaim or any deduction whatsoever. If some but less than all amounts due from the Borrower are received by the Administrative Lender, the Administrative Lender shall apply such amounts in the following order of priority: (i) to the payment of the Administrative Lender's expenses incurred on behalf of the Lenders then due and payable, if any; (ii) to the payment of all other fees then due and payable; (iii) to the payment of interest then due and payable on the Advances; (iv) to the payment of all other amounts not otherwise referred to in this clause (d) then due and 17 23 payable under the Loan Documents; and (v) to the payment of principal then due and payable on the Advances. Each payment by the Borrower in respect of obligations relating to the Advances and the Letters of Credit (whether for principal, interest, fees or otherwise) shall be made to the Administrative Lender for the account of the Lenders pro rata in accordance with their respective Specified Percentages, except that (a) any mandatory prepayment required as a result of the mandatory reduction of the Commitment pursuant to the first sentence of Section 2.6(b) hereof or (b) any mandatory prepayment required as a result of the voluntary reduction of the portion of the Bank of America commitment being reduced to $15,000,000 shall be made to the Administrative Lender for the sole account of Bank of America. LIBOR LENDING OFFICES. Each Lender's initial LIBOR Lending Office is set forth opposite its name in Schedule 1.1(a) attached hereto. Each Lender shall have the right at any time and from time to time to designate a different office of itself or of any Affiliate as such Lender's LIBOR Lending Office, and to transfer any outstanding LIBOR Advance to such LIBOR Lending Office. No such designation or transfer shall result in any liability on the part of the Borrower for increased costs or expenses resulting solely from such designation or transfer (except any such transfer which is made by a Lender pursuant to Section 9.2 or 9.3 hereof, or otherwise for the purpose of complying with Applicable Law). Increased costs for expenses related to any LIBOR Advance resulting from a change in Law occurring subsequent to any such designation or transfer shall be deemed not to result solely from such designation or transfer. SHARING OF PAYMENTS. If any Lender shall obtain a payment (whether voluntary or involuntary, due to the exercise of any right of set-off or otherwise) on account of any Advances made by it to the Borrower under this Agreement, and, as a result of such payment, such Lender shall have received a greater percentage of the amounts then due hereunder by the Borrower to such Lender than the percentage of the amounts then due hereunder to the other Lenders, it shall promptly purchase from such other Lenders participations in the Advances made by such other Lenders, and make such other adjustments from time to time as shall be equitable to the end that all the Lenders shall share the benefit of such excess payment (net of any expense which may be incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal and interest on the Advances held by each of the Lenders; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section, to the fullest extent permitted by law, may exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. CALCULATION OF LIBOR RATE. The provisions of this Agreement relating to calculation of the LIBOR Rate are included only for the purpose of determining the rate of interest or other amounts to be paid hereunder that are based upon such rate, it being understood that each Lender shall be entitled to fund and maintain its funding of all or any part of a LIBOR Advance as it sees fit. BOOKING ADVANCES. Any Lender may make, carry or transfer Advances at, to or for the account of any of its branch offices or the office of any Affiliate. TAXES. Any and all payments by the Borrower to or for the account of the Administrative Lender or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of the Administrative Lender and each Lender, taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Lender or such Lender, as the case may be, is organized or maintains a lending office (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Lender or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including 18 24 deductions applicable to additional sums payable under this Section), the Administrative Lender and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such payment, the Borrower shall furnish to the Administrative Lender (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof. In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as "Other Taxes"). If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Lender or any Lender, the Borrower shall also pay to the Administrative Lender (for the account of such Lender) or to such Lender, at the time interest is paid, such additional amount that such Lender specifies as necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Lender would have received if such Taxes or Other Taxes had not been imposed. The Borrower agrees to indemnify the Administrative Lender and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Lender and such Lender, (ii) amounts payable under Section 2.15(c) hereof and (iii) any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this subsection (d) shall be made within 30 days after the date the Lender or the Administrative Lender makes a demand therefor. Letters of Credit. THE LETTER OF CREDIT FACILITIES. The Borrower may request an Issuing Bank, on the terms and conditions hereinafter set forth, to issue, and an Issuing Bank shall, if so requested, issue, letters of credit (the "Letters of Credit") for the account of the Borrower from time to time on any Business Day from the Agreement Date until the Maturity Date in an aggregate maximum amount (assuming compliance with all conditions to drawing) not to exceed (together with all other Letters of Credit issued by Issuing Banks) at any time outstanding the lesser of (i) an amount equal to $25,000,000 or (ii) an amount equal to (A) the Commitment minus (B) the aggregate principal amount of Advances then outstanding. No Letter of Credit shall have an expiration date (including all rights of renewal) later than ten days prior to the Maturity Date. Immediately upon the issuance of each Letter of Credit, the Issuing Bank issuing such Letter of Credit shall be deemed to have sold and transferred to each Lender, and each Lender shall be deemed to have purchased and received from such Issuing Bank, in each case irrevocably and without any further action by any party, an undivided interest and participation in such Letter of Credit, each drawing thereunder and the obligations of the Borrower under this Agreement in respect thereof in an amount equal to the product of (x) such Lender's Specified Percentage and (y) the maximum amount available to be drawn under such Letter of Credit (assuming compliance with all conditions to drawing). Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, the Borrower may request the issuance of Letters of Credit under this Section 2.16(a), repay any Advances resulting from drawings thereunder pursuant to Section 2.16(c) and request the issuance of additional Letters of Credit under this Section 2.16(a). Upon the mandatory reduction of the Commitment pursuant to Section 2.6(b) hereof, the Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after such mandatory reduction, the Letters of Credit shall be subject to and governed by the terms hereof. REQUEST FOR ISSUANCE. Each Letter of Credit shall be issued upon request, given not later than 11:00 A.M. (Dallas time) on the third Business Day prior to the date of the proposed issuance of such Letter of Credit, by the Borrower to the Issuing Bank issuing such proposed Letter of Credit, which shall give to the Administrative Lender and each Lender prompt notice thereof by telex, telecopier or cable. Each Letter of Credit shall be issued upon notice given in accordance with the terms of any separate agreement between the Borrower and the Issuing Bank issuing such proposed Letter of Credit in form and substance reasonably satisfactory to the Borrower and such Issuing Bank providing for the issuance of Letters of Credit pursuant to this Agreement and containing terms and conditions not inconsistent with this Agreement (a "Letter of Credit Agreement"), provided that if any such terms and conditions are inconsistent with this Agreement, this Agreement shall control. Each such request for issuance of a Letter of Credit (a "Request for Issuance") shall 19 25 be by telex, telecopier or cable, specifying therein, in the case of a Letter of Credit, the requested (A) date of such issuance (which shall be a Business Day), (B) maximum amount of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and address of the beneficiary of such Letter of Credit, (E) form of such Letter of Credit and (F) such other information as shall be required pursuant to the relevant Letter of Credit Agreement. If the requested terms of such Letter of Credit are acceptable to the Issuing Bank issuing such proposed Letter of Credit in its reasonable discretion, the Issuing Bank issuing such proposed Letter of Credit will, upon fulfillment of the applicable conditions set forth in Article 3 hereof, make such Letter of Credit available to the Borrower at its office referred to in Section 11.1 or as otherwise agreed with the Borrower in connection with such issuance. DRAWING AND REIMBURSEMENT. The payment by an Issuing Bank of a draft drawn under any Letter of Credit issued by such Issuing Bank shall constitute for all purposes of this Agreement the making by such Issuing Bank of an Advance, which shall bear interest at the lesser of (i) the Highest Lawful Rate or (ii) the Base Rate plus the Applicable Margin, in the amount of such draft (but without any requirement for compliance with the conditions set forth in Article 3 hereof). In the event that a drawing under any Letter of Credit is not reimbursed by the Borrower by 11:00 A.M. (Dallas time) on the first Business Day after such drawing, the Issuing Bank issuing such Letter of Credit shall promptly notify Administrative Lender and each other Lender. Each such Lender shall, on the first Business Day following such notification, make an Advance (or if as a result of any Debtor Relief Law the Lenders are prohibited from making an Advance, each Lender shall fund its participation pursuant to Section 2.16(a) by making such amount available to the Administrative Lender), which shall bear interest at the lesser of (i) the Highest Lawful Rate or (ii) the Base Rate plus the Applicable Margin, and shall be used to repay the applicable portion of such Issuing Bank's Advance, with respect to such Letter of Credit, in an amount equal to the amount of its participation in such drawing for application to reimburse such Issuing Bank (but without any requirement for compliance with the applicable conditions set forth in Article 3 hereof) and shall make available to the Administrative Lender for the account of such Issuing Bank, by deposit at the Administrative Lender's office, in same day funds, the amount of such Advance (or such participation). In the event that any Lender fails to make available to the Administrative Lender for the account of such Bank the amount of such Advance, the Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest thereon at a rate per annum equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal Funds Rate. INCREASED COSTS. If any change, after the Agreement Date, in any law or regulation or in the interpretation thereof by any court or administrative or governmental authority charged with the administration thereof (any such change being a "Regulatory Change") shall impose, modify or deem applicable any reserve, special deposit or similar requirement against letters of credit or guarantees issued by, or assets held by, or deposits in or for the account of, any Issuing Bank or any Lender shall be to increase the cost to the Issuing Bank of issuing or maintaining any Letter of Credit or to any Lender of purchasing any participation therein or making any Advance pursuant to Section 2.16(c), then, upon demand by such Issuing Bank or such Lender, the Borrower shall, subject to Section 11.9 hereof, pay to such Issuing Bank or such Lender, from time to time as specified by the Issuing Bank or such Lender, additional amounts that shall be sufficient to compensate the Issuing Bank or such Lender for such increased cost. A certificate as to the amount of such increased cost, submitted to the Borrower by such Issuing Bank or such Lender, shall include in reasonable detail the basis for the demand for additional compensation, the method of calculation and the calculation thereof, and shall be conclusive and binding for all purposes, absent manifest error. The obligations of the Borrower under this Section 2.16(d) shall survive termination of this Agreement. The Issuing Bank or any Lender claiming any additional compensation under this Section 2.16(d) shall use reasonable efforts (consistent with legal and regulatory restrictions) to reduce or eliminate any such additional compensation which may thereafter accrue and which efforts would not, in the sole discretion of such Issuing Bank or such Lender, be otherwise disadvantageous. Neither the Issuing Bank nor any Lender may make any demand for increased costs otherwise due under this Section 2.16(d) more than one year after the effective date of the Regulatory Change which caused any such increased costs. OBLIGATIONS ABSOLUTE. The obligations of the Borrower under this Agreement with respect to any Letter of Credit, any Letter of Credit Agreement and any other agreement or instrument relating to any Letter of Credit or any Advance pursuant to Section 2.16(c) shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances: 20 26 (ix) any lack of validity or enforceability of this Agreement, any other Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (collectively, the "L/C Related Documents"); (x) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of the Borrower in respect of the Letters of Credit or any Advance pursuant to Section 2.16(c) or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents; (xi) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), any Issuing Bank, any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by the L/C Related Documents or any unrelated transaction; (xii) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (xiii) payment by any Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not comply with the terms of the Letter of Credit, except for any payment made upon such Issuing Bank's gross negligence or willful misconduct; (xiv) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any Subsidiary Guaranty or any other guarantee, for all or any of the Obligations of the Borrower in respect of the Letters of Credit or any Advance pursuant to Section 2.16(c); or (xv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor, other than an Issuing Bank's gross negligence or willful misconduct. COMPENSATION. (xvi) Letter of Credit Fee. Subject to Section 11.9 hereof, the Borrower shall pay to the Administrative Lender, for the ratable account of each Lender, a letter of credit fee (which shall be payable quarterly in arrears on each Quarterly Date and on the Maturity Date, commencing on the first Quarterly Date immediately following the Agreement Date, and, subject to Section 11.9 hereof, computed on the basis of a 360-day year for the actual number of days elapsed) on the daily average daily amount available for drawing under all outstanding Letters of Credit at the following per annum percentages, applicable in the following situations:
Applicability Percentage ------------- ---------- (a) If the Capitalization Ratio is greater than or equal to 0.40 to 1 1.500 (b) If the Capitalization Ratio is greater than or equal to 0.30 to 1 1.250 but less than 0.40 to 1 (c) If the Capitalization Ratio is greater than or equal to 0.20 to 1 1.000 but less than 0.30 to 1 (d) If the Capitalization Ratio is less than 0.20 to 1 0.750
21 27 The fee payable in respect of the Letters of Credit shall be subject to reduction or increase, as applicable and as set forth in the table above, on a quarterly basis according to the performance of the Borrower as tested using the Capitalization Ratio for the most recent fiscal quarter; provided, that each adjustment in such fee shall be effective on the Financial Statement Due Date. If the financial statements are not received by the Lenders on the Financial Statement Due Date, the fee payable in respect of the Letters of Credit shall be determined as if the Capitalization Ratio is greater than or equal to 0.40 to 1 until such time as such financial statements are received. Until the Financial Statement Due Date for the Borrower's financial statements for the fiscal quarter ending June 30, 2001, the fee payable in respect of the Letters of Credit shall be determined as if the Capitalization Ratio is greater than or equal to 0.30 to 1 but less than 0.40 to 1. (xvii) Letter of Credit Issuance Fee. Subject to Section 11.9 hereof, the Borrower shall pay to the Administrative Lender for the sole account of any Issuing Bank which has issued a Letter of Credit an issuance fee (which fee shall be payable quarterly in arrears on each Quarterly Date and on the Maturity Date, commencing on the first Quarterly Date immediately following the Agreement Date) equal to 0.125% per annum on the average daily amount available for drawing under all Letters of Credit issued by such Issuing Bank, and computed, subject to Section 11.9 hereof, on the basis of a 360-day year for the actual number of days elapsed. (xviii) Standard Charges. Subject to Section 11.9 hereof, the Borrower shall pay to the Administrative Lender for the sole account of the Issuing Bank issuing a Letter of Credit the standard charges assessed by such Issuing Bank in connection with the administration (including any drawings) and amendment of Letters of Credit. CONDITIONS PRECEDENT CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION. The obligation of each Lender to make its initial Credit Extension hereunder is subject to receipt by the Administrative Lender of each of the following, in form and substance satisfactory to each Lender, with a copy (except for the Revolving Credit Notes) for each Lender: a loan certificate or certificates of the Borrower certifying as to the accuracy of its representations and warranties in the Loan Documents, certifying that no Default has occurred, and including a certificate of incumbency with respect to each Authorized Signatory, and including (i) a copy of the Articles of Incorporation of the Borrower, certified to be true, complete and correct by the secretary of state of its state of incorporation, (ii) a copy of the By-Laws of the Borrower, as in effect on the Agreement Date, (iii) a copy of the resolutions of the Borrower authorizing it to execute, deliver and perform this Agreement, the Revolving Credit Notes and the other Loan Documents to which it is a party, and (iv) a copy of a certificate of good standing and a certificate of existence for its state of incorporation and the states of Texas and Missouri; a certificate or certificates of an officer or officers acceptable to the Lenders of each Initial Guarantor, certifying as to the incumbency of the officers signing the Loan Documents to which it is a party, and including (i) a copy of its Articles of Incorporation, certified as true, complete and correct by the secretary of state of its state of incorporation, (ii) a copy of its By-Laws, as in effect on the Agreement Date, (iii) a copy of the resolutions authorizing it to execute, deliver and perform the Loan Documents to which it is a party, and (iv) a copy of a certificate of good standing and a certificate of existence for its state of incorporation; duly executed Revolving Credit Notes, payable to the order of each Lender and in an amount for each Lender equal to its Specified Percentage of the Commitment; opinions of counsel to the Borrower and the Initial Guarantors addressed to the Lenders and in form and substance satisfactory to the Lenders, dated the Agreement Date, and covering certain of the matters set forth in Sections 4.1(a), (b), (c) and (n) and such other matters incident to the transactions contemplated hereby as the Administrative Lender or Special Counsel may reasonably request; reimbursement for the Administrative Lender for Special Counsel's reasonable and necessary fees and expenses rendered through the date hereof; evidence that all corporate proceedings of the Borrower and the Initial Guarantors taken in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be reasonably satisfactory in form and substance to the Lenders and Special Counsel; and the Lenders shall have received 22 28 copies of all documents or other evidence which the Administrative Lender, Special Counsel or any Lender may reasonably request in connection with such transactions; a duly executed and completed Subsidiary Guaranty, dated as of the Agreement Date; in form and substance satisfactory to the Lenders and Special Counsel, such other documents, instruments and certificates as the Administrative Lender or any Lender may reasonably require in connection with the transactions contemplated hereby, including without limitation the status, organization or authority of the Borrower or any Initial Guarantor, and the enforceability of the Obligations; payment of all amounts due and owing under the Existing Credit Agreement, whereupon the Existing Credit Agreement shall automatically terminate; and evidence satisfactory to the Administrative Lender of a commitment to purchase the 2001 Private Placement Notes by no later than July 31, 2001. CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS AND CONVERSIONS AND CONTINUATIONS. The obligation of each Lender to honor any Request for a Credit Extension (including the initial Request for Extension) is subject to the following conditions precedent: All of the representations and warranties of the Borrower under this Agreement (excluding, with respect to any continuation or conversion only, the representation and warranty contained in Section 4.1(k) hereof), which, pursuant to Section 4.2 hereof, are made at and as of the time of such Advance, shall be true and correct at such time in all material respects, both before and after giving effect to the application of the proceeds of the Credit Extension; The incumbency of the Authorized Signatories shall be as stated in the certificate of incumbency delivered in the Borrower's loan certificate pursuant to Section 3.1(a) or as subsequently modified and reflected in a certificate of incumbency delivered to the Administrative Lender. The Lenders may, without waiving this condition, consider it fulfilled and a representation by the Borrower made to such effect if no written notice to the contrary, dated on or before the date of such Credit Extension, is received by the Administrative Lender from the Borrower prior to the making of such Credit Extension; No Default shall exist or would result from such Credit Extension which is a Borrowing and no Event of Default shall exist or result from any continuation or conversion; The aggregate Advances, and amounts available for draw under Letters of Credit, after giving effect to such proposed Advance, or Letter of Credit, shall not exceed the Commitment; and The Administrative Lender shall have received all such other certificates, reports, statements, opinions of counsel or other documents as the Administrative Lender or any Lender may reasonably request to provide further assurance that all conditions precedent to the making of each Advance and the issuance of each Letter of Credit are satisfied. Notwithstanding the above, the obligation of each Lender to make an Advance pursuant to Section 2.16(c) (or fund its participation in respect of Letters of Credit pursuant to Section 2.16(c)) shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, (i) the occurrence of any Default or Event of Default, or (ii) the failure of the Borrower to satisfy any condition set forth in this Section 3.2; provided, however, the conditions precedent set forth in Sections 3.1 and 3.2 hereof with respect to the Letters of Credit for which such Advance is made (or participation funded) shall have been satisfied in full at the time of issuance of such Letter of Credit. Each Request for Credit Extension by the Borrower shall constitute a representation and warranty by the Borrower as of the date of the applicable Credit Extension that all the conditions contained in this Section 3.2 have been satisfied. REPRESENTATIONS AND WARRANTIES REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and warrants to each Lender as follows: ORGANIZATION; POWER; QUALIFICATION. As of the Agreement Date, the respective jurisdiction of incorporation and percentage ownership by the Borrower or another Subsidiary of the Subsidiaries listed on Schedule 4.1(a) are true and correct. Each of the Borrower and its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its state of organization. Each of the Borrower and its Subsidiaries has the corporate power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted. Each of the Borrower and its Subsidiaries is 23 29 duly qualified, in good standing and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization except where the failure to be so qualified or authorized would not have a Material Adverse Effect. AUTHORIZATION. The Borrower has corporate power and has taken all necessary corporate action to authorize it to borrow hereunder. Each of the Borrower and its Subsidiaries has corporate power and has taken all necessary corporate action to execute, deliver and perform the Loan Documents to which it is party in accordance with the terms thereof, and to consummate the transactions contemplated thereby. Each Loan Document has been duly executed and delivered by the Borrower or the Subsidiary executing it. Each of the Loan Documents to which the Borrower and its Subsidiary are party is a legal, valid and binding respective obligation of the Borrower or the Subsidiary, as applicable, enforceable in accordance with its terms, subject, to enforcement of remedies, to the following qualifications: (i) equitable principles generally, and (ii) Debtor Relief Laws (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower or any Subsidiary). COMPLIANCE WITH OTHER LOAN DOCUMENTS AND CONTEMPLATED TRANSACTIONS. The execution, delivery and performance by the Borrower and its Subsidiaries of the Loan Documents to which they are respectively a party, and the consummation of the transactions contemplated thereby, do not and will not (i) require any consent or approval not already obtained, (ii) violate any Applicable Law, (iii) conflict with, result in a breach of, or constitute a default under the articles of incorporation or by-laws of the Borrower or any Subsidiary, or under any Necessary Authorization, indenture, agreement or other instrument, to which the Borrower or any Subsidiary is a party or by which they or their respective properties may be bound, or (iv) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Borrower or any Subsidiary, except Permitted Liens. BUSINESS. The Borrower and its Subsidiaries are engaged in the businesses described in its Annual Report filed on Form 10-K with the Securities and Exchange Commission for the year ended December 31, 2000. Licenses, etc. All Necessary Authorizations have been duly obtained, and are in full force and effect without any known conflict with the rights of others and free from any unduly burdensome restrictions. The Borrower and its Subsidiaries are and will continue to be in compliance in all material respects with all provisions thereof. No circumstance exists which might impair the utility of the Necessary Authorization or the right to renew such Necessary Authorization the effect of which would have a Material Adverse Effect. No Necessary Authorization is the subject of any pending or, to the best of the Borrower's knowledge, threatened challenge, suspension, cancellation or revocation. COMPLIANCE WITH LAW. The Borrower and its Subsidiaries (i) are in compliance in all respects with all Applicable Laws, (ii) have duly and timely filed all reports, statements and filings that are required to be filed by any of them with any Governmental Authority, and are in all material respects in compliance therewith (including the rules and regulations of any Governmental Authority relating to the operation of the Borrower's and each Subsidiary's business), and (iii) have obtained all appropriate approvals and consents of, and have made all filings with, the Governmental Authorities in connection with the operation of the Borrower's and each Subsidiary's business, except in each case where the failure to so comply, file or obtain approval would not have a Material Adverse Effect. TITLE TO PROPERTIES. The Borrower and its Subsidiaries have good and indefeasible title to, or a valid leasehold interest in, all of their material assets. None of their assets are subject to any Liens, except Permitted Liens. No financing statement (except as set forth on Schedule 2 hereto) or other Lien filing (except relating to Permitted Liens) is on file in any state or jurisdiction that covers (or purports to cover) any assets of the Borrower or any of its Subsidiaries. The Borrower and its Subsidiaries have not signed any such financing statement or filing, nor any security agreement authorizing any Person to file any such financing statement or filing. LITIGATION. Except as reflected on Schedule 4.1(h) hereto, as of the Agreement Date, there is no action, suit or proceeding pending against, or, to the best of the Borrower's knowledge, threatened against the Borrower, or in any other manner relating directly and adversely to the Borrower or any of its Subsidiaries, or any of their properties, in any court or before any arbitrator of any kind or before or by any governmental body in which the uninsured liability could reasonably be expected to exceed $5,000,000. After the Agreement Date, there has been no action, suit, or proceeding filed against, or, to the best of the Borrower's knowledge, threatened against the Borrower, or in other manner relating directly or adversely to the Borrower or any of its Subsidiaries, or any of their properties, in any court or before any arbitrator of any kind or before or by any 24 30 governmental body in which the uninsured liability could reasonably be expected to have a Material Adverse Effect. TAXES. All federal, state and other tax returns of the Borrower and its Subsidiaries required by law to be filed have been duly filed and all federal, state and other taxes, assessments and other governmental charges or levies upon the Borrower, its Subsidiaries or any of their properties, income, profits and assets, which are due and payable, have been paid, unless the same are being diligently contested in good faith by appropriate proceedings, with adequate reserves established therefor, and no Lien (other than a Permitted Lien) has attached and no foreclosure, distraint, sale or similar proceedings have been commenced. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of their taxes are, in the judgment of the Borrower, adequate. FINANCIAL STATEMENTS; MATERIAL LIABILITIES; DEBT. The Borrower has furnished or caused to be furnished to the Lenders copies of its consolidated financial statements, as at and for the year ended December 31, 2000 and as at and for the fiscal quarter ended March 31, 2001, respectively, which present fairly in accordance with GAAP the consolidated financial position of the Borrower and its Subsidiaries as at such dates and the consolidated results of operations for the year and three month period then ended, respectively, subject to normal year-end adjustments in the case of quarterly statements. The Borrower and its Subsidiaries taken as a whole have no material liabilities, contingent or otherwise, nor material losses, except as set forth in the such consolidated financial statements. NO ADVERSE CHANGE. Since December 31, 2000, no event or circumstances has occurred or arisen that has had a Material Adverse Effect. ERISA. Each Plan has satisfied the minimum funding standards under all Laws applicable thereto, and no unfunded liabilities exist as of December 31, 2000 that are required to be disclosed pursuant to GAAP, except as disclosed in the notes to the December 31, 2000 consolidated financial statements. The Borrower and its Subsidiaries have not incurred any material liability to the PBGC with respect to any Plan. No ERISA Event has occurred with respect to any Plan. The Borrower has not participated in any Prohibited Transaction with respect to any Plan or trust created thereunder, and the consummation of the transactions contemplated hereby will not involve any Prohibited Transaction. Neither the Borrower nor any member of its Controlled Group has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA. COMPLIANCE WITH REGULATIONS T, U AND X. The Borrower is not engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or carrying any margin stock within the meaning of Regulations T, U and X of the Board of Governors of the Federal Reserve System, and no part of the proceeds of the Advances will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. No assets of the Borrower and its Subsidiaries are margin stock. None of the Borrower and its Subsidiaries nor any agent acting on their behalf, have taken or will knowingly take any action which might cause this Agreement or any other Loan Documents to violate any regulation of the Board of Governors of the Federal Reserve System or to violate the Securities Exchange Act of 1934, in each case as in effect now or as the same may hereafter be in effect. GOVERNMENTAL REGULATION. The Borrower and its Subsidiaries are not required to obtain any Necessary Authorization that has not already been obtained from, or effect any material filing or registration that has not already been effected with, any Governmental Authority in connection with the execution and delivery of this Agreement or any other Loan Document, or the performance thereof, in accordance with their respective terms, including any borrowings hereunder. ABSENCE OF DEFAULT. The Borrower and its Subsidiaries are in compliance in all material respects with all of the provisions of their articles of incorporation and by-laws, and no event has occurred or failed to occur, which has not been remedied or waived, the occurrence or non-occurrence of which constitutes, or which with the passage of time or giving of notice or both would constitute, (i) a Default or an Event of Default or (ii) a default by the Borrower or any of its Subsidiaries under any material indenture, agreement or other instrument, or any judgment, decree or order to which the Borrower or any of its Subsidiaries or by which they or any of their material properties is bound. INVESTMENT COMPANY ACT. The Borrower is not required to register under the provisions of the Investment Company Act of 1940, as amended. Neither the entering into or performance by the Borrower of this Agreement nor the issuance of the Revolving Credit Notes violates any provision of such act or requires any consent, approval, or authorization of, or registration with, the Securities and Exchange Commission or any other governmental or public body of authority pursuant to any provisions of such act. 25 31 ENVIRONMENTAL MATTERS. Except as described on Schedule 4.1(q), each of the Borrower and the Subsidiaries is in compliance with all Applicable Environmental Laws in effect in each jurisdiction where it is presently doing business or has done business, and in which the failure so to comply could have a Material Adverse Effect. Neither the Borrower nor any of the Subsidiaries is subject to any liability under any Applicable Environmental Laws that, in the aggregate, could have a Material Adverse Effect. Neither the Borrower nor any Subsidiary has received any (a) notice from any Governmental Authority by which any of its present or previously-owned or leased real properties has been designated, listed, or identified in any manner by any Governmental Authority charged with administering or enforcing any Applicable Environmental Law as a Hazardous Substance disposal or removal site, "Super Fund" clean-up site, or candidate for removal or closure pursuant to any Applicable Environmental Law, (b) notice of any Lien arising under or in connection with any Applicable Environmental Law that has attached to any revenues of, or to, any of its owned or leased real properties, or (c) summons, citation, notice, directive, letter, or other communication, written or oral, from any Governmental Authority concerning any intentional or unintentional action or omission by the Borrower or such Subsidiary in connection with its ownership or leasing of any real property resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, dumping, or otherwise disposing of any Hazardous Substance into the environment resulting in any material violation of an Applicable Environmental Law, in each case in (a), (b) and (c) immediately preceding where the effect of which could have a Material Adverse Effect. CERTAIN FEES. Except as noted herein, no broker's, finder's or other fee or commission will be payable by the Borrower (other than to the Lenders hereunder) with respect to the making of the Commitment or the Advances hereunder or the issuance of any Letters of Credit. The Borrower agrees to indemnify and hold harmless the Administrative Lender and each Lender from and against any claims, demand, liability, proceedings, costs or expenses asserted with respect to or arising in connection with any such fees or commissions. NECESSARY AUTHORIZATIONS. No event has occurred which permits (or with the passage of time would permit) the revocation or termination of any Necessary Authorization, or which could result in the imposition of any restriction thereon of such a nature that could reasonably be expected to have a Material Adverse Effect. INTELLECTUAL PROPERTY. The Borrower and its Subsidiaries have obtained all patents, trademarks, service-marks, trade names, copyrights, licenses and other rights, free from unduly burdensome restrictions, that are necessary for the operation of their business as presently conducted and as proposed to be conducted, except where the failure to so obtain such would not have a Material Adverse Effect. Nothing has come to the attention of the Borrower or any of its Subsidiaries to the effect that (i) any process, method, part or other material presently contemplated to be employed by the Borrower or any Subsidiary may infringe any patent, trademark, service-mark, trade name, copyright, license or other right owned by any other Person, or (ii) there is pending or overtly threatened any claim or litigation against or affecting the Borrower or any Subsidiary contesting its right to sell or use any such process, method, part or other material, in each case where such infringement, claim or litigation could have a Material Adverse Effect. DISCLOSURE. Neither this Agreement nor any other document, certificate or statement which has been furnished to any Lender by or on behalf of the Borrower or any Subsidiary in connection herewith contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statement contained herein and therein not misleading at the time it was furnished. There is no fact known to the Borrower and not known to the public generally that is expected, as of the date of this Agreement, to have a material adverse affect on the consolidated financial condition or results of operations of the Borrower and its Subsidiaries, which has not been set forth in this Agreement or in the documents, certificates and statements furnished to the Lenders by or on behalf of the Borrower prior to the date hereof in connection with the transaction contemplated hereby. SOLVENCY. The Borrower is, and Borrower and its Subsidiaries on a consolidated basis are, Solvent. CONSOLIDATED BUSINESS ENTITY. The Borrower and its Subsidiaries are operated as part of one consolidated business entity and are directly dependent upon each other for and in connection with their respective business activities and their respective financial resources. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All representations and warranties made under this Agreement and the other Loan Documents shall be deemed to be made at and as of the Agreement Date and at and as of the date of each Request for Credit Extension, and each shall be true and correct when made, except to the extent (a) previously fulfilled in accordance with the terms hereof, (b) applicable to a specific date or otherwise subsequently inapplicable, or (c) previously waived in writing by the Determining Lenders with respect to any 26 32 particular factual circumstance. All such representations and warranties shall survive, and not be waived by, the execution hereof by any Lender, any investigation or inquiry by any Lender, or by the making of any Credit Extension under this Agreement. GENERAL COVENANTS So long as any of the Obligations are outstanding and unpaid or any Commitment is outstanding (whether or not the conditions to borrowing have been or can be fulfilled): 27 33 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. The Borrower shall, and shall cause each Subsidiary to: Preserve and maintain, or timely obtain and thereafter preserve and maintain, its existence, rights, franchises, licenses, authorizations, consents, privileges and all other Necessary Authorizations from federal, state and local governmental bodies and any tribunal (regulatory or otherwise), the loss of which could have a Material Adverse Effect; and qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization, unless the failure to do so could not have a Material Adverse Effect. BUSINESS; COMPLIANCE WITH APPLICABLE LAW. The Borrower and its Subsidiaries shall (a) engage principally in the businesses set forth in Section 4.1(d) hereof and those directly related thereto, and (b) comply in all material respects with the requirements of all Applicable Law. MAINTENANCE OF PROPERTIES. The Borrower shall, and shall cause each Subsidiary to, maintain or cause to be maintained all its properties (whether owned or held under lease) in reasonably good repair, working order and condition, taken as a whole, and from time to time make or cause to be made all appropriate repairs, renewals, replacements, additions, betterments and improvements thereto. ACCOUNTING METHODS AND FINANCIAL RECORDS. The Borrower shall, and shall cause each Subsidiary to, maintain a system of accounting established and administered in accordance with GAAP, keep adequate records and books of account in which complete entries will be made and all transactions reflected in accordance with GAAP, and keep accurate and complete records of its respective assets. The Borrower and each of its Subsidiaries shall maintain a fiscal year ending on December 31. INSURANCE. The Borrower shall, and shall cause each Subsidiary to, maintain insurance from responsible companies in such amounts and against such risks as shall be customary and usual in the industry for companies of similar size and capability. Specifically, the Borrower will maintain (a) public liability insurance coverage, including products/completed operation liability coverage, in an amount not less than $25,000,000, and (b) physical damage insurance on all real and personal property on an all-risks basis (including the perils of flood and earthquake, provided that earthquake coverages may be less than the cost of repair and replacement, but shall in all events be such amounts as are commercially available at reasonable rates), covering the repair and replacement cost of all such property and consequential loss coverage for business interruption and extra expense. PAYMENT OF TAXES AND CLAIMS. The Borrower shall, and shall cause each Subsidiary to, pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or its income or Properties prior to the date on which penalties attach thereto, and all lawful material claims for labor, materials and supplies which, if unpaid, might become a Lien upon any of its properties; except that no such tax, assessment, charge, levy or claim need be paid which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on the appropriate books, but only so long as (a) no Lien (other than a Permitted Lien) shall attach with respect thereto, (b) no foreclosure, distraint, sale or similar proceedings shall have been commenced and (c) the Borrower's or any Subsidiary's title to, and its right to use its Property is not materially affected thereby. The Borrower shall, and shall cause each Subsidiary to, timely file all information returns required by federal, state or local tax authorities. VISITS AND INSPECTIONS. The Borrower shall, and shall cause each Subsidiary to, promptly permit representatives of the Administrative Lender or any Lender from time to time to (a) visit and inspect the properties of the Borrower and Subsidiary as often as the Administrative Lender or any Lender shall reasonably deem advisable, (b) inspect and make extracts from and copies of the Borrower's and each Subsidiary's books and records, and (c) discuss with the Borrower's and each Subsidiary's directors, officers, employees and auditors its business, assets, liabilities, financial positions, results of operations and business prospects. Prior to the occurrence of an Event of Default, all such visits and inspections shall be conducted during normal business hours. Following the occurrence and during the continuance of an Event of Default, such visits and inspections shall be conducted at any time requested by the Administrative Lender or any Lender. 28 34 PAYMENT OF DEBT. Subject to Section 5.6 hereof, the Borrower shall, and shall cause each Subsidiary to, pay its Debt when and as the same becomes due, other than amounts (other than the Obligations) duly and diligently disputed in good faith. USE OF PROCEEDS. The Borrower shall use the proceeds of Advances for working capital, real estate development activities and for other general corporate purposes, including refinancing of the debt under the Existing Credit Agreement. INDEMNITY. The Borrower agrees to defend, protect, indemnify and hold harmless the Administrative Lender, each Lender, each of their respective Affiliates, and each of their respective (including such Affiliates') officers, directors, employees, agents, attorneys, shareholders and consultants (including, without limitation, those retained in connection with the satisfaction or attempted satisfaction of any of the conditions set forth herein) of each of the foregoing (collectively, "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnitees shall be designated a party thereto), imposed on, incurred by, or asserted against such Indemnitees (whether direct, indirect or consequential and whether based on any federal, state, or local laws and regulations, under common law or at equitable cause, or on contract, tort or otherwise, arising from or connected with the past, present or future operations of the Borrower or its predecessors in interest, or the past, present or future environmental condition of property of the Borrower or any Subsidiary or the violation or asserted violation by the Borrower or any Subsidiary of any Applicable Law, including any Applicable Environmental Law), in any manner relating to or arising out of this Agreement, the Loan Documents, or any act, event or transaction or alleged act, event or transaction relating or attendant thereto, or the use or intended use of the proceeds of the Advances or the Letters of Credit hereunder, or in connection with any investigation of any potential matter covered hereby, but excluding (i) any claim or liability that arises as the result of the gross negligence or willful misconduct of any Indemnitee, as finally judicially determined by a court of competent jurisdiction, and (ii) matters raised by one Lender against another Lender or by any shareholders of a Lender against a Lender or its management. BORROWER AGREES THAT IT EXPRESSLY INTENDS TO INDEMNIFY EACH INDEMNITEE FROM AND HOLD EACH OF THEM HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES OR EXPENSES ARISING OUT OF THE ORDINARY SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNITEE, BUT NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE. The obligations of the Borrower under this Section 5.10 shall survive termination of the Commitment and payment in full of the Obligations. MATERIAL SUBSIDIARY GUARANTY. The Borrower shall cause each Person that is or becomes a Material Subsidiary (promptly upon becoming a Material Subsidiary) to (i) execute a Subsidiary Guaranty and (ii) deliver to the Lenders such board resolutions, officer's certificates and opinions of counsel as the Administrative Lender shall reasonably request in connection with the Subsidiary Guaranty. ERISA. ALL ASSUMPTIONS AND METHODS USED TO DETERMINE THE ACTUARIAL VALUATION OF EMPLOYEE BENEFITS, BOTH VESTED AND UNVESTED, UNDER EACH PLAN SUBJECT TO TITLE IV OF ERISA AND EACH SUCH PLAN, WHETHER NOW EXISTING OR ADOPTED AFTER THE DATE HEREOF, WILL COMPLY IN ALL MATERIAL RESPECTS WITH ERISA. THE BORROWER WILL NOT AT ANY TIME PERMIT ANY PLAN ESTABLISHED, MAINTAINED OR CONTRIBUTED TO BY IT OR ANY SUBSIDIARY IN THE UNITED STATES OR ANY ERISA AFFILIATE TO: 29 35 (xix) engage in any "prohibited transaction" as such term is defined in Section 4975 of the Code or in Section 406 of ERISA; (xx) incur any "accumulated funding deficiency" as such term is defined in Section 302 of ERISA, whether or not waived; or (xxi) be terminated under circumstances which are likely to result in the imposition of a lien on the property of the Borrower or any such Subsidiary pursuant to Section 4068 of ERISA, if the event or condition described in clauses (i), (ii) or (iii) above is likely to subject the Borrower or any Subsidiary or ERISA Affiliate to liabilities which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Upon request, the Borrower will furnish you or any other Lender a copy of the annual report of each Plan (Form 5500) required to be filed with the Internal Revenue Service no later than 45 days after the date such report has been filed with the Internal Revenue Service. Promptly upon obtaining knowledge of the occurrence thereof, the Borrower will give each Lender notice of (i) a Reportable Event with respect to any Plan; (ii) the institution of any steps by the Borrower, any Subsidiary, any ERISA Affiliate or the PBGC to terminate any Plan; (iii) the institution of any steps by the Borrower, any Subsidiary, or any ERISA Affiliate to withdraw from any Plan; (iv) a prohibited transaction in connection with any Plan; (v) any material increase in the contingent liability of the Borrower or any Subsidiary with respect to any post-retirement welfare liability; or (vi) the taking of any action by the Internal Revenue Service, the Department of Labor or the PBGC or any other Person with respect to any of the foregoing which, individually or in the aggregate, in any of the events specified in this subparagraph (d), could reasonably be expected to result in a Material Adverse Effect. INFORMATION COVENANTS So long as any of the Obligations are outstanding and unpaid or any Commitment is outstanding (whether or not the conditions to borrowing have been or can be fulfilled), the Borrower shall furnish or cause to be furnished to each Lender: 30 36 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION. Within 45 days after the end of each fiscal quarter, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such quarter, a consolidated statement of earnings of the Borrower and its Subsidiaries for such quarter, and in the case of the second and third quarters, for the portion of the fiscal year ending with such quarter, and a consolidated statement of cash flows for the elapsed portion of the year ended with the last day of such quarter, setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all of which shall be certified by the chief executive officer, chief financial officer, vice president - finance or treasurer of the Borrower, to be, in his or her opinion, complete and correct in all material respects and to present fairly, in accordance with GAAP, the financial position and results of operations of the Borrower and its Subsidiaries as at the end of and for such period, and for the elapsed portion of the year ended with the last day of such period, subject only to normal year-end adjustments. Copies of the Borrower's Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 6.1. ANNUAL FINANCIAL STATEMENTS AND INFORMATION; CERTIFICATE OF NO DEFAULT. Within 90 days after the end of each fiscal year, a copy of (i) the consolidated balance sheet of the Borrower and its Subsidiaries, as at the end of such fiscal year and (ii) consolidated statements of earnings, retained earnings and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, and a footnote reconciliation of treasury stock transactions for such fiscal year, all of which are prepared in accordance with GAAP, and certified by independent certified public accountants acceptable to the Lenders, whose opinion shall be in scope and substance in accordance with generally accepted auditing standards and shall be unqualified. Copies of the Borrower's Annual Report on Form 10-K prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 6.2. COMPLIANCE CERTIFICATE. At the time financial statements are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate of an Authorized Signatory: Setting forth at the end of such period, a calculation of the Capitalization Ratio, as well as certifications and arithmetical calculations required to establish whether the Borrower and its Subsidiaries were in compliance with the requirements of Section 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7 and 7.9 hereof, which shall be substantially in the form of Exhibit D hereto; and stating that, to the best of his or her knowledge after due inquiry, no Default has occurred as at the end of such period, or if a Default has occurred, disclosing each such Default and its nature, when it occurred, whether it is continuing and the steps being taken with respect to such Default. NOTICE OF LITIGATION, DEFAULT AND OTHER MATTERS. PROMPT NOTICE OF THE FOLLOWING EVENTS AFTER THE BORROWER HAS KNOWLEDGE OR NOTICE THEREOF: The commencement of all proceedings and investigations by or before any Governmental Authority, and each action and proceeding in any court or before any arbitrator involving claims for damages, fines or penalties (including punitive damages) in which the uninsured liability could reasonably be expected to exceed $5,000,000, against or in any other way relating directly to the Borrower, any Subsidiary, or any of their properties or businesses; The holder of any Revolving Credit Note or other evidence of Debt which singly or in the aggregate equals or exceeds $3,000,000 or other security for any of such Debt has given notice or taken any action with respect to a breach, failure to perform, claimed default or event of default thereunder; Promptly upon the happening of any condition or event which constitutes a Default, a written notice specifying the nature and period of existence thereof and what action is being taken or is proposed to be taken with respect thereto; and Any material adverse change with respect to the business, assets, liabilities, financial position, results of operations or prospective business of the Borrower and its Subsidiaries, on a consolidated basis. NEGATIVE COVENANTS So long as any of the Obligations are outstanding and unpaid or any Commitment is outstanding (whether or not the conditions to borrowing have been or can be fulfilled): 31 37 CAPITALIZATION RATIO. The Borrower shall not permit the Capitalization Ratio to be greater than 0.50 to 1 at the end of any fiscal quarter. FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit the Fixed Charge Coverage Ratio to be less than 1.70 to 1 at the end of any fiscal quarter. LEVERAGE RATIO. The Borrower shall not permit the Leverage Ratio to be greater than (a) 3.25 to 1 at the end of any fiscal quarter occurring during the period from and including the Agreement Date through and including June 30, 2002 and (b) 3.00 to 1 at the end of any fiscal quarter thereafter. GUARANTIES. The Borrower shall not, and shall not permit any Subsidiary to, create, assume, incur or otherwise become or remain obligated in respect of, or permit to be outstanding, or suffer to exist any Guaranty Obligation, except any or all of the following: Endorsement of negotiable instruments in the ordinary course of business; Guaranty Obligations in respect of the Existing Private Placement Notes, the 2001 Private Placement Notes, the San Marcos Bonds and the Future Headquarters Sale and Leaseback and a Facility Sale and Leaseback; The Subsidiary Guaranty; Guaranty Obligations of a Subsidiary to the Borrower or another Subsidiary and Guaranty Obligations of the Borrower to a Subsidiary; Guaranty Obligations in respect of the performance or payment of construction and related undertakings and other obligations made in the ordinary course of business of the Borrower and its Subsidiaries; and Guaranty Obligations by Subsidiaries in respect of Debt of the Borrower or other Subsidiaries, provided that the incurrence or existence of such Debt does not result in an Default or Event of Default; and Other Guaranty Obligations not to exceed $15,000,000 in aggregate amount outstanding at any time. LIENS. The Borrower shall not, and shall not permit any Subsidiary to, create, assume, incur, permit or suffer to exist, directly or indirectly, any Lien on any of its assets, whether now owned or hereafter acquired, except Permitted Liens. The Borrower shall not, and shall not permit any Subsidiary to, agree with any other Person that it shall not create, assume, incur, permit or suffer to exist or to be created, assumed, incurred or permitted to exist, directly or indirectly, any Lien on any of its assets other than with respect to the Existing Private Placement Notes, the San Marcos Bonds and the 2001 Private Placement Notes and agreements related thereto, and other than by Butler Real Estate, Inc. with respect to tenants and contract vendees of projects in the ordinary course of its business so long as such agreement by Butler Real Estate, Inc. not to create a Lien relates only to such projects. INVESTMENTS. The Borrower shall not, and shall not permit any Subsidiary to, make any Investment, except that the Borrower and its Subsidiaries may purchase or otherwise acquire and own or make any or all of the following: Investments in the form of loans to officers and employees for moving and travel expenses, drawing accounts and similar expenditures in the ordinary course of business not to exceed $5,000,000 in aggregate amount outstanding at any time; Investments disclosed on the Borrower's financial statements for the fiscal quarter ending March 31, 2001; and other Investments in an aggregate amount outstanding at any time, together with Acquisitions of Persons who become Foreign Subsidiaries as a result of such Acquisition that are permitted pursuant to Section 7.7(ii) hereof, not to exceed the sum of (x) $10,000,000 plus (y) 25% of Shareholder's Equity. ACQUISITIONS. The Borrower shall not, and shall not permit any Subsidiary to, make any Acquisitions, except that, after the Agreement Date, the Borrower and its Subsidiaries may make Acquisitions of (i) Persons who become Domestic Subsidiaries as a result of such Acquisition in an aggregate amount not to exceed the sum of (x) $20,000,000 plus (y) 25% of Shareholder's Equity immediately preceding any such Acquisition and provided that such Domestic Subsidiary (if a Material Subsidiary) becomes party to a Subsidiary Guaranty, and (ii) Persons who become Foreign Subsidiaries as a result of such Acquisition provided that Acquisitions of Foreign Subsidiaries together with Investments in all Subsidiaries permitted pursuant to Section 7.6(c) hereof shall not exceed in aggregate amount outstanding at any time, the sum of (x) $20,000,000 plus (y) 25% of Shareholder's Equity. 32 38 MERGER, ETC. The Borrower shall not, and shall not permit any Subsidiary to, at any time consolidate with, or merge into, any Person other than a Person that becomes a Subsidiary of the Borrower thereby, except that (a) a Subsidiary may consolidate with or merge into the Borrower or a Guarantor and (b) any Subsidiary which is not a Guarantor may consolidate into or merge into another Person. DISPOSITIONS. The Borrower shall not, and shall not permit any Subsidiary to (other than in the ordinary course of business) sell, lease, transfer or otherwise (including by way of merger or a sale and lease-back transaction) dispose of (collectively a "Disposition") any assets, including capital stock of Subsidiaries, in one or a series of transactions, to any Person (other than the Borrower or a Guarantor), (i) if in any fiscal year, after giving effect to such Disposition, the aggregate net book value of assets subject to Dispositions during such fiscal year would exceed 10% of Total Assets as of the end of the immediately preceding fiscal quarter, or (ii) if a Default or Event of Default exists or would exist after giving effect thereto. Notwithstanding the foregoing limitations in clause (a) of this Section 7.9, the Borrower or a Subsidiary may make a Disposition and the net book value of the assets subject to such Disposition shall not be subject to or included in the foregoing limitations and computations if the proceeds (net of taxes and related expenses) from such Disposition are reinvested, within 180 days after such Disposition, in productive assets of the Borrower or its Subsidiaries. TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not permit any Subsidiary to, engage in any transaction with an Affiliate except in the ordinary course of business as presently conducted and on terms and conditions no less favorable to the Borrower or such Subsidiary than would be obtained in a comparable arm's-length transaction with a Person not an Affiliate; provided, however, the Lenders agree that the lease of the Future Headquarters Facility with an Affiliate is not a breach of this Section 7.10 so long as the terms of such lease are no less favorable to the Borrower than would be obtained in a lease in a comparable arms-length transaction with a Person not an Affiliate. BUSINESS. The Borrower shall not, and shall not permit any Guarantor to, engage in, directly or through other Persons, any business other than the business now carried on by the Borrower and its Subsidiaries and other businesses directly related thereto. SALES AND LEASEBACKS. The Borrower shall not, and shall not permit any Subsidiary to, enter into any arrangement whereby the Borrower or such Subsidiary shall sell or transfer all or any part of its assets then owned by it, and thereafter rent or lease such assets sold or transferred if a Default or Event of Default exists or would result therefrom. DEBT. The Borrower shall not, and shall not permit any Subsidiary to, create, assume, incur or otherwise become or remain obligated in respect of, or permit to be outstanding, any Debt if a Default or Event of Default exists or would result therefrom. PREPAYMENT OF DEBT. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly prepay any Debt or defease, redeem, repurchase or otherwise acquire any Debt if after giving effect to any proposed payment, defeasance, redemption, repurchase or acquisition a Default or Event of Default exists or would occur as a result thereof. Default Events of Default. Each of the following shall constitute an Event of Default, whatever the reason for such event, and whether voluntary, involuntary, or effected by operation of law or pursuant to any judgment or order of any court or any order, rule or regulation of any governmental or non-governmental body: Any representation or warranty made under any Loan Document shall prove to have been incorrect in any material respect when made; The Borrower shall default in the payment of (i) any interest under any Revolving Credit Note or any fees payable hereunder or any other costs, fees, expenses or other amounts payable hereunder or under the Loan 33 39 Documents, when due, which Default is not cured within two (2) Business Days from the date such payment became due by payment of such late amount, or (ii) any principal under any of the Revolving Credit Notes when due; The Borrower or any Subsidiary shall default in the performance or observance of any agreement or covenant contained in Article 7 hereof; The Borrower or any Subsidiary shall default in the performance or observance of any other agreement or covenant contained in this Agreement not specifically referred to elsewhere in this Section 8.1, and such default shall not be cured within a period of thirty (30) days after the earlier of notice from the Administrative Lender thereof or actual notice thereof given by the Borrower or such Subsidiary to the Administrative Lender; There shall occur any default or breach in the performance or observance of any agreement or covenant (after the expiration of any applicable grace period) in any of the Loan Documents (other than this Agreement); There shall be commenced an involuntary proceeding or an involuntary petition shall be filed in a court having competent jurisdiction seeking (i) relief in respect of the Borrower or any Subsidiary, or a substantial port of the assets of the Borrower or such Subsidiary, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable Federal or state bankruptcy law or other similar law, (ii) the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official of the Borrower or any Subsidiary, or of any substantial part of their respective properties, or (iii) the winding-up or liquidation of the affairs of the Borrower or any Subsidiary, and any such proceeding or petition shall continue unstayed and in effect for a period of sixty (60) consecutive days; The Borrower or any Subsidiary shall file a petition, answer or consent seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable Federal or state bankruptcy law or other similar law, or the Borrower or any Subsidiary shall consent to the institution of proceedings thereunder or to the filing of any such petition or to the appointment or taking of possession of a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Borrower or any Subsidiary or of any substantial part of their respective properties, or the Borrower or any Subsidiary shall make a general assignment for the benefit of creditors, or the Borrower or any Subsidiary shall fail generally to pay its debts as they become due, or the Borrower or any Subsidiary shall take any action in furtherance of any such action; A final judgment or judgments shall be entered by any court against the Borrower or any Material Subsidiary for the payment of money which exceeds $1,000,000 in the aggregate, or a warrant of attachment or execution or similar process shall be issued or levied against property of the Borrower or any Material Subsidiary which, together with all other such property of the Borrower and its Material Subsidiaries subject to other such process, exceeds in value $1,000,000 in the aggregate, and if the events or occurrence forming the basis for such judgment or award is not insured or, within 30 days after the entry, issue or levy thereof, such judgment, warrant or process shall not have been paid or discharged or stayed pending appeal, or if, after the expiration of any such stay, such judgment, warrant or process shall not have been paid or discharged; The Borrower or any Material Subsidiary shall fail to make any payment when due in respect of any Debt having an aggregate principal amount in excess of $3,000,000 beyond any grace period provided with respect thereto, or the Borrower or any Material Subsidiary shall default in the performance of any agreement or instrument under which such Debt is created or evidenced beyond any applicable grace period, or any other event shall occur or condition shall exist under any such agreement or instrument, if the effect of such default, event or condition is to permit or cause the holder of such Debt (or a trustee on behalf of any such holder) to cause such Debt to become due or to be repurchased or redeemed; Any provision of any Loan Document shall for any reason cease to be valid and binding on or enforceable against any party to it (other than the Administrative Lender or any Lender) in all material respects, or any such party (other than the Administrative Lender or any Lender) shall so state in writing; Less than $40,000,000 in aggregate principal amount of the 2001 Private Placement Notes shall have been issued as of July 31, 2001; or A Change of Control of the Borrower shall have occurred. REMEDIES. If an Event of Default shall have occurred and shall be continuing: 34 40 With the exception of an Event of Default specified in Section 8.1(f) or (g) hereof, the Administrative Lender shall, upon the direction of the Determining Lenders, terminate the Commitments and/or declare the principal of and interest on the Advances and all Obligations and other amounts owed under the Loan Documents to be forthwith due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, anything in the Loan Documents to the contrary notwithstanding. Upon the occurrence of an Event of Default specified in Section 8.1(f) or (g) hereof, such principal, interest and other amounts shall thereupon automatically and concurrently therewith become due and payable and the Commitments shall automatically forthwith terminate, all without any action by the Administrative Lender, any Lender or any holders of the Revolving Credit Notes and without presentment, demand, protest or other notice of any kind, all of which are expressly waived, anything in the Loan Documents to the contrary notwithstanding. The Borrower hereby agrees, in addition to the provisions of this Section 8.2, that (i) upon the occurrence and during the continuance of any Event of Default, it shall, upon demand by the Determining Lenders (and, in the case of any Event of Default specified in Section 8.1(f) or (g) hereof, forthwith, without any demand or the taking of any other action by the Administrative Lender or any Lender) pay to the Administrative Lender an amount in immediately available funds equal to the then aggregate undrawn face amount of the Letters of Credit and (ii) any amounts received by the Administrative Lender pursuant to this Section 8.2(c) (and all investments of such amounts and earnings and proceeds of such investments) shall be held by the Administrative Lender in a cash collateral account in the name of the Administrative Lender entitled "Butler Manufacturing Company Letter of Credit Cash Collateral Account". As security for the payment of all Reimbursement Obligations and for all other Obligations, the Borrower hereby grants, conveys, assigns, pledges, sets over and transfers to the Administrative Lender (for the benefit of each Issuing Bank and the Lenders) a Lien in such collateral account, together with all earnings and proceeds thereof. The balance in such collateral account (including all earnings thereon) shall be invested and reinvested by the Administrative Lender in such interest-bearing obligations as the Administrative Lender shall from time to time select, and the Borrower hereby authorizes and directs the Administrative Lender to collect and receive any earnings and proceeds of any such Investments and to credit the net amount of all such receipts to such cash collateral account. The Administrative Lender, and the Lenders may exercise all of the post-default rights granted to them under the Loan Documents or under Applicable Law. The rights and remedies of the Administrative Lender and the Lenders hereunder shall be cumulative, and not exclusive. CHANGES IN CIRCUMSTANCES LIBOR RATE DETERMINATION INADEQUATE. If with respect to any proposed LIBOR Advance for any Interest Period, any Lender determines that (i) deposits in dollars (in the applicable amount) are not being offered to that Lender in the relevant market for such Interest Period or (ii) the LIBOR Rate for such proposed LIBOR Advance does not adequately cover the cost to such Lender of making and maintaining such proposed LIBOR Advance for such Interest Period, such Lender shall forthwith give notice thereof to the Borrower, whereupon until such Lender notifies the Borrower that the circumstances giving rise to such situation no longer exist, the obligation of such Lender to make LIBOR Advances shall be suspended. ILLEGALITY. If any applicable law, rule or regulation, or any change therein or adoption thereof, or interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its LIBOR Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency, shall make it unlawful or impossible for such Lender (or its LIBOR Lending Office) to make, maintain or fund its LIBOR Advances, such Lender shall so notify the Borrower and the Administrative Lender. Before giving any notice to the Borrower pursuant to this Section, the notifying Lender shall designate a different LIBOR Lending Office or other lending office if such designation will avoid the need for giving such notice and will not, in the sole judgment of the Lender, be materially disadvantageous to the Lender. Upon receipt of such notice, notwithstanding anything contained in Article 2 hereof, the Borrower shall repay in full the then outstanding principal amount of each LIBOR Advance owing to the notifying Lender, together with accrued interest thereon, on either (a) the last day of the Interest Period applicable to such Advance, if the Lender may lawfully continue to maintain and fund such 35 41 Advance to such day, or (b) immediately, if the Lender may not lawfully continue to fund and maintain such Advance to such day. Concurrently with repaying each affected LIBOR Advance owing to such Lender, notwithstanding anything contained in Article 2 hereof, the Borrower shall borrow a Base Rate Advance from such Lender, and such Lender shall make such Base Rate Advance, in an amount such that the outstanding principal amount of the Advances owing to such Lender shall equal the outstanding principal amount of the Advances owing to such Lender immediately prior to such repayment. INCREASED COSTS. If any applicable law, rule or regulation, or any change in or adoption of any law, rule or regulation, or any interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof or compliance by any Lender (or its LIBOR Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or compatible agency: (xxii) shall subject a Lender (or its LIBOR Lending Office) to any Tax (net of any tax benefit engendered thereby) with respect to its LIBOR Advances or its obligation to make such Advances, or shall change the basis of taxation of payments to a Lender (or to its LIBOR Lending Office) of the principal of or interest on its LIBOR Advances or in respect of any other amounts due under this Agreement, as the case may be, or its obligation to make such Advances (except for changes in the rate of tax on the overall net income, net worth or capital of the Lender and franchise taxes, doing business taxes or minimum taxes imposed upon such Lender); or (xxiii) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, a Lender's LIBOR Lending Office or shall impose on the Lender (or its LIBOR Lending Office) or on the United States market for certificates of deposit or the London interbank market any other condition affecting its LIBOR Advances or its obligation to make such Advances; and the result of any of the foregoing is to increase the cost to a Lender (or its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to reduce the amount of any sum received or receivable by a Lender (or its LIBOR Lending Office) with respect thereto, by an amount deemed by a Lender to be material, then, within 15 days after demand by a Lender, the Borrower agrees to pay to such Lender such additional amount as will compensate such Lender for such increased costs or reduced amounts, subject to Section 11.9 hereof. The affected Lender will as soon as practicable notify the Borrower of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section and will designate a different LIBOR Lending Office or other lending office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole judgment of the affected Lender made in good faith, be disadvantageous to such Lender. A certificate of any Lender claiming compensation under this Section which shall include, in reasonable detail, the basis for the demand for additional compensation, the method of calculation, and the calculation thereof, shall be conclusive in the absence of manifest error. In determining such amount, a Lender may use any reasonable averaging and attribution methods. If a Lender demands compensation under this Section, the Borrower may at any time, upon at least five Business Days' prior notice to the Lender, after reimbursement to the Lender by the Borrower in accordance with this Section of all costs incurred, prepay in full the then outstanding LIBOR Advances of the Lender, together with accrued interest thereon to the date of prepayment, along with any reimbursement required under Section 2.9 hereof. Concurrently with prepaying such LIBOR Advances, the Borrower may borrow a Base Rate Advance from the Lender, and the Lender shall make such Base Rate Advance, in an amount such that the outstanding principal amount of the Advances owing to such Lender shall equal the outstanding principal amount of the Advances owing to such Lender immediately prior to such prepayment. EFFECT ON BASE RATE ADVANCES. If notice has been given pursuant to Section 9.1, 9.2 or 9.3 hereof suspending the obligation of a Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be repaid or prepaid, then, unless and until the Lender notifies the Borrower that the circumstances giving rise to such repayment 36 42 no longer apply, all Advances which would otherwise be made by such Lender as LIBOR Advances shall be made instead as Base Rate Advances. CAPITAL ADEQUACY. If any change in or in the interpretation of any law, rule or regulation or in any guideline of any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by a Lender or any corporation controlling such Lender, and such Lender determines that the amount of such capital is increased by or based upon the existence of such Lender's commitment or Advances hereunder and other commitments or advances of such Lender of this type, then, upon demand by such Lender, subject to Section 11.9, the Borrower shall immediately pay to such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender with respect to such circumstances, to the extent that such Lender reasonably determines in good faith such increase in capital to be allocable to the existence of such Lender's Commitment hereunder. The Lender shall submit to the Borrower a certificate as to such amounts, which shall include, in reasonable detail, the basis for the demand for additional compensation, the method of calculation, and the calculation thereof, which certificate shall, in the absence of manifest error, be conclusive and binding for all purposes. SURVIVAL. All of the Borrower's obligations under this Article 9 shall survive termination of the Commitment and payment in full of the Obligations. AGREEMENT AMONG LENDERS Agreement Among Lenders. The Lenders agree among themselves that: ADMINISTRATIVE LENDER. Each Lender hereby appoints the Administrative Lender as its nominee in its name and on its behalf, to receive all documents and items to be furnished hereunder; to act as nominee for and on behalf of all Lenders under the Loan Documents; to, except as otherwise expressly set forth herein, take such action as may be requested by the Determining Lenders provided that, unless and until the Administrative Lender shall have received such requests, the Administrative Lender may take such administrative action, or refrain from taking such administrative action, as it may deem advisable and in the best interests of the Lenders; to arrange the means whereby the proceeds of the Advances of the Lenders are to be made available to the Borrower; to distribute promptly to each Lender information, requests and documents received from the Borrower, and each payment (in like funds received) with respect to any of such Lender's Advances, participations in Letters of Credit, fees or other amounts; and to deliver to the Borrower requests, demands, approvals and consents received from the Lenders. Administrative Lender agrees to promptly distribute to each Lender, at such Lender's address set forth below information, requests, documents and payments received from the Borrower. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Lender shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Lender have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Lender. REPLACEMENT OF ADMINISTRATIVE LENDER. Should the Administrative Lender or any successor Administrative Lender ever cease to be a Lender hereunder, or should the Administrative Lender or any successor Administrative Lender ever resign as Administrative Lender, or should the Administrative Lender or any successor Administrative Lender ever be removed with cause by the Determining Lenders, then the Lender appointed by the other Lenders shall forthwith become the Administrative Lender, and the Borrower and the Lenders shall execute such documents as any Lender may reasonably request to reflect such change. Any resignation or removal of the Administrative Lender or any successor Administrative Lender shall become effective upon the appointment by the Lenders of a successor Administrative Lender; provided, however, that if the Lenders fail for any reason to appoint a successor within 60 days after such removal or resignation, the Administrative Lender or any successor Administrative Lender (as the case may be) shall thereafter have no obligation to act as Administrative Lender hereunder. EXPENSES. Each Lender shall pay its pro rata share, based on its Specified Percentage, of any expenses paid by the Administrative Lender directly and solely in connection with any of the Loan Documents if 37 43 Administrative Lender does not receive reimbursement therefor from other sources within 60 days after the date incurred, unless payment of such fees is being diligently disputed by such Lender or the Borrower in good faith. Any amount so paid by the Lenders to the Administrative Lender shall be returned by the Administrative Lender pro rata to each paying Lender to the extent later paid by the Borrower or any other Person on the Borrower's behalf to the Administrative Lender. DELEGATION OF DUTIES. The Administrative Lender may execute any of its duties hereunder by or through officers, directors, employees, attorneys or agents, and shall be entitled to (and shall be protected in relying upon) advice of counsel concerning all matters pertaining to its duties hereunder. The Administrative Lender shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct. RELIANCE BY ADMINISTRATIVE LENDER. The Administrative Lender and its officers, directors, employees, attorneys and agents shall be entitled to rely and shall be fully protected in relying on any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telex or teletype message, statement, order, or other document or conversation reasonably believed by it or them in good faith to be genuine and correct and to have been signed or made by the proper Person and, with respect to legal matters, upon opinions of counsel selected the Administrative Lender. The Administrative Lender may, in its reasonable judgment, deem and treat the payee of any Revolving Credit Note as the owner thereof for all purposes hereof. LIMITATION OF ADMINISTRATIVE LENDER'S LIABILITY. Neither the Administrative Lender nor any of its officers, directors, employees, attorneys or agents shall be liable for any action taken or omitted to be taken by it or them hereunder in good faith and believed by it or them to be within the discretion or power conferred to it or them by the Loan Documents or be responsible for the consequences of any error of judgment, except for its or their own gross negligence or willful misconduct. Except as aforesaid, the Administrative Lender shall be under no duty to enforce any rights with respect to any of the Advances, or any security therefor. The Administrative Lender shall not be compelled to do any act hereunder or to take any action towards the execution or enforcement of the powers hereby created or to prosecute or defend any suit in respect hereof, unless indemnified to its satisfaction against loss, cost, liability and expense. The Administrative Lender shall not be responsible in any manner to any Lender for the effectiveness, enforceability, genuineness, validity or due execution of any of the Loan Documents, or for any representation, warranty, document, certificate, report or statement made herein or furnished in connection with any Loan Documents, or be under any obligation to any Lender to ascertain or to inquire as to the performance or observation of any of the terms, covenants or conditions of any Loan Documents on the part of the Borrower. To the extent not reimbursed by the Borrower, each Lender hereby indemnifies and holds harmless the Administrative Lender, pro rata according to its Specified Percentage, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and/or disbursements of any kind or nature whatsoever which may be imposed on, asserted against, or incurred by the Administrative Lender in any way with respect to any Loan Documents or any action taken or omitted by the Administrative Lender under the Loan Documents; provided, however, no Lender shall be obligated to indemnify or hold harmless the Administrative Lender hereunder if any such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, expenses and/or disbursements result from gross negligence or willful misconduct by the Administrative Lender. Each Lender agrees that it expressly intends, under this Section 10.1(f) to indemnify Administrative Lender ratably as aforesaid for all such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements arising out of or resulting from Administrative Lender's sole ordinary or contributory negligence. LIABILITY AMONG LENDERS. No Lender shall incur any liability (other than the sharing of expenses and other matters specifically set forth herein and in the other Loan Documents) to any other Lender, except for acts or omissions in bad faith. RIGHTS AS LENDER. With respect to its commitment hereunder, the Advances made by it and Revolving Credit Note issued to it, the Administrative Lender shall have the same rights as a Lender and may exercise the same as though it were not the Administrative Lender, and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include the Administrative Lender in its individual capacity. The Administrative 38 44 Lender or any Lender may accept deposits from, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower and any of its Affiliates, and any Person who may do business with or own securities of the Borrower or any of its Affiliates, all as if the Administrative Lender were not the Administrative Lender hereunder and without any duty to account therefor to the Lenders. LENDER CREDIT DECISION. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Lender or any other Lender and based upon the financial statements referred to in Sections 4.1(j), 6.1 and 6.2 hereof, and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Lender or any other Lender and based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. NOTICE OF DEFAULT. The Administrative Lender shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Lender for the account of the Lenders, unless the Administrative Lender shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". The Administrative Lender will notify the Lenders of its receipt of any such notice. The Administrative Lender shall take such action with respect to such Default or Event of Default as may be directed by the Determining Lenders in accordance with Article 8; provided, however, that unless and until the Administrative Lender has received any such direction, the Administrative Lender may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Lenders. BENEFITS OF ARTICLE. None of the provisions of this Article shall inure to the benefit of any Person other than Lenders; consequently, no Person shall be entitled to rely upon, or to raise as a defense, in any manner whatsoever, the failure of the Administrative Lender or any Lender to comply with such provisions. MISCELLANEOUS NOTICES. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or delivered, to the address, facsimile number or (subject to subsection (c) below) electronic mail address specified for notices below; or, in the case of the Borrower or the Administrative Lender, to such other address as shall be designated by such party in a notice to the other parties, and in the case of any other party, to such other address as shall be designated by such party in a notice to the Borrower and the Administrative Lender. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the intended recipient and (ii)(A) if delivered by hand or by courier, when signed for by the intended recipient; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when delivered; provided, however, that notices and other communications to the Administrative Lender pursuant to Article 2 hereof shall not be effective until actually received by such Person. Any notice or other communication permitted to be given, made or confirmed by telephone hereunder shall be given, made or confirmed by means of a telephone call to the intended recipient at the number specified below, it being understood and agreed that a voicemail message shall in no event be effective as a notice, communication or confirmation hereunder. (xxiv) If to the Borrower, at: Butler Manufacturing Company BMA Tower 31st Street and Southwest Trafficway Kansas City, Missouri 64108 Attn: Chief Financial Officer 39 45 Telephone: 816-968-3216 Facsimile: 816-968-3279 Electronic: lcmiller@butlermfg.org with a copy to: Butler Manufacturing Company BMA Tower 31st Street and Southwest Trafficway Kansas City, Missouri 64108 Attn: General Counsel Telephone: 816-968-3214 Facsimile: 816-968-3211 Electronic: jwhuey@butlermfg.org (xxv) If to the Administrative Lender, at: Bank of America, N.A. 901 Main Street, 14th Floor Dallas, Texas 75202 Attn: Corporate Credit Services, Tonya Parker Telephone: (214) 209-2138 Facsimile: (214) 290-9438 Electronic: tonya.r.parker@bankofamerica.com with a copy to: Bank of America, N.A. 901 Main Street, 66th Floor Dallas, Texas 75202 Attn: Portfolio Management, Dan Killian Telephone: (214) 209-0978 Facsimile: (214) 209-0980 Electronic: daniel.m.killian@bankofamerica.com (xxvi) If to a Lender, at its address shown below its name on the signature pages hereof, or if applicable, set forth in its Assignment Agreement. 40 46 EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to Applicable Law, have the same force and effect as manually-signed originals and shall be binding on the Borrower, its Subsidiaries, the Administrative Lender and the Lenders. The Administrative Lender may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. LIMITED USE OF ELECTRONIC MAIL. Electronic mail and internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. Expenses. The Borrower shall promptly pay: all reasonable out-of-pocket expenses of the Administrative Lender in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents, the transactions contemplated hereunder and thereunder, and the making of Advances hereunder, including without limitation the reasonable fees and disbursements of Special Counsel; all reasonable out-of-pocket expenses and attorneys' fees of the Administrative Lender in connection with the administration of the transactions contemplated in this Agreement and the other Loan Documents and the preparation, negotiation, execution and delivery of any waiver, amendment or consent by the Lenders relating to this Agreement or the other Loan Documents; and all costs, out-of-pocket expenses and attorneys' fees of the Administrative Lender and each Lender incurred for enforcement, collection, restructuring, refinancing and "work-out", or otherwise incurred in obtaining performance under the Loan Documents, and all costs and out-of-pocket expenses of collection if default is made in the payment of the Revolving Credit Notes, which in each case shall include without limitation fees and expenses of consultants, counsel for the Administrative Lender and any Lender, and administrative fees for the Administrative Lender. The obligations of the Borrower under this Section 11.2 shall survive termination of the Commitment and payment in full of the Obligations. WAIVERS. The rights and remedies of the Lenders under this Agreement and the other Loan Documents shall be cumulative and not exclusive of any rights or remedies which they would otherwise have. No failure or delay by the Administrative Lender or any Lender in exercising any right shall operate as a waiver of such right. The Lenders expressly reserve the right to require strict compliance with the terms of this Agreement in connection with any funding of a request for an Advance. In the event that any Lender decides to fund an Advance or the Issuing Bank decides to issue a Letter of Credit at a time when the Borrower is not in strict compliance with the terms of this Agreement, such decision by such Lender or the Issuing Bank shall not be deemed to constitute an undertaking by the Lender to fund any further requests for Advances or by the Issuing Bank to issue any additional Letters of Credit or preclude the Lenders from exercising any rights available under the Loan Documents or at law or equity. Any waiver or indulgence granted by the Lenders shall not constitute a modification of this Agreement, except to the extent expressly provided in such waiver or indulgence, or constitute a course of dealing by the Lenders at variance with the terms of the Agreement such as to require further notice by the Lenders of the Lenders' intent to require strict adherence to the terms of the Agreement in the future. Any such actions shall not in any way affect the ability of the Administrative Lender or the Lenders, in their discretion, to exercise any rights available to them under this Agreement or under any other agreement, whether or not the Administrative Lender or any of the Lenders are a party thereto, relating to the Borrower. DETERMINATION BY THE LENDERS CONCLUSIVE AND BINDING. Any material determination required or expressly permitted to be made by the Administrative Lender or any Lender under this Agreement shall be made in its reasonable judgment and in good faith, and shall when made, absent manifest error, be conclusive and binding on all parties. SET-OFF. In addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Lender and any subsequent holder of any Revolving Credit Note, and any assignee or participant in any Revolving Credit Note is hereby authorized by the Borrower at any time or from time to time, without notice to the Borrower or any other Person, any such notice being hereby expressly waived, to set-off, appropriate and apply any deposits (general or special (except trust and escrow 41 47 accounts), time or demand, including without limitation Debt evidenced by certificates of deposit, in each case whether matured or unmatured) and any other Debt at any time held or owing by such Lender or holder to or for the credit or the account of the Borrower, against and on account of the Obligations and other liabilities of the Borrower to such Lender or holder, irrespective of whether or not (a) the Lender or holder shall have made any demand hereunder, or (b) the Lender or holder shall have declared the principal of and interest on the Advances and other amounts due hereunder to be due and payable as permitted by Section 8.2 and although such obligations and liabilities, or any of them, shall be contingent or unmatured. Any sums obtained by any Lender or by any assignee, participant or subsequent holder of any Revolving Credit Note shall be subject to pro rata treatment of all Obligations and other liabilities hereunder. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement. Any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of the Commitment and Advances (including for purposes of this subsection (b), participations in Reimbursement Obligations) at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning lender's portion of the Commitment and the Advances at the time owing to it or in the case of an assignment to a Lender or a Lender Affiliate or an Approved Fund with respect to a Lender, the aggregate amount of the portion of the Commitment (which for this purpose includes Advances outstanding thereunder) subject to each such assignment, determined as of the date of the Assignment Agreement with respect to such assignment is delivered to the Administrative Lender, shall not be less than $5,000,000 unless each of the Administrative Lender and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed), (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement with respect to the Advances (including such Lender's participations in the Reimbursement Obligations) or the portion of the Commitment assigned, and (iii) the parties to each assignment shall execute and deliver to the Administrative Lender an Assignment Agreement, together with a processing and recordation fee of $3,500. Subject to acceptance and recording thereof by the Administrative Lender pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment Agreement, the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 9.6 (which accrued to such Lender prior to such assignment), 5.10 and 11.2 hereof). Upon request, the Borrower (at its expense) shall execute and deliver new or replacement Revolving Credit Notes to the assigning Lender and the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section. The Administrative Lender, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Lender's office a copy of each Assignment Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Advances and Reimbursement Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Lender and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 42 48 Any Lender may, without the consent of, or notice to, the Borrower or the Administrative Lender, sell participations to one or more banks or other entities (a "Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its commitment and/or the Advances (including such Lender's participations in Reimbursement Obligations) owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification that would (i) postpone any date upon which any payment of money is scheduled to be paid to such Participant, (ii) reduce the principal, interest, fees or other amounts payable to such Participant, or (iii) release any Guarantor from the Subsidiary Guaranty. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.9, 2.15 and Article 9 hereof to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.5 hereof as though it were a Lender. A Participant shall not be entitled to receive any greater payment under Section 2.5 or Article 9 hereof than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Revolving Credit Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, without the requirement for notice to or consent of any Person or the payment of any fee; provided that no such pledge or assignment shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. If the consent of the Borrower to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment which does not meet the minimum assignment threshold specified in clause (i) of the proviso to the first sentence of Section 11.6(b)), the Borrower shall be deemed to have given its consent ten Business Days after the date notice thereof has been delivered by the assigning Lender (through the Administrative Lender) unless such consent is expressly refused by the Borrower prior to such tenth Business Day. As used herein, the following terms have the following meanings: "Eligible Assignee" means (a) a Lender; (b) a Lender Affiliate; (c) an Approved Fund; and (d) any other Person (other than a natural Person) approved by the Administrative Lender and the Issuing Bank and, unless (x) such Person is taking delivery of an assignment in connection with physical settlement of a derivatives transaction or (y) an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed). "Fund" means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. "Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) a Lender Affiliate or (c) an entity or an affiliate of an entity that administers or manages a Lender. 43 49 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. SEVERABILITY. Any provision of this Agreement which is for any reason prohibited or found or held invalid or unenforceable by any court or governmental agency shall be ineffective to the extent of such prohibition or invalidity or unenforceability without invalidating the remaining provisions hereof in such jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. INTEREST AND CHARGES. It is not the intention of any parties to this Agreement to make an agreement in violation of the laws of any applicable jurisdiction relating to usury. Regardless of any provision in any Loan Documents, no Lender shall ever be entitled to receive, collect or apply, as interest on the Obligations, any amount in excess of the Maximum Amount. If any Lender or participant ever receives, collects or applies, as interest, any such excess, such amount which would be excessive interest shall be deemed a partial repayment of principal and treated hereunder as such; and if principal is paid in full, any remaining excess shall be paid to the Borrower. In determining whether or not the interest paid or payable, under any specific contingency, exceeds the Maximum Amount, the Borrower and the Lenders shall, to the maximum extent permitted under Applicable Law, (a) characterize any nonprincipal payment as an expense, fee or premium rather than as interest, (b) exclude voluntary prepayments and the effect thereof, and (c) amortize, prorate, allocate and spread in equal parts, the total amount of interest throughout the entire contemplated term of the Obligations so that the interest rate is uniform throughout the entire term of the Obligations; provided, however, that if the Obligations are paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Amount, the Lenders shall refund to the Borrower the amount of such excess or credit the amount of such excess against the total principal amount of the Obligations owing, and, in such event, the Lenders shall not be subject to any penalties provided by any laws for contracting for, charging or receiving interest in excess of the Maximum Amount. This Section shall control every other provision of all agreements pertaining to the transactions contemplated by or contained in the Loan Documents. HEADINGS. Headings used in this Agreement are for convenience only and shall not be used in connection with the interpretation of any provision hereof. AMENDMENT AND WAIVER. The provisions of this Agreement may not be amended, modified or waived except by the written agreement of the Borrower and the Determining Lenders; provided, however, that no such amendment, modification or waiver shall be made (a) without the consent of each Lender directly affected thereby, if it would (i) increase the Specified Percentage or commitment of such Lender, or (ii) extend the date of maturity of, extend the due date for any payment of principal or interest on, reduce the amount of any installment of principal or interest on, or reduce the rate of interest on, any Advance or Reimbursement Obligation owing to such Lender or reduce any other amount owing to such Lender under any Loan Documents; or (b) without the consent of all Lenders, if it would (i) release any security for or guaranty of the Obligations (except pursuant to this Agreement), or (ii) revise this Section 11.11, or (iii) waive, extend or postpone the date for payment of any of the Obligations, or (vii) amend the definition of Determining Lenders; or (c) without the consent of the Administrative Lender, if it would alter the rights, duties or obligations of the Administrative Lender; or (d) without the consent of an Issuing Bank, if it would alter the rights, duties, or obligations of such Issuing Bank. Neither this Agreement nor any term hereof may be amended orally, nor may any provision hereof be waived orally but only by an instrument in writing signed by the Administrative Lender and, in the case of an amendment, by the Borrower. EXCEPTION TO COVENANTS. Neither the Borrower nor any Subsidiary shall be deemed to be permitted to take any action or fail to take any action which is permitted as an exception to any of the covenants contained herein or which is within the permissible limits of any of the covenants contained herein if such action or omission would result in the breach of any other covenant contained herein. NO LIABILITY OF ISSUING BANK. The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. No Issuing Bank nor any Lender nor any of their respective officers or directors shall be liable or responsible for: (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, 44 50 sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by any Issuing Bank against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit, except for any payment made upon the Issuing Bank's gross negligence or willful misconduct; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the Borrower shall have a claim against an Issuing Bank, and an Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential, damages suffered by the Borrower that the Borrower proves were caused by (i) such Issuing Bank's willful misconduct or gross negligence in determining whether documents presented under any Letter of Credit comply with the terms of the Letter of Credit or (ii) such Issuing Bank's willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary. PAYMENTS SET ASIDE. To the extent that the Borrower makes a payment to the Administrative Lender or any Lender, or the Administrative Lender or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Lender or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Lender upon demand its applicable share of any amount so recovered from or repaid by the Administrative Lender, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. NO STRICT CONSTRUCTION. The parties (directly and through their counsel) hereto have participated jointly in the negotiating and drafting of this Agreement and the other Loan Documents. In the event an ambiguity or question of intent or interpretation arises, this Agreement and the other Loan Documents shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any other Loan Document. FOREIGN LENDERS. Each Lender that is a "foreign corporation, partnership or trust" within the meaning of the Code (a "Foreign Lender") shall deliver to the Administrative Lender, prior to receipt of any payment subject to withholding under the Code (or after accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Person and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Person by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Person by the Borrower pursuant to this Agreement) or such other evidence satisfactory to the Borrower and the Administrative Lender that such Person is entitled to an exemption from, or reduction of, U.S. withholding tax. Thereafter and from time to time, each such Person shall (a) promptly submit to the Administrative Lender such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to the Borrower and the Administrative Lender of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Person by the Borrower pursuant to this Agreement, (b) promptly notify the Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (c) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that the Borrower make any deduction or withholding for taxes from amounts payable to such Person. If such Person fails to deliver the above forms or other documentation, then the Administrative Lender may withhold from any interest payment to such Person an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction. If any Governmental Authority asserts that the Administrative Lender did not properly withhold any tax or other amount from payments made in respect of such Person, such Person shall indemnify the Administrative Lender therefor, including all penalties and interest, any taxes imposed by any 45 51 jurisdiction on the amounts payable to the Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Lender. The obligation of the Lenders under this Section shall survive the payment of all Obligations and the resignation or replacement of the Administrative Lender. CONFIDENTIALITY. Each of the Administrative Lender and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclose is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by an regulatory authority; (c) to the extent required by Applicable Laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty's or prospective counterparty's professional advisor) to any credit derivative transaction relating to obligations of the Borrower; (g) with the consent of the Borrower; (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Lender or any Lender on a nonconfidential basis from a source other than the Borrower that is not known to such Administrative Lender or Lender to be subject to an obligation to keep such information confidential; or (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a Lender's or its affiliates' investment portfolio in connection with ratings issued with respect to such Lender or its affiliates. For the purposes of this Section, "Information" means all information received from the Borrower relating to the Borrower, any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Lender or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 11.17 shall be considered to have complied with its obligations to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS; PROVIDED THAT THE ADMINISTRATIVE LENDER AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW AND PROVIDED, FURTHER, HOWEVER, IT IS AGREED THAT THE PROVISIONS OF CHAPTER 346 OF THE TEXAS FINANCE CODE, AS AMENDED, SHALL NOT APPLY TO THE ADVANCES, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS SHALL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS COUNTY, TEXAS. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE ADMINISTRATIVE LENDER AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT AND MAKING ANY ADVANCES HEREUNDER. ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL 46 52 AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. ================================================================================ REMAINDER OF PAGE LEFT INTENTIONALLY BLANK ================================================================================ 47 53 IN WITNESS WHEREOF, this Credit Agreement is executed as of the date first set forth above. BORROWER: BUTLER MANUFACTURING COMPANY By: ------------------------------------------ Name: ------------------------------------- Title: ------------------------------------ 48 54 ADMINISTRATIVE LENDER: BANK OF AMERICA, N.A., as Administrative Lender By: ------------------------------------------ Name: ------------------------------------- Title: ------------------------------------ LENDERS: BANK OF AMERICA, N.A., as a Lender and as the Issuing Bank Specified Percentage: 53.84615384% By: ------------------------------------------ Name: ------------------------------------- Title: ------------------------------------ 901 Main Street, 67th Floor Dallas, Texas 75202 49 55 COMMERCE BANK, N.A. Specified Percentage: 23.07692308% By: ------------------------------------------ Name: ------------------------------------- Title: ------------------------------------ 1000 Walnut Street Kansas City, Missouri 64105 Attn: Marty Nay 50 56 FIRSTAR BANK, N.A. Specified Percentage: 23.07692308% By: ------------------------------------------ Name: ------------------------------------- Title: ------------------------------------ 1101 Walnut, 7th Floor Kansas City, Missouri 64106 Attn: Bruce A. Easterly ================================================================================ 51 57 EXHIBIT A FORM OF REVOLVING CREDIT NOTE $ --------------------- ---------------------- FOR VALUE RECEIVED, BUTLER MANUFACTURING COMPANY, a Delaware corporation (the "Borrower"), hereby promises to pay to the order of ___________________________ (the "Lender"), on the Maturity Date (as defined in the Credit Agreement referred to below) the principal amount of __________________Dollars ($____________), or such lesser principal amount of Advances (as defined in such Credit Agreement) due and payable by the Borrower to the Lender on the Maturity Date under that certain Credit Agreement, dated as of June 20, 2001 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the "Agreement;" the terms defined therein being used herein as therein defined), among the Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Lender. The Borrower promises to pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full, at such interest rates, and at such times as are specified in the Agreement. All payments of principal and interest shall be made to the Administrative Lender for the account of the Lender in Dollars in immediately available funds at the Administrative Lender's office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the Default Rate set forth in the Agreement. This Note is one of the Revolving Credit Notes referred to in the Agreement, is entitled to the benefits thereof and is subject to optional and mandatory prepayment in whole or in part as provided therein. This Note is also entitled to the benefits of the Subsidiary Guaranty. Upon the occurrence of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Advances made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Revolving Loans and payments with respect thereto. The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, intent to accelerate, acceleration, dishonor and non-payment of this Note. 52 58 THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. BUTLER MANUFACTURING COMPANY By: ------------------------------------------ Name: ------------------------------------- Title: ------------------------------------ 53 59 REVOLVING LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of Outstanding ---------- ------------ Principal or Principal ------------ --------- Date Type of Loan Amount of Loan End of Interest Interest Paid Balance This ---- ------------ -------------- --------------- ------------- ------------ Made Made Period This Date Date Notation Made By - -------------------------------------------------------------------------------------------------------------------------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- ----------------- - ------------------- --------------- --------------- --------------- ------------ ------------- -----------------
================================================================================ 54 60 ================================================================================ EXHIBIT B SUBSIDIARY GUARANTY SUBSIDIARY GUARANTY (this "Guaranty"), dated as of _____________, 2001, made by each of the parties listed on the signature pages hereof (collectively, the "Guarantors", and each, a "Guarantor"), in favor of the Guarantied Parties referred to below. WITNESSETH: WHEREAS, Butler Manufacturing Company, a Delaware corporation (the "Borrower"), has entered into a Credit Agreement, dated as of June 20, 2001, among the Lenders party thereto, and Bank of America, N.A., as the administrative lender (the "Administrative Lender") for the Lenders (said Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", and capitalized terms not defined herein but defined therein being used herein as therein defined); and WHEREAS, the Borrower, directly or indirectly, owns beneficially and of record more than 50% of the capital stock of the Guarantors, and the Borrower and each of the Guarantors are members of the same consolidated group of companies and are engaged in operations which require financing on a basis in which credit can be made available from time to time to the Borrower and the Guarantors, and the Guarantors will derive direct and indirect economic benefit from the Advances and Letters of Credit under the Credit Agreement; and WHEREAS, it is a condition precedent to the obligation of the Lenders to make Advances and issue and/or participate Letters of Credit under the Credit Agreement that the Guarantors shall have executed and delivered this Guaranty; and WHEREAS, the Lenders, the Administrative Lender and any Lender Affiliate entering into a Swap Contract (provided that such Lender was a Lender at the time such Swap Contract was entered into) with the Borrower or any Affiliate of the Borrower are herein referred to as the "Guarantied Parties"; NOW, THEREFORE, in consideration of the premises and to induce the Lenders to make Advances and issue and/or participate in Letters of Credit, the Guarantors hereby agree as follows: GUARANTY. The Guarantors hereby jointly and severally unconditionally and irrevocably guarantee the full and prompt payment when due, whether at stated maturity, by acceleration or otherwise, of, and the performance of, (a) the Obligations, whether now or hereafter existing and whether for principal, interest, fees, expenses or otherwise, (b) any and all reasonable out-of-pocket expenses (including, without limitation, reasonable expenses and reasonable counsel fees and expenses of the Administrative Lender and the Lenders) incurred by any of the Guarantied Parties in enforcing any rights under this Guaranty and (c) all present and future amounts that would become due but for the operation of Section 502 or 506 or any other provision of Chapter 11 of Title 11 of the United States Code, as amended (the "Bankruptcy Code"), and all present and future accrued and unpaid interest, including, without limitation, all post-petition interest if the Borrower or any Guarantor voluntarily or involuntarily becomes subject to any Debtor Relief Laws (the items set forth in clauses (a), (b) and (c) immediately above being herein referred to as the "Guarantied Obligations"). Upon failure of the Borrower to pay any of the Guarantied Obligations when due after the giving by the Administrative Lender and/or the Lenders of any notice and the expiration of any applicable cure period in each case provided for in the Credit Agreement and other Loan Documents (whether at stated maturity, by acceleration or otherwise), the Guarantors hereby further jointly and severally agree to promptly pay the same, without any demand or notice whatsoever, including without limitation, any notice having been given to the Guarantor of either the acceptance by the Guarantied Parties of this Guaranty or the creation or incurrence of any of the Obligations. This Guaranty is an absolute guaranty of payment and performance and not a guaranty of collection, meaning that it is not necessary for the Guarantied Parties, in order to enforce payment by the Guarantors, first or contemporaneously to accelerate payment of any of the Guarantied Obligations, to institute suit or exhaust any rights against any the Borrower or any Guarantor, or to enforce any rights against any Collateral. Notwithstanding anything herein or in any other Loan 55 61 Document to the contrary, in any action or proceeding involving any state corporate law, or any state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Section 1 would otherwise, taking into account the provisions of Section 10 hereof, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under this Section 1, then the amount of such liability shall, without any further action by such Guarantor, any Lender, the Administrative Lender or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding. GUARANTY ABSOLUTE. Each Guarantor guaranties that the Guarantied Obligations will be paid strictly in accordance with the terms of the Credit Agreement, the Revolving Credit Notes and the other Loan Documents, without set-off or counterclaim, and regardless of any Applicable Law now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Guarantied Parties with respect thereto. The liability of each Guarantor under this Guaranty shall be absolute and unconditional irrespective of: any lack of validity or enforceability of any provision of any other Loan Document or any other agreement or instrument relating to any Loan Document, or avoidance or subordination of any of the Guarantied Obligations; any change in the time, manner or place of payment of, or in any other term of, or any increase in the amount of, all or any of the Guarantied Obligations, or any other amendment or waiver of any term of, or any consent to departure from any requirement of, the Credit Agreement, the Revolving Credit Notes or any of the other Loan Documents; any exchange, release or non-perfection of any Lien on any collateral for, or any release or amendment or waiver of any term of any other guaranty of, or any consent to departure from any requirement of any other guaranty of, all or any of the Guarantied Obligations; the absence of any attempt to collect any of the Guarantied Obligations from the Borrower or from any other Guarantor or any other action to enforce the same or the election of any remedy by any of the Guarantied Parties; any waiver, consent, extension, forbearance or granting of any indulgence by any of the Guarantied Parties with respect to any provision of any other Loan Document; the election by any of the Guarantied Parties in any proceeding under the Bankruptcy Code of the application of section 1111(b)(2) of the Bankruptcy Code; any borrowing or grant of a security interest by the Borrower, as debtor-in-possession, under section 364 of the Bankruptcy Code; or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a borrower or a guarantor other than payment or performance of the Obligations. WAIVER. Each Guarantor hereby (i) waives (A) promptness, diligence, notice of acceptance and any and all other notices, including, without limitation, notice of intent to accelerate and notice of acceleration, with respect to any of the Obligations or this Guaranty, (B) any requirement that any of the Guarantied Parties protect, secure, perfect or insure any security interest in or other Lien on any property subject thereto or exhaust any right or take any action against the Borrower, any other Guarantor or any other Person or any Collateral, (C) the filing of any claim with a court in the event of receivership or bankruptcy of the Borrower, any other Guarantor or any other Person, (D) protest or notice with respect to nonpayment of all or any of the Guarantied Obligations, (E) the benefit of any statute of limitation, (F) all demands whatsoever (and any requirement that demand be made on the Borrower, any other Guarantor or any other Person as a condition 56 62 precedent to such Guarantor's obligations hereunder), (G) all rights by which any Guarantor might be entitled to require suit on an accrued right of action in respect of any of the Guarantied Obligations or require suit against the Borrower or any other Guarantor or Person, whether arising pursuant to Section 3402 of the Texas Business and Commerce Code, as amended, Section 17.001 of the Texas Civil Practice and Remedies Code, as amended, Rule 31 of the Texas Rules of Civil Procedure, as amended, or otherwise, (H) any defense based upon an election of remedies by any Guarantied Party, or (I) notice of any events or circumstances set forth in clauses (a) through (h) of Section 2 hereof; and (ii) covenants and agrees that, except as set forth in Section 11 hereof, this Guaranty will not be discharged except by complete payment and performance of the Guarantied Obligations and any other obligations of such Guarantor contained herein. If, in the exercise of any of its rights and remedies, any of the Guarantied Parties shall forfeit any of its rights or remedies, including, without limitation, its right to enter a deficiency judgment against the Borrower, any other Guarantor or any other Person, whether because of any Applicable Law pertaining to "election of remedies" or the like, each Guarantor hereby consents to such action by such Guarantied Party and waives any claim based upon such action. Any election of remedies which results in the denial or impairment of the right of such Guarantied Party to seek a deficiency judgment against the Borrower shall not impair the obligation of such Guarantor to pay the full amount of the Guarantied Obligations or any other obligation of such Guarantor contained herein. In the event any of the Guarantied Parties shall bid at any foreclosure or trustee's sale or at any private sale permitted by law or under any of the Loan Documents, to the extent not prohibited by Applicable Law, such Guarantied Party may bid all or less than the amount of the Guarantied Obligations and the amount of such bid, if successful, need not be paid by such Guarantied Party but shall be credited against the Guarantied Obligations. Each Guarantor agrees that notwithstanding the foregoing and without limiting the generality of the foregoing if, after the occurrence and during the continuance of an Event of Default, the Guarantied Parties are prevented by Applicable Law from exercising their respective rights to accelerate the maturity of the Guarantied Obligations, to collect interest on the Guarantied Obligations, or to enforce or exercise any other right or remedy with respect to the Guarantied Obligations, or the Administrative Lender is prevented from taking any action to realize on the Collateral, such Guarantor agrees to pay to the Administrative Lender for the account of the Guarantied Parties, upon demand therefor, the amount that would otherwise have been due and payable had such rights and remedies been permitted to be exercised by the Guarantied Parties. Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower and of each other Guarantor of all or any part of the Guarantied Obligations, and of all other circumstances bearing upon the risk of nonpayment of the Guarantied Obligations or any part thereof, that diligent inquiry would reveal. Each Guarantor hereby agrees that the Guarantied Parties shall have no duty to advise any Guarantor of information known to any of the Guarantied Parties regarding such condition or any such circumstance. In the event that any of the Guarantied Parties in its sole discretion undertakes at any time or from time to time to provide any such information to any Guarantor, such Guarantied Party shall be under no obligation (i) to undertake any 57 63 investigation not a part of its regular business routine, (ii) to disclose any information which, pursuant to accepted or reasonable banking or commercial finance practices, such Guarantied Party wishes to maintain as confidential, or (iii) to make any other or future disclosures of such information or any other information to such Guarantor. Each Guarantor consents and agrees that the Guarantied Parties shall be under no obligation to marshal any assets in favor of any Guarantor or otherwise in connection with obtaining payment of any or all of the Guarantied Obligations from any Person or source. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby represents and warrants to the Guarantied Parties that the representations and warranties set forth in Article 4 of the Credit Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party are true and correct in all material respects in the manner specified in the Credit Agreement and the Guarantied Parties shall be entitled to rely on each of them as if they were fully set forth herein. AMENDMENTS, ETC. No amendment or waiver of any provision of this Guaranty nor consent to any departure by any Guarantor here from shall in any event be effective unless the same shall be in writing, approved by the Determining Lenders (or by all the Lenders where the approval of each Lender is required under the Credit Agreement) and signed by the Administrative Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. ADDRESSES FOR NOTICES. All notices and other communications provided for hereunder shall be effectuated in the manner provided for in Section 11.1 of the Credit Agreement, provided that if a notice or communication hereunder is sent to a Guarantor, said notice shall be addressed to such Guarantor, in care of the Borrower. NO WAIVER; REMEDIES. No failure on the part of any Guarantied Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by Applicable Law or any of the other Loan Documents. No waiver by the Guarantied Parties of any default shall operate as a waiver of any other default or the same default on a future occasion, and no action by any of the Guarantied Parties permitted hereunder shall in way affect or impair any of the rights of the Guarantied Parties or the obligations of any Guarantor under this Guaranty or under any of the other Loan Documents, except as specifically set forth in any such waiver. Any determination by a court of competent jurisdiction of the amount of any principal and/or interest or other amount constituting any of the Guarantied Obligations shall be conclusive and binding on each Guarantor irrespective of whether such Guarantor was a party to the suit or action in which such determination was made. RIGHT OF SET-OFF. Upon the occurrence and during the continuance of any Event of Default under the Credit Agreement, each of the Guarantied Parties is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set-off and apply any and all deposits (general or special (except trust and escrow accounts), time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Guarantied Party to or for the credit or the account of each Guarantor against any and all of the obligations of each Guarantor now or hereafter existing under this Guaranty, irrespective of whether or not such Guarantied Party shall have made any demand under this Guaranty and although such obligations may be contingent and unmatured; provided, however, such Guarantied Party shall promptly notify such Guarantor and the Borrower after such set-off and the application made by such Guarantied Party. The rights of each Guarantied Party under this Section 8 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Guarantied Party may have. CONTINUING GUARANTY; TRANSFER OF REVOLVING CREDIT NOTES. Subject to Section 11, this Guaranty is a continuing guaranty and shall remain in full force and effect until payment in full of the Obligations after the Maturity Date, (ii) be binding upon each Guarantor, its successors and assigns, and (iii) inure to the benefit of 58 64 and be enforceable by the Guarantied Parties and their respective successors, transferees, and permitted assigns. Without limiting the generality of the foregoing clause (iii), each of the Guarantied Parties may assign or otherwise transfer any Revolving Credit Note held by it or the Guarantied Obligations owed to it to any other Person, and such other Person shall thereupon become vested with all the rights in respect thereof granted to such Guarantied Party herein or otherwise with respect to such of the Revolving Credit Notes and the Guarantied Obligations so transferred or assigned, subject, however, to compliance with the provisions of Section 11.6 of the Credit Agreement in respect of assignments. No Guarantor may assign any of its obligations under this Guaranty without first obtaining the written consent of the Lenders as set forth in the Credit Agreement. REIMBURSEMENT. To the extent that any Guarantor shall be required to repay a portion of the Advances which shall exceed the greater of (a) the amount of such Advances actually received by such Guarantor and (b) the amount which such Guarantor would otherwise have paid if such Guarantor had repaid the aggregate amount of such Advances (excluding the amount thereof repaid by the Borrower) in the same proportion as such Guarantor's net worth immediately after the later of the Agreement Date or the date such Guarantor becomes a party to this Guaranty bears to the aggregate net worth of the Guarantors (calculated for each Guarantor based on such Guarantor's net worth immediately after the later of the Agreement Date or the date such Guarantor becomes a party to this Guaranty), then such Guarantor shall be reimbursed by the other Guarantors for the amount of such excess, pro rata, based on their respective net worth immediately after the Agreement Date or the date such Guarantor becomes a party to this Guaranty, as applicable. This Section 10 is intended only to define the relative rights of the Guarantors, and nothing set forth in this Section 10 is intended to or shall impair the obligations of the Guarantors, jointly and severally, to pay to the Guarantied Parties the Guarantied Obligations as and when the same shall become due and payable in accordance with the terms hereof. REINSTATEMENT. This Guaranty shall remain in full force and effect and continue to be effective should any petition be filed by or against the Borrower or any Guarantor for liquidation or reorganization, should the Borrower or any Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Borrower or any Guarantor's assets, and shall, to the fullest extent permitted by Applicable Law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to Applicable Law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligees of the Obligations or such part thereof, whether as a "voidable preference," "fraudulent transfer," or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Guarantied Obligations shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA. SUBMISSION TO JURISDICTION; JURY TRIAL. Any legal action or proceeding with respect to this Guaranty or any document related thereto may be brought in the United States Federal or State Courts sitting in Dallas, Texas, and, each of the Guarantors and Guarantied Parties hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each of the Guarantors and Guarantied Parties hereby irrevocably waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions. Nothing contained in this Section 13 shall affect the right of any Guarantor or Guarantied Party to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against any other party or its property in any other jurisdiction. 59 65 THE ADMINISTRATIVE LENDER, THE GUARANTORS AND GUARANTIED PARTIES EACH, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON OR ARISING OUT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT. SECTION TITLES. The Section titles contained in this Guaranty are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Guaranty. EXECUTION IN COUNTERPARTS. This Guaranty may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same Guaranty. MISCELLANEOUS. All references herein to the Borrower or to any Guarantor shall include their respective successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession of or for the Borrower or such Guarantor. All references to the singular shall be deemed to include the plural where the context so requires. SUBROGATION AND SUBORDINATION. SUBROGATION. Notwithstanding any reference to subrogation contained herein to the contrary, until the Release Date, each Guarantor hereby irrevocably waives any claim or other rights which it may have or hereafter acquire against the Borrower that arise from the existence, payment, performance or enforcement of such Guarantor's obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, any right to participate in any claim or remedy of any Lender against the Borrower or any collateral which any Lender now has or hereafter acquires, whether or not such claim, remedy or right arises in equity, or under contract, statutes or common law, including without limitation, the right to take or receive from the Borrower, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Guarantied Obligations shall not have been paid in full, such amount shall be deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Lenders, and shall forthwith be paid to the Administrative Lender to be credited and applied upon the Guarantied Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Credit Agreement and that the waiver set forth in this Section 17(a) is knowingly made in contemplation of such benefits. SUBORDINATION. All debt and other liabilities of the Borrower to any Guarantor ("Borrower Debt") are expressly subordinate and junior to the Guarantied Obligations and any instruments evidencing the Borrower Debt to the extent provided below. (xxvii) Until the Release Date, each Guarantor agrees that it will not request, demand, accept, or receive (by set-off or other manner) any payment amount, credit or reduction of all or any part of the amounts owing under the Borrower Debt or any security therefor, except as specifically allowed pursuant to clause (ii) below; (xxviii) Notwithstanding the provisions of clause (i) above, the Borrower may pay to the Guarantors and the Guarantors may receive and retain from the Borrower payments on the Borrower Debt, provided that the Borrower's right to pay and the 60 66 Guarantors' right to receive any such amount shall automatically and be immediately suspended and cease (A) upon the occurrence and during the continuance of a Default or (B) if, after taking into account the effect of such payment, a Default would occur and be continuing. The Guarantors' right to receive amounts under this clause (ii) (including any amounts which theretofore may have been suspended) shall automatically be reinstated in such time as the Default which was the basis of such suspension has been cured or waived (provided that no subsequent Default or Event of Default has occurred) or such earlier date, if any, and the Administrative Lender gives notice to the Guarantors of reinstatement by the Determining Lenders, in the Determining Lenders' sole discretion; (xxix) If any Guarantor receives any payment on the Borrower Debt in violation of this Guaranty, such Guarantor will hold such payment in trust for the Lenders and will immediately deliver such payment to the Administrative Lender; and (xxx) In the event of the commencement or joinder of any suit, action or proceeding of any type (judicial or otherwise) or proceeding under any Debtor Relief Law (an "Insolvency Proceeding") and subject to court orders issued pursuant to the Bankruptcy Code, the Guarantied Obligations shall first be paid, discharged and performed in full before any payment or performance is made upon the Borrower Debt notwithstanding any other provisions which may be made in such Insolvency Proceeding. In the event of any Insolvency Proceeding, each Guarantor will at any time prior to the Release Date (A) file, at the request of any Guarantied Party, any claim, proof of claim or similar instrument necessary to enforce the Borrower's obligation to pay the Borrower Debt, and (B) hold in trust for and pay to the Guarantied Parties any and all monies, obligations, property, stock dividends or other assets received in any such proceeding on account of the Borrower Debt in order that the Guarantied Parties may apply such monies or the cash proceeds of such other assets to the Guarantied Obligations. GUARANTOR INSOLVENCY. Should any Guarantor voluntarily seek, consent to, or acquiesce in the benefits of any Debtor Relief Law or become a party to or be made the subject of any proceeding provided for by any Debtor Relief Law (other than as a creditor or claimant) that could suspend or otherwise adversely affect the rights of any Lender granted hereunder, then, the obligations of such Guarantor under this Guaranty shall be, as between such Guarantor and such Lender, a fully-matured, due, and payable obligation of such Guarantor to such Lender (without regard to whether the Borrower is then in default under the Credit Agreement or whether any part of the Guarantied Obligations is then due and owing by the Borrower to such Lender), payable in full by such Guarantor to such Lender upon demand, which shall be the estimated amount owing in respect of the contingent claim created hereunder. RATE PROVISION. It is not the intention of any Lender to make an agreement violative of the laws of any applicable jurisdiction relating to usury. Regardless of any provision in this Guaranty, no Lender shall ever be entitled to contract, charge, receive, collect or apply, as interest on the Guarantied Obligations, any amount in excess of the Highest Lawful Rate. In no event shall any Guarantor be obligated to pay any amount in excess of the Highest Lawful Rate. If from any circumstance, the Administrative Lender or any Lender shall ever receive, collect or apply anything of value deemed excess interest under Applicable Law, an amount equal to such excess shall be applied to the reduction of the principal amount of outstanding Advances, and any remainder shall be promptly refunded to the payor. In determining whether or not interest paid or payable with respect to the Guarantied Obligations, under any specified contingency, exceeds the Highest Lawful Rate, the Guarantors and the Lenders shall, to the maximum extent permitted by Applicable Law, (a) characterize any non-principal payment as an expense, fee or premium rather than as interest, (b) amortize, prorate, allocate and spread the total amount of interest throughout the full term of 61 67 such Guarantied Obligations so that the interest paid on account of such Guarantied Obligations does not exceed the Highest Lawful Rate and/or (c) allocate interest between portions of such Guarantied Obligations; provided that if the Guarantied Obligations are paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds the Highest Lawful Rate, the Lenders shall refund to the payor the amount of such excess or credit the amount of such excess against the total principal amount owing, and, in such event, no Lender shall be subject to any penalties provided by any laws for contracting for, charging or receiving interest in excess of the Highest Lawful Rate. SEVERABILITY. Any provision of this Guaranty which is for any reason prohibited or found or held invalid or unenforceable by any court or governmental agency shall be ineffective to the extent of such prohibition or invalidity or unenforceability, without invalidating the remaining provisions hereof in such jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. ENTIRE AGREEMENT. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. CONFLICTS. If in the event of a conflict between the terms and conditions of this Guaranty and the terms and conditions of the Credit Agreement, the terms and conditions of the Credit Agreement shall control. ================================================================================ REMAINDER OF PAGE LEFT INTENTIONALLY BLANK ================================================================================ IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its duly authorized officer on the date first above written. Guarantor By: ------------------------------------------ Name: ------------------------------------- Title: ------------------------------------ ================================================================================ 62 EX-4.2 4 c64595ex4-2.txt NOTE PURCHASE AGREEMENT DATED JUNE 20, 2001 1 EXHIBIT 4.2 =============================================================================== BUTLER MANUFACTURING COMPANY $50,000,000 7.87% Senior Notes due December 30, 2016 NOTE PURCHASE AGREEMENT Dated as of June 20, 2001 =============================================================================== 2 TABLE OF CONTENTS Section Page - ------- ---- 1. AUTHORIZATION OF NOTES..................................................1 2. SALE AND PURCHASE OF NOTES..............................................1 3. CLOSING.................................................................2 4. CONDITIONS TO CLOSING...................................................2 4.1. Representations and Warranties...................................2 4.2. Performance; No Default..........................................2 4.3. Compliance Certificates..........................................3 4.4. Opinions of Counsel..............................................3 4.5. Purchase Permitted By Applicable Law, etc........................3 4.6. Sale of Other Notes..............................................3 4.7. Payment of Special Counsel Fees..................................3 4.8. Private Placement Number.........................................4 4.9. Changes in Corporate Structure...................................4 4.10. Subsidiary Guaranty..............................................4 4.11. Credit Agreement.................................................4 4.12. Proceedings and Documents........................................4 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................4 5.1. Organization; Power and Authority................................4 5.2. Authorization, etc...............................................5 5.3. Disclosure.......................................................5 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.6 5.5. Financial Statements.............................................6 5.6. Compliance with Laws, Other Instruments, etc.....................7 5.7. Governmental Authorizations, etc.................................7 5.8. Litigation; Observance of Agreements, Statutes and Orders........7 5.9. Taxes............................................................8 5.10. Title to Property; Leases........................................8 5.11. Licenses, Permits, etc...........................................8 5.12. Compliance with ERISA............................................9 5.13. Private Offering by the Company.................................10 5.14. Use of Proceeds; Margin Regulations.............................10 5.15. Existing Indebtedness; Future Liens.............................10 5.16. Foreign Assets Control Regulations, etc.........................11 5.17. Status under Certain Statutes...................................11 5.18. Environmental Matters...........................................11 5.19. Solvency of Subsidiary Guarantors...............................11 6. REPRESENTATIONS OF THE PURCHASER.......................................12 6.1. Purchase for Investment.........................................12 6.2. Source of Funds.................................................12 7. INFORMATION AS TO COMPANY..............................................13 3 7.1. Financial and Business Information..............................13 7.2. Officer's Certificate...........................................16 7.3. Inspection......................................................17 8. PREPAYMENT OF THE NOTES................................................18 8.1. Required Prepayments............................................18 8.2. Optional Prepayments with Make-Whole Amount.....................18 8.3. Change of Control...............................................18 8.4. Allocation of Partial Prepayments...............................19 8.5. Maturity; Surrender, etc........................................19 8.6. Purchase of Notes...............................................19 8.7. Make-Whole Amount...............................................19 9. AFFIRMATIVE COVENANTS..................................................21 9.1. Compliance with Law.............................................21 9.2. Insurance.......................................................21 9.3. Maintenance of Properties.......................................21 9.4. Payment of Taxes and Claims.....................................22 9.5. Corporate Existence, etc........................................22 10. NEGATIVE COVENANTS.....................................................22 10.1. Consolidated Net Worth..........................................22 10.2. Funded Debt.....................................................22 10.3. Short-Term Debt.................................................23 10.4. Indebtedness of Subsidiaries....................................23 10.5. Fixed Charge Coverage...........................................23 10.6. Limitations on Liens............................................23 10.7. Merger, Consolidation, etc......................................25 10.8. Sale of Assets..................................................26 10.9. Disposition of Stock of Restricted Subsidiaries.................27 10.10. Designation of Unrestricted and Restricted Subsidiaries.........27 10.11. Nature of Business..............................................28 10.12. Transactions with Affiliates....................................28 10.13. Subsidiary Guaranties...........................................28 11. EVENTS OF DEFAULT......................................................28 12. REMEDIES ON DEFAULT, ETC...............................................30 12.1. Acceleration....................................................30 12.2. Other Remedies..................................................31 12.3. Rescission......................................................31 12.4. No Waivers or Election of Remedies, Expenses, etc...............32 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................32 13.1. Registration of Notes...........................................32 13.2. Transfer and Exchange of Notes..................................32 13.3. Replacement of Notes............................................33 14. PAYMENTS ON NOTES......................................................33 14.1. Place of Payment................................................33 14.2. Home Office Payment.............................................33 15. EXPENSES, ETC..........................................................34 15.1. Transaction Expenses............................................34 4 15.2. Survival........................................................34 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........34 17. AMENDMENT AND WAIVER...................................................35 17.1. Requirements....................................................35 17.2. Solicitation of Holders of Notes................................35 17.3. Binding Effect, etc.............................................36 17.4. Notes held by Company, etc......................................36 18. NOTICES................................................................36 19. REPRODUCTION OF DOCUMENTS..............................................37 20. CONFIDENTIAL INFORMATION...............................................37 21. SUBSTITUTION OF PURCHASER..............................................38 22. RELEASE OF SUBSIDIARY GUARANTORS.......................................38 23. MISCELLANEOUS..........................................................39 23.1. Successors and Assigns..........................................39 23.2. Payments Due on Non-Business Days...............................39 23.3. Severability....................................................39 23.4. Construction....................................................39 23.5. Counterparts....................................................39 23.6. Governing Law...................................................40 SCHEDULE A -- Information Relating to Purchasers SCHEDULE B -- Defined Terms SCHEDULE B-1 -- Existing Investments SCHEDULE 4.9 -- Changes in Corporate Structure SCHEDULE 5.3 -- Disclosure Materials SCHEDULE 5.4 -- Subsidiaries; Affiliates SCHEDULE 5.5 -- Financial Statements SCHEDULE 5.8 -- Litigation SCHEDULE 5.11 -- Permits, etc. SCHEDULE 5.12 -- Compliance with ERISA SCHEDULE 5.14 -- Use of Proceeds SCHEDULE 5.15 -- Existing Indebtedness; Future Liens SCHEDULE 10.6 -- Liens 5 EXHIBIT 1(a) -- Form of Senior Note EXHIBIT 1(b) -- Form of Subsidiary Guaranty EXHIBIT 4.4(a) -- Form of Opinion of Counsel for the Company EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers 6 BUTLER MANUFACTURING COMPANY BMA Tower One Penn Valley Park Kansas City, Missouri 64108 (816) 968-3000 Fax: (816) 968-3279 $50,000,000 7.87% Senior Notes due December 30, 2016 Dated as of June 20, 2001 TO EACH OF THE PURCHASERS LISTED IN THE ATTACHED SCHEDULE A: Ladies and Gentlemen: BUTLER MANUFACTURING COMPANY, a Delaware corporation (the "Company"), agrees with you as follows: 1. AUTHORIZATION OF NOTES. The Company has authorized the issuance and sale of $50,000,000 aggregate principal amount of its 7.87% Senior Notes due December 30, 2016 (the "Notes", such term to include any such notes issued in substitution therefor pursuant to Section 13 of this Agreement). The Notes will be substantially in the form set out in Exhibit 1(a), with such changes therefrom, if any, as may be approved by you and the Company. Certain capitalized terms used in this Agreement are defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement. Subject to Section 22, the Notes will be guaranteed by certain existing and future Subsidiaries (individually, a "Subsidiary Guarantor" and collectively, the "Subsidiary Guarantors") pursuant to the guaranty in substantially the form of Exhibit 1(b) (the "Subsidiary Guaranty"). The Notes will rank pari passu with the Company's Indebtedness under the Credit Agreement. 1. SALE AND PURCHASE OF NOTES. Subject to the terms and conditions of this Agreement, the Company will issue and sell to you and each of the other purchasers named in Schedule A (the "Other Purchasers"), and you and the Other Purchasers agree to purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite your name in Schedule A at the purchase price of 100% of the principal amount thereof. Your obligation hereunder and the obligations of the Other Purchasers are several and not joint obligations and you shall have no liability to any Person for the performance or non-performance by any Other Purchaser hereunder. 1. CLOSING. The sale and purchase of the Notes to be purchased by you and the Other Purchasers shall occur at the offices of Gardner, Carton & Douglas, Quaker Tower, Suite 3400, 321 North Clark Street, Chicago, Illinois 60610 at 9:00 a.m., Chicago time, at a closing (the "Closing") on June 27, 2001 or on such other Business Day thereafter on or prior to June 30, 2001 as may be agreed upon by the Company and you and the Other Purchasers. At the Closing the Company will deliver to you the Notes to be purchased by you in the form of a single Note (or such greater number of Notes in denominations of at least $500,000 as you may request) dated the date of the Closing and registered in your name (or in the name of your nominee), against delivery by you to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number 375-0953187 at Bank of America, Dallas, Texas, ABA No. 111000012. If at the Closing the Company shall fail to tender such Notes to you as provided above in this 7 Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment. 1. CONDITIONS TO CLOSING. Your obligation to purchase and pay for the Notes to be sold to you at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions: 1.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company in this Agreement shall be correct when made and at the time of the Closing. 1.1. PERFORMANCE; NO DEFAULT. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14) no Default or Event of Default shall have occurred and be continuing. Neither the Company nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Sections 10.1 through 10.13 had such Sections applied since such date. 1.1. COMPLIANCE CERTIFICATES. (a) Officer's Certificate. The Company shall have delivered to you an Officer's Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled. (b) Secretary's Certificate. The Company shall have delivered to you a certificate certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and the Agreement. 1.2. OPINIONS OF COUNSEL. You shall have received opinions in form and substance satisfactory to you, dated the date of the Closing (a) from Lathrop & Gage L.C., counsel for the Company and the Subsidiary Guarantors, and John W. Huey, Esq., Vice President, General Counsel and Secretary of the Company and an officer of each of the Subsidiary Guarantors, covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company instructs its counsel to deliver such opinion to you) and (b) from Gardner, Carton & Douglas, your special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(b) and covering such other matters incident to such transactions as you may reasonably request. 1.1. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. On the date of the Closing your purchase of Notes shall (i) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (ii) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (iii) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer's Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such purchase is so permitted. 2 8 1.1. SALE OF OTHER NOTES. Contemporaneously with the Closing the Company shall sell to the Other Purchasers and the Other Purchasers shall purchase the Notes to be purchased by them at the Closing as specified in Schedule A. 1.1. PAYMENT OF SPECIAL COUNSEL FEES. Without limiting the provisions of Section 15.1, the Company shall have paid on or before the Closing the reasonable fees, charges and disbursements of your special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing. 1.1. PRIVATE PLACEMENT NUMBER. A Private Placement Number issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for the Notes by Gardner, Carton & Douglas. 1.1. CHANGES IN CORPORATE STRUCTURE. Except as specified in Schedule 4.9, the Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5. 1.1. SUBSIDIARY GUARANTY. Each Subsidiary Guarantor shall have executed and delivered the Subsidiary Guaranty. 1.1. CREDIT AGREEMENT. The Company shall have provided to you and your special counsel a copy of the Credit Agreement, as in existence on the Closing Date. 1.1. PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request. 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to you that: 1.1. ORGANIZATION; POWER AND AUTHORITY. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof. 3 9 1.1. AUTHORIZATION, ETC. This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Subsidiary Guaranty has been duly authorized by all necessary corporate action on the part of each Subsidiary Guarantor and upon execution and delivery thereof will constitute the legal, valid and binding obligation of each Subsidiary Guarantor, enforceable against each such Subsidiary Guarantor in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 1.1. DISCLOSURE. The Company, through its agent, Banc of America Securities LLC, has delivered to you and each Other Purchaser a copy of a Private Placement Memorandum, dated May 2001 (the "Memorandum"), relating to the transactions contemplated hereby. The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the Memorandum, the documents, certificates or other writings delivered to you by or on behalf of the Company in connection with the transactions contemplated hereby and the financial statements listed in Schedule 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one of the documents, certificates or other writings identified therein, or in the financial statements (including the notes thereto) listed in Schedule 5.5, since December 31, 2000, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Memorandum or in the other documents, certificates and other writings delivered to you by or on behalf of the Company specifically for use in connection with the transactions contemplated hereby. 1.1. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES. (a) Schedule 5.4 contains (except as noted therein) complete and correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, whether such Subsidiary is a Restricted Subsidiary, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii) of the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's directors and senior officers. (b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise permitted by Section 10.6). (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or 4 10 hold under lease and to transact the business it transacts and proposes to transact. (d) No Subsidiary is a party to, or otherwise subject to any legal restriction or any agreement (other than this Agreement, the Credit Agreement, the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. 1.2. FINANCIAL STATEMENTS. The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). 1.1. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The execution, delivery and performance by the Company of this Agreement and the Notes will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument by which the Company or any Subsidiary is bound or by which any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary. The execution, delivery and performance by each Subsidiary Guarantor of the Subsidiary Guaranty will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of such Subsidiary Guarantor under any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument by which such Subsidiary is bound or by which any of its properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to such Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to such Subsidiary. 1.1. GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement or the Notes or the execution, delivery or performance by each Subsidiary Guarantor of the Subsidiary Guaranty. 1.1. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS. (a) Except as disclosed in Schedule 5.8, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 5 11 (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 1.2. TAXES. The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which is not individually or in the aggregate Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate. The Federal income tax liabilities of the Company and its Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 1996. 1.1. TITLE TO PROPERTY; LEASES. The Company and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects. 1.1. LICENSES, PERMITS, ETC. Except as disclosed in Schedule 5.11: (a) the Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others; (b) to the best knowledge of the Company, no product of the Company infringes in any material respect any license, permit, franchise, authorization, patent, copyright, service mark, trademark, trade name or other right owned by any other Person; and (c) to the best knowledge of the Company, there is no Material violation by any Person of any right of the Company or any of its Subsidiaries with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries. 1.2. COMPLIANCE WITH ERISA. Except as disclosed in Schedule 5.12: (a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any 6 12 ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or 412 of the Code, other than in each case such liabilities or Liens as would not be individually or in the aggregate Material. (b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan's most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan's most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities in the case of any single Plan or in the aggregate for all Plans. The term "benefit liabilities" has the meaning specified in section 4001 of ERISA and the terms "current value" and "present value" have the meaning specified in section 3 of ERISA. (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material. (d) The expected post-retirement benefit obligation (determined as of the last day of the Company's most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material. (e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of your representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by you. 1.2. PRIVATE OFFERING BY THE COMPANY. Neither the Company nor anyone acting on its behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than you, the Other Purchasers and not more than 26 other Institutional Investors, each of which has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act. 1.1. USE OF PROCEEDS; MARGIN REGULATIONS. The Company will apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 1.0% of the value of the consolidated assets of the Company and the Company does not have any present intention that margin stock will constitute more than 1.0% of the value of such assets. As used in this Section, the terms "margin stock" and "purpose of buying or carrying" shall have the meanings assigned to them in said Regulation U. 7 13 1.1. EXISTING INDEBTEDNESS; FUTURE LIENS. (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of March 31, 2001, since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries. Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment. (b) Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by Section 10.6. 1.2. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the sale of the Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. 1.1. STATUS UNDER CERTAIN STATUTES. Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended. 1.1. ENVIRONMENTAL MATTERS. Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to you in writing, (a) neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect; (b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and (c) all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect. 8 14 1.2. SOLVENCY OF SUBSIDIARY GUARANTORS. After giving effect to the transactions contemplated herein and after giving due consideration to any rights of contribution (i) each Subsidiary Guarantor has received fair consideration and reasonably equivalent value for the incurrence of its obligations under the Subsidiary Guaranty, (ii) the fair value of the assets of each Subsidiary Guarantor exceeds its liabilities, (iii) each Subsidiary Guarantor is able to and expects to be able to pay its debts as they mature, and (iv) each Subsidiary Guarantor has capital sufficient to carry on its business as conducted and as proposed to be conducted. 1. REPRESENTATIONS OF THE PURCHASER. 1.1. PURCHASE FOR INVESTMENT. You represent that you are purchasing the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or their control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes. 1.1. SOURCE OF FUNDS. You represent that at least one of the following statements is an accurate representation as to each source of funds (a "Source") to be used by you to pay the purchase price of the Notes to be purchased by you hereunder: (a) the Source is an "insurance company general account" as such term is defined in the Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) ("PTE 95-60") and as of the date of this Agreement there is no "employee benefit plan" with respect to which the aggregate amount of such general account's reserves and liabilities for the contracts held by or on behalf of such employee benefit plan and all other employee benefit plans maintained by the same employer (and affiliates thereof as defined in Section V(a)(1) of PTE 95-60) or by the same employee organization (in each case determined in accordance with the provisions of PTE 95-60) exceeds 10% of the total reserves and liabilities of such general account (as determined under PTE 95-60) (exclusive of separate account liabilities) plus surplus as set forth in the National Association of Insurance Commissioners Annual Statement filed with your state of domicile; or (b) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank collective investment fund, within the meaning of PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to this paragraph (b), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or (c) the Source constitutes assets of an "investment fund" (within the meaning of Part V of the QPAM Exemption) managed by a "qualified professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the 9 15 identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this paragraph (c); or (d) the Source is a governmental plan; or (e) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (e); or (f) the Source is the assets of one or more employee benefit plans that are managed by an "in-house asset manager," as that term is defined in PTE 96-23 and such purchase and holding of the Notes is exempt under PTE 96-23; or (g) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA. As used in this Section 6.2, the terms "employee benefit plan", "governmental plan" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA. 1. INFORMATION AS TO COMPANY. 1.1. FINANCIAL AND BUSINESS INFORMATION The Company shall deliver to each holder of Notes that is an Institutional Investor: (a) Quarterly Statements -- within 45 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of, (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, (ii) consolidated statements of earnings of the Company and its Subsidiaries for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, and (iii) consolidated statements of cash flows for the portion of the fiscal year ending with such quarter, setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company's Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a); (a) Annual Statements -- within 90 days after the end of each fiscal year of the Company, duplicate copies of, (i) a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and 10 16 (ii) consolidated statements of earnings, retained earnings and cash flows of the Company and its Subsidiaries, for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied (A) by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, and (B) a certificate of such accountants stating that they have reviewed this Agreement and stating further whether, in making their audit, they have become aware of any condition or event that then constitutes a Default or an Event of Default, and, if they are aware that any such condition or event then exists, specifying the nature and period of the existence thereof (it being understood that such accountants shall not be liable, directly or indirectly, for any failure to obtain knowledge of any Default or Event of Default unless such accountants should have obtained knowledge thereof in making an audit in accordance with generally accepted auditing standards or did not make such an audit), provided that the delivery within the time period specified above of the Company's Annual Report on Form 10-K for such fiscal year (together with the Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission, together with the accountant's certificate described in clause (B) above, shall be deemed to satisfy the requirements of this Section 7.1(b); (a) Unrestricted Subsidiaries -- if, at the time of delivery of any financial statements pursuant to Section 7.1(a) or (b), Unrestricted Subsidiaries account for more than 10% of (i) the consolidated total assets of the Company and its Subsidiaries reflected in the balance sheet included in such financial statements or (ii) the consolidated revenues of the Company and its Subsidiaries reflected in the consolidated statement of income included in such financial statements, an unaudited balance sheet for all Unrestricted Subsidiaries taken as whole as at the end of the fiscal period included in such financial statements and the related unaudited statements of earnings, retained earnings and cash flows for such Unrestricted Subsidiaries for such period, together with consolidating statements reflecting all eliminations or adjustments necessary to reconcile such group financial statements to the consolidated financial statements of the Company and its Subsidiaries shall be delivered together with the financial statements required pursuant to Sections 7.1(a) and (b); (b) SEC and Other Reports -- promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Restricted Subsidiary to public securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and each prospectus and all amendments thereto filed by the Company or any Restricted Subsidiary with the Securities and Exchange Commission and of all press releases and other statements made available generally by the Company or any Restricted Subsidiary to the public concerning developments that are Material; (c) Notice of Default or Event of Default -- promptly, and in any event within five Business Days after a Responsible Officer becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto; 11 17 (d) ERISA Matters -- promptly, and in any event within five Business Days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto: (i) with respect to any Plan, any reportable event, as defined in section 4043(b) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or (ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or (iii) any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a Material Adverse Effect; (e) Notices from Governmental Authority -- promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect; (f) Requested Information -- with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of Notes. 1.2. OFFICER'S CERTIFICATE. Each set of financial statements delivered to a holder of Notes pursuant to Sections 7.1(a) or (b) hereof shall be accompanied by a certificate of a Senior Financial Officer setting forth: (a) Covenant Compliance -- the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10.1 through Section 10.13, inclusive, during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence); and (b) Event of Default -- a statement that such officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Restricted Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Restricted Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company or such Restricted Subsidiary shall have taken or proposes to take with respect thereto. 12 18 1.2. INSPECTION. The Company shall permit the representatives of each holder of Notes that is an Institutional Investor: (a) No Default -- if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company's officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and (b) Default -- if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested. Prior to or concurrently with any inspection pursuant to this Section 7.3, the holder, if requested by the Company, shall have entered into a confidentiality agreement with the Company, reasonably satisfactory to it and the Company, so as to avoid any disclosure obligation on the Company under Regulation FD under the Exchange Act. 1. PREPAYMENT OF THE NOTES 1.1. REQUIRED PREPAYMENTS. On December 30, 2006, and on each December 30 thereafter to and including December 30, 2015, the Company will prepay $4,545,455 principal amount (or such lesser principal amount as shall then be outstanding) of the Notes at 100% of the principal amount thereof and without payment of the Make-Whole Amount or any premium, provided that upon any partial prepayment of the Notes pursuant to Sections 8.2, 8.3 or 10.8 or purchase of the Notes permitted by Section 8.6 the principal amount of each required prepayment of the Notes becoming due under this Section 8.1 on and after the date of such prepayment or purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of the Notes is reduced as a result of such prepayment or purchase. 1.1. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $1,000,000 in the case of a partial prepayment, at 100% of the principal amount so prepaid, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.4), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date. 13 19 1.1. CHANGE OF CONTROL. In the event of a Change of Control Event, the Company, upon notice as provided below, shall offer to prepay the entire principal amount outstanding of the Notes at 100% of the principal amount thereof and without payment of the Make-Whole Amount or any premium. The Company shall give notice of any offer to prepay the Notes to each holder of the Notes within three Business Days after any executive officer has knowledge that a Change of Control Event is likely to occur and in any event not later than the date of such Change of Control Event. Such notice shall be certified by the principal accounting officer or principal financial officer and shall specify (i) the nature of the Change of Control Event, (ii) the date fixed for prepayment, which shall not be later than 30 calendar days following the Change of Control Event, (iii) the estimated date of the Change of Control Event, if it has not occurred, (iv) the accrued and unpaid interest applicable to the prepayment and (v) the date by which any holder of a Note that wishes to accept such offer must deliver notice thereof to the Company, which shall not be later than 10 calendar days prior to the date fixed for prepayment. Not earlier than seven calendar days prior to the date fixed for prepayment, the Company shall give written notice to each holder of the Notes of those holders who have given notices of acceptance of the Company's offer, and the principal amount of Notes held by each, and thereafter any holder may change its response to the Company's offer by written notice to such effect delivered to the Company not less than three calendar days prior to the date fixed for prepayment. Upon receipt by the Company of any non-revoked notice of acceptance from any holder within the required time period, the aggregate principal amount of Notes held by such holder shall become due and payable on the prepayment date. Failure of a holder to respond to a notice shall be deemed to be a rejection by such holder of the offer to prepay. 1.1. ALLOCATION OF PARTIAL PREPAYMENTS. In the case of each partial prepayment of the Notes pursuant to Sections 8.1 or 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment. 1.1. MATURITY; SURRENDER, ETC. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. 1.1. PURCHASE OF NOTES. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes. 1.1. MAKE-WHOLE AMOUNT. The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings: 14 20 "CALLED PRINCIPAL" means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. "DISCOUNTED VALUE" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. "REINVESTMENT YIELD" means, with respect to the Called Principal of any Note, 0.50% plus the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as the "PX Screen" on the Bloomberg Financial Market Service (or such other display as may replace the PX Screen on Bloomberg Financial Market Service) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the maturity closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the maturity closest to and less than the Remaining Average Life. "REMAINING AVERAGE LIFE" means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. "REMAINING SCHEDULED PAYMENTS" means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1. "SETTLEMENT DATE" means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. 1. AFFIRMATIVE COVENANTS. The Company covenants that so long as any of the Notes are outstanding: 1.1. COMPLIANCE WITH LAW. The Company will and will cause each Subsidiary to comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, Environmental 15 21 Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 1.1. INSURANCE. The Company will and will cause each Restricted Subsidiary to maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated. 1.1. MAINTENANCE OF PROPERTIES. The Company will and will cause each Restricted Subsidiary to maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 1.1. PAYMENT OF TAXES AND CLAIMS. The Company will and will cause each Subsidiary to file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges or levies imposed on them or any of their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax or assessment or claims if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in the aggregate could not reasonably be expected to have a Material Adverse Effect. 1.1. CORPORATE EXISTENCE, ETC. The Company will at all times preserve and keep in full force and effect its corporate existence. Subject to Sections 10.8 and 10.9, the Company will at all times preserve and keep in full force and effect the corporate existence of each Restricted Subsidiary (unless merged into the Company or a Restricted Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect. 1. NEGATIVE COVENANTS. The Company covenants that so long as any of the Notes are outstanding: 16 22 1.1. CONSOLIDATED NET WORTH. The Company will not permit at any time its Adjusted Consolidated Net Worth to be less than $125,000,000 plus the cumulative sum of 50% of Consolidated Net Income (but only if a positive number) for each fiscal quarter ending after March 31, 2001. 1.1. FUNDED DEBT. The Company will not, and will not permit any Restricted Subsidiary to, create, assume, incur or otherwise become liable for, directly or indirectly, any Funded Debt, other than: (a) the Notes; (b) Funded Debt of the Company and its Restricted Subsidiaries outstanding on the Closing Date and described in Schedule 5.15. (c) Funded Debt of the Company to a Restricted Subsidiary or Funded Debt of a Restricted Subsidiary to the Company or another Restricted Subsidiary; and (d) additional Funded Debt, provided that at the time of incurring such additional Funded Debt and after giving effect thereto and to the application of the proceeds therefrom, the Funded Debt of the Company and its Restricted Subsidiaries then to be outstanding does not exceed 60% of Consolidated Total Capitalization. 1.2. SHORT-TERM DEBT. The Company will not, and will not permit any Restricted Subsidiary to, create, assume, incur or otherwise become liable for, directly or indirectly, any Short-Term Debt unless during the 12 calendar months immediately preceding such incurrence there shall have been a period of 30 consecutive days during which either (i) there was no Short-Term Debt of the Company and its Restricted Subsidiaries outstanding or (ii) the average daily amount of Short-Term Debt of the Company and its Restricted Subsidiaries during such 30-day period could have been incurred as Funded Debt pursuant to Section 10.2(d). 1.1. INDEBTEDNESS OF SUBSIDIARIES. The Company will not permit any Restricted Subsidiary to create, assume, incur, or otherwise become liable for, directly or indirectly, or permit to exist any Indebtedness, other than Indebtedness to the Company or another Restricted Subsidiary, unless, at the time of incurrence thereof and after giving effect thereto and to the application of the proceeds therefrom: (a) such Indebtedness, if it constitutes Funded Debt, may be incurred pursuant to Section 10.2(d); and (b) the aggregate outstanding Indebtedness of Restricted Subsidiaries does not exceed 15% of Consolidated Total Capitalization. 1.2. FIXED CHARGE COVERAGE. The Company will not permit the ratio (calculated as of the end of each fiscal quarter) of Consolidated Income Available for Fixed Charges to Fixed Charges for the period of four quarters ending as of the last day of each fiscal quarter to be less than 1.5 to 1.0. 17 23 1.1. LIMITATIONS ON LIENS. The Company will not, and will not permit any Restricted Subsidiary to, permit to exist, create, assume or incur, directly or indirectly, any Lien on its properties or assets, whether now owned or hereafter acquired, except: (a) Liens existing on property or assets of the Company or any Restricted Subsidiary as of the Closing Date that are described in Schedule 10.6 and Liens resulting from extensions, renewals, refinancings and refundings of Indebtedness secured by such Liens, provided that there is no increase in the principal amount of the Indebtedness secured thereby at the time of extension, renewal, refinancing or refunding, and any new Lien attaches only to the property which was subject to such Lien at the time of such extension, renewal, refinancing or refunding; provided that this 10.6(a) shall not permit any Liens securing Indebtedness owed to banks; (b) Liens for taxes, assessments or governmental charges not then due and delinquent or the nonpayment of which is permitted by Section 9.4; (c) any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay; (d) Liens arising in the ordinary course of business and not incurred in connection with the borrowing of money, including encumbrances in the nature of survey exceptions, zoning restrictions, easements, rights and restrictions of record on the use of real property, statutory landlord's and lessor's liens, warehousemen's liens and mechanics' and materialmen liens in the ordinary course of business, which in the aggregate do not materially interfere with the conduct of the business of the Company and its Subsidiaries taken as a whole or materially impair the value of the property subject thereto for the purpose of such business; (e) Liens securing Indebtedness of a Restricted Subsidiary to the Company; (f) Liens (i) existing on tangible property at the time of its acquisition by the Company or a Restricted Subsidiary and not created in contemplation thereof, whether or not the Indebtedness secured by such Lien is assumed by the Company or such Restricted Subsidiary, or (ii) on tangible property created substantially contemporaneously with the date of acquisition or within 180 days of the acquisition or completion of construction thereof to secure or provide for all or a portion of the purchase price or cost of construction of such tangible property, or (iii) existing on tangible property of a Person at the time such Person is merged into or consolidated with or is acquired by, or substantially all of its tangible assets are acquired by, the Company or a Restricted Subsidiary and not created in contemplation thereof, or (iv) securing reimbursement obligations under letters of credit, or (v) renewals, extensions or replacements of such Liens; provided, in each case, that (x) the incurrence of the Indebtedness secured by such Liens does not violate or conflict with any other provision of this Agreement, (y) such Liens do not extend to other property of the Company or any Restricted Subsidiary and (z) the aggregate principal amount of Indebtedness secured by each such Lien does not exceed 100% of the cost or fair market value of the tangible property subject thereto; (g) Liens on real estate projects held for sale created within one year of the acquisition or completion of construction thereof to secure or provide for all or a portion of the purchase price or cost of construction of such real estate projects; (h) Liens not otherwise permitted by paragraphs (a) through (g) above incurred subsequent to the Closing Date to secure Indebtedness; provided that the Indebtedness of the Company and its Restricted Subsidiaries secured by Liens incurred pursuant to this paragraph (h) does not exceed 10% of Adjusted Consolidated Net Worth; and 18 24 (i) the Lien on cash advanced, together with the earnings and proceeds thereof, to fund potential general liability and workers' compensation reimbursement obligations under a bank letter of credit upon a default in agreements providing for the letter of credit so long as the amounts advanced have been adequately reserved against on the consolidated financial statements of the Company. 1.2. MERGER, CONSOLIDATION, ETC. The Company will not, and will not permit any Restricted Subsidiary to, consolidate with or merge with any other Person or convey, transfer, sell or lease all or substantially all of its assets in a single transaction or series of transactions to any Person except that: (a) the Company may consolidate or merge with any other Person or convey, transfer, sell or lease all or substantially all of its assets in a single transaction or series of transactions to any Person, provided that: (i) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer, sale or lease all or substantially all of the assets of the Company as an entirety, as the case may be, is a solvent corporation organized and existing under the laws of the United States or any State thereof (including the District of Columbia), and, if the Company is not such corporation, such corporation (y) shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes and (z) shall have caused to be delivered to each holder of any Notes an opinion of independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles, and comply with the terms hereof; (ii) immediately after giving effect to such transaction, the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer, sale or lease all or substantially all of the assets of the Company as an entirety, as the case may be, could incur $1.00 of additional Funded Debt pursuant to Section 10.2; and (iii) immediately after giving effect to such transaction, no Default or Event of Default shall exist; and (b) Any Restricted Subsidiary may (x) merge into the Company (provided that the Company is the surviving corporation) or another Wholly Owned Restricted Subsidiary or (y) sell, transfer or lease all or any part of its assets to the Company or another Wholly Owned Restricted Subsidiary, or (z) merge or consolidate with, or sell, transfer or lease all or substantially all of its assets to, any Person in a transaction that is permitted by Section 10.8 or, as a result of which, such Person becomes a Restricted Subsidiary; provided in each instance set forth in clauses (x) through (z) that, immediately before and after giving effect thereto, there shall exist no Default or Event of Default; No such conveyance, transfer or lease of substantially all of the assets of the Company shall have the effect of releasing the Company or any successor corporation that shall theretofore have become such in the manner prescribed in this Section 10.7 from its liability under this Agreement or the Notes. 1.1. SALE OF ASSETS. The Company will not, and will not permit any Restricted Subsidiary to, sell, lease, transfer or otherwise dispose of, including by way of merger (collectively a "Disposition"), any assets, including capital stock of Restricted Subsidiaries, in one or a series of transactions, to any Person, other than: 19 25 (a) Dispositions in the ordinary course of business; (b) Dispositions by a Restricted Subsidiary to the Company or another Wholly Owned Restricted Subsidiary; or (c) Dispositions not otherwise permitted by Section 10.8(a) or (b), provided that: (i) each such Disposition is for a consideration at least equal to the fair market value of the property subject thereto; (ii) the aggregate net book value of all assets so disposed of in any fiscal year pursuant to this Section 10.8(c) does not exceed 10% of Consolidated Total Assets as of the end of the immediately preceding fiscal year; and (iii) after giving effect to such Disposition no Default or Event of Default would exist. Notwithstanding the foregoing, the Company may, and may permit any Restricted Subsidiary to, make a Disposition and the assets subject to such Disposition shall not be subject to or included in the foregoing limitation and computation contained in Section 10.8(c) to the extent that (A) it is a sale and leaseback (including the purchase and resale by the Company of bonds secured by such facility) by the Company of its Kansas City, Missouri headquarters facility, or (B) the net proceeds from such Disposition are within 180 days of such Disposition (y) reinvested in productive assets of the Company or its Restricted Subsidiaries consistent with Section 10.11 or (z) offered by the Company to be applied to the prepayment of the Notes on a pro rata basis with other outstanding Indebtedness at a price of 100% of the principal amount to be prepaid together with interest accrued to the date of prepayment; provided, that if any holder of the Notes declines such repayment, the pro rata proceeds which would have been paid to such holder shall not be distributed to any other holders of the Notes or any other holders of Indebtedness as part of such repayment. 1.1. DISPOSITION OF STOCK OF RESTRICTED SUBSIDIARIES. The Company (i) will not permit any Restricted Subsidiary to issue its capital stock, or any warrants, rights or options to purchase, or securities convertible into or exchangeable for, such capital stock, to any Person other than the Company or another Wholly Owned Restricted Subsidiary (other than directors' qualifying shares or similar issuances), and (ii) will not, and will not permit any other Restricted Subsidiary to, sell, transfer or otherwise dispose of any shares of capital stock of a Restricted Subsidiary if such sale would be prohibited by Section 10.8. If a Restricted Subsidiary at any time ceases to be such as a result of a sale or issuance of its capital stock, any Liens on property of the Company or any other Restricted Subsidiary securing Indebtedness owed to such Restricted Subsidiary, which is not contemporaneously repaid, together with such Indebtedness, shall be deemed to have been incurred by the Company or such other Restricted Subsidiary, as the case may be, at the time such Restricted Subsidiary ceases to be a Restricted Subsidiary. 1.1. DESIGNATION OF UNRESTRICTED AND RESTRICTED SUBSIDIARIES. The Company may designate any Restricted Subsidiary as an Unrestricted Subsidiary and any Unrestricted Subsidiary as a Restricted Subsidiary; provided that, (a) the Company may not designate a Restricted Subsidiary as an Unrestricted Subsidiary unless: (i) such Restricted Subsidiary does not own, directly or indirectly, any Indebtedness or capital stock of the Company or any other Restricted Subsidiary, (ii) such designation, considered as a sale of assets, is permitted pursuant to Section 10.8(c)(ii) and (iii) and Section 10.9, (iii) the Company can incur at least $1.00 of additional Funded Debt, and (iv) immediately before and after such designation there exists no Default or Event of Default; and (b) each Subsidiary Guarantor must be designated a Restricted Subsidiary. 20 26 1.2. NATURE OF BUSINESS. The Company will not, and will not permit any Restricted Subsidiary to, engage in any business if, as a result thereof, the general nature of the business in which the Company and its Restricted Subsidiaries, taken as a whole, would then be engaged, would be substantially changed from the general nature of the business in which the Company is engaged on the date of this Agreement as described in the Memorandum. 1.1. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not permit any Restricted Subsidiary to, enter into directly or indirectly any transaction or Material group of related transactions (including the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Restricted Subsidiary), except in the ordinary course and pursuant to the reasonable requirements of the Company's or such Subsidiary's business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm's-length transaction with a Person not an Affiliate. 1.1. SUBSIDIARY GUARANTIES. The Company will not permit any Subsidiary to become a guarantor of Indebtedness owed to banks under the Credit Agreement or to directly or indirectly guarantee any of the Company's Indebtedness or other obligations unless such Subsidiary is, or concurrently therewith becomes, a party to the Subsidiary Guaranty. 1. EVENTS OF DEFAULT. An "Event of Default" shall exist if any of the following conditions or events shall occur and be continuing: (a) the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or (b) the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or (c) the Company defaults in the performance of or compliance with any term contained in Section 7.1(e) or Sections 10.1 through 10.13; or (d) the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default; or (e) any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or (f) (i) the Company or any Restricted Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least $5,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or any Restricted Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least $5,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such 21 27 Indebtedness has become, or has been declared, due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), the Company or any Restricted Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $5,000,000; or (g) the Company or any Restricted Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or (h) a court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any Restricted Subsidiary, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any Restricted Subsidiary, or any such petition shall be filed against the Company or any Restricted Subsidiary and such petition shall not be dismissed within 60 days; or (i) a final judgment or judgments for the payment of money aggregating in excess of $5,000,000 are rendered against one or more of the Company and its Restricted Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or (j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect; or (k) any Subsidiary Guarantor defaults in the performance of or compliance with any term contained in the Subsidiary Guaranty or the Subsidiary Guaranty ceases to be in full force and effect as a result of acts taken by the Company or any Subsidiary Guarantor, except as provided in Section 22, or is declared to be null and void in whole or in part by a court or other governmental or regulatory authority having jurisdiction or the validity or enforceability thereof shall be contested by any of the Company or any Subsidiary Guarantor or any of them renounces any of the same or denies that it has any or further liability thereunder. 22 28 As used in Section 11(j), the terms "employee benefit plan" and "employee welfare benefit plan" shall have the respective meanings assigned to such terms in Section 3 of ERISA. 1. REMEDIES ON DEFAULT, ETC. 1.1. ACCELERATION. (a) If an Event of Default with respect to the Company described in paragraph (g) or (h) of Section 11 (other than an Event of Default described in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable. (b) If any other Event of Default has occurred and is continuing, any holder or holders of more than 51% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable. (c) If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable. Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances. 1.1. OTHER REMEDIES. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. 1.1. RESCISSION. At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of 66-2/3% or more in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon. 23 29 1.1. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys' fees, expenses and disbursements. 1. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. 1.1. REGISTRATION OF NOTES. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes. 1.1. TRANSFER AND EXCHANGE OF NOTES. Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver, at the Company's expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $500,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $500,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representations set forth in Section 6.2 and the second sentence of Section 6.1. 1.1. REPLACEMENT OF NOTES. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note that is an Institutional Investor, such Person's own unsecured agreement of indemnity shall be deemed to be satisfactory), or (b) in the case of mutilation, upon surrender and cancellation thereof, 24 30 the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon. 1. PAYMENTS ON NOTES. 1.1. PLACE OF PAYMENT. Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in Chicago, Illinois, at the principal office of Bank of America in such jurisdiction. The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction. 1.1. HOME OFFICE PAYMENT. So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in Schedule A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement and that has made the same agreement relating to such Note as you have made in this Section 14.2. 1. EXPENSES, ETC. 1.1. TRANSACTION EXPENSES. Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys' fees of a special counsel and, if reasonably required, local or other counsel) incurred by you and each Other Purchaser or holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Subsidiary Guaranty or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Subsidiary Guaranty or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Subsidiary Guaranty or the Notes, or by reason of being a holder of any Note, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes. The Company will pay, and will save you and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders (other than those retained by you). 1.1. SURVIVAL. The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement. 25 31 1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof. 1. AMENDMENT AND WAIVER. 1.1. REQUIREMENTS. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to you unless consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20. 1.1. SOLICITATION OF HOLDERS OF NOTES. (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes. (b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment. 1.2. BINDING EFFECT, ETC. Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. 26 32 1.1. NOTES HELD BY COMPANY, ETC. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding. 1. NOTICES. All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent: (i) if to you or your nominee, to you or it at the address specified for such communications in Schedule A, or at such other address as you or it shall have specified to the Company in writing, (ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or (iii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Chief Financial Officer (with a copy to the Vice President, General Counsel and Secretary), or at such other address as the Company shall have specified to the holder of each Note in writing. Notices under this Section 18 will be deemed given the next Business Day when sent as described in clauses 18(a) and (c) and when actually received when sent as described in clause 18(b). 1. REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction. 1. CONFIDENTIAL INFORMATION. For the purposes of this Section 20, "Confidential Information" means information delivered to you by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified in writing when received by you as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any person acting on your behalf, (c) otherwise becomes known to you, other than through disclosure by the Company or any Subsidiary, from a source not known by you to be subject to an obligation to keep such information 27 33 confidential or (d) constitutes financial statements delivered to you under Section 7.1 that are otherwise publicly available. You will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you, provided that you may deliver or disclose Confidential Information to (i) your directors, trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by your Notes), (ii) your financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which you offer to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over you, but only under the circumstances described in clauses (viii)(w), (x) and (y) below, (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20. 1. SUBSTITUTION OF PURCHASER. You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate's agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, wherever the word "you" is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word "you" is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder of the Notes under this Agreement. 1. RELEASE OF SUBSIDIARY GUARANTORS. You and each subsequent holder of a Note agree to release each Subsidiary Guarantor from the Subsidiary Guaranty (i) if such Subsidiary Guarantor ceases to be such as a result of a Disposition permitted by Sections 10.7 or 10.8 or (ii) at such time as the banks party to the Credit Agreement release such Subsidiary Guarantor from any Guaranty of Indebtedness under the Credit Agreement; provided, however, that such Subsidiary Guarantor shall not be released from the Subsidiary Guaranty under the circumstances contemplated by clause (ii), if (A) a Default or Event of Default has occurred and is continuing, (B) such Subsidiary Guarantor is to become a borrower under the Credit Agreement, (C) such release is part of a plan of financing that contemplates such Subsidiary Guarantor guaranteeing any other Indebtedness of the Company or (D) the banks party to the Credit Agreement have received, directly or indirectly, any fee or other consideration, including a material modification to any financial or other covenants in the Credit Agreement, as inducement for the release of such Subsidiary Guarantor. The release of any Subsidiary Guarantor from the Subsidiary Guaranty is conditioned upon your prior receipt of a certificate from a Senior Financial Officer of the Company stating that none of the circumstances described in clauses (A), (B), (C) and (D) above exist. 28 34 1. MISCELLANEOUS. 1.1. SUCCESSORS AND ASSIGNS. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not. 1.1. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day. 1.1. SEVERABILITY. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction. 1.1. CONSTRUCTION. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. 1.1. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. 1.1. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Illinois excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State. * * * * * 29 35 If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company. Very truly yours, BUTLER MANUFACTURING COMPANY By: /s/ Larry C. Miller -------------------------------- Name: Larry C. Miller ------------------------------ Title: Vice President--Finance ------------------------------ S-1 36 The foregoing is agreed to as of the date thereof. ALLSTATE LIFE INSURANCE COMPANY By: /s/ Ronald A. Mendel --------------------------------------------- Name: Ronald A. Mendel ------------------------------------------- By: /s/ Patricia W. Wilson ---------------------------------------------- Name: Patricia W. Wilson ------------------------------------------- Authorized Signatories S-2 37 METROPOLITAN LIFE INSURANCE COMPANY By: /s/ Claudia Cromie --------------------------------------------- Name: Claudia Cromie ------------------------------------------- Title: Director ------------------------------------------ S-3 38 PRINCIPAL LIFE INSURANCE COMPANY, an Iowa corporation By: Principal Capital Management, LLC a Delaware limited liability company, its authorized signatory By: /s/ Clint Woods --------------------------------------------- Its: Clint Woods, Counsel -------------------------------------------- By: /s/ Douglas A. Drees --------------------------------------------- Its: Douglas A. Drees, Counsel -------------------------------------------- S-4 39 COMMERCIAL UNION LIFE INSURANCE COMPANY OF AMERICA, a Delaware corporation By: Principal Capital Management, LLC, a Delaware limited liability company, its attorney in fact By: /s/ Clint Woods --------------------------------------------- Its: Clint Woods, Counsel -------------------------------------------- By: /s/ Douglas A. Drees --------------------------------------------- Its: Douglas A. Drees, Counsel -------------------------------------------- S-5 40 JOHN HANCOCK LIFE INSURANCE COMPANY By: /s/ Marlene J. DeLeon --------------------------------------------- Marlene J. DeLeon Director S-6 41 JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY By: /s/ Marlene J. DeLeon --------------------------------------------- Marlene J. DeLeon Authorized Signatory S-7 42 NATIONWIDE INDEMNITY COMPANY By: /s/ Mark W. Poeppelman -------------------------------------------- Name: Mark W. Poeppelman ------------------------------------------- Title: Associate Vice President ------------------------------------------ S-8 43 NATIONWIDE MUTUAL FIRE INSURANCE COMPANY By: /s/ Mark W. Poeppelman --------------------------------------------- Name: Mark W. Poeppelman ------------------------------------------- Title: Associate Vice President ------------------------------------------ S-9 44 PROVIDENT MUTUAL LIFE INSURANCE COMPANY By: /s/ James D. Kestner --------------------------------------------- Name: James D. Kestner ------------------------------------------- Title: Vice President ------------------------------------------ S-10 45 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- -------------------------------- ALLSTATE LIFE INSURANCE COMPANY $8,000,000 $8,000,000 Register Notes in the name of: Allstate Life Insurance Company (1) All payments by Fedwire transfer or ACH of immediately available (on receipt) funds, identifying the name of the Issuer, the Private Placement Number preceded by "DPP" and the payment as principal, interest or premium in the format as follows: BBK = Harris Trust and Savings Bank ABA #071000288 BNF = Allstate Life Insurance Company Collection Account #168-117-0 ORG = Butler Manufacturing Company OBI = DPP - 123655 B@ 0 Payment Due Date (MM/DD/YY) - P________ (Enter "P" and amount of principal being remitted, for example, P5000000.00) - I (Enter "I" __________ and amount of interest being remitted, for example, I225000.00) (2) All notices of scheduled payments and written confirmations of such wire transfer to be sent to: Allstate Insurance Company Investment Operations--Private Placements 3075 Sanders Road, STE G4A Northbrook, Illinois 60062-7127 Telephone: (847) 402-2769 Telecopy: (847) 326-5040 (3) Securities to be delivered to: Citibank, Federal Savings Bank U.S. Custody & Employee Benefit Trust 500 W. Madison Street, Floor 6, Zone 4 Chicago, Illinois 60661-2591 Attention: Pam Jost For Allstate Life Insurance Company/Safekeeping Account No. 846627 (4) All financial reports, compliance certificates and all other written communications, including notice of prepayments, to be sent to: Allstate Life Insurance Company Private Placements Department 3075 Sanders Road, STE G5D Northbrook, Illinois 60062-7127 Telephone: (847) 402-8922 Telecopy: (847) 402-3092 Schedule A 46 Tax I.D.#: 36-2554642 Schedule A 47 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- ------------------------------------- METROPOLITAN LIFE INSURANCE COMPANY $10,000,000 Register Notes in the name of: Metropolitan Life Insurance Company (1) All payments by wire transfer or ACH of immediately available (on receipt) funds to: The Chase Manhattan Bank ABA #021-000-021 New York, New York Metropolitan Life Insurance Company, Account No. 002-2-410591 With reference to PPN # 123655 B@ 0 with sufficient information to identify the source and application of such funds (2) All notices and other communications: Metropolitan Life Insurance Company Private Placement Unit 334 Madison Avenue Convent Station, New Jersey 07961-0633 Attention: Director Facsimile: (973) 254-3032 With a copy to: Metropolitan Life Insurance Company One Madison Avenue New York, New York 10010-3690 Attention: Lisa Korsten, Esq. (Area 6-H) Facsimile: (212) 251-1640 Tax I.D.#: 13-5581829 Schedule A 48 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- ------------------------------------- PRINCIPAL LIFE INSURANCE COMPANY $4,250,000 $1,000,000 $1,000,000 $750,000 Register Notes in the name of: Principal Life Insurance Company (1) All payments on account of the Notes to be made by 12:00 noon (New York City time) by wire transfer or ACH of immediately available (on receipt) funds to: With respect to the four (4) Notes in the following denominations: $4.25 million, $1 million, $1 million, $750,000 ABA No.: 073000228 Wells Fargo Bank Iowa, N.A. 7th and Walnut Streets Des Moines, Iowa 50309 For credit to Principal Life Insurance Company Account No.: 0000014752 OBI PFGSE (S) B0063963() For payments by ACH include Bond Name (Butler Manufacturing Company 7.87% Senior Notes) and Bond Number (1-B-63963). With sufficient information (including interest rate, maturity date, interest amount, principal amount and premium amount, if applicable) to identify the source and application of such funds. (2) All notices with respect to payments to: Principal Capital Management, LLC 801 Grand Avenue Des Moines, Iowa 50392-0960 Attn: Investment Accounting - Securities Fax (515) 248-2643 Confirmation (515) 247-0689 (3) All other communications to: Principal Capital Management, LLC 801 Grand Avenue Des Moines, Iowa 50392-0800 Attn: Investment - Securities Fax (515) 248-2490 Confirmation (515) 248-3495 (4) Upon closing, deliver Notes to: Principal Capital Management, LLC 801 Grand Avenue Schedule A 49 Des Moines, Iowa 50392-0301 Attn.: Clint Woods Tax I.D.#: 42-0127290 Schedule A 50 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- ------------------------------------- COMMERCIAL UNION LIFE INSURANCE COMPANY $1,000,000 OF AMERICA Register Notes in the name of: Commercial Union Life Insurance Company of America (1) All payments on account of the Notes to be made by 12:00 noon (New York City time) by wire transfer or ACH of immediately available (on receipt) funds to: With respect to the $1,000,000 Note: Mellon Bank (Boston Safe Deposit) ABA No.: 011001234 DDA#: 048771 Account Name: None Given FFC: CU Life Insurance Co/Principal Financial FFC AC#: GAIF1309002 OBI PFGSE (S) B0063963() For payments by ACH include Bond Name (Butler Manufacturing Company 7.87% Senior Notes) and Bond Number (400-B-63963). With sufficient information (including interest rate, maturity date, interest amount, principal amount and premium amount, if applicable) to identify the source and application of such funds. (2) All notices with respect to payments to: Commercial Union Life Insurance Company of America c/o Principal Capital Management, LLC 801 Grand Avenue Des Moines, Iowa 50392-0960 Attn: Investment Accounting - Securities Fax (515) 248-2643 Confirmation (515) 247-0689 (3) All other communications to: Commercial Union Life Insurance Company of America c/o Principal Capital Management, LLC 801 Grand Avenue Des Moines, Iowa 50392-0800 Attn: Investment - Securities - Jon Davidson Fax (515) 248-2490 Confirmation (515) 248-3495 (4) Upon closing, deliver Notes to: Commercial Union Life Insurance Company of America c/o Principal Capital Management, LLC Schedule A 51 801 Grand Avenue Des Moines, Iowa 50392-0301 Attn: Clint Woods Tax I.D.#: 04-2235236 Schedule A 52 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- ------------------------------------- JOHN HANCOCK LIFE INSURANCE COMPANY $7,750,000 Register Notes in the name of: John Hancock Life Insurance Company PAYMENT INFORMATION (1) Wire Information Fleet Boston ABA No. 011000390 Boston, Massachusetts 02110 Account of : John Hancock Life Insurance Co. Private Placement Collection Acct. Account Number: 541-55417 On Order of: Name of Issuer and CUSIP/PPN Full name, interest rate and maturity date of Notes or other obligations Wire Deadline 12 NOON, BOSTON TIME All payments on account of the Notes or other obligations in accordance with the provisions thereof shall be made by bank wire transfer or ACH of immediately available (on receipt) funds for credit by 12 noon, Boston time. NOTICE INFORMATION All notices shall be sent via fax AND mail according to the instructions below: (3) Scheduled Payments John Hancock Life Insurance Company Unscheduled 200 Clarendon St. Prepayments Boston, MA 02117 Notice of Maturity Attn: Investment Accounting Division, B-3 Fax: (617) 572-0628 Include: (a) full name, interest rate and maturity date of the Notes or other obligations (b) allocation of payment between principal and interest and any special payment (c) name and address of Bank (or Trustee) from which the wire transfer was sent (4) Financial Statements John Hancock Life Insurance Company Certificates of Compliance 200 Clarendon St. with financial covenants Boston, MA 02117 Attn: Bond and Corporate Finance Group, T-57 Fax: (617) 572-1605 (5) Change in Issuer's name, John Hancock Life Insurance Company Schedule A 53 address or principal place 200 Clarendon St. of business Boston, MA 02117 Change in location of Attn: Investment Law Division, T-30 collateral Fax: (617) 572-9269 Copy of legal opinions Tax I.D.#: 04-1414660 Schedule A 54 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- ---------------------------- JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY $250,000 Register Notes in the name of: John Hancock Variable Life Insurance Company PAYMENT INFORMATION (1) Wire Information Fleet Boston ABA No. 011000390 Boston, Massachusetts 02110 Account of : John Hancock Life Insurance Co. Private Placement Collection Acct. Account Number: 541-55417 On Order of: Name of Issuer and CUSIP/PPN Full name, interest rate and maturity date of Notes or other obligations Wire Deadline 12 Noon, Boston time All payments on account of the Notes or other obligations in accordance with the provisions thereof shall be made by bank wire or transfer or ACH of immediately available (on receipt) funds for credit by 12 noon, Boston time. NOTICE INFORMATION All notices shall be sent via fax AND mail according to the instructions below: (3) Scheduled Payments John Hancock Variable Life Insurance Company Unscheduled 200 Clarendon St. Prepayments Boston, MA 02117 Notice of Maturity Attn: Investment Accounting Division, B-3 Fax: (617) 572-0628 Include: (a) full name, interest rate and maturity date of the Notes or other obligations (b) allocation of payment between principal and interest and any special payment (c) name and address of Bank (or Trustee) from which the wire transfer was sent (4) Financial Statements John Hancock Life Insurance Company Certificates of Compliance 200 Clarendon St. with financial covenants Boston, MA 02117 Attn: Bond and Corporate Finance Group, T-57 Fax: (617) 572-1605 Schedule A 55 (5) Change in Issuer's name, John Hancock Life Insurance Company address or principal place 200 Clarendon St. of business Boston, MA 02117 Change in location of Attn: Investment Law Division, T-30 collateral Fax: (617) 572-9269 Copy of legal opinions Tax I.D.#: 04-2664016 Schedule A 56 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- ---------------------------- NATIONWIDE INDEMNITY COMPANY $3,000,000 Register Notes in the name of: Nationwide Indemnity Company (1) Send notices and communications to: Nationwide Indemnity Company One Nationwide Plaza (1-33-07) Columbus, Ohio 43215-2220 Attention: Corporate Fixed-Income Securities (2) Wiring instructions or payments by ACH of immediately available (on receipt) funds to: The Bank of New York ABA #021-000-018 BNF: IOC566 F/A/O Nationwide Indemnity Company Attn: P&I Department PPN# 123655 B@ 0 Security Description -------------------------------- All notices of payment on or in respect to the security should be sent to: Nationwide Indemnity Company c/o The Bank of New York P.O. Box 19266 Attn: P&I Department Newark, NJ 07195 With a copy to: Nationwide Indemnity Company Attn: Investment Accounting One Nationwide Plaza (1-32-05) Columbus, Ohio 43215-2220 (3) The original note should be registered in the name of Nationwide Indemnity Company and delivered to: The Bank of New York One Wall Street 3rd Floor- Window A New York, NY 10286 F/A/O Nationwide Indemnity Company Acct # 264234 Tax I.D.#: 31-1399201 Schedule A 57 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- ---------------------------- NATIONWIDE MUTUAL FIRE INSURANCE COMPANY $3,000,000 Register Notes in the name of: Nationwide Mutual Fire Insurance Company (1) Send notices and communications to: Nationwide Mutual Fire Insurance Company One Nationwide Plaza (1-33-07) Columbus, Ohio 43215-2220 Attention: Corporate Fixed-Income Securities (2) Wiring instructions or payments by ACH of immediately available (on receipt) funds to: The Bank of New York ABA #021-000-018 BNF: IOC566 F/A/O Nationwide Mutual Fire Insurance Company Attn: P&I Department PPN# 123655 B@ 0 Security Description -------------------------------- All notices of payment on or in respect to the security should be sent to: Nationwide Mutual Fire Insurance Company c/o The Bank of New York P.O. Box 19266 Attn: P& I Department Newark, NJ 07195 With a copy to: Nationwide Mutual Fire Insurance Company Attn: Investment Accounting One Nationwide Plaza (1-32-05) Columbus, Ohio 43215-2220 (3) The original note should be registered in the name of Nationwide Mutual Fire Insurance Company and delivered to: The Bank of New York One Wall Street 3rd Floor- Window A New York, NY 10286 F/A/O Nationwide Mutual Fire Insurance Co. Acct #267966 Tax ID: 31-4177110 Schedule A 58 SCHEDULE A INFORMATION RELATING TO PURCHASERS PRINCIPAL AMOUNT OF Name of Purchaser NOTES TO BE PURCHASED - ----------------- ---------------------------- PROVIDENT MUTUAL LIFE INSURANCE COMPANY $2,000,000 Register Notes in the name of: Provident Mutual Life Insurance Company (1) All payments by wire transfer or ACH of immediately available (on receipt) funds to: PNC Bank Broad and Chestnut Streets Philadelphia, PA 19101 ABA # 031-000-053 For credit to the account of Provident Mutual Life Insurance Company Re: Butler Manufacturing Account # 85-4084-2176 with sufficient information to identify the source and application of such funds. (2) All notices of payments and written confirmations of such wire transfers: Provident Mutual Life Insurance Company 1000 Cheterbrook Blvd. Wayne, PA 19312 Attention: Treasurer (3) All other communications: Provident Mutual Life Insurance Company 1000 Cheterbrook Blvd. Wayne, PA 19312 Attention: Treasurer Tax I.D. #23-0990450 Schedule A 59 SCHEDULE B DEFINED TERMS As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term: "ADJUSTED CONSOLIDATED NET WORTH" means, as of any date, consolidated stockholders' equity of the Company and its Restricted Subsidiaries on such date, determined in accordance with GAAP, less the amount by which outstanding Restricted Investments on such date exceed 10% of consolidated stockholders' equity of the Company and its Restricted Subsidiaries. "AFFILIATE" means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or (c) any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests. As used in this definition, "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an "Affiliate" is a reference to an Affiliate of the Company. "BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City or Chicago, Illinois are required or authorized to be closed. "CAPITAL LEASE" means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP. "CHANGE OF CONTROL EVENT" means: (a) the acquisition through purchase or otherwise, without the written consent of the Company, by any Person, or group of Persons acting in concert, directly or indirectly, in one or more transactions, of beneficial ownership or control of securities representing more than 50% of the combined voting power of the Company's Voting Stock (including the agreement to act in concert by Persons who beneficially own or control securities representing more than 50% of the combined voting power of the Company's Voting Stock); or (b) the acquisition through purchase or otherwise, with the written consent of the Company, by any Person, or group of Persons acting in concert, directly or indirectly, in one or more transactions, of beneficial ownership or control of securities representing more than 50% of the combined voting power of the Company's Voting Stock (including the agreement to act in concert by Persons who beneficially own or control securities representing more than 50% of the combined voting power of the Company's Voting Stock) and where less than one-third of the directors of the Company serving immediately prior to such acquisition, continue to serve as directors of the Company (or any successor thereof) after the consummation of such acquisition. "CLOSING" is defined in Section 3. "CODE" means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time. Schedule B 60 "COMPANY" means Butler Manufacturing Company, a Delaware corporation. "CONFIDENTIAL INFORMATION" is defined in Section 20. "CONSOLIDATED INCOME AVAILABLE FOR FIXED CHARGES" means, for any period, the sum of (i) EBITDA for such period and (ii) Consolidated Rent Expense for such period under all leases other than Capital Leases. "CONSOLIDATED INDEBTEDNESS" means, as of any date, Indebtedness of the Company and its Restricted Subsidiaries as of such date determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED INTEREST EXPENSE" means, for any period, the consolidated interest expense of the Company and its Restricted Subsidiaries for such period determined in accordance with GAAP (including imputed interest under Capital Leases and all debt discount and expense amortized in such period). "CONSOLIDATED NET INCOME" means, for any period, the net income (or deficit) of the Company and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP and after eliminating income or losses attributable to outstanding minority interests, but excluding in any event (i) net income and losses of any Restricted Subsidiary accrued prior to the date it became a Restricted Subsidiary; (ii) net income and losses of any Person (other than a Restricted Subsidiary), substantially all the assets of which have been acquired in any manner, realized by such Person prior to the date of such acquisition; (iii) net income and losses of any Person (other than a Restricted Subsidiary) with which the Company or a Restricted Subsidiary shall have consolidated or which shall have merged into or with the Company or a Restricted Subsidiary prior to the date of such consolidation or merger; (iv) net income of any Person (other than a Restricted Subsidiary) in which the Company or any Restricted Subsidiary has an ownership interest except to the extent actually received in the form of cash distributions to the Company or such Restricted Subsidiary; (v) any portion of the net income of any Restricted Subsidiary which for any reason is legally or contractually unavailable for payment of cash dividends to the Company or any other Restricted Subsidiary; (vi) gains or losses resulting from any reappraisal, revaluation, write-up or write-off of assets; (vii) any gains or losses, or other earnings, properly classified as extraordinary in accordance with generally accepted accounting principles; (viii) restructuring reserves for future expenditures until the expenditures covered thereby are actually paid; and (ix) any gains or losses on the sale or other disposition of fixed or capital assets other than in the ordinary course of business, and any taxes on such excluded gains and any tax deductions or credits on account of any such excluded losses. "CONSOLIDATED NET WORTH" means, as of any date, the consolidated shareholders' equity of the Company and its Restricted Subsidiaries as of such date determined in accordance with GAAP. "CONSOLIDATED RENT EXPENSE" means, for any period, the rent expense of the Company and its Restricted Subsidiaries for such period under all operating leases, determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED TOTAL ASSETS" means, as of any date, the assets and properties of the Company and its Restricted Subsidiaries as of such date determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED TOTAL CAPITALIZATION" means, as of any date, the sum of Consolidated Indebtedness and Consolidated Net Worth as of such date. "CREDIT AGREEMENT" means that certain Credit Agreement among the Company, certain Lenders (as identified therein) and Bank of America, N.A., as Administrative Lender, dated as of June 20, 2001, as such agreement may be amended, modified, supplemented, replaced or restated from time to time. "DEFAULT" means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default. 2 Schedule B 61 "DEFAULT RATE" means that rate of interest that is the greater of (i) 2.0% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2.0% over the rate of interest publicly announced by Bank of America in Chicago, Illinois as its "base" or "prime" rate. "DISPOSITION" is defined in Section 10.8. "EBITDA" means, for any period, the sum of Consolidated Net Income for such period, plus, to the extent deducted in determining such Consolidated Net Income, (i) federal, state, local and foreign income, value added and similar taxes, (ii) Consolidated Interest Expense and (iii) depreciation and amortization expense. "ENVIRONMENTAL LAWS" means any and all Federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. "ERISA AFFILIATE" means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code. "EVENT OF DEFAULT" is defined in Section 11. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "FIXED CHARGES" means, for any period, the sum of (i) Consolidated Rent Expense for such period under all leases other than Capital Leases and (ii) Consolidated Interest Expense for such period. "FUNDED DEBT" means, with respect to any Person, (i) all Indebtedness (other than obligations under Capital Leases and Guaranties) having a final maturity of one year or more from the date of origin thereof (or which is renewable or extendible at the option of the obligor for a period or periods more than one year from the date of origin), including current maturities, whether or not included as current liabilities on the balance sheet of such Person prepared in accordance with GAAP, (ii) all liabilities appearing on its balance sheet as indebtedness in accordance with GAAP in respect of Capital Leases, and (iii) all Guaranties of Indebtedness of others (except Guaranties by the Company or any Restricted Subsidiary of Funded Debt of a Restricted Subsidiary and Guaranties by a Restricted Subsidiary of Funded Debt of the Company or another Restricted Subsidiary) having a final maturity of one year or more from the date of origin thereof (or which is renewable or extendible at the option of the obligor for a period or periods more than one year from the date of origin). "GAAP" means generally accepted accounting principles as in effect from time to time in the United States of America. "GOVERNMENTAL AUTHORITY" means (a) the government of (i) the United States of America or any State or other political subdivision thereof, or (ii) any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or 3 Schedule B 62 (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government. "GUARANTY" means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such indebtedness or obligation or any property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or (d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof. In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. "HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polycholorinated biphenyls). "HOLDER" means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1. "INDEBTEDNESS" with respect to any Person means, at any time, without duplication, (a) its liabilities for borrowed money and its redemption obligations in respect of preferred stock that is mandatorily redeemable at the option of the holder thereof prior to payment in full of the Notes; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) all liabilities appearing on its balance sheet as indebtedness in accordance with GAAP in respect of Capital Leases; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (d). 4 Schedule B 63 Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (e) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP. "INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note and any Affiliates thereof, and (b) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form. "INVESTMENTS" means all investments made, in cash or by delivery of property, directly or indirectly, in any Person, whether by acquisition of shares of capital stock, indebtedness or other obligations or securities or by loan, Guaranty, advance, capital contribution or otherwise. "LIEN" means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including, in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements). "MAKE-WHOLE AMOUNT" is defined in Section 8.7. "MATERIAL" means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and its Restricted Subsidiaries taken as a whole. "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement and the Notes, or (c) the ability of any Subsidiary Guarantor to perform its obligations under the Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement, the Notes or the Subsidiary Guaranty. "MEMORANDUM" is defined in Section 5.3. "MOODY'S" means Moody's Investors Service, Inc. "MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA). "NOTES" is defined in Section 1. "OFFICER'S CERTIFICATE" means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate. "OTHER PURCHASERS" is defined in Section 2. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto. "PERSON" means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof. "PLAN" means an "employee benefit plan" (as defined in section 3(3) of ERISA) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability. 5 Schedule B 64 "PROPERTY" or "Properties" means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate. "QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor. "REQUIRED HOLDERS" means, at any time, the holders of at least 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates). "RESPONSIBLE OFFICER" means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement. "RESTRICTED INVESTMENTS" means all Investments of the Company and its Restricted Subsidiaries, other than: (a) property or assets to be used or consumed in the ordinary course of business; (b) current assets arising from the sale of goods or services in the ordinary course of business; (c) Investments in Restricted Subsidiaries or in any Person that, as a result thereof, becomes a Restricted Subsidiary; (d) Investments existing as of the date of this Agreement that are listed in the attached Schedule B-1; (e) Investments in treasury stock; (f) relocation, travel and similar advances to employees made in the ordinary course of business consistent with past practice; (g) bonds, the proceeds of which are used to fund the sale and leaseback of real estate and equipment by the Company or a Restricted Subsidiary in a transaction designed to result in an abatement of certain taxes; and (h) Investments in: (i) obligations, maturing within one year from the date of acquisition, of or fully guaranteed by the United States of America or an agency thereof or by Canada or a province thereof; (ii) state or municipal securities, maturing within one year from the date of acquisition, that are rated in one of the top two rating classifications by at least one nationally recognized rating agency; (iii) certificates of deposit or banker's acceptances maturing within one year from the date of acquisition or issued by a commercial bank whose long-term unsecured debt obligations (or the long-term unsecured debt obligations of the bank holding company owning all of the capital stock of such bank) are rated in one of the top two rating classifications by at least one nationally recognized rating agency; (iv) commercial paper maturing within 270 days from the date of issuance that, at the time of acquisition, is rated in one of the top two rating classifications by at least one credit rating agency of recognized national standing; 6 Schedule B 65 (v) repurchase agreements, having a term of not more than 90 days and fully collateralized with obligations of the type described in clause (i), with a bank satisfying the requirements of clause (iii); (v) municipal or Canadian provincial securities maturing within three years of the date of acquisition and rated AA- or better by S&P or Aa3 or better by Moody's, or their short-term equivalent ratings, or, in the case of Canadian provincial securities, rated within the two highest classifications of the leading provincial rating agency; and (vi) money market instrument programs or registered investment companies that invest in securities of the type described in this clause (h) that are properly classified as current assets in accordance with GAAP. As of any date of determination, each Restricted Investment shall be valued at the greater of: (x) the amount at which such Restricted Investment is shown on the books of the Company or any of its Restricted Subsidiaries (or zero if such Restricted Investment is not shown on any such books); and (y) either (i) in the case of any Guaranty of the obligation of any Person, the amount which the Company or any of its Restricted Subsidiaries has paid on account of such obligation less any recoupment by the Company or such Restricted Subsidiary of any such payments, or (ii) in the case of any other Restricted Investment, the excess of (x) the greater of (A) the amount originally entered on the books of the Company or any of its Restricted Subsidiaries with respect thereto and (B) the cost thereof to the Company or its Restricted Subsidiary over (y) any return of capital (after income taxes applicable thereto) upon such Restricted Investment through the sale or other liquidation thereof or part thereof or otherwise. "RESTRICTED SUBSIDIARY" means any Subsidiary (a) at least a majority of the voting securities of which are owned by the Company and/or one or more Wholly Owned Restricted Subsidiaries and (b) that the Company has not designated an Unrestricted Subsidiary by notice in writing given to the holders of the Notes. "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill, Inc. "SECURITIES ACT" means the Securities Act of 1933, as amended from time to time. "SENIOR FINANCIAL OFFICER" means the chief financial officer, principal accounting officer, treasurer or controller of the Company. "SHORT-TERM DEBT" means all Indebtedness other than Funded Debt. "SUBSIDIARY" means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership, limited liability company or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries (unless such partnership, limited liability company or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the Company. "SUBSIDIARY GUARANTOR" is defined in Section 1. 7 Schedule B 66 "SUBSIDIARY GUARANTY" is defined in Section 1. "THIS AGREEMENT" OR "THE AGREEMENT" is defined in Section 17.3. "UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that has been so designated by notice in writing given to the holders of the Notes. "VOTING STOCK" shall mean the capital stock of any class or classes of a corporation having power under ordinary circumstances to vote for the election of members of the board of directors of such corporation, or person performing similar functions (irrespective of whether or not at the time stock of any of the class or classes shall have or might have special voting power or rights by reason of the happening of any contingency). "WHOLLY OWNED SUBSIDIARY" or "WHOLLY OWNED RESTRICTED SUBSIDIARY" mean, at any time, any Subsidiary, or Restricted Subsidiary, as the case may be, 100% of all of the equity interests (except directors' qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company's other Wholly Owned Subsidiaries or Wholly Owned Restricted Subsidiaries, as the case may be, at such time. 8 Schedule B 67 EXHIBIT 1(a) [FORM OF NOTE] BUTLER MANUFACTURING COMPANY 7.87% SENIOR NOTE DUE DECEMBER 30, 2016 No. [_____] [Date] $[_______] PPN FOR VALUE RECEIVED, the undersigned, BUTLER MANUFACTURING COMPANY (herein called the "Company"), a corporation organized and existing under the laws of the State of Delaware, promises to pay to [ ], or registered assigns, the principal sum of [ ] DOLLARS on December 30, 2016 with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.87% per annum from the date hereof, payable semiannually, on the June 30 and December 30 in each year, commencing with the June 30 or December 30 next succeeding the date hereof (except that no interest payment shall be made on June 30, 2001), until the principal hereof shall have become due and payable, and (b) to the extent permitted by law on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note Purchase Agreement referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 9.87% or (ii) 2.0% over the rate of interest publicly announced by Bank of America from time to time in Chicago, Illinois as its "base" or "prime" rate. Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal office of Bank of America in Chicago or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below. This Note is one of the Senior Notes (herein called the "Notes") issued pursuant to the Note Purchase Agreement, dated as of June 20, 2001 (as from time to time amended, the "Note Purchase Agreement"), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to have made the representations set forth in Section 6.2 and the second sentence of Section 6.1 of the Note Purchase Agreement. This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary. The Company will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreement. This Note is also subject to prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise. If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement. Exhibit 1(a) 68 Payment of the principal of, and interest and Make-Whole Amount, if any, on this Note, and all other amounts due under the Note Purchase Agreement, is guaranteed pursuant to the terms of a Subsidiary Guaranty dated as of June 20, 2001 of certain Subsidiaries of the Company.* This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Illinois excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State. BUTLER MANUFACTURING COMPANY By: -------------------------------------- Name: ------------------------------------ Title: ------------------------------------ - -------- * This paragraph must be removed at such time as there are no Subsidiary Guarantors. 2 Exhibit 1(a) 69 6 EXHIBIT 1(b) SUBSIDIARY GUARANTY ------------------- THIS SUBSIDIARY GUARANTY (this "Guaranty") dated as of June 20, 2001 is made by BMC Real Estate, Inc., BUCON, Inc., Butler Holdings, Inc., Butler Real Estate, Inc., Lester Buildings, Inc., Butler Pacific, Inc., Moduline Windows, Inc. and Liberty Building Systems, Inc. (each individually a "Guarantor" and collectively the "Guarantors"), in favor of the holders from time to time of the Notes hereinafter referred to, including each Purchaser listed on Schedule A to the Note Agreement hereinafter referred to and its respective successors and assigns (the "Purchaser"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Butler Manufacturing Company, a Delaware corporation (the "Company"), and the Purchasers listed on Schedule A thereto entered into a Note Purchase Agreement dated as of June 20, 2001 (as amended, supplemented, restated or otherwise modified from time to time in accordance with its terms and in effect, the "Note Agreement"); WHEREAS, the Company owns, directly or indirectly, all of the issued and outstanding capital stock of the Guarantors and, by virtue of such ownership and otherwise, the Guarantors will derive substantial benefits as a result of the purchase of the Company's Notes (as defined in the Note Agreement) by the Purchasers; WHEREAS, it is a condition precedent to the obligation of the Purchasers to purchase the Company's Notes that the Guarantors shall have executed and delivered this Guaranty to the Purchasers; and WHEREAS, the Board of Directors of each Guarantor has determined that the execution, delivery, and performance of this Guaranty is necessary and convenient to the conduct, promotion and attainment of such Guarantor's business and each of the Guarantors desires to execute this Guaranty to satisfy the condition described in the preceding paragraph; NOW, THEREFORE, in consideration of the premises and other benefits to the Guarantors, and of the purchase of the Company's Notes by the Purchasers, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantors hereby makes this Guaranty as follows: SECTION 1. Definitions. Any capitalized terms not otherwise herein defined, when used herein in capitalized form, shall have the respective meanings attributed to them in the Note Agreement. SECTION 2. Guaranty. (a) The Guarantors, jointly and severally, hereby unconditionally and irrevocably guarantee to the Purchasers the due, prompt and complete payment by the Company of the principal of, Make-Whole Amount, if any, and interest on, and each other amount due under, the Notes, when and as the same shall become due and payable (whether at stated maturity or by required or optional prepayment or by declaration or otherwise) in accordance with the terms of the Notes and the Note Agreement (the Notes and the Note Agreement being collectively hereinafter referred to as the "Note Documents", and the amounts payable by the Company under any of the Note Documents, and all other obligations of the Company thereunder, being sometimes collectively hereinafter referred to as the "Obligations"). This guaranty is a guaranty of payment, performance and compliance and not just of collectibility and is in no way conditioned or contingent upon any attempt to collect from or enforce performance or compliance by the Company or upon any other event, contingency or circumstance whatsoever. If for any reason whatsoever the Company shall fail or be unable duly, punctually and fully to pay such amounts as and when the same shall become due and payable or to perform or comply with any such obligation, covenant, term, condition or undertaking, whether or not such failure or inability shall constitute a "Default" or an "Event of Default" under any Note Document, the Guarantors, without demand, presentment, protest or notice of any kind, will forthwith pay or cause to be paid such amounts to the Purchasers under the terms of such Note Document, in lawful money of the United States, at the place specified in the Note Agreement, or perform or comply with the same or cause the same to be performed or complied with, together with interest (to the extent provided for under such Note Document) on any amount due and owing from the Company. The Guarantors, promptly after demand, will pay to 70 the Purchasers the reasonable costs and expenses of collecting such amounts or otherwise enforcing this Guaranty, including, without limitation, the reasonable fees and expenses of counsel. Notwithstanding the foregoing, the right of recovery against each of the Guarantors under this Guaranty is limited to the extent it is judicially determined with respect to such Guarantor that entering into this Guaranty would violate section 548 of the United States Bankruptcy Code or any comparable provisions of any state law, in which case such Guarantor shall be liable under this Guaranty only for amounts aggregating up to the largest amount that would not render such Guarantor's obligations hereunder subject to avoidance under section 548 of the United States Bankruptcy Code or any comparable provisions of any state law. (b) Each Guarantor hereby agrees that to the extent a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder who has not paid its proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 6 hereof. The provisions of this paragraph (b) shall in no respect limit the obligations and liabilities of any Guarantor to the Purchasers, and each Guarantor shall remain liable to the Purchasers for the full amount guaranteed by such Guarantor hereunder. SECTION 3. Guarantor's Obligations Absolute and Unconditional. The obligations of each Guarantor under this Guaranty shall be primary, absolute and unconditional obligations of such Guarantor, shall not be subject to any counterclaim, set-off, deduction, diminution, abatement, recoupment, suspension, deferment, reduction or defense based upon any claim such Guarantor or any other Person may have against the Company or any other Person, and to the full extent permitted by applicable law shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not any Guarantor or the Company shall have any knowledge or notice thereof), including, without limitation: (a) any termination, amendment or modification of or deletion from or addition or supplement to or other change in any of the Note Documents or any other instrument or agreement applicable to any of the parties to any of the Note Documents; (b) any furnishing or acceptance of any security, or any release of any security, for the Obligations, or the failure of any security or the failure of any Person to perfect any interest in any collateral; (c) any failure, omission or delay on the part of the Company to conform or comply with any term of any of the Note Documents or any other instrument or agreement referred to in paragraph (a) above, including, without limitation, failure to give notice to any Guarantor of the occurrence of a "Default" or an "Event of Default" under any Note Document; (d) any waiver of the payment, performance or observance of any of the obligations, conditions, covenants or agreements contained in any Note Document, or any other waiver, consent, extension, indulgence, compromise, settlement, release or other action or inaction under or in respect of any of the Note Documents or any other instrument or agreement referred to in paragraph (a) above or any obligation or liability of the Company, or any exercise or non-exercise of any right, remedy, power or privilege under or in respect of any such instrument or agreement or any such obligation or liability; (e) any failure, omission or delay on the part of any Purchaser to enforce, assert or exercise any right, power or remedy conferred on such Purchaser in this Guaranty, or any such failure, omission or delay on the part of such Purchaser in connection with any Note Document, or any other action on the part of such Purchaser; (f) any voluntary or involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment, assignment for the benefit of creditors, composition, receivership, conservatorship, custodianship, liquidation, marshalling of assets and liabilities or similar proceedings with respect to the 2 71 Company, any Guarantor or to any other Person or any of their respective properties or creditors, or any action taken by any trustee or receiver or by any court in any such proceeding; (g) any limitation on the liability or obligations of the Company or any other Person under any of the Note Documents, or any discharge, termination, cancellation, frustration, irregularity, invalidity or unenforceability, in whole or in part, of any of the Note Documents or any other agreement or instrument referred to in paragraph (a) above or any term hereof; (h) any merger or consolidation of the Company or any Guarantor into or with any other corporation, or any sale, lease or transfer of any of the assets of the Company or any Guarantor to any other Person; (i) any change in the ownership of any shares of capital stock of the Company or any change in the corporate relationship between the Company and any Guarantor, or any termination of such relationship; (j) any release or discharge, by operation of law, of any Guarantor from the performance or observance of any obligation, covenant or agreement contained in this Guaranty; (k) any lack of corporate power of the Company or any other Person at any time liable for part or all of the Obligations; (l) the existence of any claim, defense, set-off, or other rights which the Company or any Guarantor may have at any time against any Purchaser, the Company or any Guarantor, or any other Person, whether in connection with this Guaranty, the Note Documents, the transactions contemplated thereby, or any other transaction; (m) any failure of a Purchaser to notify any Guarantor of any renewal, extension, or assignment of the Obligations or any part thereof, or the release of any security, or if any action taken or refrained from being taken by a Purchaser, it being understood that a Purchaser shall not be required to give any Guarantor any notice of any kind under any circumstance whatsoever with respect to or in connection with the Obligations; or (n) any other occurrence, circumstance, happening or event whatsoever, whether similar or dissimilar to the foregoing, whether foreseen or unforeseen, and any other circumstance which might otherwise constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or which might otherwise limit recourse against any Guarantor. SECTION 4. Full Recourse Obligations. The obligations of each of the Guarantors set forth herein constitute the full recourse obligations of such Guarantor enforceable against it to the full extent of all its assets and properties. SECTION 5. Waiver. Each of the Guarantors unconditionally waives, to the extent permitted by applicable law, (a) notice of any of the matters referred to in Section 3, (b) notice to the Guarantor of the incurrence of any of the Obligations, notice to the Guarantor or the Company of any breach or default by the Company with respect to any of the Obligations or any other notice that may be required, by statute, rule of law or otherwise, to preserve any rights of the Purchasers against the Guarantor, (c) presentment to or demand of payment from the Company or the Guarantor with respect to any amount due under any Note Document or protest for nonpayment or dishonor, (d) any right to the enforcement, assertion or exercise by any Purchaser of any right, power, privilege or remedy conferred in the Note Agreement or any other Note Document or otherwise, (e) any requirement of diligence on the part of any Purchaser, (f) any requirement to exhaust any remedies or to mitigate the damages resulting from any default under any Note Document, (g) any notice of any sale, transfer or other disposition by a Purchaser of any right, title to or interest in the Note Agreement or in any other Note Document, (h) any right to assert against any Purchaser as a counterclaim, set-off or cross-claim, any counterclaim, set-off or claim which it may now or hereafter have against the Company or other Person liable on the Obligations, and (i) any other circumstance whatsoever 3 72 which might otherwise constitute a legal or equitable discharge, release or defense of a guarantor or surety or which might otherwise limit recourse against the Guarantor. SECTION 6. No Subrogation, Contribution, Reimbursement or Indemnity. Notwithstanding anything to the contrary in this Guaranty and the other Note Documents, each of the Guarantors hereby irrevocably waives any and all claims or other rights which may have arisen in connection with this Guaranty to be subrogated to any of the rights (whether contractual, under the United States Bankruptcy Code, as amended, including Section 509 thereof, under common law or otherwise) of any Purchaser against the Company or against any collateral security or guaranty or right of offset held by the Purchasers for the payment of the Obligations until indefeasible payment in full of the Obligations. Each of the Guarantors hereby further irrevocably waives all contractual, common law, statutory or other rights of reimbursement, contribution, exoneration or indemnity (or any similar right) from or against the Company which may have arisen in connection with this Guaranty, whether or not such remedy or right arises in equity, or under contract, statute or common law until indefeasible payment in full of the Obligations. So long as the Obligations remain, if any amount shall be paid by or on behalf of the Company to any of the Guarantors on account of any of the rights waived in this paragraph, such amount shall be held by the Guarantor in trust for the benefit of the Purchasers, segregated from other funds of the Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to the Purchasers (duly indorsed by such Guarantor to the Purchasers, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Purchasers may determine. The provisions of this paragraph shall survive the term of this Guaranty and the payment in full of the Obligations. Each Guarantor acknowledges that it will receive direct and indirect benefits from the sale of the Notes by the Company and that the waiver set forth in this Section 6 is knowingly made in contemplation of such benefits. SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the sums due to any Purchaser pursuant to the terms of the Note Agreement or any other Note Document is rescinded or must otherwise be restored or returned by such Purchaser upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or any other Person, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Company or other Person or any substantial part of its property, or otherwise, all as though such payment had not been made. If an event permitting the acceleration of the maturity of the principal amount of the Notes shall at any time have occurred and be continuing, and such acceleration shall at such time be prevented by reason of the pendency against the Company or any other Person of a case or proceeding under a bankruptcy or insolvency law, each of the Guarantors agrees that, for purposes of this Guaranty and its obligations hereunder, the maturity of the principal amount of the Notes and all other Obligations shall be deemed to have been accelerated with the same effect as if a Purchaser had accelerated the same in accordance with the terms of the Note Agreement or other applicable Note Document, and the Guarantors shall forthwith pay such principal amount, Make-Whole Amount, if any, and interest thereon and any other amounts guaranteed hereunder without further notice or demand. SECTION 8. Term of Agreement. This Guaranty and all guaranties, covenants and agreements of the Guarantors contained herein shall continue in full force and effect and shall not be discharged until such time as all of the Obligations shall be paid and performed in full and all of the agreements of the Guarantors hereunder shall be duly paid and performed in full. SECTION 9. Representations and Warranties. Each Guarantor represents and warrants to each Purchaser that: (a) such Guarantor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the corporate power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged; (b) such Guarantor has the corporate power and authority and the legal right to execute and deliver, and to perform its obligations under, this Guaranty, and has taken all necessary corporate action to authorize its execution, delivery and performance of this Guaranty; 4 73 (c) this Guaranty constitutes a legal, valid and binding obligation of such Guarantor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law); (d) the execution, delivery and performance of this Guaranty will not violate any provision of any material requirement of law or material contractual obligation of such Guarantor and will not result in or require the creation or imposition of any Lien on any of the properties, revenues or assets of such Guarantor pursuant to the provisions of any material contractual obligation of such Guarantor or any requirement of law; (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty; (f) no litigation, investigation or proceeding of or before any arbitrator or governmental authority is pending or, to the knowledge of such Guarantor, threatened by or against such Guarantor or any of its properties or revenues (i) with respect to this Guaranty or any of the transactions contemplated hereby or (ii) which could reasonably be expected to have a material adverse effect upon the business, operations or financial condition of such Guarantor and its Subsidiaries taken as a whole; (g) the execution, delivery and performance of this Guaranty will not violate any provision of any order, judgment, writ, award or decree of any court, arbitrator or Governmental Authority, domestic or foreign, or of the charter or by-laws of such Guarantor or of any securities issued by such Guarantor; and (h) such Guarantor (after giving due consideration to any rights of contribution) has received fair consideration and reasonably equivalent value for the incurrence of its obligations hereunder or as contemplated hereby and after giving effect to the transactions contemplated herein, (i) the fair value of the assets of such Guarantor exceeds its liabilities, (ii) such Guarantor is able to and expects to be able to pay its debts as they mature, and (iii) such Guarantor has capital sufficient to carry on its business as conducted and as proposed to be conducted. SECTION 10. Notices. All notices under the terms and provisions hereof shall be in writing, and shall be delivered or sent by overnight delivery or telecopy or mailed by first-class mail, postage prepaid, addressed (a) if to the Company or a Purchaser at the addresses set forth in the Note Agreement or (b) if to any of the Guarantors, at: BMA Tower 31st Street and Southwest Trafficway Kansas City, Missouri 64108 or at such other address as the Guarantors shall from time to time designate in writing to the Purchasers. Any notice so addressed shall be deemed to be given when so delivered or sent or, if mailed, on the third Business Day after being so mailed. SECTION 11. Survival. All warranties, representations and covenants made by the Guarantors herein or in any certificate or other instrument delivered by it or on its behalf hereunder shall be considered to have been relied upon by the Purchasers and shall survive the execution and delivery of this Guaranty, regardless of any investigation made by any Purchaser. All statements in any such certificate or other instrument shall constitute warranties and representations by the Guarantors hereunder. SECTION 12. Miscellaneous. Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability 5 74 in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, each of the Guarantors hereby waives any provision of law that renders any provisions hereof prohibited or unenforceable in any respect. The terms of this Guaranty shall be binding upon, and inure to the benefit of, the Guarantors and the Purchasers and their respective successors and assigns. No term or provision of this Guaranty may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Guarantors and the Purchasers. The Section and paragraph headings in this Guaranty are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof, and all references herein to numbered Sections, unless otherwise indicated, are to Sections in this Guaranty. SECTION 13. Information. Each Guarantor acknowledges and agrees that it shall have the sole responsibility for obtaining from the Company such information concerning the Company's financial condition or business operations as such Guarantor may require, and that the Purchasers do not have any duty at any time to disclose to any Guarantor any information relating to the business operations or financial conditions of the Company. SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS AND THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER JURISDICTION, EACH GUARANTOR AGREES THAT THE STATE AND FEDERAL COURTS OF ILLINOIS LOCATED IN CHICAGO, ILLINOIS SHALL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH. SECTION 15. WAIVER OF JURY TRIAL. EACH GUARANTOR AND EACH PURCHASER HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO EACH PURCHASER ENTERING INTO THE NOTE AGREEMENT. 6 75 IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be duly executed as of the day and year first above written. BMC REAL ESTATE, INC. By: /s/ Larry C. Miller -------------------------------------- Name: Larry C. Miller Title: Vice President--Finance BUCON, INC. By: /s/ Larry C. Miller -------------------------------------- Name: Larry C. Miller Title: Vice President--Finance BUTLER HOLDINGS, INC. By: /s/ Larry C. Miller -------------------------------------- Name: Larry C. Miller Title: Vice President--Finance BUTLER REAL ESTATE, INC. By: /s/ Larry C. Miller -------------------------------------- Name: Larry C. Miller Title: Vice President--Finance LESTER BUILDINGS, INC. By: /s/ Larry C. Miller -------------------------------------- Name: Larry C. Miller Title: Vice President--Finance BUTLER PACIFIC, INC. By: /s/ Larry C. Miller -------------------------------------- Name: Larry C. Miller Title: Vice President--Finance MODULINE WINDOWS, INC. By: /s/ Larry C. Miller -------------------------------------- Name: Larry C. Miller Title: Vice President--Finance LIBERTY BUILDING SYSTEMS, INC. By: /s/ Larry C. Miller -------------------------------------- Name: Larry C. Miller Title: Vice President--Finance S-1 76 FORM OF JOINDER TO SUBSIDIARY GUARANTY -------------------------------------- The undersigned (the "Guarantor"), joins in the Subsidiary Guaranty dated as of June 20, 2001 from the Guarantors named therein in favor of the Purchasers, as defined therein, and agrees to be bound by all of the terms thereof and represents and warrants to the Purchasers that: (a) the Guarantor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the corporate power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged; (b) the Guarantor has the corporate power and authority and the legal right to execute and deliver, and to perform its obligations under, this Guaranty, and has taken all necessary corporate action to authorize its execution, delivery and performance of this Guaranty; (c) this Guaranty constitutes a legal, valid and binding obligation of the Guarantor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law); (d) the execution, delivery and performance of this Guaranty will not violate any provision of any material requirement of law or material contractual obligation of the Guarantor and will not result in or require the creation or imposition of any Lien on any of the properties, revenues or assets of the Guarantor pursuant to the provisions of any material contractual obligation of the Guarantor or any requirement of law; (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty; (f) no litigation, investigation or proceeding of or before any arbitrator or governmental authority is pending or, to the knowledge of the Guarantor, threatened by or against the Guarantor or any of its properties or revenues (i) with respect to this Guaranty or any of the transactions contemplated hereby or (ii) which could reasonably be expected to have a material adverse effect upon the business, operations or financial condition of the Guarantor and its Subsidiaries taken as a whole; (g) the execution, delivery and performance of this Guaranty will not violate any provision of any order, judgment, writ, award or decree of any court, arbitrator or Governmental Authority, domestic or foreign, or of the charter or by-laws of the Guarantor or of any securities issued by the Guarantor; and (h) the Guarantor (after giving due consideration to any rights of contribution) has received fair consideration and reasonably equivalent value for the incurrence of its obligations hereunder or as contemplated hereby and after giving effect to the transactions contemplated herein, (i) the fair value of the assets of the Guarantor exceeds its liabilities, (ii) the Guarantor is able to and expects to be able to pay its debts as they mature, and (iii) the Guarantor has capital sufficient to carry on its business as conducted and as proposed to be conducted. Capitalized terms used but not defined herein have the meanings ascribed thereto in the Subsidiary Guaranty. Exhibit 1(b) 77 IN WITNESS WHEREOF, the undersigned has caused this Joinder to Subsidiary Guaranty to be duly executed as of , . ---------- ---- [Name of Guarantor] 2 Exhibit 1(b) 78 EXHIBIT 4.4(a) FORM OF OPINION OF COUNSEL FOR THE COMPANY AND THE SUBSIDIARY GUARANTORS (a) The opinion of Lathrop & Gage L.C., counsel to the Company and the Guarantors, shall be to the effect that: 1. Each of the Company and each Subsidiary Guarantor is a corporation duly organized and validly existing in good standing under the laws of its jurisdiction of incorporation, and each has the corporate power and authority to carry on the business now being conducted by it, to own its property and, in the case of the Company, to enter into and perform the Agreement and to issue and sell the Notes and, in the case of the Subsidiary Guarantors, to enter into and perform the Subsidiary Guaranty. 2. The Agreement and the Notes have been duly authorized by proper corporate action on the part of the Company, have been duly executed and delivered by an authorized officer thereof, and constitute the legal, valid and binding agreements of the Company, enforceable in accordance with its terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws of general application relating to or affecting the enforcement of the rights of creditors or by equitable principles, regardless of whether enforcement is sought in a proceeding in equity or at law. 3. The Subsidiary Guaranty has been duly authorized by proper corporate action on the part of each Subsidiary Guarantor, has been duly executed and delivered by an authorized officer thereof, and constitutes the legal, valid and binding agreement of each Subsidiary Guarantor, enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws of general application relating to or affecting the enforcement of the rights of creditors or by equitable principles, regardless of whether enforcement is sought in a proceeding in equity or at law. 4. The offering, sale and delivery of the Notes and the delivery of the Subsidiary Guaranty do not require the registration of the Notes or the Subsidiary Guaranty under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended. 5. No authorization, approval or consent of any governmental or regulatory body is necessary or required in connection with the lawful execution and delivery by the Company of the Agreement, by the Subsidiary Guarantors of the Subsidiary Guaranty, or the lawful offering, issuance and sale by the Company of the Notes, and no designation, filing, declaration, registration and/or qualification with any governmental authority is required in connection with the offer, issuance and sale of the Notes by the Company. 6. The issuance and sale of the Notes by the Company, compliance with the terms and provisions of the Notes and the Agreement by the Company and compliance with the terms and provisions of the Subsidiary Guaranty by each of the Subsidiary Guarantors will not conflict with, or result in any breach or violation of any of the provisions of, or constitute a default under, or result in the creation or imposition of any Lien upon the property of the Company or any Subsidiary Guarantor pursuant to the provisions of (i) the Certificate of Incorporation (or other charter document) or By-Laws of the Company or any Subsidiary Guarantor, (ii) any loan agreement or evidence of Indebtedness or other instrument under which the Company or any Subsidiary is a party or by which any of their property is bound or may be affected that is set forth on Exhibit I, or (iii) any law (including usury laws) or regulation, or to such counsel's knowledge, order, writ, injunction or decree of any court or governmental authority applicable to the Company or any Subsidiary. Such counsel shall state that it has been informed by the Company that there are no other loan agreements or evidences of Indebtedness to which the Company or any Subsidiary is a party other than as set forth on Exhibit I. Exhibit 4.4(a) 79 7. There are no actions, suits or proceedings with respect to which counsel has been engaged to provide substantive attention pending, or, to such counsel's knowledge, threatened in writing against, or affecting the Company or any Subsidiary, at law or in equity or before or by any Governmental Authority, which are likely to result, individually or in the aggregate, in a Material Adverse Effect. 8. Neither the Company nor any Subsidiary Guarantor is: (i) a "public utility company" or a "holding company," or an "affiliate" or a "subsidiary company" of a "holding company," or an "affiliate" of such a "subsidiary company," as such terms are defined in the Public Utility Holding Company Act of 1935, as amended, or (ii) a "public utility" as defined in the Federal Power Act, as amended, or (iii) an "investment company" or an "affiliated person" thereof, as such terms are defined in the Investment Company Act of 1940, as amended. 9. The issuance of the Notes and the use of the proceeds of the sale of the Notes do not violate or conflict with Regulation G, T, U or X of the Board of Governors of the Federal Reserve System (12 C.F.R., Part 201 et seq.). The opinion of Lathrop & Gage L.C. shall cover such other matters relating to the sale of the Notes as the Purchasers may reasonably request. With respect to matters of fact on which such opinion is based, such counsel shall be entitled to rely on appropriate certificates of public officials and officers of the Company and the Subsidiary Guarantors. With respect to matters governed by the laws of any jurisdiction other than the United States of America and the States of Delaware and Missouri, such counsel may rely upon the opinions of counsel deemed (and stated in their opinion to be deemed) by them to be competent and reliable; provided that, with respect to the opinions in numbered paragraphs 2 and 3, such counsel may assume that the laws of the State of Illinois are the same as the laws of the State of Missouri. (b) The opinion of John W. Huey, Esq., General Counsel to the Company and the Subsidiary Guarantors, shall be to the effect that: There are no actions, suits or proceedings pending, or, to such counsel's knowledge threatened in writing against, or affecting the Company or any Subsidiary, at law or in equity or before or by any Governmental Authority, which are likely to result, individually or in the aggregate, in a Material Adverse Effect. 80 Exhibit I ---------
LOAN ARRANGEMENT AMOUNT MATURITY ---------------- ------ -------- Private Placement Note dated June 1, 1994 $15,000,000 December 2003 $35 million Senior notes dated March 1, 1998 $35,000,000 March 2013 Vistawall TVA Loan $2,000,000 2008 Tennessee Valley Authority Industrial Development Revenue Bond issue, $6,250,000 April 2015 City of San Marcos Industrial Development Corporation Note on Vistawall Factory Equipment to $400,000 2004 Valspar Corporation Note to former shareholders of Rebco West, $140,000 December 2001 Inc. Credit Agreement $65,000,000 2004 Europe Line of Credit $2,467,000 outstanding Renewable Revolver 2002 CIB Central-European International Bank $3M, 24M (RMB) CHINA LINE OF CREDIT, BANK $0 outstanding Renewable Revolver 2002 OF COMMUNICATIONS Capitalized Lease obligations relating to $2,306,000 January 2013 office, manufacturing and warehouse facility in Newman, Georgia Capitalized Lease obligations relating to $24,000,000 December 2006 land, business and factory facility in Midway City, Tennessee CAPITALIZED LEASE OBLIGATIONS REGARDING THE $30,000,000 2022 COMPANY'S NEW HEADQUARTER FACILITY
81 EXHIBIT 4.4(b) FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS The opinion of Gardner, Carton & Douglas, special counsel for the Purchasers, shall be to the effect that: 1. The Company is a corporation validly existing in good standing under the laws of the State of Delaware, with the corporate power and authority to enter into the Agreement and to issue and sell the Notes. Each of the Subsidiary Guarantors is a corporation validly existing under the laws of its jurisdiction of incorporation, with all requisite corporate power and authority to enter into the Subsidiary Guaranty. 2. The Agreement and the Notes have been duly authorized by proper corporate action on the part of the Company, have been duly executed and delivered by an authorized officer thereof, and constitute the legal, valid and binding agreements of the Company, enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws of general application relating to or affecting the enforcement of the rights of creditors or by equitable principles, regardless of whether enforcement is sought in a proceeding in equity or at law. 3. The Subsidiary Guaranty has been duly authorized by proper corporate action on the part of each Subsidiary Guarantor, has been duly executed and delivered by an authorized officer thereof, and constitutes the legal, valid and binding agreement of each Subsidiary Guarantor, enforceable in accordance with its terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws of general application relating to or affecting the enforcement of the rights of creditors or by equitable principles, regardless of whether enforcement is sought in a proceeding in equity or at law. 4. Based upon the representations set forth in the Agreement, the offering, sale and delivery of the Notes do not require the registration of the Notes under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended. 5. The issuance and sale of the Notes and compliance with the terms and provisions of the Notes, the Agreement and the Subsidiary Guaranty will not conflict with or result in any breach of any of the provisions of the Certificate of Incorporation or By-Laws of the Company or the Subsidiary Guarantors. The opinion of Gardner, Carton & Douglas also shall state that the legal opinion of Lathrop & Gage, counsel for the Company, delivered to you pursuant to the Agreement, is satisfactory in form and scope to it, and, in its opinion, the Purchasers and it are justified in relying thereon and shall cover such other matters relating to the sale of the Notes as the Purchasers may reasonably request. EX-18 5 c64595ex18.txt ACCOUNTANTS PREFERABILITY LETTER 1 EXHIBIT 18 Mr. Larry C. Miller Vice President-Finance & CFO Butler Manufacturing Company BMA Tower, One Penn Valley Park Kansas City, Missouri 64141-0917 August 9, 2001 RE: FORM 10-Q REPORT FOR THE QUARTER ENDED JUNE 30, 2001 Dear Sir: This letter is written to meet the requirements of Regulation S-K calling for a letter from a registrant's independent accountants whenever there has been a change in accounting principle or practice. We have been informed that, effective January 2001, the company changed its method for the recognition of deferred gains and losses considered in the calculation of the annual net pension expense for its base retirement pension plan under SFAS 87, "Employers' Accounting for Pensions." The company has changed from the market value method of asset valuation to the market-related value method. Under the previous accounting method all gains and losses, subject to a ten-percent corridor, were recognized and amortized in determining the net periodic pension costs. The new method recognizes and amortizes 20 percent of the cumulative investment gains or losses in determining net periodic pension costs. The new method is preferable is a method that is commonly used by the manufacturing sector and is preferable because it more accurately matches expense to accounting periods for which benefits are earned and will improve year-to-year comparability of net period costs for this plan. A complete coordinated set of financial and reporting standards for determining the preferability of accounting principles among acceptable alternative principles has not been established by the accounting profession. Thus, we cannot make an objective determination of whether the change in accounting described in the preceding paragraph is to a preferable method. However, we have reviewed the pertinent factors, including those related to financial reporting, in this particular case on a subjective basis, and our opinion stated below is based on our determination made in this manner. We are of the opinion that the Company's change in method of accounting is to an acceptable alternative method of accounting, which, based upon the reasons stated for the change and our discussions with you, is also preferable under the circumstances in this particular case. In arriving at this opinion, we have relied on the business judgment and business planning of your management. We have not audited the application of this change to the financial statements of any period subsequent to the December 31, 2000. Further, we have not examined and do not express any opinion with respect to your financial statements for the six months ended June 30, 2001. Very truly yours, /s/ Arthur Andersen LLP EX-19 6 c64595ex19.txt JULY 17, 2000 LETTER TO SHAREHOLDERS 1 EXHIBIT 19 Butler Manufacturing Company SECOND QUARTER REPORT 2001 Six Months Ended June 30, 2001 BMA TOWER PENN VALLEY PARK KANSAS CITY, MO 64108 To Our Shareholders: Second quarter sales for Butler Manufacturing Company were $214 million, a decrease of 12% compared with a year ago. Net earnings for the quarter were $3.4 million, or $.54 per share, compared with the $6.6 million, or $1.01 per share earned in the second quarter of 2000. For the first six months sales were $409 million compared with $463 million a year ago, also 12% lower. Net earnings were $.6 million, or $.10 per share compared with $8.9 million, or $1.32 per share last year. The lower sales volume and earnings were primarily attributable to the weaker economy in the United States, as well as poorer construction weather early in the year. As expected, second quarter results rebounded from the losses of the first quarter, but we believe this is primarily due to the normal seasonal upswing between winter and spring more so than any positive change in the cyclical direction of nonresidential construction. For the first six months, sales in the North American Building Systems segment were $202 million, approximately 19% below the sales of a year ago. Year to date operating results for the segment were a loss of $1.5 million, as profits in the second quarter were not enough to offset losses recorded in the first quarter. The pre-engineered steel buildings business recorded the strongest improvement over the first quarter results, while our Lester wood frame building business continued to endure weak demand and poor weather in its key trade territories through most of the second quarter. We anticipate that Lester will begin to post year over year improvement during the second half of the year from actions implemented late last year and the first six months of this year. In the International Building Systems segment, six months sales were up 5% as both the Chinese and European pre-engineered metal buildings businesses registered gains. Operating income in this segment was lower than that of the same period last year. Both the Chinese and European economies witnessed slowing during the period, causing increased competitive pressure on both Butler operations. We continue to expand our market reach in China with additional resources to tap this large construction market opportunity. The Vistawall Architectural Products segment sales were $116 million, 6% higher compared with a year ago. Operating earnings at $7.5 million were good, but down 13% from last year. Start-up costs associated with the new plant in Tennessee were the primary reason for lower earnings for the first half of the year. We anticipate improvement in the second half of the year as plant staffing and training stabilizes and the expected efficiencies are realized. Butler Construction's sales for the first half were $51 million compared with $77 million in the first half of 2000. Operating earnings were $.7 million compared with $1.3 million for the same period a year ago. The lower sales and operating earnings were expected, and are principally the result of the decision to focus this business primarily on material-erect opportunities. Pursuing an increasing share of material-erect work better aligns Butler Construction to support our Butler Builder's pursuit of complex projects. The Real Estate segment sales were $16 million for the first half, and operating earnings were $.5 million, approximately the same as a year ago. The company's balance sheet reflects the recently completed $50 million private placement of senior unsecured notes. The notes have a fifteen and one-half year maturity with a fixed interest rate of 7.91%. We believe this 2 2 financing, on attractive terms, will help continue to assure the liquidity and flexibility to make investments in support of the company's future growth. The first six months have been challenging. The nonresidential construction economy continues to trend downward. F. W. Dodge reports that orders through May, the latest data available, were 6% lower compared with last year. The company's backlog totals $342 million, 2% higher than last year. Our higher margin product backlog is equal to a year ago and the construction backlog is up 10%. We expect market demand in the second half of 2001 to remain sluggish and pricing conditions to be very competitive. However, as we enter the seasonally stronger third and fourth quarters, we do anticipate improvement in operating earnings over the second quarter this year. Cordially yours, /s/ John Holland John Holland President and Chief Executive Officer July 17, 2001 Butler Manufacturing Company -----END PRIVACY-ENHANCED MESSAGE-----