Exhibit 10.2


 




 





HNI CORPORATION


 


 


$150,000,000 5.54%
Series 2006-A Senior Notes


due April 6, 2016


 


 






 


NOTE PURCHASE AGREEMENT


 






 


 


DATED
AS OF APRIL 6, 2006


 




 




















 


TABLE OF CONTENTS


 


	
  SECTION

  	
   

  	
  HEADING

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  AUTHORIZATION OF NOTES

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  Description
  of Notes

  	
  1

  
	
  Section 1.2.

  	
  Interest
  Rate

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  SALE AND PURCHASE OF NOTES; ADDITIONAL SERIES OF NOTES;
  SUBSIDIARY GUARANTY

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Series
  2006-A Notes

  	
  2

  
	
  Section 2.2.

  	
  Additional
  Series of Notes

  	
  2

  
	
  Section 2.3.

  	
  Subsidiary
  Guaranty

  	
  4

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  CLOSING

  	
  4

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  CONDITIONS TO CLOSING

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Representations
  and Warranties

  	
  5

  
	
  Section 4.2.

  	
  Performance;
  No Default

  	
  5

  
	
  Section 4.3.

  	
  Compliance
  Certificates

  	
  5

  
	
  Section 4.4.

  	
  Opinions
  of Counsel

  	
  6

  
	
  Section 4.5.

  	
  Purchase
  Permitted By Applicable Law, Etc.

  	
  6

  
	
  Section 4.6.

  	
  Sale
  of Other Notes

  	
  6

  
	
  Section 4.7.

  	
  Payment
  of Special Counsel Fees

  	
  6

  
	
  Section 4.8.

  	
  Private
  Placement Number

  	
  6

  
	
  Section 4.9.

  	
  Changes
  in Corporate Structure

  	
  6

  
	
  Section 4.10.

  	
  Subsidiary
  Guaranty

  	
  6

  
	
  Section 4.11.

  	
  Funding
  Instructions

  	
  7

  
	
  Section 4.12.

  	
  Proceedings
  and Documents

  	
  7

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Organization;
  Power and Authority

  	
  7

  
	
  Section 5.2.

  	
  Authorization,
  Etc.

  	
  7

  
	
  Section 5.3.

  	
  Disclosure

  	
  7

  
	
  Section 5.4.

  	
  Organization
  and Ownership of Shares of Subsidiaries; Affiliates

  	
  8

  
	
  Section 5.5.

  	
  Financial
  Statements; Material Liabilities

  	
  9

  
	
  Section 5.6.

  	
  Compliance
  with Laws, Other Instruments, Etc.

  	
  9

  
	
  Section 5.7.

  	
  Governmental
  Authorizations, Etc.

  	
  9

  
	
  Section 5.8.

  	
  Litigation;
  Observance of Agreements, Statutes and Orders

  	
  9

  
	
  Section 5.9.

  	
  Taxes

  	
  10

  
	
  Section 5.10.

  	
  Title
  to Property; Leases

  	
  10

  
	
  Section 5.11.

  	
  Licenses,
  Permits, Etc.

  	
  10

  
	
  Section 5.12.

  	
  Compliance
  with ERISA

  	
  11

  



 


i

















 


	
  Section 5.13.

  	
  Private
  Offering by the Company

  	
  12

  
	
  Section 5.14.

  	
  Use of
  Proceeds; Margin Regulations

  	
  12

  
	
  Section 5.15.

  	
  Existing
  Debt; Future Liens

  	
  12

  
	
  Section 5.16.

  	
  Foreign
  Assets Control Regulations, Etc.

  	
  13

  
	
  Section 5.17.

  	
  Status
  under Certain Statutes

  	
  13

  
	
  Section 5.18.

  	
  Environmental
  Matters

  	
  13

  
	
  Section 5.19.

  	
  Notes
  Rank Pari Passu

  	
  14

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  REPRESENTATIONS OF THE PURCHASER

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Purchase
  for Investment

  	
  14

  
	
  Section 6.2.

  	
  Accredited
  Investor

  	
  14

  
	
  Section 6.3.

  	
  Source
  of Funds

  	
  14

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  INFORMATION AS TO COMPANY

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Financial
  and Business Information

  	
  16

  
	
  Section 7.2.

  	
  Officer’s
  Certificate

  	
  19

  
	
  Section 7.3.

  	
  Visitation

  	
  19

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  PAYMENT OF THE NOTES

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Required
  Prepayments

  	
  20

  
	
  Section 8.2.

  	
  Optional
  Prepayments with Make-Whole Amount

  	
  20

  
	
  Section 8.3.

  	
  Allocation
  of Partial Prepayments

  	
  20

  
	
  Section 8.4.

  	
  Maturity;
  Surrender, Etc.

  	
  20

  
	
  Section 8.5.

  	
  Purchase
  of Notes

  	
  21

  
	
  Section 8.6.

  	
  Make-Whole
  Amount for the Series 2006-A Notes

  	
  21

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AFFIRMATIVE COVENANTS

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Compliance
  with Law

  	
  22

  
	
  Section 9.2.

  	
  Insurance

  	
  23

  
	
  Section 9.3.

  	
  Maintenance
  of Properties

  	
  23

  
	
  Section 9.4.

  	
  Payment
  of Taxes and Claims

  	
  23

  
	
  Section 9.5.

  	
  Corporate
  Existence, Etc.

  	
  23

  
	
  Section 9.6.

  	
  Designation
  of Subsidiaries

  	
  23

  
	
  Section 9.7.

  	
  Notes
  to Rank Pari Passu

  	
  24

  
	
  Section 9.8.

  	
  Additional
  Subsidiary Guarantors

  	
  24

  
	
  Section 9.9.

  	
  Books
  and Records

  	
  24

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  NEGATIVE COVENANTS

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
  Consolidated
  Debt to Consolidated EBITDA

  	
  25

  
	
  Section 10.2.

  	
  Priority
  Debt

  	
  25

  
	
  Section 10.3.

  	
  Limitation
  on Liens

  	
  25

  
	
  Section 10.4.

  	
  Sales
  of Asset

  	
  27

  
	
  Section 10.5.

  	
  Merger
  and Consolidation

  	
  28

  
	
  Section 10.6.

  	
  Transactions
  with Affiliates

  	
  29

  



 


ii

















 


	
  Section 10.7.

  	
  Terrorism
  Sanctions Regulations

  	
  29

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  EVENTS OF DEFAULT

  	
  29

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  REMEDIES ON DEFAULT, ETC.

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
  Acceleration

  	
  31

  
	
  Section 12.2.

  	
  Other
  Remedies

  	
  32

  
	
  Section 12.3.

  	
  Rescission

  	
  32

  
	
  Section 12.4.

  	
  No
  Waivers or Election of Remedies, Expenses, Etc.

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
  Registration
  of Notes

  	
  33

  
	
  Section 13.2.

  	
  Transfer
  and Exchange of Notes

  	
  33

  
	
  Section 13.3.

  	
  Replacement
  of Notes

  	
  34

  
	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  PAYMENTS ON NOTES

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 14.1.

  	
  Place
  of Payment

  	
  34

  
	
  Section 14.2.

  	
  Home
  Office Payment

  	
  35

  
	
   

  	
   

  	
   

  
	
  SECTION 15.

  	
  EXPENSES, ETC.

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 15.1.

  	
  Transaction
  Expenses

  	
  35

  
	
  Section 15.2.

  	
  Survival

  	
  35

  
	
   

  	
   

  	
   

  
	
  SECTION 16.

  	
  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
  AGREEMENT

  	
  36

  
	
   

  	
   

  	
   

  
	
  SECTION 17.

  	
  AMENDMENT AND WAIVER

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 17.1.

  	
  Requirements

  	
  36

  
	
  Section 17.2.

  	
  Solicitation
  of Holders of Notes

  	
  37

  
	
  Section 17.3.

  	
  Binding
  Effect, Etc.

  	
  37

  
	
  Section 17.4.

  	
  Notes
  Held by Company, Etc.

  	
  37

  
	
   

  	
   

  	
   

  
	
  SECTION 18.

  	
  NOTICES

  	
  38

  
	
   

  	
   

  	
   

  
	
  SECTION 19.

  	
  REPRODUCTION OF DOCUMENTS

  	
  38

  
	
   

  	
   

  	
   

  
	
  SECTION 20.

  	
  CONFIDENTIAL INFORMATION

  	
  39

  
	
   

  	
   

  	
   

  
	
  SECTION 21.

  	
  SUBSTITUTION OF PURCHASER

  	
  40

  



 


iii

















 


	
  SECTION 22.

  	
  MISCELLANEOUS

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 22.1.

  	
  Successors
  and Assigns

  	
  40

  
	
  Section 22.2.

  	
  Payments
  Due on Non-Business Days

  	
  40

  
	
  Section 22.3.

  	
  Accounting
  Terms

  	
  41

  
	
  Section 22.4.

  	
  Severability

  	
  41

  
	
  Section 22.5.

  	
  Construction

  	
  41

  
	
  Section 22.6.

  	
  Counterparts

  	
  41

  
	
  Section 22.7.

  	
  Governing
  Law

  	
  41

  
	
  Section 22.8.

  	
  Jurisdiction
  and Process; Waiver of Jury Trial

  	
  41

  



 


iv

















 


	
   

  	
   

  	
   

  
	
  SCHEDULE A

  	
  —

  	
  INFORMATION RELATING TO
  PURCHASERS

  
	
   

  	
   

  	
   

  
	
  SCHEDULE B

  	
  —

  	
  DEFINED TERMS

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.9

  	
  —

  	
  Changes in Corporate
  Structure

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5.3

  	
  —

  	
  Certain Disclosure
  Documents

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5.4

  	
  —

  	
  Subsidiaries of the
  Company, Ownership of Subsidiary Stock, Affiliates

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5.5

  	
  —

  	
  Financial Statements

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5.11

  	
  —

  	
  Licenses, Permits, Etc.

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5.15

  	
  —

  	
  Existing Debt

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 10.3

  	
  —

  	
  Existing Liens

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 1(a)

  	
  —

  	
  Form of 5.54% Series
  2006-A Senior Notes due April 6, 2016

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 2.3

  	
  —

  	
  Form of Subsidiary
  Guaranty

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 4.4(a)

  	
  —

  	
  Forms of Opinion of
  Special Counsels to the Company

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 4.4(b)

  	
  —

  	
  Form of Opinion of
  Special Counsel to the Purchasers

  
	
   

  	
   

  	
   

  
	
  EXHIBIT S

  	
  —

  	
  Form of Supplement to
  Note Purchase Agreement

  



 


v

















 


HNI CORPORATION


414 EAST
THIRD STREET


P.O. BOX
1109


MUSCATINE,
IA  52761-0071


	
  EMAIL:

  	
   

  	
   

  



 


 


$150,000,000 5.54% SERIES 2006-A SENIOR NOTES

DUE APRIL 6, 2016


 


Dated as of

April 6, 2006


 


TO THE PURCHASERS LISTED
IN


THE ATTACHED SCHEDULE A:


 


Ladies and Gentlemen:


 


HNI CORPORATION, an Iowa
corporation (the “Company”), agrees with the
Purchasers listed in the attached Schedule A (the “Purchasers”)
to this Note Purchase Agreement (this “Agreement”) as
follows:


 


SECTION 1.                                                 AUTHORIZATION OF NOTES.


 


Section 1.1.           Description of Notes.
The Company will authorize the issue and sale of the following Senior Notes:


 


	
  ISSUE

  	
   

  	
  SERIES AND/OR

  TRANCHE

  	
   

  	
  AGGREGATE

  PRINCIPAL

  AMOUNT

  	
   

  	
  INTEREST RATE

  	
   

  	
  MATURITY DATE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Senior Notes

  	
   

  	
  Series 2006-A

  	
   

  	
  $

  	
  150,000,000

  	
   

  	
  5.54%

  	
   

  	
  April 6, 2016

  	
   

  
											



 


The Senior Notes
described above are individually referred to as the “Series 2006-A
Notes”. The Series 2006-A Notes, together with each Series of
Additional Notes which may from time to time be issued pursuant to the
provisions of Section 2.2 are collectively referred to as the “Notes” (such term shall also include any such notes issued
in substitution therefor pursuant to Section 13 of this Agreement). The
Series 2006-A Notes shall be substantially in the form set out in Exhibit
1, with such changes therefrom, if any, as may be approved by the Purchasers
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.


 


Section 1.2.           Interest Rate. The
Series 2006-A Notes shall bear interest (computed on the basis of a 360-day
year of twelve 30-day months) on the unpaid principal thereof from the date


 

















 


of issuance at their
respective stated rate of interest payable semi-annually in arrears on the 6th
day of April and October and at maturity commencing on October 6, 2006, until
such principal sum shall have become due and payable (whether at maturity, upon
notice of prepayment or otherwise) and interest (so computed) on any overdue
principal, Make-Whole Amount or, to the extent permitted by law, interest from
the due date thereof (whether by acceleration or otherwise) at the applicable
Default Rate until paid.


 


SECTION 2.                                                 SALE AND PURCHASE OF NOTES; ADDITIONAL
SERIES OF NOTES; SUBSIDIARY GUARANTY.


 


Section 2.1.           Series 2006-A Notes. Subject
to the terms and conditions of this Agreement, the Company will issue and sell
to each Purchaser and each Purchaser will purchase from the Company, at the Closing
provided for in Section 3, the

Series 2006-A Notes in the principal amount specified opposite such
Purchaser’s name in Schedule A at the purchase price of 100% of the principal
amount thereof. The obligations of each Purchaser hereunder are several and not
joint obligations and no Purchaser shall have any obligation or any liability
to any Person for the performance or nonperformance by any other Purchaser
hereunder.


 


Section 2.2.           Additional Series of Notes.
The Company may, from time to time, in its sole discretion but subject to the
terms hereof, issue and sell one or more additional Series of its unsecured
promissory notes under the provisions of this Agreement pursuant to a
supplement (a “Supplement”) substantially in
the form of Exhibit S, provided that
the aggregate principal amount of Notes of all Series issued pursuant to all
Supplements in accordance with the terms of this Section 2.2 shall not
exceed $500,000,000. Each additional Series of Notes (the “Additional
Notes”) issued pursuant to a Supplement shall be subject to the
following terms and conditions:


 


(i)            each Series of Additional Notes,
when so issued, shall be differentiated from all previous Series by the year of
issuance and sequential alphabetical designation inscribed thereon;


 


(ii)           Additional Notes of the same Series
may consist of more than one different and separate tranches and may differ
with respect to outstanding principal amounts, maturity dates, interest rates
and premiums, if any, and price and terms of redemption or payment prior to
maturity, but all such different and separate tranches of the same Series shall
vote as a single class and constitute one Series;


 


(iii)          each Series of Additional Notes shall
be dated the date of issue, bear interest at such rate or rates, mature on such
date or dates, be subject to such mandatory and optional prepayment on the
dates and at the premiums, if any, have such additional or different conditions
precedent to closing, such representations and warranties and such additional
covenants as shall be specified in the Supplement under which such Additional
Notes are issued and upon execution of any such Supplement, this Agreement
shall be deemed amended (a) to reflect such additional covenants without
further action on the part of the holders of the Notes outstanding under this
Agreement, provided, that any such additional
covenants shall inure to the benefit of all holders of Notes so long as any
Additional Notes issued pursuant to such Supplement remain outstanding, and (b)
to


 


2

















 


reflect such
representations and warranties as are contained in such Supplement for the
benefit of the holders of such Additional Notes in accordance with the
provisions of Section 16;


 


(iv)          each Series of Additional Notes issued
under this Agreement shall be in substantially the form of Exhibit 1 to
Exhibit S hereto with such variations, omissions and insertions as are
necessary or permitted hereunder;


 


(v)           the minimum principal amount of any
Note issued under a Supplement shall be $100,000, except as may be necessary to
evidence the outstanding amount of any Note originally issued in a denomination
of $100,000 or more;


 


(vi)          all Additional Notes shall constitute
Senior Debt of the Company and shall rank pari passu with
all other outstanding Notes; and


 


(vii)         no Additional Notes shall be issued
hereunder if at the time of issuance thereof and after giving effect to the
application of the proceeds thereof, any Default or Event of Default shall have
occurred and be continuing.


 


The obligations of the
Additional Purchasers to purchase any Additional Notes shall be subject to the
following conditions precedent, in addition to the conditions specified in the
Supplement pursuant to which such Additional Notes may be issued:


 


(a)           Compliance Certificate.
A duly authorized Senior Financial Officer shall execute and deliver to each
Additional Purchaser and each holder of Notes an Officer’s Certificate dated
the date of issue of such Series of Additional Notes stating that such officer
has reviewed the provisions of this Agreement (including any Supplements
hereto) and setting forth the information and computations (in sufficient
detail) required to establish whether after giving effect to the issuance of
the Additional Notes and after giving effect to the application of the proceeds
thereof, the Company is in compliance with the requirements of Sections 10.1
and 10.2 on such date (based upon the financial statements for the most recent
fiscal quarter ended prior to the date of such certificate for which financial
statements are then available).


 


(b)           Execution and Delivery of
Supplement. The Company and each such Additional Purchaser shall
execute and deliver a Supplement substantially in the form of Exhibit S
hereto.


 


(c)           Representations of
Additional Purchasers. Each Additional Purchaser shall have
confirmed in the Supplement that the representations set forth in
Section 6 are true with respect to such Additional Purchaser on and as of
the date of issue of the Additional Notes.


 


(d)           Execution and Delivery of
Guaranty Ratification. Each Subsidiary Guarantor with respect to
which a Guaranty Release shall not have occurred shall execute


 


3

















 


and deliver a Guaranty
Ratification in form and substance satisfactory to the Additional Purchasers.


 


Section
2.3.           Subsidiary Guaranty. (a) The
payment by the Company of all amounts due with respect to the Notes and the
performance by the Company of its obligations under this Agreement will be
absolutely and unconditionally guaranteed by the Subsidiary Guarantors pursuant
to the Subsidiary Guaranty Agreement dated as of even date herewith, which
shall be substantially in the form of Exhibit 2.3 attached hereto, and
otherwise in accordance with the provisions of Section 9.8 hereof (the “Subsidiary Guaranty”).


 


(b)           The holders of the Notes agree to
discharge and release any Subsidiary Guarantor from the Subsidiary Guaranty
upon the written request of the Company, provided that
(i) such Subsidiary Guarantor has been released and discharged (or will be
released and discharged concurrently with the release of such Subsidiary
Guarantor under the Subsidiary Guaranty) as an obligor and guarantor under and
in respect of the Bank Credit Agreement and the Company so certifies to the
holders of the Notes in a certificate of a Responsible Officer, (ii) at
the time of such release and discharge, the Company shall deliver a certificate
of a Responsible Officer to the holders of the Notes stating that no Default or
Event of Default exists, and (iii) if any fee or other form of
consideration (other than, for the avoidance of doubt, the reimbursement of out
of pocket costs or expenses) is given to any holder of Debt under the Bank
Credit Agreement expressly for the purpose of such release, the holders of the
Notes shall receive proportional fees or consideration pro rata
in respect of the amount of Debt of the Company held by such holders in
relation to the Debt outstanding under the Bank Credit Agreement at the time
such release was granted (a “Guaranty Release”).


 


SECTION 3.                                                 CLOSING.


 


The sale and purchase of
the Series 2006-A Notes to be purchased by each Purchaser shall occur at
the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago,
Illinois 60603 at 10:00 a.m. Central time, at a closing (the “Closing”) on April 6, 2006 or on such other Business Day
thereafter on or prior to April 15, 2006 as may be agreed upon by the Company
and the Purchasers (the “Closing Date”).
On the Closing Date, the Company will deliver to each Purchaser the
Series 2006-A Notes to be purchased by such Purchaser in the form of a
single Series A Note (or such greater number of Series 2006-A Notes in
denominations of at least $100,000 as such Purchaser may request) dated the
date of the Closing Date and registered in such Purchaser’s name (or in the
name of such Purchaser’s nominee), against delivery by such Purchaser 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: 
2000022977766, at Wachovia Bank N.A., Charlotte, North Carolina, ABA
Number: 053000219, in the Account Name of “HNI Corporation”. If, on the Closing
Date, the Company shall fail to tender such Series 2006-A Notes to any
Purchaser as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to any Purchaser’s
satisfaction, such Purchaser shall, at such Purchaser’s election, be relieved
of all further obligations under this Agreement, without thereby waiving any
rights such Purchaser may have by reason of such failure or such
nonfulfillment.


 


4

















 


SECTION 4.                                                 CONDITIONS TO CLOSING.


 


Each Purchaser’s
obligation to purchase and pay for the Series 2006-A Notes to be sold to
such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following conditions
applicable to the Closing Date:


 


Section
4.1.           Representations and
Warranties.


 


(a)           Representations and
Warranties of the Company. The representations and warranties of the
Company in this Agreement shall be correct when made and at the time of the
Closing.


 


(b)           Representations and
Warranties of the Subsidiary Guarantors. The representations and
warranties of the Subsidiary Guarantors in the Subsidiary Guaranty shall be
correct when made and at the time of the Closing.


 


Section 4.2.           Performance; No Default.
The Company and each Subsidiary Guarantor shall have performed and complied
with all agreements and conditions contained in this Agreement and the
Subsidiary Guaranty required to be performed or complied with by the Company
and each such Subsidiary Guarantor prior to or at the Closing, and immediately
after giving effect to the issue and sale of the Series 2006-A 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 Section 10
hereof had such Section applied since such date.


 


Section 4.3.           Compliance Certificates.


 


(a)           Officer’s Certificate of
the Company. The Company shall have delivered to such Purchaser an
Officer’s Certificate, dated the Closing Date, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.


 


(b)           Secretary’s Certificate of
the Company. The Company shall have delivered to such Purchaser a
certificate, dated the Closing Date, certifying as to the resolutions attached
thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Series 2006-A Notes and this Agreement.


 


(c)           Officer’s Certificate of
the Subsidiary Guarantors. Each Subsidiary Guarantor shall have
delivered to such Purchaser an Officer’s Certificate, dated the Closing Date,
certifying that the conditions specified in Sections 4.1(b), 4.2 and 4.9 have
been fulfilled.


 


(d)           Secretary’s Certificate of
the Subsidiary Guarantors. Each Subsidiary Guarantor shall have
delivered to such Purchaser a certificate, dated the Closing Date, certifying
as to the resolutions attached thereto and other corporate proceedings relating
to the authorization, execution and delivery of the Subsidiary Guaranty.


 


5

















 


Section 4.4.           Opinions of Counsel.
Such Purchaser shall have received opinions in form and substance satisfactory
to such Purchaser, dated the Closing Date (a) from Jones Day and Stanley,
Lande & Hunter, special counsel for the Company, covering the matters set
forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as such Purchaser or its counsel may
reasonably request (and the Company hereby instructs its counsel to deliver
such opinion to the Purchasers), and (b) from Chapman and Cutler LLP, the
Purchasers’ 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 such Purchaser may reasonably request.


 


Section 4.5.           Purchase Permitted By Applicable Law,
Etc. On the Closing Date such Purchaser’s purchase of
Series 2006-A Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which such Purchaser is 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, (b) 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 (c) not subject such Purchaser 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 such
Purchaser, such Purchaser shall have received an Officer’s Certificate
certifying as to such matters of fact regarding the Company and its
Subsidiaries as such Purchaser may reasonably specify to enable such Purchaser
to determine whether such purchase is so permitted.


 


Section 4.6.           Sale of Other Notes.
Contemporaneously with the Closing the Company shall sell to each other
Purchaser and each other Purchaser shall purchase the Series 2006-A Notes
to be purchased by it at the Closing as specified in Schedule A.


 


Section 4.7.           Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing Date, the reasonable fees, reasonable charges and
reasonable disbursements of the Purchasers’ 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 Date.


 


Section 4.8.           Private Placement Number.
A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau
(in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Series
2006-A Notes.


 


Section 4.9.           Changes in Corporate Structure.
Neither the Company nor any Subsidiary Guarantor shall have changed its
jurisdiction of incorporation or organization or, except as reflected in
Schedule 4.9, been a party to any merger or consolidation, or shall 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.


 


Section
4.10.        Subsidiary Guaranty. The
Subsidiary Guaranty shall have been duly authorized, executed and delivered by
each Subsidiary Guarantor, shall constitute the legal, valid


 


6

















 


and binding contract and
agreement of each Subsidiary Guarantor and such Purchaser shall have received a
true, correct and complete copy thereof.


 


Section 4.11.        Funding Instructions. At
least three Business Days prior to the date of the Closing, each Purchaser
shall have received written instructions signed by a Responsible Officer on
letterhead of the Company confirming the information specified in
Section 3 including (i) the name and address of the transferee bank,
(ii) such transferee bank’s ABA number and (iii) the account name and
number into which the purchase price for the Series 2006-A Notes is to be
deposited.


 


Section 4.12.        Proceedings and Documents.
All corporate and other organizational proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be reasonably satisfactory to such
Purchaser and its special counsel, and such Purchaser and its special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as such Purchaser or such special counsel may reasonably
request.


 


SECTION 5.           REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.


 


The Company represents
and warrants to each Purchaser, as of the date hereof and as of the Closing
Date that:


 


Section 5.1.           Organization; Power and Authority.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing would 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 Series 2006-A Notes and to perform the
provisions hereof and thereof.


 


Section 5.2.           Authorization, Etc.
This Agreement and the Notes to be issued on the Closing Date 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 such
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).


 


Section 5.3.           Disclosure. The
Company, through its agent, Banc of America Securities LLC, has delivered each
Purchaser a copy of a Private Placement Memorandum, dated March, 2006 (the “Memorandum”), relating to the transactions contemplated
hereby. The Disclosure Documents (as defined below), taken as a whole, fairly
describe, in all material respects, the


 


7

















 


general nature of the
business and principal properties of the Company and its Restricted
Subsidiaries. This Agreement, the Memorandum, the documents, certificates or
other writings delivered to the Purchasers by or on behalf of the Company in
connection with the transactions contemplated hereby and identified in Schedule
5.3, and the financial statements listed in Schedule 5.5, in each case,
delivered to the Purchasers prior to March 14, 2006 (this Agreement, the
Memorandum and such documents, certificates or other writings and such
financial statements being referred to, collectively, as the “Disclosure Documents”), 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 the light of the
circumstances under which they were made. Except as disclosed in the Disclosure
Documents, since January 1, 2005, there has been no change in the
financial condition, operations, business or properties of the Company or any
of its Restricted Subsidiaries except changes that individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect. There
is no fact known to the Company that would reasonably be expected to have a
Material Adverse Effect that has not been set forth herein or in the Disclosure
Documents.


 


Section 5.4.           Organization and Ownership of Shares
of Subsidiaries; Affiliates. (a) Schedule 5.4
contains (except as noted therein) complete and correct lists (i) of the
Company’s Restricted and Unrestricted Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, and all
other material Investments of the Company and its Restricted Subsidiaries,
(ii) of the Company’s Affiliates, other than Subsidiaries and Undisclosed
Affiliates, and (iii) of the Company’s directors and senior officers.


 


(b)           All of the outstanding shares of
capital stock or similar equity interests of each Subsidiary shown in
Schedule 5.4 as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by the Company
or another Subsidiary free and clear of any Lien (except as otherwise disclosed
in Schedule 5.4).


 


(c)           Each Subsidiary identified in
Schedule 5.4 is a corporation or other legal entity duly organized,
validly existing and, to the extent such concept is applicable, 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 would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary has the
corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business
it transacts and proposes to transact.


 


(d)           No Subsidiary is a party to, or
otherwise subject to, any legal restriction or any agreement (other than this
Agreement, the agreements listed on Schedule 5.4 and customary limitations
imposed by corporate law or similar statutes and foreign laws and regulations
applicable to Foreign Subsidiaries) 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


 


8

















 


Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Subsidiary.


 


Section 5.5.           Financial Statements; Material
Liabilities. The Company has delivered to each Purchaser
copies of the consolidated financial statements of the Company and its
Subsidiaries listed on Schedule 5.5. All of such 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 and the absence of footnotes). The Company and its
Subsidiaries do not have any Material liabilities that are not disclosed on
such financial statements or otherwise disclosed in the Disclosure Documents.


 


Section 5.6.           Compliance with Laws, Other
Instruments, Etc. The execution, delivery and performance by
the Company of this Agreement and the Series 2006-A Notes will not
(a) 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, organizational document,
or any other material agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound, (b) 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 (c) violate any provision of any
statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary.


 


Section 5.7.           Governmental Authorizations, Etc.
Except for filings on Form 8-K required to be filed with the SEC as a
result of the execution of this Agreement, 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 Series 2006-A Notes.


 


Section 5.8.           Litigation; Observance of Agreements,
Statutes and Orders. (a) There are no actions, suits,
governmental investigations or proceedings pending or, to the knowledge of the
Company, threatened against the Company or any Restricted Subsidiary or any
property of the Company or any Restricted Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.


 


(b)           Neither the Company nor any
Restricted 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 or the USA Patriot Act) of any
Governmental Authority, which default or violation,


 


9

















 


individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.


 


Section 5.9.           Taxes. The Company
and its Subsidiaries have filed all income tax and other material 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 (a) the
amount of which is not individually or in the aggregate Material or
(b) 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 would 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 in accordance with GAAP. The United States federal income tax
liabilities of the Company and its Subsidiaries have been finally determined
(whether by reason of completed audits or the statute of limitations having
run) for all fiscal years up to and including the fiscal year ended
December 29, 2001.


 


Section 5.10.        Title to Property; Leases.
The Company and its Restricted Subsidiaries have good and sufficient title to
their respective properties which the Company and its Restricted Subsidiaries
own or purport to own 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 Restricted 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.


 


Section 5.11.        Licenses, Permits, Etc.
Except as disclosed in Schedule 5.11,


 


(a)           the
Company and its Restricted Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, proprietary software, service
marks, trademarks and trade names, or rights thereto, that are used or are
necessary in the operation of their respective businesses, without known
conflict with the rights of others, except for those failures to own or possess
or conflicts that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect;


 


(b)           to
the best knowledge of the Company, no product of the Company or any of its
Restricted Subsidiaries infringes any license, permit, franchise,
authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person, except for
those infringements that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect; and


 


(c)           to
the best knowledge of the Company, there is no violation by any Person of any
right of the Company or any of its Restricted Subsidiaries with respect to any


 


10

















 


patent,
copyright, proprietary software, service mark, trademark, trade name or other
right owned or used by the Company or any of its Restricted Subsidiaries,
except for those violations that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.


 


Section 5.12.        Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and administered
each Plan (which is not a Multiemployer Plan) in compliance with all applicable
laws except for such instances of noncompliance as have not resulted in and
would not reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any ERISA Affiliate has incurred any liability for failure to
comply with the provisions of Title I of ERISA or any liability pursuant
to Title IV of ERISA (other than for premium payments to the PBGC paid in
a timely manner) 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 would reasonably be
expected to result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.


 


(b)           The present value of the aggregate
benefit liabilities under each of the Plans subject to Title IV of ERISA
(other than Multiemployer Plans), determined as of the beginning of such Plan’s
most recent plan year (for which such liabilities have been determined) 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 as of such determination date of the assets of such Plan allocable to
such benefit liabilities by more than $5,000,000 in the case of any single Plan
and by more than $30,000,000 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 meanings
specified in Section 3 of ERISA.


 


(c)           The Company and its ERISA Affiliates
have not incurred any 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 Series 2006-A Notes hereunder
will not involve any transaction that is subject to and not exempt from the
prohibitions of Section 406 of ERISA or in connection with which a tax
would 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
the Purchasers’ representation in Section 6.3 as to the sources of the
funds to be used to pay the purchase price of the Series 2006-A Notes to
be purchased by the Purchasers.


 


11

















 


Section 5.13.        Private Offering by the Company.
Neither the Company nor anyone acting on the Company’s behalf has, directly or
through any agent, offered the Series 2006-A 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 the Purchasers and not more than twenty (20) other Institutional
Investors of the type described in clause (c) of the definition thereof,
each of which has been offered the Series 2006-A Notes in connection with 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 Series 2006-A Notes to the registration requirements of
Section 5 of the Securities Act or to the registration requirements of any
securities or blue sky laws of any applicable jurisdiction.


 


Section 5.14.        Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Series 2006-A Notes
to refinance existing Debt and for general corporate purposes of the Company. No
part of the proceeds from the sale of the Series 2006-A 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 10% of
the value of the consolidated assets of the Company and its Subsidiaries and
the Company does not have any present intention that margin stock will
constitute more than 10% 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.


 


Section 5.15.        Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth a complete
and correct list of all outstanding Debt of the Company and its Restricted
Subsidiaries as of February 28, 2006 since which date there has been no
Material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Debt of the Company or its Restricted
Subsidiaries. Neither the Company nor any Restricted Subsidiary is in default
and no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of the Company or such Restricted Subsidiary,
and no event or condition exists with respect to any Debt of the Company or any
Restricted Subsidiary, that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Debt to become
due and payable before its stated maturity or before its regularly scheduled
dates of payment.


 


(b)           Except as disclosed in
Schedule 5.15, neither the Company nor any Restricted 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 10.3.


 


(c)           Neither the Company nor any
Subsidiary is a party to, or otherwise subject to any provision contained in,
any instrument evidencing Debt of the Company or such Subsidiary, any agreement
relating thereto or any other material agreement (including, but not limited
to, its charter or other organizational document) which limits the amount of,
or otherwise imposes


 


12

















 


restrictions on the
incurring of, Debt of the Company, except as specifically indicated in
Schedule 5.15.


 


Section 5.16.        Foreign Assets Control Regulations, Etc.
(a) Neither the sale of the Series 2006-A 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.


 


(b)           Neither the Company nor any
Subsidiary is a Person described or designated in the Specially Designated
Nationals and Blocked Persons List of the Office of Foreign Assets Control or
in Section 1 of the Anti-Terrorism Order or, to the knowledge of the
Company, engages in any dealings or transactions with any such Person. The
Company and its Subsidiaries are in compliance, in all material respects, with
the USA Patriot Act.


 


(c)           No part of the proceeds from the sale
of the Series 2006-A Notes hereunder will be used, directly or indirectly,
for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business
or obtain any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act
applies to the Company.


 


Section 5.17.        Status under Certain Statutes.
Neither the Company nor any Restricted Subsidiary is an “investment company”
registered or required to be registered under the Investment Company Act of
1940, as amended, or is subject to regulation under the ICC Termination Act of
1995, as amended, or the Federal Power Act, as amended.


 


Section 5.18.        Environmental Matters.
(a) Neither the Company nor any Restricted Subsidiary has knowledge of any
liability or has received any notice of any liability, and no proceeding has
been instituted raising any liability against the Company or any of its
Restricted 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 would not reasonably be expected to result in a Material
Adverse Effect.


 


(b)           Neither the Company nor any
Restricted Subsidiary has knowledge of any facts which would give rise to any
liability, 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 would not reasonably be
expected to result in a Material Adverse Effect.


 


(c)           Neither the Company nor any of its
Restricted Subsidiaries has stored any Hazardous Materials on real properties
now or formerly owned, leased or operated by any of them or has disposed of any
Hazardous Materials in each case in a manner contrary to any Environmental Laws
in each case in any manner that would reasonably be expected to result in a
Material Adverse Effect.


 


13

















 


(d)           All buildings on all real properties
now owned, leased or operated by the Company or any of its Restricted
Subsidiaries are in compliance with applicable Environmental Laws, except where
failure to comply would not reasonably be expected to result in a Material
Adverse Effect.


 


Section 5.19.        Notes
Rank Pari Passu. The obligations of the Company under this
Agreement and the Notes rank pari passu in
right of payment with all other unsecured Senior Debt (actual or contingent) of
the Company, including, without limitation, all unsecured Senior Debt of the
Company described in Schedule 5.15 hereto.


 


SECTION 6.                                                 REPRESENTATIONS OF THE PURCHASER.


 


Section 6.1.           Purchase for Investment.
Each Purchaser severally represents that it is purchasing the Series 2006-A
Notes for its own account or for one or more separate accounts maintained by it
or for the account of one or more pension or trust funds and not with a view to
the distribution thereof (other than any Notes purchased by Banc of America
Securities LLC on the Closing Date which Banc of America Securities LLC intends
to resell to a “qualified institutional buyer” pursuant to Rule 144A of
the Securities Act), provided that
the disposition of such Purchaser’s or such pension or trust fund’s property
shall at all times be within such Purchaser’s or such pension or trust fund’s
control. Each Purchaser understands that the Series 2006-A 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, nor does it intend, to register the Series 2006-A Notes.


 


Section 6.2.           Accredited Investor.
Each Purchaser represents that it is an “accredited investor” (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
acting for its own account (and not for the account of others) or as a
fiduciary or agent for others (which others are also “accredited investors”). Each
Purchaser further represents that such Purchaser has had the opportunity to ask
questions of the Company and received answers concerning the terms and
conditions of the sale of the Series 2006-A Notes.


 


Section 6.3.           Source of Funds. Each
Purchaser severally represents that at least one of the following statements is
an accurate representation as to each source of funds (a “Source”)
to be used by such Purchaser to pay the purchase price of the Series 2006-A
Notes to be purchased by such Purchaser hereunder:


 


(a)           the Source is an “insurance company
general account” (as the term is defined in the United States Department of
Labor’s Prohibited Transaction Class Exemption (“PTE”)
95-60, as amended) in respect of which the reserves and liabilities (as defined
by the annual statement for life insurance companies approved by the National
Association of Insurance Commissioners (the “NAIC Annual Statement”))
for the general account contract(s) held by or on behalf of any employee
benefit plan (as defined in PTE 95-60, as amended) together with the
amount of the reserves and liabilities (as defined by the NAIC Annual
Statement) for the general account contract(s)


 


14

















 


held by or on behalf of
any other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60, as amended) or by the same employee
organization in the general account do not exceed 10% of the total reserves and
liabilities of the general account (exclusive of separate account liabilities)
plus surplus as set forth in the NAIC Annual Statement filed with such
Purchaser’s state of domicile; or


 


(b)           the Source is an insurance company
separate account that is maintained solely in connection with such Purchaser’s
fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such
separate account (or to any participant or beneficiary of such plan (including
any annuitant)) are not affected in any manner by the investment performance of
the separate account; or


 


(c)           the Source is either (i) an
insurance company pooled separate account, within the meaning of PTE 90-1, as
amended or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38, as amended and, except as disclosed by such Purchaser to the
Company in writing pursuant to this clause (c), no employee benefit plan
(as defined in such PTEs) 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


 


(d)           the Source constitutes assets of an “investment
fund” (within the meaning of Part V of PTE 84-14, as amended (the “QPAM Exemption”)) managed by a “qualified professional
asset manager” or “QPAM” (within the meaning of Part V of the QPAM
Exemption), no assets of any employee benefit plan (as defined in the QPAM
Exemption) that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained by the
same employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by such QPAM,
the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a Person controlling or controlled by the QPAM (applying
the definition of “control” in Section V(e) of the QPAM Exemption) owns a 5% or
more interest in the Company and (i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose assets are included in
such investment fund have been disclosed to the Company in writing pursuant to
this clause (d); or


 


(e)           the Source constitutes assets of a “plan(s)”
(within the meaning of Section IV of PTE 96-23, as amended (the “INHAM Exemption”)) managed by an “in-house asset manager”
or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a Person controlling or controlled by the INHAM (applying
the definition of “control” in Section IV(d) of the INHAM Exemption) owns a 5%
or more interest in the Company and (i) the identity of such INHAM and
(ii) the name(s) of the employee benefit plan(s) whose assets constitute
the Source have been disclosed to the Company in writing pursuant to this
clause (e); or


 


15

















 


(f)            the Source is a governmental plan;
or


 


(g)           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 clause (g); or


 


(h)           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 6.3, the terms “employee benefit plan,”
“governmental plan,” and “separate account” shall have, unless otherwise indicated,
the respective meanings assigned to such terms in section 3 of ERISA.


 


SECTION 7.                                                 INFORMATION AS TO COMPANY.


 


Section 7.1.           Financial and Business Information.
The Company shall deliver to each holder of Notes that is an Institutional
Investor:


 


(a)           Quarterly Statements
— within 60 days after the end of each quarterly fiscal period in each fiscal
year of the Company (other than the last quarterly fiscal period of each such
fiscal year), copies of:


 


(i)            a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such quarter, and


 


(ii)           consolidated statements of income,
changes in shareholders’ equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such quarter,


 


setting forth in each
case in comparative form the figures for the corresponding periods in the
previous fiscal year, all in reasonable detail, prepared in accordance with
GAAP applicable to quarterly financial statements generally, and certified by a
Senior Financial Officer as fairly presenting, in all material respects, the
financial position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end adjustments
and the absence of footnotes, provided that
filing with the SEC within the time period specified above the Company’s
Quarterly Report on Form 10-Q prepared in compliance, in all material
respects, with the requirements therefor shall be deemed to satisfy the
requirements of this Section 7.1(a);


 


(b)           Annual Statements
— within 105 days after the end of each fiscal year of the Company, copies of:


 


(i)            a consolidated balance sheet of the
Company and its Subsidiaries, as at the end of such year, and


 


16

















 


(ii)           consolidated statements of income,
changes in shareholders’ equity and cash flows of the Company and its
Subsidiaries, for such year,


 


setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP, and accompanied by 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, provided that filing with the SEC 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, in all material respects, with the requirements therefor shall be
deemed to satisfy the requirements of this Section 7.1(b);


 


(c)           SEC and Other Reports
— except for filings referred to in Section 7.1(a) and (b) above, promptly
upon their becoming available and, to the extent applicable, one copy of
(i) each financial statement, report, notice or proxy statement sent by
the Company or any Subsidiary to public securities holders generally, and
(ii) each regular or periodic report, each registration statement (without
exhibits except as expressly requested by such holder), and each prospectus and
all amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and of all press releases and other
statements made available generally by the Company or any Subsidiary to the
public concerning developments that are Material; provided,
further, that the Company shall be deemed to have made such delivery
of such information and documentation if it shall have made such information
and documentation available on “EDGAR” and on the Company’s homepage on the
worldwide web (at the date of this Agreement located at http//www.hnicorp.com)
and shall have given each holder of Notes notice of such availability;


 


(d)           Notice of Default or Event
of Default — promptly, and in any event within five Business Days
after a Responsible Officer becomes aware of the existence of any Default or
Event of Default or that any Person has given any written notice or taken any
action with respect to a claimed Default or Event of Default or that any Person
has given any written notice or taken any action with respect to a claimed
default of the type referred to in Section 11(g), a written notice
specifying the nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto;


 


(e)           ERISA Matters —
promptly, and in any event within five Business Days after a Responsible
Officer becomes 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:


 


17

















 


(i)            with respect to any Plan subject to
Title IV of ERISA (other than a Multiemployer Plan), any reportable event, as
defined in Section 4043(c) of ERISA and the regulations thereunder, for
which notice thereof has not been waived pursuant to such regulations as in
effect on the date thereof; or


 


(ii)           the taking by the PBGC of steps to
institute, or receipt of written notice from the PBGC threatening the
institution of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan subject
to Title IV of ERISA (other than a Multiemployer 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 would result in the incurrence of any liability by the Company or any ERISA
Affiliate for failure to comply with the provisions of Title I of ERISA or
any liability pursuant to Title IV of ERISA or the imposition of a penalty
or excise tax under the provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), or 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, would reasonably be expected to have a
Material Adverse Effect;


 


(f)            Notices from Governmental
Authority — promptly, and in any event within 30 days of receipt
thereof, copies of any written 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 would reasonably be expected to have a Material
Adverse Effect;


 


(g)           Supplements  — promptly and in any event within
10 Business Days after the execution and delivery of any Supplement, a copy
thereof; and


 


(h)           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.


 


Notwithstanding the foregoing,
if one or more Unrestricted Subsidiaries shall either (i) own more than
10% of the consolidated total assets of the Company and its Subsidiaries, or
(ii) account for more than 10% of the consolidated gross revenues of the
Company and its Subsidiaries, determined in each case in accordance with GAAP,
then, within the respective periods provided in Section 7.1(a) and (b)
above, the Company shall deliver to each holder of Notes that is an
Institutional Investor, unaudited financial statements of the character and for
the dates and periods as in said Sections 7.1(a) and (b) covering such
group of Unrestricted


 


18

















 


Subsidiaries (on a
consolidated basis), together with a consolidating statement reflecting eliminations
or adjustments required to reconcile the financial statements of such group of
Unrestricted Subsidiaries to the financial statements delivered pursuant to
Sections 7.1(a) and (b).


 


Section 7.2.           Officer’s Certificate.
Within the required time period for delivery of financial statements under
Sections 7.1(a) and 7.1(b), the Company shall also deliver, in the manner
set forth in Section 18 hereof, to each holder of Notes a certificate of a
Senior Financial Officer setting forth:


 


(a)           Covenant Compliance
— the information required in order to establish whether the Company was in
compliance with the requirements of Section 10.1 and Section 10.2 hereof and, if during any 12 consecutive months ending
during the applicable period, asset sales, leases or other dispositions limited
by Section 10.4 (and not excluded from the determination of “substantial part”)
exceed 7.5% of the book value of Consolidated Total Assets (as of the end of
the immediately preceding fiscal year), Section 10.4 hereof, 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, as of the end of such period); and


 


(b)           Event of Default
— a statement that such officer has reviewed the relevant terms hereof and such
review shall not have disclosed the existence during the quarterly or annual
period covered by the statements then being furnished of any condition or event
that constitutes a Default or an Event of Default or, if any such condition or
event existed or exists, specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with respect
thereto.


 


Section 7.3.           Visitation. 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 Restricted 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
Restricted 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


 


19

















 


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.


 


SECTION 8.                                                 PAYMENT OF THE NOTES.


 


Section 8.1.           Required Prepayments. The
entire unpaid principal amount of the Series 2006-A Notes shall become due
and payable on April 6, 2016.


 


Section 8.2.           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 of any Series, in an amount not less than 10% of the then outstanding
aggregate principal amount of the Notes of such Series to be prepaid (but in
the case of a partial prepayment not less than $10,000,000 or such lesser
amount as shall be required to effect a partial prepayment resulting from an
offer of prepayment pursuant to Section 10.4), at 100% of the principal
amount so prepaid, together with interest accrued thereon to the date of such
prepayment, plus the applicable Make-Whole Amount, if any, determined for the
prepayment date with respect to the then outstanding aggregate principal amount
of the Notes of such Series to be prepaid. The Company will give each holder of
Notes of the Series to be prepaid 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,
designated by Series and tranche, if applicable, to be prepaid on such date,
the principal amount of each Note held by such holder to be prepaid (determined
in accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment,
the Company shall deliver to each holder of Notes of the Series to be prepaid a
certificate of a Senior Financial Officer specifying the calculation of each
such Make-Whole Amount as of the specified prepayment date.


 


Section 8.3.           Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes pursuant to the provisions
of Section 8.2, the principal amount of the Notes of the Series to be
prepaid shall be allocated among all of the Notes of such Series at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof. All regularly scheduled partial prepayments made
with respect to any Series of Additional Notes pursuant to any Supplement shall
be allocated as provided therein.


 


Section 8.4.           Maturity; Surrender, Etc. In
the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and Make-Whole
Amount, if any, as aforesaid, interest on such


 


20

















 


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.


 


Section 8.5.           Purchase of Notes. The
Company will not and will not permit any Affiliate that it Controls to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes of any Series except (a) upon the payment or
prepayment of the Notes of any Series in accordance with the terms of this
Agreement (including any Supplement hereto) and the Notes of such Series or
(b) pursuant to a written offer to purchase any outstanding Notes of any
Series made by the Company or an Affiliate pro rata to the holders of the Notes
of such Series upon the same terms and conditions (except that if such Series
has more than one separate tranche, such written offer shall be allocated among
all of the separate tranches of such Series at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof but such written offer may otherwise differ among such separate
tranches and such written offer shall be made pro rata to the holders of the
same tranches of such Series upon the same terms and conditions). The Company
will promptly cancel all Notes acquired by it or any Affiliate it Controls
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.


 


Section 8.6.           Make-Whole Amount for the Series 2006-A
Notes. The term “Make-Whole Amount”
means with respect to any Series 2006-A 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, minus
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 with respect to the Called Principal of such Note:


 


“Called
Principal” means, the principal of the Series 2006-A
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, the amount obtained by discounting all
Remaining Scheduled Payments 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 such Note is payable) equal to the
Reinvestment Yield.


 


“Reinvestment
Yield” means, 0.50% plus the yield to maturity calculated by
using (i) the yields reported, as of 10:00 A.M. (New York City
time) on the second Business Day preceding the Settlement Date on screen “PX-1”
on the Bloomberg Financial Market Service (or such other information service as
may replace Bloomberg) 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 (including by way
of interpolation), the Treasury Constant Maturity Series Yields reported, for
the latest day


 


21

















 


for which such yields have been so reported as of the
second Business Day preceding the Settlement Date, 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.
In either case, the 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 on a straight line
basis 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, 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 by (b) the number
of years (calculated to the nearest one-twelfth year) that will elapse between
the Settlement Date and the scheduled due date of such Remaining Scheduled
Payment.


 


“Remaining
Scheduled Payments” means, all payments of such Called
Principal and interest thereon that would be due after the Settlement Date 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 Series 2006-A
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, 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.


 


SECTION 9.                                                 AFFIRMATIVE COVENANTS.


 


The Company covenants
that so long as any of the Notes are outstanding:


 


Section 9.1.           Compliance with Law.
Without limiting Section 10.7, the Company will, and will cause each of
its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
ERISA, the USA Patriot Act and Environmental 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 would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.


 


22

















 


Section 9.2.           Insurance. The
Company will, and will cause each of its Restricted Subsidiaries to, maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles, co-insurance
and self-insurance, if adequate reserves are maintained with respect thereto)
as is customary in the case of entities of established reputations engaged in
the same or a similar business and similarly situated except for any non-maintenance
that would not reasonably be expected to have a Material Adverse Effect.


 


Section 9.3.           Maintenance of Properties.
The Company will, and will cause each of its Restricted Subsidiaries to,
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary
wear and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that
this Section shall not prevent the Company or any Restricted 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 would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.


 


Section 9.4.           Payment of Taxes and Claims.
The Company will, and will cause each of its Subsidiaries to, file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary not
permitted by Section 10.3, 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 non-filing or nonpayment, as the case may
be, of all such taxes and assessments in the aggregate would not reasonably be
expected to have a Material Adverse Effect.


 


Section 9.5.           Corporate Existence, Etc.
Subject to Sections 10.4 and
10.5, the Company will at all times preserve and keep in full force and effect
its corporate existence, and will at all times preserve and keep in full force
and effect the corporate (or other applicable organizational) existence of each
of its Restricted Subsidiaries (unless merged into the Company or a Restricted
Subsidiary) and all rights and franchises of the Company and its Restricted
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 (or
other organizational) existence, right or franchise would not, individually or
in the aggregate, to have a Material Adverse Effect.


 


Section 9.6.           Designation of Subsidiaries. The
Company may from time to time cause any Subsidiary (other than a Subsidiary
Guarantor) to be designated as an Unrestricted Subsidiary or any Unrestricted
Subsidiary to be designated a Restricted Subsidiary; provided,


 


23

















 


however, that at the time of such
designation and immediately after giving effect thereto, (a) no Default or
Event of Default would exist under the terms of this Agreement, and
(b) the Company and its Restricted Subsidiaries would be in compliance
with all of the covenants set forth in this Section 9 and Section 10
if tested on the date of such action and provided, further,
that once a Subsidiary has been designated an Unrestricted Subsidiary, it shall
not thereafter be redesignated as a Restricted Subsidiary on more than one
occasion and once a Subsidiary has been designated a Restricted Subsidiary, it
shall not thereafter be redesignated as an Unrestricted Subsidiary on more than
one occasion. Within ten (10) days following any designation described
above, the Company will deliver to each holder of the Notes a notice of such
designation accompanied by a certificate signed by a Senior Financial Officer
certifying compliance with all requirements of this Section 9.6 and
setting forth all information required in order to establish such compliance.


 


Section 9.7.           Notes to Rank Pari Passu. The
Notes and all other obligations under this Agreement of the Company are and at
all times shall remain direct and unsecured obligations of the Company ranking pari passu as against the assets of the Company with all
other Notes from time to time issued and outstanding hereunder without any
preference among themselves and pari passu with
all other present and future unsecured Senior Debt (actual or contingent) of
the Company.


 


Section 9.8.           Additional Subsidiary Guarantors.
The Company will cause any Subsidiary which is required by the terms of the
Bank Credit Agreement to become a party to, or otherwise guarantee, Debt in
respect of the Bank Credit Agreement, to enter into the Subsidiary Guaranty and
deliver to each of the holders of the Notes (concurrently with the incurrence
of any such obligation pursuant to the Bank Credit Agreement) the following
items:


 


(a)           a joinder or supplemental agreement
in respect of the Subsidiary Guaranty;


 


(b)           a certificate signed by an authorized
Responsible Officer of the Company making representations and warranties to the
effect of those contained in Sections 5.4, 5.6 and 5.7, with respect to
such Subsidiary and the Subsidiary Guaranty, as applicable; and


 


(c)           an opinion of counsel (who may be in-house
counsel for the Company) addressed to each of the holders of the Notes
reasonably satisfactory to the Required Holders, to the effect that the
Subsidiary Guaranty by such Person has been duly authorized, executed and
delivered and that the Subsidiary Guaranty constitutes the legal, valid and
binding contract and agreement of such Person enforceable in accordance with
its terms, except as an enforcement of such terms may be limited by bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.


 


Section 9.9.           Books and Records. The
Company will, and will cause each of its Restricted Subsidiaries to, maintain
proper books of record and account in conformity with GAAP and all applicable
requirements of any Governmental Authority having legal or regulatory
jurisdiction over the Company or such Restricted Subsidiary, as the case may be


 


24

















 


SECTION 10.              NEGATIVE COVENANTS.


 


The Company
covenants that so long as any of the Notes are outstanding:


 


Section 10.1.        Consolidated
Debt to Consolidated EBITDA. The Company will not at any time permit the
ratio of Consolidated Debt to Consolidated EBITDA (Consolidated EBITDA to be
calculated as at the end of each fiscal quarter for the four consecutive fiscal
quarters then ended) to exceed 3.50 to 1.00.


 


Section 10.2.        Priority
Debt. The Company will not at any time permit the aggregate amount of all
Priority Debt to exceed 15% of Consolidated Total Assets (Consolidated Total
Assets to be determined as of the end of the then most recently ended fiscal
quarter of the Company).


 


Section 10.3.        Limitation
on Liens. The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly create, incur, assume or permit to
exist (upon the happening of a contingency or otherwise) any Lien on or with
respect to any property or asset (including, without limitation, any document
or instrument in respect of goods or accounts receivable) of the Company or any
such Restricted Subsidiary, whether now owned or held or hereafter acquired, or
any income or profits therefrom, or assign or otherwise convey any right to
receive income or profits (unless it makes, or causes to be made, effective
provision whereby the Notes will be equally and ratably secured with any and
all other obligations thereby secured, such security to be pursuant to an
agreement reasonably satisfactory to the Required Holders and, in any such
case, the Notes shall have the benefit, to the fullest extent that, and with
such priority as, the holders of the Notes may be entitled under applicable
law, of an equitable Lien on such property), except:


 


(a)           Liens for
taxes, assessments or other governmental charges that are not yet due and
payable or the payment of which is not at the time required by Section 9.4;


 


(b)           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;


 


(c)           Liens
incidental to the conduct of business or the ownership of properties and assets
(including landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s and
other similar Liens for sums not yet due and payable or being contested in good
faith and for which appropriate reserves have been established in accordance
with GAAP) and Liens to secure the performance of bids, tenders, leases, or
trade contracts, or to secure statutory obligations (including obligations
under workers compensation, unemployment insurance and other social security
legislation), surety or appeal bonds or other Liens incurred in the ordinary
course of business and not in connection with the borrowing of money;


 


25

















 


(d)           leases or
subleases granted to others, easements, reservations, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to the ownership of property or assets or the ordinary conduct of the business
of the Company or any of its Restricted Subsidiaries and Liens incidental to
minor survey exceptions and the like, provided that
such Liens do not, in the aggregate, materially detract from the value of such
property;


 


(e)           Liens
securing Debt of a Restricted Subsidiary to the Company or to a Restricted
Subsidiary;


 


(f)            Liens
existing as of the date of Closing and reflected in Schedule 10.3;


 


(g)           Liens
incurred after the date of Closing given to secure the payment of the purchase
price incurred in connection with the acquisition, construction or improvement
of property (other than accounts receivable or inventory) useful and intended
to be used in carrying on the business of the Company or a Restricted
Subsidiary, including Liens existing on such property at the time of
acquisition or construction thereof or improvement thereon or Liens incurred
within 365 days of such acquisition or completion of such construction or
improvement, provided that (i) the Lien
shall attach solely to the property acquired, purchased, constructed or
improved; (ii) at the time of acquisition, construction or improvement of
such property (or, in the case of any Lien incurred within three hundred sixty-five
(365) days of such acquisition or completion of such construction or
improvement, at the time of the incurrence of the Debt secured by such Lien),
the aggregate amount remaining unpaid on all Debt secured by Liens on such
property, whether or not assumed by the Company or a Restricted Subsidiary,
shall not exceed the lesser of (y) the cost of such acquisition,
construction or improvement or (z) the Fair Market Value of such property;
and (iii) at the time of such incurrence and after giving effect thereto,
no Default or Event of Default would exist;


 


(h)           any Lien
existing on property of a Person immediately prior to its being consolidated
with or merged into the Company or a Restricted Subsidiary or its becoming a
Restricted Subsidiary, or any Lien existing on any property acquired by the
Company or any Restricted Subsidiary at the time such property is so acquired
(whether or not the Debt secured thereby shall have been assumed), provided that (i) no such Lien shall have been created
or assumed in contemplation of such consolidation or merger or such Person’s
becoming a Restricted Subsidiary or such acquisition of property, (ii) each
such Lien shall extend solely to the item or items of property so acquired and,
if required by the terms of the instrument originally creating such Lien, other
property which is an improvement to or is acquired for specific use in
connection with such acquired property, and (iii) at the time of such
incurrence and after giving effect thereto, no Default or Event of Default
would exist;


 


(i)            any
extensions, renewals or replacements of any Lien permitted by the preceding
subparagraphs (e), (f), (g) and (h) of this Section 10.3, provided that (i) no additional property shall be
encumbered by such Liens, (ii) the unpaid principal amount of the Debt or
other obligations secured thereby shall not be increased on or after the date


 


26

















 


of any extension, renewal or replacement, and (iii) at such time
and immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing;


 


(j)            Liens
relating to customary rights of setoff, revocation, refund or chargeback of
banks or other financial institutions under deposit agreements or under
applicable law where the Company or its Restricted Subsidiaries maintain
deposits in the ordinary course of business;


 


(k)           Liens on
accounts receivable of the Company and its Restricted Subsidiaries to the
extent such Liens arise by reason of a Permitted Securitization Transaction; provided that no such Lien shall extend to or cover any
property of the Company or any Restricted Subsidiary other than such accounts
receivable subject to such Permitted Securitization Transaction; and


 


(l)            Liens
securing Priority Debt of the Company or any Restricted Subsidiary, provided that the aggregate principal amount of any such
Priority Debt shall be permitted by Section 10.2.


 


Section 10.4.        Sales
of Assets. The Company will not, and will not permit any Restricted
Subsidiary to, sell, lease or otherwise dispose of any substantial part (as
defined below) of the assets of the Company and its Restricted Subsidiaries; provided, however, that the Company or any Restricted
Subsidiary may sell, lease or otherwise dispose of assets constituting a
substantial part of the assets of the Company and its Restricted Subsidiaries
if such assets are sold in an arms length transaction and, at such time and
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing and an amount equal to the net proceeds received from such
sale, lease or other disposition (but only with respect to that portion of such
assets that exceeds the definition of “substantial part” set forth below) shall
be used within 365 days of such sale, lease or disposition, in any combination:


 


(1)           to acquire
productive assets used or useful in carrying on the business of the Company and
its Restricted Subsidiaries and having a value at least equal to the value of
such assets sold, leased or otherwise disposed of; and/or


 


(2)           to prepay
or retire Senior Debt of the Company and/or its Restricted Subsidiaries, provided that, to the extent
any such proceeds are used to prepay the outstanding principal amount of the
Notes, such prepayment shall be made in accordance with the terms of Section 8.2.


 


As used in this Section 10.4,
a sale, lease or other disposition of assets shall be deemed to be a “substantial part” of the assets of the Company and its
Restricted Subsidiaries if the book value of such assets, when added to the
book value of all other assets sold, leased or otherwise disposed of by the
Company and its Restricted Subsidiaries during the period of 12 consecutive
months ending on the date of such sale, lease or other disposition, exceeds 10%
of the book value of Consolidated Total Assets, determined as of the end of the
fiscal year immediately preceding such sale, lease or other disposition; provided that there shall be excluded from any


 


27

















 


determination
of a “substantial part” any (i) sale, lease or other disposition of
(x) inventory and materials in the ordinary course of business of the
Company and its Restricted Subsidiaries, (y) cash equivalents or
(z) machinery, parts and equipment no longer used or useful in the conduct
of its business, (ii) any sale or lease of assets from the Company to any
Restricted Subsidiary or from any Restricted Subsidiary to the Company or
another Restricted Subsidiary, (iii) sales of accounts receivables
pursuant to any Permitted Securitization Transaction, and (iv) any sale or
transfer of property acquired or constructed by the Company or any Restricted
Subsidiary after the date of this Agreement to any Person within 365 days
following the acquisition or completion of construction of such property by the
Company or any Restricted Subsidiary if the Company or a Restricted Subsidiary
shall concurrently with such sale or transfer, lease such property, as lessee.


 


Section 10.5.        Merger
and Consolidation. The Company will not, and will not permit any of its
Restricted Subsidiaries to, consolidate with or merge with any other Person or
convey, transfer or lease substantially all of its assets in a single
transaction or series of transactions to any Person; provided
that:


 


(a)           any
Restricted Subsidiary may (i) consolidate with or merge with, or convey,
transfer or lease substantially all of its assets in a single transaction or
series of transactions to, (x) the Company or another Restricted Subsidiary
so long as in any merger or consolidation involving the Company, the Company
shall be the surviving or continuing corporation or (y) any other Person
so long as the survivor is a Restricted Subsidiary, or (ii) convey,
transfer or lease all of its assets in compliance with the provisions of Section 10.4;
and


 


(b)           the
Company may consolidate or merge with, or convey, transfer or lease of
substantially all of its assets in a single transaction or series of
transactions to, any Person so long as:


 


(i)            the
successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease substantially all of the
assets of the Company as an entirety, as the case may be (the “Successor Corporation”), shall be a solvent entity
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia;


 


(ii)           if the
Company is not the Successor Corporation, such Successor Corporation shall have
executed and delivered to each holder of Notes its assumption of the due and
punctual performance and observance of each covenant and condition of this
Agreement (and each Supplement thereto) and the Notes (pursuant to such
agreements and instruments as shall be reasonably satisfactory to the Required
Holders), and the Successor Corporation shall have caused to be delivered to
each holder of Notes (A) an opinion of nationally recognized independent
counsel, to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and (B) an
acknowledgment from each Subsidiary Guarantor that the Subsidiary Guaranty
continues in full force and effect; and


 


28

















 


(iii)          immediately
after giving effect to such transaction no Default or Event of Default would
exist.


 


Section 10.6.        Transactions
with Affiliates. The Company will not and will not permit any Restricted
Subsidiary to enter into directly or indirectly any Material transaction or
Material group of related transactions (including without limitation 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 (or, to the extent not in the
ordinary course, with respect to repurchases of the Company’s capital stock
owned by State Farm Mutual Automobile Insurance Company or any of its
Affiliates) and upon fair and reasonable terms that are not materially less
favorable to the Company or such Restricted Subsidiary, taken as a whole, than
would be obtainable in a comparable arm’s-length transaction with a Person not
an Affiliate.


 


Section 10.7.        Terrorism Sanctions Regulations. The Company will not and will not permit any
Subsidiary to (a) become a Person described or designated in the Specially
Designated Nationals and Blocked Persons List of the Office of Foreign Assets
Control or in Section 1 of the Anti-Terrorism Order or (b) to the
knowledge of the Company, engage in any dealings or transactions with any such
Person.


 


SECTION 11.              EVENTS OF DEFAULT.


 


An “Event of Default” shall exist if any of the following
conditions or events shall occur and be continuing:


 


(a)           the
Company defaults in the payment of any principal or Make-Whole Amount, if any,
on any Note when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or


 


(b)           the
Company defaults in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or


 


(c)           the
Company defaults in the performance of or compliance with any term contained in
Section 10 or any covenant in a Supplement which specifically provides
that it shall have the benefit of this paragraph (c) or any
Subsidiary Guarantor defaults in the performance of or compliance with any term
of the Subsidiary Guaranty beyond any period of grace or cure period (if any)
provided with respect thereto; or


 


(d)           the
Company defaults in the performance of or compliance with any term contained
herein or in any Supplement (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 or (ii) the Company receiving written notice of
such default from any holder of a Note (any such written notice to be
identified as a “notice of default” and to refer specifically to this paragraph
(d) of Section 11); or


 


29

















 


(e)           any
Subsidiary Guaranty ceases to be a legally valid, binding and enforceable
obligation or contract of a Subsidiary Guarantor (other than upon a release of
any Subsidiary Guarantor from a Subsidiary Guaranty in accordance with the
terms of Section 2.3(b) hereof), or any Subsidiary Guarantor or any
party by, through or on account of any such Person, challenges the validity,
binding nature or enforceability of any such Subsidiary Guaranty; or


 


(f)            any
representation or warranty made in writing by the Company or any Subsidiary
Guarantor in this Agreement (including any Supplement) or any Subsidiary
Guaranty or by any officer of the Company or any Subsidiary Guarantor in any
writing furnished in connection with the transactions contemplated hereby or by
any Subsidiary Guaranty (in his or her capacity as such) proves to have been
false or incorrect in any material respect on the date as of which made; or


 


(g)           (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 (in the payment amount of at least $100,000) on
any Debt other than the Notes that is outstanding in an aggregate principal
amount of at least $35,000,000 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 instrument, mortgage,
indenture or other agreement relating to any Debt other than the Notes in an
aggregate principal amount of at least $35,000,000 or any other condition
exists, and as a consequence of such default or condition such Debt 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 Debt to convert such Debt into equity
interests), the Company or any Restricted Subsidiary has become obligated to
purchase or repay Debt other than the Notes before its stated maturity or
before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $35,000,000; or


 


(h)           the
Company, any Material Subsidiary or any Subsidiary Guarantor (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


 


(i)            a court
or governmental authority of competent jurisdiction enters an order appointing,
without consent by the Company, any of its Material Subsidiaries or any
Subsidiary Guarantor, 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


 


30

















 


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, any of its Material
Subsidiaries or any Subsidiary Guarantor, or any such petition shall be filed
against the Company, any of its Material Subsidiaries or any Subsidiary
Guarantor and such petition shall not be dismissed within 60 days; or


 


(j)            a final
judgment or judgments at any one time outstanding for the payment of money
aggregating in excess of $35,000,000 (other than to the extent not covered by
third party insurance as to which the insurer does not dispute coverage) are
rendered against one or more of the Company, its Restricted Subsidiaries or any
Subsidiary Guarantor 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


 


(k)           if (i) any
Plan subject to Title IV of ERISA (other than a Multiemployer Plan) shall
fail to satisfy the minimum funding standards of ERISA or the Code for any plan
year 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 subject to Title IV of ERISA (other than a
Multiemployer Plan) shall have been or is reasonably expected to be filed with
the PBGC in a “distress termination” under Section 4041(c) of ERISA or the PBGC shall have instituted proceedings under Section 4042
of ERISA to terminate or appoint a trustee to administer any Plan or the PBGC
shall have formally 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 subject to Title IV of ERISA (other than a
Multiemployer Plan), determined in accordance with Title IV of ERISA,
shall exceed $35,000,000, (iv) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any liability for the failure
to comply with the provisions of Title I of ERISA or any liability
pursuant to Title 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 in a complete or partial
withdrawal within the meaning of Title IV of ERISA, 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 could
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, would
reasonably be expected to have a Material Adverse Effect.


 


As used in Section 11(k), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to
such terms in Section 3 of ERISA.


 


SECTION 12.              REMEDIES ON DEFAULT, ETC.


 


Section 12.1.        Acceleration.
(a) If an Event of Default with respect to the Company described in
paragraph (h) or (i) of Section 11 (other than an Event of
Default described in clause


 


31

















 


(i) of
paragraph (h) or described in clause (vi) of paragraph (h) by
virtue of the fact that such clause encompasses clause (i) of paragraph
(h)) has occurred, all the Notes of every Series 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 50% in aggregate principal amount of the Notes of any Series at
the time outstanding may at any time at its or their option, by notice or
notices to the Company, declare all the Notes of such Series 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 with respect to any Notes, 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 such holder or holders to be immediately due and payable.


 


Upon any Note’s
becoming due and payable under this Section 12.1, whether automatically or
by declaration, such Note will forthwith mature and the entire unpaid principal
amount of such Note, plus (i) all accrued and unpaid interest thereon
(including, but not limited to, interest accrued thereon at the Default Rate
during the occurrence and continuance of an Event of Default (to the full extent
permitted by applicable law)) and (ii) the applicable Make-Whole Amount,
if any, 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 or in any
Supplement specifically provided for) and that the provision for payment of a
Make-Whole Amount, if any, by the Company if 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.


 


Section 12.2.        Other
Remedies. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any
Note at the time outstanding may proceed to protect and enforce the rights of
such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.


 


Section 12.3.        Rescission.
At any time after any Notes have been declared due and payable pursuant to
clause (b) or (c) of Section 12.1, the holders of more than
50% in aggregate principal amount of the Notes of any Series then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences with respect to the Notes of such Series if
(a) the Company has paid all overdue interest on the Notes, all principal
of and applicable Make-Whole Amount, if any, on any Notes of such Series 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


 


32

















 


overdue
interest in respect of the Notes of such Series, at the Default Rate, (b) neither
the Company nor any other Person shall have paid any amounts which have become
due solely by reason of such declaration, (c) 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 (d) no judgment or decree has been entered for the payment of any
monies due pursuant hereto or to any Notes of such Series. 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.


 


Section 12.4.        No
Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no
delay on the part of any holder of any Note in exercising any right, power or
remedy shall operate as a waiver thereof or otherwise prejudice such holder’s
rights, powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the
holder of each Note on demand such further amount as shall be sufficient to
cover all 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.


 


SECTION 13.                     REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES.


 


Section 13.1.        Registration
of Notes. The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the
Person in whose name any Note shall be registered shall be deemed and treated
as the owner and holder thereof for all purposes hereof, and the Company shall
not be affected by any notice or knowledge to the contrary. The Company shall
give to any holder of a Note that is an Institutional Investor promptly upon
request therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.


 


Section 13.2.        Transfer
and Exchange of Notes. Upon surrender of any Note to the Company at the
address and to the attention of the designated officer (all as specified in Section 18(iv)),
for registration of transfer or exchange (and in the case of a surrender for
registration of transfer accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or such holder’s attorney duly
authorized in writing and accompanied by the relevant name, address and other
information for notices of each transferee of such Note or part thereof),
within 15 Business Days thereafter, 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) of the same Series (and of the same
tranche if such Series has separate tranches) 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 the Note of such Series and
tranche, if applicable, originally issued hereunder or pursuant to any
Supplement. Each such new Note shall be dated and bear interest from the date
to which interest shall have been paid on


 


33

















 


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
$100,000, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, of any Series and
tranche, if applicable, one Note of such Series and tranche, if
applicable, may be in a denomination of less than $100,000. Any transferee, by
its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representation set forth in Section 6.3, provided, that in lieu thereof such holder may (in reliance
upon information provided by the Company, which shall not be unreasonably
withheld) make a representation to the effect that the purchase by any holder
of any Note will not constitute a non-exempt prohibited transaction under section 406(a) of
ERISA.


 


The Notes have not
been registered under the Securities Act or under the securities laws of any
state and may not be transferred or resold unless registered under the
Securities Act and all applicable state securities laws or unless an exemption
from the requirement for such registration is available.


 


Section 13.3.        Replacement
of Notes. Upon receipt by the Company at the address and to the attention
of the designated officer (all as specified in Section 18(iv) of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and


 


(a)           in the
case of loss, theft or destruction, of indemnity reasonably satisfactory to it
(provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a Note with
a minimum net worth of at least $150,000,000, such Person’s own unsecured
agreement of indemnity shall be deemed to be satisfactory), or


 


(b)           in the
case of mutilation, upon surrender and cancellation thereof,


 


the Company at its own
expense shall execute and deliver not more than 15 Business Days following
satisfaction of such conditions, in lieu thereof, a new Note of the same Series (and
of the same tranche if such Series has separate tranches), 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.


 


SECTION 14.              PAYMENTS ON NOTES.


 


Section 14.1.        Place
of Payment. Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be
made in New York, New York at the principal office of Bank of
America, N.A. 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.


 


34

















 


Section 14.2.        Home
Office Payment. So long as any Purchaser or Additional Purchaser or such
Purchaser’s nominee or such Additional Purchaser’s 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 wire transfer or
other commercially reasonable method and at the address specified for such
purpose for such Purchaser on Schedule A hereto or, in the case of any
Additional Purchaser, Schedule A attached to any Supplement pursuant to
which such Additional Purchaser is a party, or by such other commercially
reasonable method or at such other address as such Purchaser or Additional
Purchaser 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, such Purchaser or Additional Purchaser 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 any Purchaser or Additional Purchaser or such
Person’s nominee, such Person will, at its 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,
subject to the obligations, of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note.


 


SECTION 15.              EXPENSES, ETC.


 


Section 15.1.        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 for the Purchasers or any Additional Purchasers and,
if reasonably required by the Required Holders, local or other counsel)
incurred by each Purchaser and each Additional Purchaser and each other 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
(including any Supplement) 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 (including any Supplement) or the Notes or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement (including any Supplement) 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 each Purchaser, each
Additional Purchaser 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, if any, retained by a Purchaser or other holder in connection with
its purchase of the Notes).


 


Section 15.2.        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


 


35

















 


provision
of this Agreement, any Supplement or the Notes, and the termination of this
Agreement or any Supplement.


 


SECTION 16.              SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; ENTIRE AGREEMENT.


 


All
representations and warranties contained herein, which shall be made only as of
the date hereof and the Closing Date, or in any Supplement, which shall be made
only as of the date hereof and the date of the closing thereunder, shall
survive the execution and delivery of this Agreement, such Supplement and the
Notes, the purchase or transfer by any Purchaser or any Additional Purchaser of
any such Note or portion thereof or interest therein and the payment of any
Note and may be relied upon by any subsequent holder of any such Note,
regardless of any investigation made at any time by or on behalf of any
Purchaser or any Additional Purchaser or any other holder of any such Note. All
statements contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant to this Agreement or any Supplement shall be
deemed representations and warranties of the Company under this Agreement; provided, that the representations and warranties contained
in any Supplement shall only be made for the benefit of the Additional
Purchasers which are party to such Supplement and the holders of the Notes
issued pursuant to such Supplement, including subsequent holders of any Note
issued pursuant to such Supplement, and shall not require the consent of the
holders of existing Notes. Subject to the preceding sentence, this Agreement
(including every Supplement) and the Notes embody the entire agreement and
understanding between the Purchasers and the Additional Purchasers and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.


 


SECTION 17.              AMENDMENT AND WAIVER.


 


Section 17.1.        Requirements.
(a) This Agreement (including any Supplement) 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 (i) no
amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6
or 21 hereof or the corresponding provision of any Supplement, or any defined
term (as it is used in any such Section or such corresponding provision of
any Supplement), will be effective as to any holder of Notes unless consented
to by such holder of Notes in writing, and (ii) no such amendment or
waiver may, without the written consent of all of the holders of Notes at the
time outstanding affected thereby, (A) 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 (if such change results in a
decrease in the interest rate) or of the Make-Whole Amount on, the Notes, (B) 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 (C) amend any of
Sections 8, 11(a), 11(b), 12, 17 or 20.


 


(b)           Supplements. Notwithstanding anything to the contrary
contained herein, the Company may enter into any Supplement providing for the
issuance of one or more Series of Additional Notes consistent with Section 2.2
hereof without obtaining the consent of any holder of any other Series of
Notes.


 


36

















 


Section 17.2.        Solicitation
of Holders of Notes.


 


(a)           Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof, any Supplement 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 or provide other credit
support, 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 or any Supplement unless such remuneration is
concurrently paid, or security is concurrently granted or other credit support
is concurrently provided, on the same terms, ratably to each holder of Notes
then outstanding even if such holder did not consent to such waiver or
amendment.


 


(c)           Consent in Contemplation of Transfer. Any consent made
pursuant to this Section 17 by a holder of Notes that has transferred or
has agreed to transfer its Notes to the Company, any Subsidiary or any
Affiliate of the Company and has provided or has agreed to provide such written
consent as a condition to such transfer shall be void and of no force or effect
except solely as to such holder, and any amendments effected or waivers granted
or to be effected or granted that would not have been or would not be so
effected or granted but for such consent (and the consents of all other holders
of Notes that were acquired under the same or similar conditions) shall be void
and of no force or effect except solely as to such holder.


 


Section 17.3.        Binding
Effect, Etc. Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note
nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note. As used herein,
the term “this Agreement” and references thereto shall mean this Agreement as
it may from time to time be amended or supplemented.


 


Section 17.4.        Notes
Held by Company, Etc. Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Notes
then outstanding approved or consented to any amendment, waiver or consent to
be given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of the
holders of a specified percentage of the aggregate principal


 


37

















 


amount
of Notes then outstanding, Notes directly or indirectly owned by the Company or
any of its Affiliates that it Controls shall be deemed not to be outstanding.


 


SECTION 18.              NOTICES.


 


All notices and
communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice
by a recognized overnight delivery service (charges prepaid), (b) by a
recognized overnight delivery service (with charges prepaid), or (c) by
posting to IntraLinks® or a similar service reasonably acceptable to the
Required Holders if the sender on the same day sends or causes to be sent
notice of such posting by email or in accordance with clause (a) or (b) above.
Any such notice must be sent:


 


(i)            if to a
Purchaser or such Purchaser’s nominee, to such Purchaser or such Purchaser’s
nominee at the address or, in the case of clause (c) above, the email
address, specified for such communications in Schedule A to this
Agreement, or at such other address or email address as such Purchaser or such
Purchaser’s nominee shall have specified to the Company in writing pursuant to
this Section 18;


 


(ii)           if to an
Additional Purchaser or such Additional Purchaser’s nominee, to such Additional
Purchaser or such Additional Purchaser’s nominee at the address or, in the case
of clause (c) above, the email address, specified for such communications
in Schedule A to the applicable Supplement, or at such other address or
email address as such Additional Purchaser or such Additional Purchaser’s
nominee shall have specified to the Company in writing,


 


(iii)          if
to any other holder of any Note, to such holder at such address or, in the case
of clause (c) above, the email address, as such other holder shall have
specified to the Company in writing pursuant to this Section 18, or


 


(iv)          if to the
Company, to the Company at its address or email address set forth at the
beginning hereof to the attention of Chief Financial Officer, with copies to
the Treasurer and the General Counsel, or at such other address or email
address as the Company shall have specified to the holder of each Note in
writing.


 


Notices under this Section 18
will be deemed given only when actually received.


 


SECTION 19.              REPRODUCTION OF DOCUMENTS.


 


This Agreement and
all documents relating hereto, including, without limitation, (a) consents,
waivers and modifications that may hereafter be executed, (b) documents
received by any Purchaser at the Closing or by any Additional Purchaser on the
date of purchase of its Additional Notes (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter
furnished to any Purchaser or any Additional Purchaser, may be reproduced by
such Purchaser or such Additional Purchaser by any photographic, photostatic,
electronic, digital, or other similar process and such Purchaser or such 


 


38

















 


Additional
Purchaser 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 such Purchaser or
such Additional Purchaser 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.


 


SECTION 20.              CONFIDENTIAL INFORMATION.


 


For the purposes
of this Section 20, “Confidential Information”
means information delivered to any Purchaser or any Additional Purchaser by or
on behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately
identified when received by such Purchaser or Additional Purchaser 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 such Purchaser or such Additional
Purchaser prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by such Purchaser or such Additional
Purchaser or any Person acting on such Purchaser’s or such Additional Purchaser’s
behalf, (c) otherwise becomes known to such Purchaser or such Additional
Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes
financial statements delivered to such Purchaser or such Additional Purchaser
under Section 7.1 that are otherwise publicly available. Each Purchaser
and each Additional Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such
Purchaser or such Additional Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser or such Additional
Purchaser, provided that such Purchaser or such
Additional Purchaser may deliver or disclose Confidential Information to (i) such
Purchaser’s or such Additional Purchaser’s directors, trustees, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by such
Purchaser’s or such Additional Purchaser’s Notes), (ii) such Purchaser’s
or such Additional Purchaser’s 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 such
Purchaser or such Additional Purchaser sells or offers 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 such
Purchaser or such Additional Purchaser offers 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
such Purchaser or such Additional Purchaser, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
such Purchaser’s or such Additional Purchaser’s investment portfolio, or (viii) any
other Person to which such delivery or disclosure may be necessary or


 


39

















 


appropriate
(w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser or such Additional Purchaser, (x) in response
to any subpoena or other legal process, (y) in connection with any
litigation to which such Purchaser or such Additional Purchaser is a party or
(z) if an Event of Default has occurred and is continuing, to the extent
such Purchaser or such Additional Purchaser 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 such Purchaser’s or such
Additional Purchaser’s Notes, the Subsidiary Guaranty 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.


 


SECTION 21.              SUBSTITUTION OF PURCHASER.


 


Each Purchaser and
each Additional Purchaser shall have the right to substitute any one of its
Affiliates as the purchaser of the Notes that it has agreed to purchase
hereunder or under a Supplement, by written notice to the Company, which notice
shall be signed by both such Purchaser or such Additional Purchaser and such
Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement or such Supplement, as the case may be, 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, any
reference to such Purchaser or such Additional Purchaser in this Agreement
(other than in this Section 21) or such Supplement, shall be deemed to
refer to such Affiliate in lieu of such original Purchaser or such original
Additional Purchaser. If such Affiliate is so substituted as a Purchaser or an
Additional Purchaser hereunder or such Supplement and such Affiliate thereafter
transfers to such original Purchaser or such original Additional Purchaser all
of the Notes then held by such Affiliate, upon receipt by the Company of notice
of such transfer, any reference to such Affiliate as a “Purchaser” or an “Additional
Purchaser” in this Agreement (other than in this Section 21) or such
Supplement, shall no longer be deemed to refer to such Affiliate, but shall
refer to such original Purchaser or such original Additional Purchaser, and
such original Purchaser or such original Additional Purchaser shall again have
all the rights of an original holder of the Notes under this Agreement or such
Supplement, as the case may be.


 


SECTION 22.              MISCELLANEOUS.


 


Section 22.1.        Successors
and Assigns. All covenants and other agreements contained in this Agreement
(including all covenants and other agreements contained in any Supplement) 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.


 


Section 22.2.        Payments
Due on Non-Business Days. Anything in this Agreement or the Notes to the
contrary notwithstanding (but without limiting the requirement in Section 8.4
that


 


40

















 


the
notice of any optional prepayment specify a Business Day as the date fixed for
such prepayment), 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; provided that if the maturity date of any Note is a date other than a
Business Day, the payment otherwise due on such maturity date shall be made on
the next succeeding Business Day and shall include the additional days elapsed
in the computation of interest payable on such next succeeding Business Day.


 


Section 22.3.        Accounting
Terms. All accounting terms used herein (or in any Supplement) which are
not expressly defined in this Agreement (or in any Supplement) have the
meanings respectively given to them in accordance with GAAP. Except as
otherwise specifically provided herein (or in any Supplement), (i) all
computations made pursuant to this Agreement (or such Supplement) shall be made
in accordance with GAAP, and (ii) all financial statements shall be
prepared in accordance with GAAP.


 


Section 22.4.        Severability.
Any provision of this Agreement (or any Supplement) 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 (or of such Supplement), 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.


 


Section 22.5.        Construction.
Each covenant contained herein (or in any Supplement) shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein (or in any Supplement), 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 (or in
any Supplement) 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.


 


For the avoidance
of doubt, all Schedules and Exhibits attached to this Agreement (or in any Supplement)
shall be deemed to be a part hereof (or of such Supplement).


 


Section 22.6.        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.


 


Section 22.7.        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
New York excluding choice-of-law principles of the law of such State that
would permit the application of the laws of a jurisdiction other than such
State.


 


Section 22.8.        Jurisdiction
and Process; Waiver of Jury Trial. (a) The Company irrevocably submits
to the non-exclusive jurisdiction of any New York State or federal court


 


41

















 


sitting
in the Borough of Manhattan, The City of New York, over any suit, action or
proceeding arising out of or relating to this Agreement (including any
Supplement) or the Notes. To the fullest extent permitted by applicable law,
the Company irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the jurisdiction of
any such court, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.


 


(b)           The
Company consents to process being served by or on behalf of any holder of Notes
in any suit, action or proceeding of the nature referred to in Section 22.8(a) by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, return receipt requested, to it at its
address specified in Section 18 or at such other address of which such
holder shall then have been notified pursuant to said Section. The Company
agrees that such service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(ii) shall, to the fullest extent permitted by applicable law, be taken
and held to be valid personal service upon and personal delivery to it. Notices
hereunder shall be conclusively presumed received as evidenced by a delivery
receipt furnished by the United States Postal Service or any reputable
commercial delivery service.


 


(c)           Nothing in
this Section 22.8 shall affect the right of any holder of a Note to serve
process in any manner permitted by law, or limit any right that the holders of
any of the Notes may have to bring proceedings against the Company in the
courts of any appropriate jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.


 


(d)           TO THE
FULLEST EXTENT PERMITTED BY LAW THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT (INCLUDING ANY
SUPPLEMENT), THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH
(INCLUDING ANY SUPPLEMENT) OR THEREWITH.


 


*   *   *  
*   *


 


42

















 


The execution hereof
by the Purchasers shall constitute a contract among the Company and the
Purchasers for the uses and purposes hereinabove set forth. This Agreement may
be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  HNI CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Melinda C. Ellsworth

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Melinda C. Ellsworth

  
	
   

  	
   

  	
  Title:

  	
  Vice President,
  Treasurer

  
	
   

  	
   

  	
   

  	
  and Investor Relations

  
					



 


43

















 


	
  HNI Corporation

  	
  Note Purchase Agreement

  



 


	
  Accepted as of
  the date first written above.

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHWESTERN
  MUTUAL LIFE INSURANCE

  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ 

  	
  Mark E. Kishler

  
	
   

  	
   

  	
  Name:

  	
  Mark E. Kishler

  
	
   

  	
   

  	
  Its Authorized
  Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHWESTERN
  MUTUAL LIFE INSURANCE

  COMPANY For Its Group Annuity Separate

  Account

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ 

  	
  Mark E. Kishler

  
	
   

  	
   

  	
  Name:

  	
  Mark E. Kishler

  
	
   

  	
   

  	
  Its Authorized
  Representative

  
	
   

  	
   

  
	
   

  	
  METROPOLITAN LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/

  	
  Judith A. Gulotta

  
	
   

  	
   

  	
  Name:

  	
  Judith A. Gulotta

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THRIVENT FINANCIAL FOR
  LUTHERANS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ 

  	
  Alan D. Onstad

  
	
   

  	
   

  	
  Name:

  	
  Alan D. Onstad

  
	
   

  	
   

  	
  Title:

  	
  Associate Portfolio
  Manager

  
					



 


44

















 


	
   

  	
  STATE FARM LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/

  	
  Jeff Attwood

  
	
   

  	
   

  	
  Name:

  	
  Jeff Attwood

  
	
   

  	
   

  	
  Title:

  	
  Investment Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ 

  	
  Larry Rottunda

  
	
   

  	
   

  	
  Name:

  	
  Larry Rottunda

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STATE FARM LIFE AND
  ACCIDENT ASSURANCE

  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/

  	
  Jeff Attwood

  
	
   

  	
   

  	
  Name:

  	
  Jeff Attwood

  
	
   

  	
   

  	
  Title:

  	
  Investment Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/

  	
  Larry Rottunda

  
	
   

  	
   

  	
  Name:

  	
  Larry Rottunda

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALLIANZ LIFE INSURANCE
  COMPANY OF NORTH

  AMERICA

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Allianz of America, Inc.
  as the authorized

  signatory and investment manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/

  	
  Gary Brown

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Gary Brown

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
							



 


45

















 


	
   

  	
  CONSECO HEALTH
  INSURANCE COMPANY

  
	
   

  	
  CONSECO SENIOR HEALTH
  INSURANCE

  COMPANY

  
	
   

  	
  COLONIAL PENN LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  40/86 Advisors, Inc.,
  acting as Investment

  Advisor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/

  	
  Timothy L. Powell

  
	
   

  	
   

  	
  Name:

  	
  Timothy L. Powell

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN FAMILY LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ 

  	
  Phillip Hannifan

  
	
   

  	
   

  	
  Name:

  	
  Phillip Hannifan

  
	
   

  	
   

  	
  Title: 

  	
  Investment Director

  
								



 


46

















 


	
   

  	
  UNITED OF OMAHA LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ 

  	
  Kent Knudsen

  
	
   

  	
   

  	
  Name:

  	
  Kent Knudsen

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANION LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ 

  	
  Kent Knudsen

  
	
   

  	
   

  	
  Name:

  	
  Kent Knudsen

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE STATE LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By

  	
  American United Life
  Insurance Company, 

  Its Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/ 

  	
  Kent R. Adams

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kent R. Adams

  
	
   

  	
   

  	
   

  	
  Title:

  	
  V.P. Fixed Income
  Securities

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN UNITED LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ 

  	
  Kent R. Adams

  
	
   

  	
   

  	
  Name:

  	
  Kent R. Adams

  
	
   

  	
   

  	
  Title:

  	
  V.P. Fixed Income
  Securities

  
							



 


47

















 


	
   

  	
  PIONEER MUTUAL LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By

  	
  American United Life
  Insurance Company,

  Its Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/ Kent R.
  Adams

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kent R. Adams

  
	
   

  	
   

  	
   

  	
  Title:

  	
  V.P. Fixed Income
  Securities

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRINCIPAL LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Principal Global
  Investors, LLC, a

  Delaware limited
  liability company,

  its authorized
  signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/ 

  	
  Karen A. Pearston

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Karen A. Pearston

  
	
   

  	
   

  	
  Second Vice President
  &

  
	
   

  	
   

  	
  Counsel

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/ 

  	
  James C. Fifield

  
	
   

  	
   

  	
   

  	
  Its:

  	
  James C. Fifield,
  Counsel

  
	
   

  	
   

  
	
   

  	
  VANTISLIFE
  INSURANCE COMPANY, a

  Connecticut company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Principal Global
  Investors, LLC a 

  Delaware limited
  liability company,

  its authorized
  signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ 

  	
  Karen A. Pearston

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Karen A. Pearston

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Second Vice President
  &

  
	
   

  	
   

  	
  Counsel

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ 

  	
  James C. Fifield

  
	
   

  	
   

  	
   

  	
  Name:

  	
  James C. Fifield

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Counsel

  
						



 


48

















 


SCHEDULE A


(to Note Purchase Agreement)


[Intentionally Removed]


 

















 


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:


 


“Additional
Notes” is defined in Section 2.2.


 


“Additional
Purchasers” means purchasers of Additional Notes.


 


“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 such
first Person or any Subsidiary of such first Person or any Person of which such
first Person and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity
interests. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.


 


“Anti-Terrorism
Order” means Executive Order No. 13,224 of October 24,
2001, Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as
amended.


 


“Bank
Credit Agreement” means the Credit Agreement dated as of January 28,
2005 by and among the Company, certain Subsidiaries of the Company named
therein, Wachovia Bank, National Association, as administrative agent, and the
other financial institutions party thereto, as amended, restated, joined,
supplemented or otherwise modified from time to time, and any renewals,
extensions or replacements thereof, which constitute the primary bank credit
facility of the Company and its Subsidiaries.


 


“Business
Day” means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York 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 account for as a capital lease in accordance
with GAAP.


 


“Capital
Lease Obligation” means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.


 


“Closing”
is defined in Section 3.


 


“Closing
Date” 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


(to Note Purchase Agreement)


 

















 


“Company”
is defined in the first paragraph of this Agreement and includes any successor
that becomes such in the manner prescribed in Section 10.5.


 


“Confidential
Information” is defined in Section 20.


 


“Consolidated
Debt” means as of any date of determination the total amount
of all Debt of the Company and its Restricted Subsidiaries outstanding on such
date, determined on a consolidated basis in accordance with GAAP.


 


“Consolidated
EBITDA” means, for any period, Consolidated Net Income for
such period, plus, to the extent deducted in computing such Consolidated Net
Income and without duplication, (a) depreciation, depletion, if any, and
amortization expense for such period, (b) Consolidated Interest Expense
for such period, (c) income tax expense for such period, and (d) other
non cash charges for such period, all as determined on a consolidated basis in
accordance with GAAP. For purposes of calculating Consolidated EBITDA for any
period of four consecutive quarters, if during such period the Company or any
Restricted Subsidiary shall have engaged in a Material acquisition or
disposition of any Person (or all or substantially all of the assets of any Person),
Consolidated EBITDA for such period shall be calculated after giving pro forma
effect thereto as if such transaction occurred on the first day of such period;
provided that such calculation shall
also give effect to adjustments for expected synergies that would have existed
during such period and non-recurring expenses as reasonably determined by the
Company in good faith.


 


“Consolidated
Interest Expense” means, for any period, the gross interest
expense of the Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP.


 


“Consolidated
Net Income” means, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.


 


“Consolidated
Total Assets” means, as of any date of determination, the
total amount of all assets of the Company and its Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP.


 


“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.


 


“Debt”
means, with respect to any Person, without duplication,


 


(a)                                  its
liabilities for borrowed money;


 


(b)                                 its
liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable and other accrued liabilities arising in the
ordinary


 


B-2

















 


course of business but including, without limitation, all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);


 


(c)                                  the
principal portion of its Capital Lease Obligations;


 


(d)                                 its
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); provided that so long as such liabilities are non-recourse
to such Person, only that portion of such liabilities that are secured shall
constitute Debt; and


 


(e)                                  Guarantees
by such Person with respect to liabilities of a type described in any of
clauses (a) through (d) hereof.


 


Debt
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.


 


“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.


 


“Default
Rate” means with respect to any Notes that rate of interest
that is 2% per annum above the rate of interest stated in clause (a) of
the first paragraph of such Note.


 


“Disclosure
Documents” is defined in Section 5.3.


 


“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.


 


“Fair
Market Value” means, at any time and with respect to any
property, the sale value of such property that would be realized in an arm’s-length
sale at such time between an informed


 


B-3

















 


and willing buyer
and an informed and willing seller (neither being under a compulsion to buy or
sell), as reasonably determined in the good faith opinion of a Responsible
Officer.


 


“Foreign
Subsidiary” means any Subsidiary other than a Subsidiary that
is organized under the laws of any state or commonwealth of the United States
of America.


 


“GAAP”
means those generally accepted accounting principles as in effect from time to
time in the United States of America; provided that, if the Company notifies
the Required Holders that the Company wishes to amend any negative covenants
(or any definition hereof) to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant or definition,
then the Company’s compliance with such covenant or the meaning of such
definition shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended  in
a manner satisfactory to the Company and the Required Holders.


 


“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 Restricted Subsidiary conducts all or
any part of its business, or which has jurisdiction over any properties of
the Company or any Restricted Subsidiary, or


 


(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 Debt,
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 Debt or obligation or any property constituting security therefor
primarily for the purpose of assuring the owner of such Debt or obligation of
the ability of any other Person to make payment of such Debt or obligation;


 


(b)                                 to
advance or supply funds (i) for the purchase or payment of such Debt 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 Debt or
obligation;


 


B-4

















 


(c)                                  to
lease properties or to purchase properties or services primarily for the
purpose of assuring the owner of such Debt or obligation of the ability of any
other Person to make payment of the Debt or obligation; or


 


(d)                                 otherwise
to assure the owner of such Debt or obligation against loss in respect thereof.


 


In any
computation of the Debt or other liabilities of the obligor under any Guaranty,
the Debt or other obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor, provided
that the amount of such Debt outstanding for purposes of this Agreement shall
not exceed the lesser of (i) maximum amount of Debt that is the subject of
such Guaranty and (ii) any stated maximum recourse amount of such
Guaranty.


 


“Guaranty
Release” is defined in Section 2.3.


 


“Hazardous
Material” means any and all pollutants, toxic or hazardous
wastes or other substances that pose a hazard to health and 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 restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum, petroleum products, lead based paint,
radon gas or similar restricted, prohibited or penalized substances.


 


“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.


 


“Institutional
Investor” means (a) any original purchaser of a Note, (b) any
holder of more than $2,000,000 of the aggregate principal amount of the Notes
then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.


 


“Investments”
shall mean all investments, in cash or by delivery of property made, directly
or indirectly in any Person, whether by acquisition of shares of capital stock,
Debt or other obligations or securities or by loan, 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 (other than an operating lease) or Capital
Lease, upon or with respect to any property or asset of such Person (including,
in the case of stock, shareholder agreements, voting trust agreements and all
similar arrangements).


 


“Make-Whole
Amount” shall have the meaning (i) set forth in Section 8.6
with respect to any Series A Note and (ii) set forth in the
applicable Supplement with respect to any other Series of Notes.


 


B-5

















 


“Material”
means material in relation to the business, operations, 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, financial condition, assets or properties of the Company
and its Restricted Subsidiaries taken as a whole, (b) the ability of the
Company to perform its obligations under this Agreement (including any
Supplement) and the Notes, (c) the ability of the Subsidiary Guarantors,
taken as a whole, to perform their obligations under the Subsidiary
Guaranty or (d) the validity or enforceability of this Agreement
(including any Supplement), the Notes or the Subsidiary Guaranty.


 


“Material
Subsidiary” means, at any time, any Restricted Subsidiary of
the Company which, together with all other Restricted Subsidiaries of such
Restricted Subsidiary, accounts for more than (i) 15% of the consolidated
assets of the Company and its Restricted Subsidiaries or (ii) 15% of
consolidated revenue of the Company and its Restricted Subsidiaries.


 


“Memorandum”
is defined in Section 5.3.


 


“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.


 


“Paoli Securitization”
means the factoring arrangement established pursuant to the Factoring Agreement,
dated as of January 5, 2004, between Paoli, Inc., an Iowa corporation
and Subsidiary, and The CIT Group/Commercial Services, Inc., as such
agreement may be amended, supplemented, restated or otherwise modified
from time to time.


 


“PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
or any successor thereto.


 


“Permitted
Securitization Transaction” means the Paoli Securitization
and any other transaction or group of transactions typically referred to as a
securitization in which the Company or any Restricted Subsidiary sells,
directly or indirectly through another Person, its accounts receivable on a
limited recourse basis (i.e., other
than for recourse relating to, e.g., certain
bad acts or breaches of representations or warranties) provided that (i) each
such transaction is treated as a legal true sale to a special purpose
bankruptcy remote entity that obtains debt financing to finance the purchase
price or, in the case of the Paoli Securitization, to the purchaser under the
factoring agreement, (ii) each such transaction qualifies as a sale under
GAAP, (iii) the aggregate amount of the financings (including, without
limitation, loans, revolving loans and revolving commitments) in connection
with such transactions (other than the Paoli Securitization) does not exceed
$100,000,000 at any time and (iv) in the case of the Paoli Securitization,
the aggregate outstanding balance of all receivables sold pursuant to such


 


B-6

















 


transaction for
which payment has not been received by Paoli, Inc. does not exceed
$50,000,000 at any time.


 


“Person”
means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, business entity or Governmental
Authority.


 


“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.


 


“Priority
Debt” means (without duplication), as of the date of any
determination thereof, the sum of (i) all unsecured Debt of Restricted
Subsidiaries (including all Guaranties of Debt of the Company but excluding (x)
Debt owing to the Company or any other Restricted Subsidiary, (y) Debt
outstanding at the time such Person became a Restricted Subsidiary (other than
an Unrestricted Subsidiary which is designated as a Restricted Subsidiary
pursuant to Section 9.6 hereof), provided that such Debt shall have not
been incurred in contemplation of such Person becoming a Restricted Subsidiary,
and (z) all Guaranties of Debt of the Company by any Restricted Subsidiary
which has also guaranteed the Notes and (ii) all Debt of the Company and
its Restricted Subsidiaries secured by Liens other than Debt secured by Liens
permitted by subparagraphs (a) through (k), inclusive, of Section 10.3.


 


“property”
or “properties” means, unless otherwise
specifically limited, real or personal property of any kind, tangible or
intangible, choate or inchoate.


 


“PTE” is
defined in Section 6.3(a).


 


“Purchasers”
means the purchasers of the Notes named in Schedule A hereto.


 


“QPAM
Exemption” is defined in Section 6.3(d).


 


“Qualified
Institutional Buyer” means any Person who is a qualified
institutional buyer within the meaning of such term as set forth in Rule 144(a)(1) under
the Securities Act.


 


“Required
Holders” means, at any time, the holders of not less than 51%
in principal amount of each Series of Notes at the time outstanding,
voting as separate classes (exclusive of Notes then owned by the Company or any
of its Affiliates that it Controls and any Notes held by parties who are
contractually required to abstain from voting with respect to matters affecting
the holders of the Notes).


 


“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
Subsidiary” means any Subsidiary in which:  (i) at least a majority of the voting
securities are owned by the Company and/or one or more Restricted Subsidiaries,
and


 


B-7

















 


(ii) the
Company has not designated an Unrestricted Subsidiary on the Closing Date or in
accordance with Section 9.6.


 


“SEC”
means the Securities and Exchange Commission of the United States, or any successor
thereto.


 


“Securities
Act” means the Securities Act of 1933, as amended from time
to time.


 


“Senior
Debt” means, as of the date of any determination thereof, all
Consolidated Debt, other than Subordinated Debt.


 


“Senior
Financial Officer” means the chief financial officer,
principal accounting officer, treasurer, assistant treasurer, comptroller or
controller of the Company.


 


“Series” means
any series of Notes issued pursuant to this Agreement or any Supplement
hereto.


 


“Series 2006-A
Notes” is defined in Section 1 of this Agreement.


 


“Source”
is defined in Section 6.3.


 


“Subordinated
Debt” means all unsecured Debt of the Company that shall
contain or have applicable thereto subordination provisions providing for the
subordination thereof to other Debt of the Company (including, without
limitation, the obligations of the Company under this Agreement, any Supplement
or the Notes).


 


“Subsidiary”
means, as to any Person, any corporation, association or other business entity
in which such Person or one or more of its Subsidiaries or such Person and one
or more of its Subsidiaries owns sufficient equity or voting interests to
enable it or them (as a group) ordinarily, in the absence of contingencies, to
elect a majority of the directors (or Persons performing similar functions) of
such entity, and any partnership or joint venture if more than a 50% interest
in the profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless such
partnership can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries). Unless the
context otherwise clearly requires, any reference to a “Subsidiary” is a
reference to a Subsidiary of the Company.


 


“Subsidiary
Guarantor” means each Subsidiary that is party to the
Subsidiary Guaranty.


 


“Subsidiary
Guaranty” is defined in Section 2.3 of this Agreement.


 


“Supplement”
is defined in Section 2.2 of this Agreement.


 


“tranche”
means all Notes of a Series having the same maturity, interest rate and schedule for
mandatory prepayments.


 


B-8

















 


“Undisclosed
Affiliate” means, at any time and with respect to the
Company, any Person (a) that beneficially owns or holds, directly or
indirectly, 10% or more of any class of voting or equity interests of the
Company or (b) that is an Affiliate of any such Person; provided that, at such time, (i) in the case of
clause (a), such Person shall not have given written notice to the Company
of its 10% or greater holding in the Company and, in the case of
clause (b), such Affiliate of such Person shall not have given the Company
written notice of its affiliation to the Company, (ii) such Person or
Affiliate of such Person shall not have made a filing with the SEC with respect
to its 10% or greater holding in the Company or (iii) the Company shall
not otherwise have knowledge of such holding or affiliation to the Company.


 


“Unrestricted
Subsidiary” means any Subsidiary so designated by the
Company.


 


“USA
Patriot Act” means United States Public Law 107-56, Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to
time, and the rules and regulations promulgated thereunder from time to
time in effect.


 


B-9

















 


SCHEDULES 4.9, 5.3, 5.4, 5.5, 5.11, 5.15 and 10.3


[Intentionally Removed]


 

















 


[FORM OF
SERIES A NOTE]


 


HNI CORPORATION


 


5.54% SERIES 2006-A
SENIOR NOTE, SERIES A, DUE APRIL 6, 2016


 


	
  No. [              ]

  	
   

  	
  [Date]

  
	
  $[                   ]

  	
   

  	
  PPN 404251 A* 1

  



 


FOR VALUE RECEIVED,
the undersigned, HNI CORPORATION (herein called the “Company”),
a corporation organized and existing under the laws of the State of Iowa,
hereby promises to pay to [                                           ]
or registered assigns, the principal sum of [                                    ]
DOLLARS (or so much thereof as shall not have been prepaid) on April 6,
2016 with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance hereof at the rate of 5.54% per annum
from the date hereof, payable semi-annually, on the 6th day of April and October in
each year and at maturity, commencing on October 6, 2006, until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law, at a rate per annum from time to time equal to 2% above the
stated rate, on any overdue payment of interest and, during the continuance of
an Event of Default, on the unpaid balance hereof and on any overdue payment of
any Make-Whole Amount, payable semiannually as aforesaid (or, at the option of
the registered holder hereof, on demand).


 


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, N.A. in New York, New York 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 a series of Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement,
dated as of April 6, 2006 (as from time to time amended, supplemented or
otherwise modified, 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, to have (i) agreed to the confidentiality provisions set forth in Section 20
of the Note Purchase Agreement and (ii) made the representations set forth
in Sections 6.2 and 6.3 of the Note Purchase Agreement, provided, that in lieu of the representations set forth in Section 6.3
such holder may (in reliance upon information provided by the Company,
which shall not be unreasonably withheld) make a representation to the effect
that the purchase by any holder of any Note will not constitute a non-exempt
prohibited transaction under section 406(a) of ERISA. Unless
otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in 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


 


EXHIBIT 1 (a)


(to Note Purchase Agreement)


 

















 


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.


 


This
Note is subject to optional prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.


 


Pursuant
to the Subsidiary Guaranty Agreement dated as of April 6, 2006 (as
amended, restated or otherwise modified from time to time, the “Subsidiary Guaranty”), certain Subsidiaries of the Company
have absolutely and unconditionally guaranteed payment in full of the principal
of, Make-Whole Amount, if any, and interest on this Note and the performance by
the Company of its obligations contained in the Note Purchase Agreement all as
more fully set forth in said Subsidiary Guaranty.


 


If an
Event of Default occurs and is continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in
the Note Purchase Agreement.


 


This
Note shall be construed and enforced in accordance with, and the rights of the
issuer and holder hereof shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.


 


	
   

  	
  HNI CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


E-1(a)-2

















 


FORM OF SUBSIDIARY
GUARANTY


 


SUBSIDIARY
GUARANTY AGREEMENT


 


Dated
as of April 6, 2006


 


from


 


THE
SUBSIDIARY GUARANTORS NAMED HEREIN


 


for
the benefit of


 


THE
HOLDERS OF THE NOTES


 


RE:


 


$150,000,000
5.54% SERIES 2006-A SENIOR NOTES DUE APRIL 6, 2016


 


OF


 


HNI
CORPORATION


 


EXHIBIT 2.3


(to Note Purchase
Agreement)


 

















 


TABLE OF CONTENTS


 


	
  SECTION

  	
   

  	
  HEADING

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  GUARANTY

  	
  2

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  3

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  SUBSIDIARY GUARANTOR’S OBLIGATIONS UNCONDITIONAL

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  FULL RECOURSE OBLIGATIONS; PARI PASSU RANKING

  	
  10

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  WAIVER

  	
  10

  
	
   

  	
   

  	
   

  
	
  SECTION
  6.

  	
  WAIVER OF SUBROGATION

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  SUBORDINATION

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  EFFECT OF BANKRUPTCY PROCEEDINGS, ETC.

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  TERM OF GUARANTY

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  CONTRIBUTION

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  LIMITATION OF LIABILITY

  	
  14

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  NEGATIVE PLEDGE

  	
  14

  
	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  SUPPLEMENTAL AGREEMENT

  	
  14

  
	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  DEFINITIONS AND TERMS GENERALLY

  	
  15

  
	
   

  	
   

  	
   

  
	
  SECTION
  15.

  	
  NOTICES

  	
  16

  
	
   

  	
   

  	
   

  
	
  SECTION
  16.

  	
  AMENDMENTS, ETC.

  	
  16

  
	
   

  	
   

  	
   

  
	
  SECTION
  17.

  	
  CONSENT TO JURISDICTION; SERVICE OF PROCESS

  	
  16

  



 


E-2.3-i

















 


	
  SECTION 18.

  	
  WAIVER OF JURY TRIAL

  	
  17

  
	
   

  	
   

  	
   

  
	
  SECTION 19.

  	
  SURVIVAL

  	
  17

  
	
   

  	
   

  	
   

  
	
  SECTION 20.

  	
  SEVERABILITY

  	
  18

  
	
   

  	
   

  	
   

  
	
  SECTION 21.

  	
  SUCCESSORS AND ASSIGNS

  	
  18

  
	
   

  	
   

  	
   

  
	
  SECTION 22.

  	
  TABLE OF CONTENTS; HEADINGS

  	
  18

  
	
   

  	
   

  	
   

  
	
  SECTION 23.

  	
  COUNTERPARTS

  	
  18

  
	
   

  	
   

  	
   

  
	
  SECTION 24.

  	
  GOVERNING LAW

  	
  18

  
	
   

  	
   

  	
   

  
	
  SECTION
  25.

  	
  RELEASE

  	
  19

  
	
   

  	
   

  	
   

  
	
  SECTION 26.

  	
  COVENANT COMPLIANCE

  	
  19

  



 


E-2.3-ii

















 


SUBSIDIARY GUARANTY
AGREEMENT, dated as of April 6, 2006 (the “Guaranty”),
from each of:


 


(i)            Allsteel
Inc., an Illinois corporation,


(ii)           Hearth
& Home Technologies Inc., an Iowa corporation,


(iii)          Paoli
Inc., an Iowa corporation,


(iv)          River Bend
Capital Corporation, an Iowa corporation,


(v)           The HON
Company, an Iowa corporation, and


(vi)          such
Subsidiaries as shall become parties hereto in accordance with Section 13
hereof (each a “Subsidiary Guarantor” and
collectively the “Subsidiary Guarantors”),


 


for the benefit of the
holders from time to time of the Notes (as defined below) (the “Holders”). Capitalized terms used herein are defined in
Section 14 hereof or the Note Purchase Agreement referred to below.


 


WHEREAS, HNI Corporation,
an Iowa corporation (the “Company”),
will authorize the issue and sale of $150,000,000 5.54% Series 2006-A
Senior Notes due April 6, 2016 (the “Series 2006-A Notes”)
pursuant to a Note Purchase Agreement, dated as of the date hereof (as amended,
modified or supplemented from time to time, the “Note
Purchase Agreement”) among the Company and the purchasers named
therein.


 


WHEREAS, Section 2.2
of the Note Purchase Agreement provides for the issuance by the Company of
Additional Notes (as such term is defined in the Note Purchase Agreement) of
one or more separate series from time to time in an aggregate principal amount
not to exceed $500,000,000.


 


WHEREAS, the Additional
Notes, together with the Series 2006-A Notes, are collectively referred to as
the “Notes”.


 


WHEREAS, each of the
Subsidiary Guarantors is a Subsidiary of the Company.


 


WHEREAS, the Company has
agreed that certain of its Subsidiaries will guarantee its respective
obligations under the Notes and the Note Purchase Agreement.


 


WHEREAS, the Subsidiary
Guarantors each acknowledge that they will derive substantial benefits from the
issuance of the Notes.


 


NOW, THEREFORE, in
consideration of the premises and to induce the Holders to purchase the Notes,
each of the Subsidiary Guarantors, intending to be legally bound, hereby agrees
for the benefit of the Holders, as follows:


 

















 


SECTION 1.                GUARANTY.


 


Each Subsidiary Guarantor
with all other Subsidiary GuarantorS, hereby absolutely, unconditionally and
irrevocably guarantees, jointly and severally, as a primary obligor and not
merely as a surety, to each Holder and its successors and assigns, the full and
punctual payment and performance when due, whether at stated maturity, by
acceleration or otherwise, of the principal of and the applicable Make-Whole
Amount, if any, and interest on (including, without limitation, interest,
whether or not an allowable claim, accruing after the date of filing of any
petition in bankruptcy, or the commencement of any bankruptcy, insolvency or
similar proceeding relating to the Company) the Notes and all other amounts
under the Note Purchase Agreement and all other obligations, agreements and
covenants of the Company now or hereafter existing under the Note Purchase
Agreement whether for principal, the applicable Make-Whole Amount (if any),
interest (including interest accruing or becoming owing both prior to and
subsequent to the commencement of any proceeding against or with respect to the
Company under any chapter of Title 11 of the United States Code), indemnification
payments, expenses (including reasonable attorneys’ fees and expenses) or
otherwise, and all reasonable costs and expenses, if any, incurred by any
Holder in connection with enforcing any rights under this Guaranty (all such
obligations being the “Guaranteed Obligations”),
and agrees to pay any and all reasonable expenses incurred by each Holder in
enforcing this Guaranty; provided that,
notwithstanding anything contained herein or in the Note Purchase Agreement to
the contrary, the maximum liability of each Subsidiary Guarantor hereunder and
under the Note Purchase Agreement shall in no event exceed such Guarantor’s
Maximum Guaranteed Amount, and provided further,
each Subsidiary Guarantor shall be unconditionally required to pay all amounts
demanded of it hereunder prior to any determination of such Maximum Guaranteed
Amount and the recipient of such payment, if so required by a final
non-appealable order of a court of competent jurisdiction, shall then be liable
for the refund of any excess amounts. If any such rebate or refund is ever
required, all other Subsidiary Guarantors (and the Company) shall be fully
liable for the repayment thereof to the maximum extent allowed by applicable
law. This Guaranty is an absolute, unconditional, present and continuing
guaranty of payment and not of collectibility and is in no way conditioned upon
any attempt to collect from the Company or any other action, occurrence or
circumstance whatsoever. Each Subsidiary Guarantor agrees that the Guaranteed
Obligations may at any time and from to time exceed the Maximum Guaranteed
Amount of such Subsidiary Guarantor without impairing this Guaranty or
affecting the rights and remedies of the Holders hereunder.


 


Notwithstanding any stay,
injunction or other prohibition preventing such action against the Company, if
for any reason whatsoever the Company shall fail or be unable duly, punctually
and fully to perform and (in the case of the payment of Guaranteed Obligations)
pay such amounts as and when the same shall become due and (in the case of the
payment of Guaranteed Obligations) payable or to perform or comply with any
other Guaranteed Obligation, whether or not such failure or inability shall
constitute an “Event of Default” under the Note Purchase Agreement or the
Notes, each Subsidiary Guarantor will forthwith (in the case of the payment of
Guaranteed Obligations) pay or cause to be paid such amounts to the Holders, in
lawful money of the United States of America, at the place specified in the
Note Purchase Agreement, or perform or comply with such Guaranteed Obligations
or cause such Guaranteed Obligations to be performed or complied with, (in the
case of the payment of Guaranteed Obligations) together


 


E-2.3-2

















 


with interest (in the
amounts and to the extent required under such Notes) on any amount due and
owing; provided that, for the avoidance of
doubt, any failure by any Subsidiary Guarantor to do so shall not constitute an
Event of Default, except and to the extent the failure of the Company to do so
constitutes an Event of Default.


 


SECTION 2.                REPRESENTATIONS AND WARRANTIES.


 


Each Subsidiary Guarantor
hereby represents and warrants as follows:


 


(a)           All
representations and warranties contained in the Note Purchase Agreement that
relate to such Subsidiary Guarantor are true and correct in all respects and
are incorporated by reference with the same force and effect as though set
forth herein in full.


 


(b)           Such
Subsidiary Guarantor acknowledges that any default in the due observance or
performance by such Subsidiary Guarantor of any covenant, condition or
agreement contained herein (if, after the running of any applicable notice and
opportunity to cure periods provided in the Note Purchase Agreement, such
default or event of default remains uncured) shall constitute an Event of
Default.


 


(c)           There
are no conditions precedent to the effectiveness of this Guaranty that have not
been satisfied or expressly waived.


 


(d)           Such
Subsidiary Guarantor has, independently and without reliance upon the Holders
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Guaranty. Such
Subsidiary Guarantor has investigated fully the benefits and advantages which
will be derived by it from execution of this Guaranty, and the Board of
Directors (or equivalent governing body) of such Subsidiary Guarantor has
decided that a direct and/or an indirect benefit will accrue to such Subsidiary
Guarantor by reason of the execution of this Guaranty.


 


(e)           (i) This
Guaranty is not given with actual intent to hinder, delay or defraud any Person
to which such Subsidiary Guarantor is or will become, on or after the date
hereof, indebted; (ii) such Subsidiary Guarantor has received at least a
reasonably equivalent value in exchange for the giving of this Guaranty;
(iii) such Subsidiary Guarantor is not insolvent on the date hereof and
will not become insolvent as a result of the giving of this Guaranty;
(iv) such Subsidiary Guarantor is not engaged in a business or
transaction, nor is about to engage in a business or transaction, for which any
property remaining with such Subsidiary Guarantor constitutes an unreasonably
small amount of capital; and (v) such Subsidiary Guarantor does not intend
to incur debts that will be beyond such Subsidiary Guarantor’s ability to pay
as such debts mature.


 


(f)            Each
Subsidiary Guarantor is a corporation or other legal
entity duly organized and validly existing under the laws of its state of
organization, and has the requisite power, authority and legal right under the
laws of its state of organization to conduct its business as presently
conducted and to execute,  deliver and
perform its obligations under this Guaranty.


 


E-2.3-3

















 


(g)           The
execution, delivery and performance of this Guaranty have been duly authorized
by all necessary corporate (or other
organizational) action on the part of each
Subsidiary Guarantor, and does not require any consent or approval of, or the
giving of notice to, or the taking of any other action in respect of, any
stockholder, other equity holder or trustee or holder of any indebtedness or
obligations of such Subsidiary Guarantor. This Guaranty constitutes a legal,
valid and binding obligation of each Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its terms,
except that such enforceability is subject to any limitations arising from
bankruptcy, insolvency, liquidation, moratorium, reorganization and other
similar laws of general application relating to or affecting the rights of
creditors or pledgees and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).


 


(h)           The
execution, delivery and performance of this Guaranty does not and will not
conflict with or result in any violation of or default under any provision of
the Articles or Certificate of Incorporation or Formation or by-laws or
partnership agreement or operating agreement or other organizational document,
as the case may be, of any Subsidiary Guarantor, or any indenture, mortgage,
deed of trust, instrument, law, rule or regulation binding on any Subsidiary
Guarantor or to which a Subsidiary Guarantor is a party or by which any of its
assets or property is bound.


 


(i)            The
execution, delivery and performance of this Guaranty does not and will not
result in violation of any judgment or order applicable to any Subsidiary
Guarantor or result in the creation or imposition of any Lien on any of the
properties or revenues of any Subsidiary Guarantor pursuant to any requirement
of law or any indenture, mortgage, deed of trust or other instrument to which
such Subsidiary Guarantor is a party or by which any of its property is bound.


 


(j)            The
execution, delivery and performance of this Guaranty do not and will not
conflict with and do not and will not require any consent, approval or
authorization of, or registration or filing with, any governmental authority or
agency of the state of organization of any Subsidiary Guarantor or of the
United States or any State.


 


(k)           There are
no pending or, to the knowledge of any Subsidiary Guarantor, threatened actions
or proceedings against or affecting such Subsidiary Guarantor or any of its
properties by or before any court or administrative agency or arbiter that
would adversely affect the ability of the Subsidiary Guarantors, taken as a
whole, to perform their obligations hereunder or call into question the
validity or enforceability of this Guaranty.


 


(l)            Each
Subsidiary Guarantor’s obligations under this Guaranty are at least pari passu in right of payment with all other unsecured
claims of the general creditors against such Subsidiary Guarantor.


 


(m)          No
Subsidiary Guarantor is in breach of or default under or with respect to any
instrument, document or agreement binding upon such Subsidiary Guarantor or any
of its property which breach or default is reasonably probable to have a
Material Adverse Effect or result in the creation of a Lien on any property of
such Subsidiary Guarantor other than Liens


 


E-2.3-4

















 


permitted
under Section 10.3 of the Note Purchase Agreement. Each Subsidiary
Guarantor is in compliance with all applicable requirements of law except such
non-compliance as would not have a Material Adverse Effect.


 


(n)           The
execution, delivery and performance by each Subsidiary Guarantor of this
Guaranty will not render such Subsidiary Guarantor insolvent, nor is it being
made in contemplation of such Subsidiary Guarantor’s insolvency, and the
Subsidiary Guarantor does not have an unreasonably small capital.


 


SECTION 3.                SUBSIDIARY GUARANTOR’S OBLIGATIONS
UNCONDITIONAL.


 


(a)           This
Guaranty shall constitute a guarantee of payment, performance and compliance
and not of collection, and each Subsidiary Guarantor specifically agrees that
it shall not be necessary, and that such Subsidiary Guarantor shall not be
entitled to require, before or as a condition of enforcing the liability of
such Subsidiary Guarantor under this Guaranty or requiring payment or
performance of the Guaranteed Obligations by any Subsidiary Guarantor
hereunder, or at any time thereafter, that any Holder:  (a) file suit or proceed to obtain or
assert a claim for personal judgment against the Company or any other Person
that may be liable for or with respect to any Guaranteed Obligation;
(b) make any other effort to obtain payment or performance of any
Guaranteed Obligation from the Company or any other Person that may be liable for
or with respect to such Guaranteed Obligation, except for the making of the
demands, when appropriate, described in Section 1; (c) foreclose
against, or seek to realize upon security now or hereafter existing for such
Guaranteed Obligations; (d) except to the extent set forth in Section 1,
exercise or assert any other right or remedy to which such Holder is or may be
entitled in connection with any Guaranteed Obligation or any security or other
guaranty therefor; or (e) assert or file any claim against the assets or
property of the Company or any other Person liable for any Guaranteed
Obligation. Each Subsidiary Guarantor agrees that this Guaranty shall be
continuing, and that the Guaranteed Obligations will be paid and performed in
accordance with their terms and the terms of this Guaranty, and are the
primary, absolute and unconditional obligations of such Subsidiary Guarantor,
irrespective of the value, genuineness, validity, legality, regularity or
enforceability or lack thereof of any part of the Guaranteed Obligations or any
agreement or instrument relating to the Guaranteed Obligations or this
Guaranty, or the existence of any indemnities with respect to the existence of
any other guarantee of or security for any of the Guaranteed Obligations, or
any substitution, release or exchange of any other guarantee of or security for
any of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 3 that the obligations of each
Subsidiary Guarantor hereunder shall be irrevocable, primary, absolute and
unconditional under any and all circumstances.


 


(b)           Each
Subsidiary Guarantor hereby expressly waives notice of acceptance of and
reliance upon this Guaranty, diligence, presentment, demand of payment or
performance, protest and all other notices (except as otherwise provided for in
Section 1) whatsoever, any requirement that the Holders exhaust any right,
power or remedy or proceed against the Company or against any other Person
under any other guarantee of, or security for, or any other agreement,
regarding any of the Guaranteed Obligations. Each Subsidiary Guarantor further
agrees that, subject solely


 


E-2.3-5

















 


to the requirement of
making demands under Section 1, the occurrence of any event or other
circumstance that might otherwise vary the risk of
the Company or such Subsidiary Guarantor or constitute a defense (legal or equitable) available to, or a discharge of, or a
counterclaim or right of set-off by, the Company or such Subsidiary Guarantor
(other than the full and indefeasible due payment and performance of the
Guaranteed Obligations), shall not affect the liability of any Subsidiary
Guarantor hereunder.


 


(c)           The
obligations of each Subsidiary Guarantor under this Guaranty are not subject to
any counterclaim, set-off, deduction, diminution, abatement, recoupment,
suspension, deferment or defense based upon any claim such Subsidiary Guarantor
or any other Person may have against the Company, any Holder or any other
Person, and shall remain in full force and effect without regard to, and shall
not be released, discharged or in any way affected by, any circumstances or
condition whatsoever (whether or not such Subsidiary Guarantor or the Company
shall have any knowledge or notice thereof), including:


 


(i)            any
renewal, extension, modification, increase, decrease, alteration or
rearrangement of all or any part of the Guaranteed Obligations or any
instrument executed in connection therewith, or any contract or understanding
with the Company, the Holders, or any of them, or any other Person, pertaining
to the Guaranteed Obligations;


 


(ii)           any
adjustment, indulgence, forbearance or compromise that might be granted or
given by any Holder to the Company or any other Person liable on the Guaranteed
Obligations, or the failure of any Holder to assert any claim or demand or to
exercise any right or remedy against the Company or any other Person under the
provisions of the Note Purchase Agreement, the Notes or otherwise; or any
rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of, the Note Purchase Agreement, the Notes, any
guarantee or any other agreement;


 


(iii)          the
insolvency, bankruptcy arrangement, adjustment, composition, liquidation,
disability, dissolution or lack of power of the Company or any other Person at
any time liable for the payment of all or part of the Guaranteed Obligations;
or any dissolution of the Company or any other such Person, or any change,
restructuring or termination of the organizational structure or existence of
the Company or any other such Person, or any sale, lease or transfer of any or
all of the assets or property of the Company or any other such Person, or any
change in the shareholders, partners, equity holders or members of the Company
or any other such Person; or any default, failure or delay, willful or
otherwise, in the performance of the Guaranteed Obligations;


 


(iv)          the
invalidity, illegality or unenforceability of all or any part of the Guaranteed
Obligations, or any document or agreement executed in connection with the
Guaranteed Obligations, for any reason whatsoever, including the fact that the
Guaranteed Obligations, or any part thereof, exceed the amount permitted by
law, the act of creating the Guaranteed Obligations or any part is ultra vires, the officers or representatives executing the
documents or otherwise creating the Guaranteed Obligations acted in excess of
their authority, the Guaranteed Obligations violate


 


E-2.3-6

















 


applicable usury laws,
the Company or any other Person has valid defenses, claims or offsets (whether
at law, in equity or by agreement) which render the Guaranteed Obligations
wholly or partially uncollectible from the Company or any other Person, the
creation, performance or repayment of the Guaranteed Obligations (or the
execution, delivery and performance of any document or instrument representing
part of the Guaranteed Obligations or executed in connection with the
Guaranteed Obligations or given to secure the repayment of the Guaranteed
Obligations) is illegal, uncollectible, legally impossible or unenforceable, or
the documents or instruments pertaining to the Guaranteed Obligations have been
forged or otherwise are irregular or not genuine or authentic;


 


(v)           any
full or partial release of the liability of the Company on the Guaranteed
Obligations or any part thereof, of any co-guarantors, or of any other Person
now or hereafter liable, whether directly or indirectly, jointly, severally, or
jointly and severally, to pay, perform, guarantee or assure the payment of the
Guaranteed Obligations or any part thereof, it being recognized, acknowledged
and agreed by each Subsidiary Guarantor that such Subsidiary Guarantor may be
required to pay the Guaranteed Obligations in full without assistance or
support of any other Person, and such Subsidiary Guarantor has not been induced
to enter into this Guaranty on the basis of a contemplation, belief,
understanding or agreement that any parties other than the Company will be
liable to perform the Guaranteed Obligations, or that the Holders will look to
other parties to perform the Guaranteed Obligations;


 


(vi)          the
taking or accepting of any other security, collateral or guaranty, or other
assurance of payment, for all or any part of the Guaranteed Obligations;


 


(vii)         any
release, surrender, exchange, subordination, deterioration, waste, loss or
impairment (including negligent, unreasonable or unjustifiable impairment) of
any collateral, property or security, at any time existing in connection with,
or assuring or securing payment of, all or any part of the Guaranteed
Obligations;


 


(viii)        the
failure of any Holder or any other Person to exercise diligence or reasonable
care in the preservation, protection, enforcement, sale or other handling or
treatment of all or any part of such collateral, property or security;


 


(ix)           the
fact that any collateral, security, security interest or Lien contemplated or
intended to be given, created or granted as security for the repayment of the
Guaranteed Obligations shall not be properly perfected or created, or shall
prove to be unenforceable or subordinate to any other security interest or
Lien, it being recognized and agreed by each Subsidiary Guarantor that such
Subsidiary Guarantor is not entering into this Guaranty in reliance on, or in contemplation
of the benefits of, the validity, enforceability, collectibility or value of
any of the collateral;


 


(x)            any
payment by the Company to any Holder being held to constitute a preference
under any Fraudulent Conveyance Law, or for any reason any Holder being
required to refund such payment or pay such amount to the Company or someone
else;


 


E-2.3-7

















 


(xi)           any
other action taken or omitted to be taken with respect to the Guaranteed
Obligations, or the security and collateral therefor, whether or not such
action or omission prejudices such Subsidiary Guarantor or increases the
likelihood that such Subsidiary Guarantor will be required to pay the
Guaranteed Obligations pursuant to the terms hereof, it being the unambiguous
and unequivocal intention of such Subsidiary Guarantor that it shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action or omission whatsoever, whether or not
contemplated, and whether or not otherwise or particularly described herein,
except for the full and final indefeasible payment and satisfaction of the
Guaranteed Obligations in cash;


 


(xii)          the
fact that all or any of the Guaranteed Obligations cease to exist by operation
of law, including by way of a discharge, limitation or tolling thereof under
applicable bankruptcy laws;


 


(xiii)         any
other circumstance (including any statute of limitations) that might in any
manner or to any extent otherwise constitute a defense available to, vary the
risk of, or operate as a discharge of, the Company or any Person as a matter of
law or equity;


 


(xiv)        any
change in the ownership of any shares of capital stock (or other equity
interests) of the Company, or any change in the relationship between the
Company and such Subsidiary Guarantor or any termination of any such
relationship;


 


(xv)         any
default, failure or delay, willful or otherwise, in the performance by the
Company, any Subsidiary Guarantor or any other Person of any obligations of any
kind or character whatsoever under the Note Purchase Agreement or any other
agreement;


 


(xvi)        any
merger or consolidation of the Company or any Subsidiary Guarantor or any other
Person into or with any other Person or any sale, lease, transfer or other
disposition of any of the assets or property of the Company, any Subsidiary
Guarantor or any other Person to any other Person, or any change in the
ownership of any shares or partnership interests or other equity interests of
the Company, any Subsidiary Guarantor or any other Person;


 


(xvii)       in
respect of the Company, any Subsidiary Guarantor or any other Person, any
change of circumstances, whether or not foreseen or foreseeable, whether or not
imputable to the Company, any Subsidiary Guarantor or any other Person, or
other impossibility of performance through fire, explosion, accident, labor
disturbance, floods, droughts, embargoes, wars (whether or not declared), civil
commotion, acts of God or the public enemy, delays or failure of suppliers or
carriers, inability to obtain materials, action of any Federal or state
regulatory body or agency, change of law or any other causes affecting
performance, or any other force majeure,
whether or not beyond the control of the Company, any Subsidiary Guarantor or any
other Person and whether or not of the kind hereinbefore specified; or


 


E-2.3-8

















 


(xx)          any
other occurrence, circumstance, 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 such Subsidiary Guarantor;


 


provided that
the specific enumeration of the above-mentioned acts, failures or omissions
shall not be deemed to exclude any other acts, failures, circumstances or
omissions, though not specifically mentioned above, it being the purpose and
intent of this Guaranty and the parties hereto that the obligations of each
Subsidiary Guarantor shall be absolute and unconditional and shall not be
discharged, impaired or varied except by the payment and performance of all
obligations of the Company under the Note Purchase Agreement and the Notes in
accordance with their respective terms as each may be amended or modified from
time to time. Without limiting the foregoing, it is understood that repeated
and successive demands may be made and recoveries may be had hereunder as and
when, from time to time, the Company or any Subsidiary Guarantor shall default
under or in respect of the terms of the Note Purchase Agreement and that
notwithstanding recovery hereunder for or in respect of any given default or
defaults by the Company or any Subsidiary Guarantor under the Note Purchase
Agreement, this Guaranty shall remain in full force and effect and shall apply
to each and every subsequent default. All waivers herein contained shall be
without prejudice to the Holders at their respective options to proceed against
the Company, any Subsidiary Guarantor or other Person, whether by separate
action or by joinder.


 


(d)           Each
Subsidiary Guarantor hereby consents and agrees that any Holder or Holders from
time to time, with or without any further notice to or assent from any other
Subsidiary Guarantor may, without in any manner affecting the liability of any
Subsidiary Guarantor under this Guaranty, and upon such terms and conditions as
any such Holder or Holders may deem advisable:


 


(i)            extend
in whole or in part (by renewal or otherwise), modify, change, compromise,
release or extend the duration of the time for the performance or payment of
any debt, liability or obligation of the Company or any Subsidiary Guarantor or
of any other Person secondarily or otherwise liable for any debt, liability or
obligations of the Company on the Note Purchase Agreement or the Notes, or
waive any Default or Event of Default with respect thereto, or waive, modify,
amend or change any provision of any other agreement or waive this Guaranty; or


 


(ii)           sell,
release, surrender, modify, impair, exchange or substitute any and all
property, of any nature and from whomsoever received, held by, or for the
benefit of, any such Holder as direct or indirect security for the payment or
performance of any debt, liability or obligation of the Company, any Subsidiary
Guarantor or of any other Person secondarily or otherwise liable for any debt,
liability or obligation of the Company on the Note Purchase Agreement or the
Notes; or


 


E-2.3-9

















 


(iii)          settle,
adjust or compromise any claim of the Company or any Subsidiary Guarantor
against any other Person secondarily or otherwise liable for any debt,
liability or obligation of the Company on the Note Purchase Agreement or the
Notes; or


 


(iv)          purchase
Additional Notes form time to time from the Company pursuant to the terms and
provisions of the Note Purchase Agreement.


 


Each
Subsidiary Guarantor hereby ratifies and confirms any such extension, renewal,
change, sale, release, waiver, surrender, exchange, modification, amendment,
impairment, substitution, settlement, adjustment, compromise or purchase and
that the same shall be binding upon it, and hereby waives, to the fullest
extent permitted by law, any and all defenses, counterclaims or offsets which
it might or could have by reason thereof, it being understood that such
Subsidiary Guarantor shall at all times be bound by this Guaranty and remain
liable hereunder.


 


(e)           All rights
of any Holder may be transferred or assigned at any time in accordance with the
Note Purchase Agreement and shall be considered to be transferred or assigned
at any time or from time to time upon the transfer of such Note in accordance
with the Note Purchase Agreement without the consent of or notice to the
Subsidiary Guarantors under this Guaranty.


 


(f)            No
Holder shall be under any obligation: 
(i) to marshal any assets or property in favor of the Subsidiary
Guarantors or in payment of any or all of the liabilities of the Company or any
Subsidiary Guarantor under or in respect of the Notes or the obligations of the
Company and the Subsidiary Guarantors under the Note Purchase Agreement or
(ii) to pursue any other remedy that the Subsidiary Guarantors may or may
not be able to pursue themselves and that may lighten the Subsidiary Guarantors’
burden, any right to which each Subsidiary Guarantor hereby expressly waives.


 


SECTION 4.                FULL RECOURSE OBLIGATIONS; PARI PASSU
RANKING.


 


Subject to the Maximum
Guaranteed Amount, the obligations of each Subsidiary Guarantor set forth
herein constitute the full recourse obligations of such Subsidiary Guarantor
enforceable against it to the full extent of all its assets and properties.


 


The respective
obligations under this Guaranty of the Subsidiary Guarantors are and at all
times shall remain direct and unsecured obligations of the Subsidiary
Guarantors ranking pari passu as
against the assets of the Subsidiary Guarantors without any preference among
themselves and pari passu with all other present
and future unsecured Debt (actual
or contingent) of the Subsidiary Guarantors which is not expressed to be
subordinate or junior in rank to any other unsecured Debt
of the Subsidiary Guarantors.


 


SECTION 5.                WAIVER.


 


Each Subsidiary Guarantor
unconditionally waives, to the extent permitted by applicable law:


 


(a)           notice
of any of the matters referred to in Section 3;


 


E-2.3-10

















 


(b)           notice
to such Subsidiary Guarantor of the incurrence of any of the Guaranteed
Obligations, notice to such Subsidiary Guarantor of any breach or default by
the Company or such Subsidiary Guarantor with respect to any of the Guaranteed
Obligations or any other notice that may be required, by statute, rule of law
or otherwise, to preserve any rights of any Holder against such Subsidiary
Guarantor;


 


(c)           presentment
to the Company or such Subsidiary Guarantor or of payment from the Company or
such Subsidiary Guarantor with respect to any Note or other Guaranteed
Obligation or protest for nonpayment or dishonor;


 


(d)           any
right to the enforcement, assertion, exercise or exhaustion by any Holder of
any right, power, privilege or remedy conferred in any Note, the Note Purchase
Agreement or otherwise;


 


(e)           any
requirement of diligence on the part of any Holder;


 


(f)            any
requirement to mitigate the damages resulting from any default under the Notes
or the Note Purchase Agreement;


 


(g)           any
notice of any sale, transfer or other disposition of any right, title to or
interest in any Note or other Guaranteed Obligation by any Holder, assignee or
participant thereof, or in the Note Purchase Agreement;


 


(h)           any
release of any Subsidiary Guarantor from its obligations hereunder resulting
from any loss by it of its rights of subrogation hereunder; and


 


(i)            any
other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge, release or defense of a guarantor or surety or which might
otherwise limit recourse against such Subsidiary Guarantor.


 


SECTION 6.                WAIVER OF SUBROGATION.


 


Notwithstanding any
payment or payments made by any Subsidiary Guarantor hereunder, or any
application by any Holder of any security or of any credits or claims, no
Subsidiary Guarantor will assert or exercise any rights of any Holder or of
such Subsidiary Guarantor against the Company to recover the amount of any
payment made by such Subsidiary Guarantor to any Holder hereunder by way of any
claim, remedy or subrogation, reimbursement, exoneration, contribution,
indemnity, participation or otherwise arising by contract, by statute, under
common law or otherwise, and such Subsidiary Guarantor shall not have any right
of recourse to or any claim against assets or property of the Company or any
other Subsidiary Guarantor, in each case unless and until the Guaranteed
Obligations have been indefeasibly paid in full. Until such time (but not
thereafter), each Subsidiary Guarantor hereby expressly waives any right to
exercise any claim, right or remedy which such Subsidiary Guarantor may now
have or hereafter acquire against the Company or any other Subsidiary Guarantor
that arises under the Notes, the Note Purchase Agreement or from the
performance by any Subsidiary Guarantor of the guaranty hereunder including any
claim, remedy or right of subrogation, reimbursement,


 


E-2.3-11

















 


exoneration,
contribution, indemnification or participation in any claim, right or remedy of
any Holder against the Company or any Subsidiary Guarantor, or any security
that any Holder now has or hereafter acquires, whether or not such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise. If any amount shall be paid to a Subsidiary Guarantor by the Company
or another Subsidiary Guarantor after payment in full of the Guaranteed
Obligations, and all or any portion of the Guaranteed Obligations shall
thereafter be reinstated in whole or in part and any Holder is required to
repay any sums received by any of them in payment of the Guaranteed Obligations,
this Guaranty shall be automatically reinstated and such amount shall be held
in trust for the benefit of the Holders and shall forthwith be paid to the
Holders to be credited and applied to the Guaranteed Obligations, whether
matured or unmatured. The provisions of this paragraph shall survive the
termination of this Guaranty, and any satisfaction and discharge of the Company
by virtue of any payment, court order or any Federal or state law.


 


SECTION 7.                SUBORDINATION.


 


If any Subsidiary
Guarantor is or becomes the holder of any indebtedness payable by the Company
or another Subsidiary Guarantor, each Subsidiary Guarantor hereby subordinates
all indebtedness owing to it from the Company or such other Subsidiary
Guarantor to all indebtedness of the Company to the Holders, and agrees that,
during the continuance of any Event of Default, it shall not accept any payment
on the same until payment in full of the Guaranteed Obligations and shall in no
circumstance whatsoever attempt to set-off or reduce any obligations hereunder
because of such indebtedness. If any amount shall nevertheless be paid in
violation of the foregoing to a Subsidiary Guarantor by the Company or another
Subsidiary Guarantor prior to payment in full of the Guaranteed Obligations, such
amount shall be held in trust for the benefit of the Holders and shall
forthwith be paid to the Holders to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured.


 


SECTION 8.                EFFECT OF BANKRUPTCY PROCEEDINGS, ETC.


 


(a)           If
after receipt of any payment of, or proceeds of any security applied (or
intended to be applied) to the payment of all or any part of, the Guaranteed
Obligations, any Holder is for any reason compelled to surrender or voluntarily
surrenders (under circumstances in which it believes it could reasonably be
expected to be so compelled if it did not voluntarily surrender), such payment
or proceeds to any Person (i) because such payment or application of
proceeds is or may be avoided, invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, fraudulent conveyance,
fraudulent transfer, impermissible set-off or a diversion of trust funds or
(ii) for any other similar reason, including, without limitation,
(x) any judgment, decree or order of any court or administrative body
having jurisdiction over any Holder or any of their respective properties or
(y) any settlement or compromise of any such claim effected by any Holder
with any such claimant (including the Company), then the Guaranteed Obligations
or part thereof intended to be satisfied shall be reinstated and continue, and
this Guaranty shall continue in full force as if such payment or proceeds had
not been received, notwithstanding any revocation thereof or the cancellation of
any Note or any other instrument evidencing any Guaranteed Obligations or
otherwise, and the Subsidiary Guarantors, jointly and severally, shall be
liable to pay the Holders, and hereby do indemnify the Holders and hold them
harmless for,


 


E-2.3-12

















 


the amount of such
payment or proceeds so surrendered and all expenses (including reasonable
attorneys’ fees, court costs and expenses attributable thereto) incurred by any
Holder in defense of any claim made against any of them that any payment or
proceeds received by any Holder in respect of all or part of the Guaranteed
Obligations must be surrendered. The provisions of this paragraph shall survive
the termination of this Guaranty, and any satisfaction and discharge of the
Company by virtue of any payment, court order or any Federal or state law.


 


(b)           If
an event permitting the acceleration of the maturity of any of the Guaranteed
Obligations 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 any case or proceeding contemplated by
Section 8(a) hereof, then, for the purpose of defining the obligation of
any Subsidiary Guarantor under this Guaranty, the maturity of the principal
amount of the Guaranteed Obligations shall be deemed to have been accelerated
with the same effect as if an acceleration had occurred in accordance with the
terms of such Guaranteed Obligations, and such Subsidiary Guarantor shall
forthwith pay such principal amount, all accrued and unpaid interest thereon,
and all other Guaranteed Obligations, due or that would have become due but for
such case or proceeding, without further notice or demand.


 


SECTION 9.                TERM OF GUARANTY.


 


This Guaranty and all
guarantees, covenants and agreements of each Subsidiary Guarantor contained
herein shall continue in full force and effect and shall not be discharged
until such time as all of the principal of and interest on the Notes, the other
Guaranteed Obligations and other independent payment obligations of such
Subsidiary Guarantor under this Guaranty shall be indefeasibly paid in cash and
performed in full, and all of the agreements of each of the other Subsidiary
Guarantors hereunder shall be duly and indefeasibly paid in cash and performed
in full.


 


SECTION 10.              CONTRIBUTION.


 


In order to provide for
just and equitable contribution among the Subsidiary Guarantors, each
Subsidiary Guarantor agrees that, to the extent any Subsidiary Guarantor makes
any payment hereunder on any date which, when added to all preceding payments
made by such Subsidiary Guarantor hereunder, would result in the aggregate
payments by such Subsidiary Guarantor hereunder exceeding its Percentage (as
defined below) of all payments then or theretofore made by all Subsidiary
Guarantors hereunder, such Subsidiary Guarantor shall have a right of
contribution against each other Subsidiary Guarantor whose aggregate payments
then or theretofore made hereunder are less than its Percentage of all payments
by all Subsidiary Guarantors then or theretofore made hereunder, in an amount
such that, after giving effect to any such contribution rights, each Subsidiary
Guarantor will have paid only its Percentage of all payments by all Subsidiary
Guarantors then or theretofore made hereunder. In addition to and without
limiting Section 6 hereof, such contribution rights shall be subordinate and
subject in right of payment to the Guaranteed Obligations and all other
indebtedness owed to any Holder and, except as provided in the next sentence,
no Subsidiary Guarantor shall exercise such rights of contribution until all
Guaranteed Obligations have been indefeasibly paid in cash and performed in
full. Furthermore, each Subsidiary Guarantor hereby unconditionally and


 


E-2.3-13

















 


irrevocably agrees that
in the event any payment shall be required to be made to any Holder under this
Guaranty, such Subsidiary Guarantor will contribute, to the maximum extent
permitted by law, such amounts to each other Subsidiary Guarantor so as to
maximize the aggregate amount paid to the Holders under or in respect of the
Notes and the Note Purchase Agreement. A Subsidiary Guarantor’s “Percentage” on any date shall mean the percentage obtained
by dividing (a) the Adjusted Net Assets of such Subsidiary Guarantor on
such date by (b) the sum of the Adjusted Net Assets of all Subsidiary
Guarantors on such date. “Adjusted Net Assets”
means, for each Subsidiary Guarantor on any date, the lesser of (i) the
amount by which the fair value of the property of such Subsidiary Guarantor
exceeds the total amount of liabilities, including contingent liabilities, but
excluding liabilities under this Guaranty, of such Subsidiary Guarantor on such
date and (ii) the amount by which the present fair salable value of the
assets of such Subsidiary Guarantor on such date exceeds the amount that will
be required to pay the probable liability of such Subsidiary Guarantor on its
debts, excluding debt in respect of this Guaranty, as they become absolute and
matured.


 


SECTION 11.              LIMITATION OF LIABILITY.


 


Each Subsidiary Guarantor
hereby confirms that it is the intention of such Subsidiary Guarantor that the
guarantee by such Subsidiary Guarantor pursuant to this Guaranty not constitute
a fraudulent transfer or conveyance for purposes of Title 11 of the United
States Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar applicable Federal or state law (all such statutes
and laws are collectively referred to as “Fraudulent Conveyance
Laws”). To effectuate the foregoing intention, each Subsidiary
Guarantor hereby irrevocably agrees that the obligations of such Subsidiary
Guarantor under this Guaranty shall be limited to the amount as will, after
giving effect to all rights to receive any collections from or payments by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor pursuant to Section 10 hereof, result in
the obligations of such Subsidiary Guarantor under this Guaranty not
constituting such a fraudulent transfer or conveyance. In the event that the
liability of any Subsidiary Guarantor hereunder is limited pursuant to this
Section 11 to an amount that is less than the total amount of the
Guaranteed Obligations, then it is understood and agreed that the portion of
the Guaranteed Obligations for which such Subsidiary Guarantor is liable
hereunder shall be the last portion of the Guaranteed Obligations to be repaid.


 


SECTION 12.              NEGATIVE PLEDGE.


 


No Subsidiary Guarantor
will, directly or indirectly, create, incur, assume or permit to exist (upon
the happening of a contingency or otherwise) any Lien on its assets or property
during the pendency of this Guaranty except for Liens permitted by
Section 10.3 of the Note Purchase Agreement.


 


SECTION 13.              SUPPLEMENTAL AGREEMENT.


 


Upon execution and
delivery by a Subsidiary of a Supplemental Agreement substantially in the form
of Exhibit A hereto, such Subsidiary shall become a Subsidiary Guarantor
hereunder


 


E-2.3-14

















 


with the same force and
effect as if originally named as a Subsidiary Guarantor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Subsidiary Guarantor hereunder or of any Holder. The rights and obligations of
each Subsidiary Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Subsidiary Guarantor as a party to this
Guaranty.


 


SECTION 14.              DEFINITIONS AND TERMS GENERALLY.


 


(a)           Unless
otherwise defined herein, capitalized terms defined in the Note Purchase
Agreement are used herein as defined therein. In addition, the following terms
shall have the following meanings.


 


“Adjusted
Net Assets” has the meaning specified in Section 10
hereof.


 


“Fraudulent
Conveyance Laws” has the meaning specified in Section 11
hereof.


 


“Guaranteed
Obligations” has the meaning specified in Section 1
hereof.


 


“Guaranty”
has the meaning specified in the introduction hereto.


 


“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 of the Note Purchase Agreement.


 


“Holders”
has the meaning specified in the introduction hereto.


 


“Maximum
Guaranteed Amount” shall mean, for each Subsidiary Guarantor,
the maximum amount which any Subsidiary Guarantor could pay under this Guaranty
without having such payment set aside as a fraudulent transfer or conveyance or
similar action under Fraudulent Conveyance Law.


 


“Note
Purchase Agreement” has the meanings specified in the
Recitals hereto.


 


“Notes”
has the meanings specified  in the
Recitals hereto.


 


“Percentage”
has the meaning specified in Section 10 hereof.


 


“property”
or “properties” means, unless otherwise
specifically limited, real or personal property of any kind, tangible or
intangible, choate or inchoate.


 


“Subsidiary
Guarantor” has the meaning specified in the introduction
hereto.


 


(b)           Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.”  All references herein to Articles,


 


E-2.3-15

















 


Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Exhibits
and Schedules to, this Guaranty unless the context shall otherwise require.


 


SECTION 15.              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), (b) by a
recognized overnight delivery service (with charges prepaid), or (c) by posting
to IntraLinks® or a similar service reasonably acceptable to the Required
Holders if the sender on the same day sends or causes to be sent notice of such
posting by email or in accordance with clause (a) or (b) above. Any such notice
must be sent:


 


(a)           if
to any Holder, at the address (or, in the case of clause (c) above, the email
address) set forth in the Note Purchase Agreement, or at such other address
(or, in the case of clause (c) above, the email address) as any such Holder
shall from time to time designate to the Company, or


 


(b)           if
to a Subsidiary Guarantor, at the address or email address of such Subsidiary
Guarantor set forth on the signature pages hereto or at such other address or email
address as such Subsidiary Guarantor shall from time to time designate in
writing to each Holder.


 


Notices under this Section 14 will
be deemed given only when actually received.


 


SECTION 16.              AMENDMENTS, ETC.


 


No amendment, alteration,
modification or waiver of any term or provision of this Guaranty, nor consent
to any departure by any Subsidiary Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and consented to by the Required
Holders and the applicable Subsidiary Guarantor; provided,
however, that (i) any amendment,
alteration, modification or waiver of the terms and conditions contained in
Section 1 hereof shall require consent from all Holders, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given, (ii) any Supplemental Agreement executed
pursuant to Section 13 shall not require the consent of any Holder or any
Subsidiary Guarantor and (iii) the Holders agree to release any Subsidiary Guarantor
from this Guaranty when and as required under, and upon satisfaction of the
terms and conditions of, Section 2.3(b) of the Note Purchase Agreement.


 


SECTION 17.              CONSENT TO JURISDICTION; SERVICE OF
PROCESS.


 


(a)           Each
Subsidiary Guarantor irrevocably submits to the nonexclusive in personam jurisdiction of any New York State or federal
court sitting in New York City, over any suit, action or proceeding arising out
of or relating to this Guaranty or the Notes. To the fullest extent it may
effectively do so under applicable law, each Subsidiary Guarantor irrevocably
waives and


 


E-2.3-16

















 


agrees not to assert, by
way of motion, as a defense or otherwise, any claim that it is not subject to
the in personam jurisdiction of any such
court, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.


 


(b)           Each
Subsidiary Guarantor agrees, to the fullest extent it may effectively do so
under applicable law, that a final judgment in any suit, action or proceeding
of the nature referred to in paragraph (a) of this Section 17 brought in
any such court shall be conclusive and binding upon such party, subject to
rights of appeal and may be enforced in the courts of the United States of
America or the State of New York (or any other courts to the jurisdiction of
which such party is or may be subject) by a suit upon such judgment.


 


(c)           Each
Subsidiary Guarantor consents to process being served by or on behalf of any
Holder in any suit, action or proceeding of the nature referred to in paragraph
(a) of this Section 17 by mailing a copy thereof by registered or
certified mail, postage prepaid, return receipt requested, to the address of
each Subsidiary Guarantor specified in Section 15 or at such other address
of which such Holder shall then have been notified pursuant to said Section. Each
Subsidiary Guarantor agrees that such service upon receipt (i) shall be deemed
in every respect effective service of process upon it in any such suit, action
or proceeding and (ii) shall, to the full extent permitted by law, be
taken and held to be valid personal service upon and personal delivery to such
party. Notices under this paragraph (c) of this Section 17 shall be
conclusively presumed received as evidenced by a delivery receipt furnished by
the United States Postal Service or any reputable commercial delivery service.


 


(d)           Nothing
in this Section 17 shall affect the right of any holder of Notes to serve
process in any manner permitted by law, or limit any right that the holders of
any of the Notes may have to bring proceedings against any Subsidiary Guarantor
in the courts of any appropriate jurisdiction or to enforce in any lawful
manner a judgment obtained in one jurisdiction in any other jurisdiction.


 


SECTION 18.              WAIVER OF JURY TRIAL.


 


EACH SUBSIDIARY GUARANTOR AND BY
ITS ACCEPTANCE HEREOF EACH HOLDER, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY OR THE NOTE PURCHASE AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT MATTER OF ANY OF THE FOREGOING.


 


SECTION 19.              SURVIVAL.


 


All warranties,
representations and covenants made by each Subsidiary Guarantor herein or in
any written certificate or other instrument required to be delivered by it or
on its behalf hereunder or under the Note Purchase Agreement shall be
considered to have been relied upon by the Holders and shall survive the
execution and delivery of this Guaranty, regardless of any


 


E-2.3-17

















 


investigation made by any
Holder or on such Holder’s behalf. All statements in any such certificate or
other instrument shall constitute warranties and representations by such
Subsidiary Guarantor hereunder.


 


SECTION 20.              SEVERABILITY.


 


To the fullest extent
permitted under applicable law, in the event any one or more of the provisions
contained in this Guaranty should be held invalid, illegal or unenforceable in
any respect with respect to any Subsidiary Guarantor, such Subsidiary Guarantor
shall not be required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, and the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired. The parties shall endeavor in
good-faith negotiations to replace any invalid, illegal or unenforceable
provisions with valid provisions, the economic effect of which comes as close
as possible to that of the invalid, illegal or unenforceable provisions. To the
extent permitted by applicable law, each Subsidiary Guarantor hereby waives any
provision of law that renders any provisions hereof invalid, illegal or
unenforceable in any respect.


 


SECTION 21.              SUCCESSORS AND ASSIGNS.


 


The terms of this
Guaranty shall be binding upon each Subsidiary Guarantor and its successors and
assigns and shall inure to the benefit of the Holders and their respective
successors and assigns.


 


SECTION 22.              TABLE OF CONTENTS; HEADINGS.


 


The section and paragraph
headings in this Guaranty and the table of contents 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 23.              COUNTERPARTS.


 


This Guaranty may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.


 


SECTION 24.              GOVERNING LAW.


 


This Guaranty shall in
all respects be governed by, and construed and interpreted in accordance with,
the laws of the State of New York, without regard to the conflicts of laws
principles of such state.


 


E-2.3-18

















 


SECTION 25.              RELEASE.


 


Notwithstanding any other
provision hereof to the contrary, including without limitation
Section 3(c)(v), 3(c)(xiv) and 3(c)(xv), a Subsidiary Guarantor shall be
automatically released from its guaranty hereunder upon the sale or exchange of
all or substantially all of the stock (or other equity interests) or the assets
of such Subsidiary Guarantor permitted pursuant to Section 10.5 of the
Note Purchase Agreement.


 


SECTION 26.              COVENANT COMPLIANCE.


 


Each Subsidiary Guarantor
agrees to comply with each of the covenants contained herein and in the Note
Purchase Agreement that imposes or purports to impose, by reference to such
Subsidiary Guarantor, express or otherwise, through agreements with the
Company, restrictions or obligations on such Subsidiary Guarantor.


 


[SIGNATURES
FOLLOW]


 


E-2.3-19

















 


IN WITNESS WHEREOF, each
party hereto has caused this Guaranty to be duly executed as of the date first
above written.


 


	
   

  	
  ALLSTEEL INC.

  
	
   

  	
  HEARTH & HOME TECHNOLOGIES INC.

  
	
   

  	
  PAOLI INC.

  
	
   

  	
  RIVER BEND CAPITAL CORPORATION

  
	
   

  	
  THE HON COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice information for each of the above Subsidiary
  Guarantors:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o HNI Corporation

  
	
   

  	
   

  	
  414 East Third Street

  
	
   

  	
   

  	
  PO Box 1109

  
	
   

  	
   

  	
  Muscatine, Iowa
  52761-0071

  
	
   

  	
  Attention:

  	
  Treasurer and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  (563) 272-7237 and

  
	
   

  	
   

  	
  (563) 272-7655

  
	
   

  	
  Email:

  	
   

  	
   

  
							



 


E-2.3-20

















 


EXHIBIT A


FORM OF SUPPLEMENTAL
AGREEMENT


 


SUPPLEMENTAL AGREEMENT
dated as of                         ,           
from                         ,
a             organized
under the laws of the State of                    
(the “New Subsidiary”), for the benefit of
the Holders (as defined in the Guaranty referred to below). Capitalized terms
used herein without definition shall have the respective meanings ascribed
thereto in the Subsidiary Guaranty Agreement, dated as of April 6, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Guaranty”), from: (i) Allsteel Inc., an Illinois
corporation, (ii) Hearth & Home Technologies Inc., an Iowa corporation,
(iii) Paoli Inc., an Iowa corporation, (iv) River Bend Capital Corporation, an
Iowa corporation, (v) The HON Company, an Iowa corporation, and (vi) such other
Subsidiaries (as defined below) as shall become parties thereto in accordance
therewith, for the benefit of the Holders (as such term is defined in such
Guaranty).


 


WHEREAS, HNI Corporation,
an Iowa corporation (the “Company”), has
authorized, issued and sold $150,000,000 5.54% Series 2006-A Senior Notes
due April 6, 2016 (the “Series 2006-A Notes”)
pursuant to a Note Purchase Agreement, dated as of April 6, 2006 (as amended,
modified or supplemented from time to time, the “Note
Purchase Agreement”) among the Company and the purchasers named
therein.


 


WHEREAS, Section 2.2
of the Note Purchase Agreement provides for the issuance by the Company of
Additional Notes (as such term is defined in the Note Purchase Agreement) of
one or more separate series from time to time in an aggregate principal amount
not to exceed $500,000,000.


 


WHEREAS, the Additional
Notes, together with the Series 2006-A Notes, are collectively referred to as
the “Notes”.


 


WHEREAS, the New
Subsidiary is a Subsidiary of the Company.


 


WHEREAS, certain existing
Subsidiaries of the Company have entered into the Guaranty.


 


WHEREAS, the Note
Purchase Agreement requires that certain Subsidiaries become party to the
Guaranty (as a Subsidiary Guarantor).


 


WHEREAS, the New
Subsidiary acknowledges that it has and will derive substantial benefits from
the issuance of the Notes.


 


WHEREAS, the Guaranty
specifies that additional Subsidiaries may become Subsidiary Guarantors under
the Guaranty by execution and delivery of an instrument in the form of this
Agreement. The undersigned Subsidiary is executing this Agreement in accordance
with the requirements of the Note Purchase Agreement and the Guaranty to become
a Subsidiary Guarantor under the Guaranty as consideration for the Notes
previously purchased.


 


EXHIBIT A


(to Form of Subsidiary
Guaranty Agreement)


 

















 


NOW, THEREFORE, the New Subsidiary Guarantor agrees as
follows:


 


Section 1.              Guaranty.
In accordance with Section 13 of the Guaranty, the New Subsidiary by its
signature hereto shall become a Subsidiary Guarantor under the Guaranty with
the same force and effect as if originally named therein as a Subsidiary
Guarantor and the New Subsidiary hereby (a) agrees to all the terms and
provisions of such Guaranty applicable to it as a Subsidiary Guarantor
thereunder, (b) represents and warrants that the representations and warranties
made by it as a Subsidiary Guarantor are true and correct on and as of the date
hereof with the same effect as though made on and as of the date hereof, (c)
acknowledges receipt of a copy of and agrees to be obligated and bound by the
terms of the Guaranty, and (d) agrees that each reference to a “Subsidiary Guarantor” in such Guaranty shall be deemed to
include the New Subsidiary.


 


Section 2.              Enforceability.
The New Subsidiary hereby represents and warrants that this Agreement has been
duly authorized, executed and delivered by the New Subsidiary and that each of
this Agreement and the Guaranty (as supplemented hereby) constitutes a legal,
valid and binding obligation of the New Subsidiary enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the applicability of creditors’ rights generally and by equitable principles of
general applicability (regardless of whether such enforceability is considered
in a proceeding in equity or at law).


 


Section 3.              Effect
on Guaranty. Except as expressly supplemented hereby, the Guaranty shall
continue in full force and effect.


 


Section 4.              GOVERNING
LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.


 


Section 5.              Savings
Clause. To the fullest extent permitted under applicable law, in the event
any one or more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect with respect to the New
Subsidiary, no party hereto shall be required to comply with such provision for
so long as such provision is held to be invalid, illegal or unenforceable, and
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired. The parties shall endeavor
in good-faith negotiations to replace any invalid, illegal or unenforceable
provisions with valid provisions, the economic effect of which comes as close
as possible to that of the invalid, illegal or unenforceable provisions.


 


Section 6.              Notices.
All communications to the New Subsidiary shall be given to it at the address,
email address or facsimile number set forth under its signature hereto.


 


E-A-2

















 


IN WITNESS WHEREOF, the
New Subsidiary has duly executed this Agreement as of the day and year first
above written.


 


	
   

  	
  [NEW SUBSIDIARY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  (     )
        -        

  	
   

  
	
   

  	
  Email:

  	
   

  	
   

  
						



 


E-A-3

















 


FORM OF OPINION OF
SPECIAL COUNSEL TO THE COMPANY


 


 


EXHIBIT 4.4(a)


(to Note Purchase
Agreement)


[Intentionally Removed]


 

















 


FORM OF OPINION OF
SPECIAL COUNSEL TO THE PURCHASERS


 


 


EXHIBIT 4.4(b)


(to Note Purchase
Agreement)


[Intentionally Removed]


 


 

















 


HNI CORPORATION


 


 


[NUMBER]
SUPPLEMENT TO NOTE PURCHASE AGREEMENT


 


Dated as of ______________________


 


 


Re:          $                    
             %
Series                 
Senior Notes


DUE                        


 


 


EXHIBIT S


(to Note Purchase
Agreement)


 

















 


HNI CORPORATION


414 EAST
THIRD STREET


P.O. BOX
1109


MUSCATINE,
IA  52761-0071


 


Dated as of


                                         ,
20      


 


To the Purchaser(s) named
in


Schedule A hereto


 


Ladies and Gentlemen:


 


This [Number] Supplement
to Note Purchase Agreement (the “Supplement”)
is between HNI CORPORATION, an Iowa corporation (the “Company”),
and the institutional investors named on Schedule A attached hereto (the “Purchasers”).


 


Reference is hereby made
to that certain Note Purchase Agreement dated as of April 6, 2006 (the “Note Purchase Agreement”) between the Company and the
purchasers listed on Schedule A thereto. All capitalized terms not
otherwise defined herein shall have the same meaning as specified in the Note
Purchase Agreement. Reference is further made to Section 2.2(b) of the
Note Purchase Agreement which requires that, prior to the delivery of any
Additional Notes, the Company and each Additional Purchaser shall execute and
deliver a Supplement.


 


The Company hereby agrees
with the Purchaser(s) as follows:


 


1.             The
Company has authorized the issue and sale of $                    
aggregate principal amount of its                %
Series             [,
Tranche,] Senior Notes due               ,
             (the “Series           
Notes”). The Series           
Notes, together with the Series 2006-A Notes [and the Series            
Notes] initially issued pursuant to the Note Purchase Agreement [and the           
Supplement] and each series of Additional Notes
which may from time to time hereafter be issued pursuant to the provisions of
Section 2.2 of the Note Purchase Agreement, are collectively referred to
as the “Notes” (such term shall also include
any such notes issued in substitution therefor pursuant to Section 13 of
the Note Purchase Agreement). The Series              
Notes shall be substantially in the form set out in Exhibit 1 hereto with
such changes therefrom, if any, as may be approved by the Purchaser(s) and the
Company.


 


2.             Subject
to the terms and conditions hereof and as set forth in the Note Purchase
Agreement and on the basis of the representations and warranties hereinafter
set forth, the Company agrees to issue and sell to each Purchaser, and each
Purchaser agrees to purchase from the Company, Series               
Notes in the principal amount set forth opposite such Purchaser’s name on
Schedule A hereto at a price of 100% of the principal amount thereof on
the closing date hereinafter mentioned. The obligations of each Purchaser
hereunder are several and not


 

















 


joint obligations and no
Purchaser shall have any obligation or any liability to any Person for the
performance or nonperformance by any other Purchaser hereunder.


 


3.             The
sale and purchase of the Series
              
Notes to be purchased by each Purchaser shall occur at the offices of [                                          ]
at 10:00 A.M. Chicago time, at a closing (the “Closing”)
on               ,
              
or on such other Business Day thereafter on or prior to               ,
              
as may be agreed upon by the Company and the Purchasers (the “Closing Date”). At the Closing, the Company will deliver to
each Purchaser the Series
              
Notes to be purchased by such Purchaser in the form of a single Series
              
Note (or such greater number of Series
              
Notes in denominations of at least $100,000 as such Purchaser may request)
dated the Closing Date and registered in such Purchaser’s name (or in the name
of such Purchaser’s nominee), against delivery by such Purchaser 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 [                                          ]
at                             
Bank, [Insert Bank address, ABA number for wire transfers,
and any other relevant wire transfer information]. If, at the
Closing, the Company shall fail to tender such Series
              
Notes to any Purchaser as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to any
Purchaser’s satisfaction, such Purchaser shall, at such Purchaser’s election,
be relieved of all further obligations under this Agreement, without thereby
waiving any rights such Purchaser may have by reason of such failure or such
nonfulfillment.


 


4.             The
obligation of each Purchaser to purchase and pay for the Series
              
Notes to be sold to such Purchaser at the Closing is subject to the fulfillment
to such Purchaser’s satisfaction, prior to the Closing, of the conditions set
forth in Section 4 of the Note Purchase Agreement with respect to the Series
              
Notes to be purchased at the Closing, and to the following additional
conditions:


 


(a)           Except
as supplemented, amended or superceded by the representations and warranties
set forth in Exhibit A hereto, each of the representations and warranties of
the Company set forth in Section 5 of the Note Purchase Agreement shall be
correct as of the Closing Date and the
Company shall have delivered to each Purchaser an Officer’s Certificate, dated
the Closing Date certifying that such condition has been fulfilled.


 


(b)           Contemporaneously
with the Closing, the Company shall sell to such Purchaser, and such Purchaser
shall purchase, the Series
              
Notes to be purchased by such Purchaser at the Closing as specified in
Schedule A.


 


5.             [Here
insert special provisions for Series              
Notes including prepayment provisions applicable to Series
              
Notes (including Make-Whole Amount) and closing conditions applicable to Series
              
Notes].


 


6.             Each
Purchaser represents and warrants that the representations and warranties set
forth in Section 6 of the Note Purchase Agreement are true and correct on
the date hereof with respect to the purchase of the Series
              
Notes by such Purchaser.


 


E-S-2

















 


7.             The
Company and each Purchaser agree to be bound by and comply with the terms and
provisions of the Note Purchase Agreement as fully and completely as if such
Purchaser were an original signatory to the Note Purchase Agreement.


 


The execution hereof
shall constitute a contract between the Company and the Purchaser(s) for the
uses and purposes hereinabove set forth, and this agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.


 


	
   

  	
  HNI CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Accepted as of                   ,
                   

  	
   

  
	
   

  	
   

  
	
   

  	
  [VARIATION]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


E-S-3

















 


INFORMATION RELATING TO
PURCHASERS


 


 


	
  NAME AND ADDRESS OF PURCHASER

  	
   

  	
  PRINCIPAL

  AMOUNT OF SERIES

              NOTES TO

  BE PURCHASED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [NAME OF PURCHASER]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (1)

  	
  All payments by wire
  transfer of immediately available funds to:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with sufficient
  information to identify the source and application of such funds.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (2)

  	
  All notices of payments
  and written confirmations of such wire transfers:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
  All other
  communications:

  	
   

  	
   

  	
   

  
						



 


SCHEDULE A


(to Supplement)


 

















 


SUPPLEMENTAL
REPRESENTATIONS


 


The Company represents
and warrants to each Purchaser that except as hereinafter set forth in this
Exhibit A, each of the representations and warranties set forth in Section 5 of
the Note Purchase Agreement is true and correct in all material respects as of
the date hereof with respect to the Series                 
Notes with the same force and effect as if each reference to “Series 2006-A
Notes” set forth therein was modified to refer the “Series                 
Notes” and each reference to “this Agreement” therein was modified to refer to
the Note Purchase Agreement as supplemented by the                 
Supplement. The Section references hereinafter set forth correspond to the
similar sections of the Note Purchase Agreement which are supplemented hereby:


 


Section 5.3.           Disclosure.
The Company, through its agent, Banc of America Securities LLC has delivered to
each Purchaser a copy of a Private Placement Memorandum, dated                 
(the “Memorandum”), relating to the
transactions contemplated by the                 
Supplement. The Disclosure Documents (as defined below), taken as a whole,
fairly describe, in all material respects, the general nature of the business
and principal properties of the Company and its Restricted Subsidiaries. The                 
Supplement, the Note Purchase Agreement, the Memorandum, the documents,
certificates or other writings delivered to each Purchaser by or on behalf of
the Company in connection with the transactions contemplated by the Note
Purchase Agreement and the                 
Supplement and identified in Schedule 5.3 to the         
Supplement, and the financial statements listed in Schedule 5.5 to the                 
Supplement (the          Supplement,
the Note Purchase Agreement, the Memorandum and such documents, certificates and
other writings and such financial statements being referred to collectively, as
the “Disclosure Documents”), 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
the light of the circumstances under which they were made. Except as disclosed
in the Disclosure Documents, since                         ,
there has been no change  in  the 
financial  condition, operations,
business or properties of the Company or any Restricted Subsidiary except
changes that individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect. There is no fact known to the Company that
would reasonably be expected to have a Material Adverse Effect that has not
been set forth herein or in the Disclosure Documents.


 


Section 5.4.           Organization
and Ownership of Shares of Subsidiaries. (a) Schedule 5.4 to the                 
Supplement contains (except as noted therein) complete and correct lists of
(i) the Company’s Restricted and Unrestricted Subsidiaries, and showing,
as to each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital stock
or similar equity interests outstanding owned by the Company and each other
Subsidiary, and all other material Investments of the Company and its
Restricted Subsidiaries, (ii) the Company’s Affiliates, other than
Subsidiaries and Undisclosed Affiliates, and (iii) the Company’s directors and
senior officers.


 


Section 5.13.        Private
Offering by the Company. Neither the Company nor anyone acting on its
behalf, directly or through any agent, has offered the Series
           Notes or any
similar securities for sale to, or solicited any offer to buy any of the same
from, or otherwise approached


 


EXHIBIT A

(to Supplement)


 

















 


or negotiated in respect
thereof with, any Person other than the Purchasers and not more than [                ]
other Institutional Investors of the type described in clause (c) of the
definition thereof, each of which has been offered the Series
                
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.


 


Section 5.14.        Use
of Proceeds; Margin Regulations. The Company will apply the proceeds of the
sale of the Series
                
Notes to                                                 
and for general corporate purposes. No part of the proceeds from the sale of
the Series
                
Notes pursuant to the                 
Supplement 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 10% of the value
of the consolidated assets of the Company and its Subsidiaries and the Company
does not have any present intention that margin stock will constitute more than
10% 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.


 


Section 5.15.        Existing
Debt; Future Liens. (a) Schedule 5.15 to the                 
Supplement sets forth a complete and correct list of all outstanding Debt of
the Company and its Restricted Subsidiaries as of                        ,
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Debt of the
Company or its Restricted Subsidiaries. Neither the Company nor any Restricted
Subsidiary is in default and no waiver of default is currently in effect, in
the payment of any principal or interest on any Debt of the Company or such
Subsidiary and no event or condition exists with respect to any Debt of the
Company or any Restricted Subsidiary that would permit (or that with notice or
the lapse of time, or both, would permit) one or more Persons to cause such
Debt to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.


 


[Add any additional
Sections as appropriate at the time the Series                 
Notes are issued]


 


E-A-2

















 


[FORM OF SERIES             
NOTE]


 


HNI CORPORATION


 


       % SERIES           SENIOR NOTE DUE                 


 


	
  No.
  [              ]

  	
   

  	
  [Date]

  
	
  $[                      ]

  	
   

  	
  PPN
  [                ]

  



 


FOR VALUE RECEIVED, the
undersigned, HNI Corporation, an Iowa corporation (herein called the “Company”), a corporation organized and existing under the
laws of the State of                                    ,
hereby promises to pay to [                                   ],
or registered assigns, the principal sum of [                                   ]
DOLLARS (or so much thereof as shall not have been prepaid) on                                    ,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate of        %
per annum from the date hereof, payable semiannually, on the           
day of        and               
in each year, commencing on the first of such dates after the date hereof,
until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law, at a rate per annum from time to time equal to [2%
above the stated rate], on any overdue payment of interest and, during the
continuance of an Event of Default, on the unpaid balance hereof and on any
overdue payment of any Make-Whole Amount, payable [semiannually] as aforesaid
(or, at the option of the registered holder hereof, on demand).


 


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                                    ,
in                                    ,
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 a
series of Senior Notes (the “Notes”) issued
pursuant to a Supplement to the Note Purchase Agreement dated as of                         
           , 2006 (as
from time to time amended, supplemented or modified, the “Note
Purchase Agreement”), between the Company, the Purchasers named
therein and Additional Purchasers of Notes from time to time issued pursuant to
any Supplement to the Note Purchase Agreement. This Note and the holder hereof
are entitled equally and ratably with the holders of all other Notes of all
series from time to time outstanding under the Note Purchase Agreement to all
the benefits provided for thereby or referred to therein. Each holder of this
Note will be deemed, by its acceptance hereof, to have (i) agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) made the representations set forth in Sections 6.2
and 6.3 of the Note Purchase Agreement, provided that
such holder may (in reliance upon information provided by the Company, which
shall not be unreasonably withheld) make a representation to the effect that the
purchase by such holder of any Note will not constitute a non-exempt prohibited
transaction under Section 406(a) of ERISA. Unless otherwise indicated,
capitalized terms used in this Note shall have the respective meanings ascribed
to such terms in the Note Purchase Agreement.


 


EXHIBIT 1


(to Supplement)


 

















 


This Note is registered
with the Company 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 of the same series 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 not subject to regularly scheduled prepayments of principal.] This Note is
[also] subject to optional prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.


 


Pursuant to the
Subsidiary Guaranty Agreement dated as of                     
         , 2006 (as amended or
modified from time to time, the “Subsidiary Guaranty”),
certain Subsidiaries of the Company have absolutely and unconditionally
guaranteed payment in full of the principal of, Make-Whole Amount, if any, and
interest on this Note and the performance by the Company of its obligations
contained in the Note Purchase Agreement all as more fully set forth in said
Subsidiary Guaranty.


 


If an Event of Default
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.


 


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 New York] excluding choice-of-law
principles of the law of such State that would require the application of the
laws of a jurisdiction other than such State.


 


	
   

  	
  HNI CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


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