1
Exhibit 4(f)
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Revolving Credit Agreement,
made to be effective on
February 28, 1996, among
▇. ▇. ▇▇▇▇▇ Corporation,
The Bank of New York,
The Huntington National Bank
and NBD Bank
2
REVOLVING CREDIT AGREEMENT
▇. ▇. ▇▇▇▇▇ CORPORATION
THE BANK OF NEW YORK
THE HUNTINGTON NATIONAL BANK
NBD BANK
FEBRUARY 28, 1996
3
TABLE OF CONTENTS
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SECTION 1. COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Basic Commitment Terms. . . . . . . . . . . . . . . . . . . . . . 1
1.2 Commitment Limitations. . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 2
2.1 Organization, Corporate Power, etc. . . . . . . . . . . . . . . . 2
2.2 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7 Renegotiation of Government Contracts . . . . . . . . . . . . . . 3
2.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.11 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 Government Consent . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 Legal and Binding Obligation . . . . . . . . . . . . . . . . . . . 4
2.14 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 4
3.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 "Alternate Base Rate" . . . . . . . . . . . . . . . . . . . . . . 5
3.3 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 "Capitalized Lease" . . . . . . . . . . . . . . . . . . . . . . . 5
3.5 "Capitalized Lease Obligation" . . . . . . . . . . . . . . . . . . 5
3.6 "Consolidated Current Assets" . . . . . . . . . . . . . . . . . . 5
3.7 "Consolidated Current Liabilities" . . . . . . . . . . . . . . . . 5
3.8 "Consolidated Funded Debt" . . . . . . . . . . . . . . . . . . . . 5
3.9 "Consolidated Net Income" . . . . . . . . . . . . . . . . . . . . 5
3.11 "Consolidated Net Tangible Assets" . . . . . . . . . . . . . . . . 6
3.12 "Consolidated Net Worth" . . . . . . . . . . . . . . . . . . . . . 6
3.13 "Consolidated Tangible Net Worth" . . . . . . . . . . . . . . . . 6
3.14 "Consolidated Senior Funded Debt" . . . . . . . . . . . . . . . . 6
3.15 "Consolidated Total Assets" . . . . . . . . . . . . . . . . . . . 6
3.16 "Current Debt" . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.17 "Debt" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.18 "Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.19 "Dollars" and "$" . . . . . . . . . . . . . . . . . . . . . . . . 6
3.20 "Domestic Loans" . . . . . . . . . . . . . . . . . . . . . . . . . 7
010170.009 2
4
3.21 "Eurodollar Interest Rate" . . . . . . . . . . . . . . . . . 7
3.22 "Eurodollar Loans" . . . . . . . . . . . . . . . . . . . . . 7
3.23 "Event of Default" . . . . . . . . . . . . . . . . . . . . . 7
3.24 "Federal Funds Rate" . . . . . . . . . . . . . . . . . . . . 7
3.25 "Funded Debt" . . . . . . . . . . . . . . . . . . . . . . . 7
3.26 "GAAP" . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.27 "Guaranties" . . . . . . . . . . . . . . . . . . . . . . . . 7
3.28 "Interest Period" . . . . . . . . . . . . . . . . . . . . . 8
3.28.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.28.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.29 "Investment" . . . . . . . . . . . . . . . . . . . . . . . . 8
3.31 "LIBOR Business Day" . . . . . . . . . . . . . . . . . . . . 9
3.32 "Lien" . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.33 "Loan" or "Loans" . . . . . . . . . . . . . . . . . . . . . 9
3.34 "Metropolitan Agreement" . . . . . . . . . . . . . . . . . . 9
3.35 "Net Income" . . . . . . . . . . . . . . . . . . . . . . . . 9
3.36 "Note" or "Notes" . . . . . . . . . . . . . . . . . . . . . 9
3.37 "Permitted Investments" . . . . . . . . . . . . . . . . . . 9
3.37.1 . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.37.2 . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.37.3 . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.37.4 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.37.5 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.37.6 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.37.7 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.37.8 . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.38 "Person" . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.39 "Prime Rate" . . . . . . . . . . . . . . . . . . . . . . . . 10
3.40 "Senior Funded Debt" . . . . . . . . . . . . . . . . . . . . 10
3.41 "Subordinated Funded Debt" . . . . . . . . . . . . . . . . . 10
3.42 "Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . 11
3.43 "Termination Date" . . . . . . . . . . . . . . . . . . . . . 11
3.44 "Total Capitalization" . . . . . . . . . . . . . . . . . . . 11
SECTION 4. BORROWING PROVISION . . . . . . . . . . . . . . . . . . 11
4.1 Amount of Revolving Credit . . . . . . . . . . . . . . . . . 11
4.2 Evidence of Loans Made Under Revolving Credit . . . . . . . 11
4.3 Commitment Fees . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Conversion of Loans . . . . . . . . . . . . . . . . . . . . 12
4.5 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.6 Termination or Reduction Options . . . . . . . . . . . . . . 13
4.7 Interest Payment Dates . . . . . . . . . . . . . . . . . . . 13
4.8 Payment Method . . . . . . . . . . . . . . . . . . . . . . . 13
4.9 No Setoff or Deduction . . . . . . . . . . . . . . . . . . . 14
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5
4.10 Payment on Non-Business Day; Payment Computations . . . . . . . . . 14
4.11 Extension of Commitments . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5. PRO RATA TREATMENT . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . 15
6.1 Opinion of Counsel for Borrower . . . . . . . . . . . . . . . . . . 15
6.2 Supporting Documents . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 7. PROVISIONS RELATING TO EURODOLLAR LOANS . . . . . . . . . . . . 16
7.1 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.2 Additional Eurocurrency Reserves . . . . . . . . . . . . . . . . . . 16
7.3 Limitations of Requests and Elections . . . . . . . . . . . . . . . 17
7.4 Illegality and Impossibility . . . . . . . . . . . . . . . . . . . . 18
7.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.6 Survival of Obligations . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 18
8.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 19
8.2 Out of Pocket Expenses . . . . . . . . . . . . . . . . . . . . . . . 19
8.3 Compliance with Statutes; Payment of Taxes . . . . . . . . . . . . . 19
8.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.5 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . 20
8.6 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.7 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.8 Inspection of Books and Records . . . . . . . . . . . . . . . . . . 20
8.9 Notification by Borrower . . . . . . . . . . . . . . . . . . . . . . 21
8.10 Amendments to Metropolitan Agreement . . . . . . . . . . . . . . . . 21
8.11 Notice of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 21
9.1 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.2 Limitations on Debt . . . . . . . . . . . . . . . . . . . . . . . . 21
9.3 Additional Limitations on Debt . . . . . . . . . . . . . . . . . . . 22
9.3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.4 Maintenance of Consolidated Tangible Net Worth 22
9.5 Interest Coverage . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.7 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . 23
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6
9.8 Permits and Liens . . . . . . . . . . . . . . . . . . . . . . . . 23
9.8.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.8.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.8.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.8.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.8.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.8.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.9 Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . 24
9.9.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.9.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.10 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . 24
9.10.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.10.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.10.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.10.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.11 Sale-Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.12 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . 25
9.13 Restrictions on Borrower . . . . . . . . . . . . . . . . . . . . . 26
9.13.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.13.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.14 Permitted Investments . . . . . . . . . . . . . . . . . . . . . . 26
9.15 Limitation on Restrictive Covenants . . . . . . . . . . . . . . . 26
9.16 Loan, Advances and Purchases of Stock . . . . . . . . . . . . . . 26
SECTION 10. FURTHER ASSURANCE . . . . . . . . . . . . . . . . . . . . . 27
SECTION 11. TAXES AND STAMPS . . . . . . . . . . . . . . . . . . . . . 27
SECTION 12. ARRANGEMENT BETWEEN BANKS . . . . . . . . . . . . . . . . . 27
SECTION 13. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . 28
13.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 28
13.1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
13.1.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
13.1.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
13.1.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.1.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.1.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.1.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.1.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.1.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5
7
13.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 31
14.1 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . 31
14.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 31
14.3 Conduct No Waiver; Remedies Cumulative . . . . . . . . . . . 31
14.4 Reliance on and Survival of Various Provisions . . . . . . . 32
14.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 32
14.5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
14.5.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
14.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . 32
14.7 Assignment to Federal Reserve Banks . . . . . . . . . . . . 33
14.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 33
14.9 Governing Law, Consent to Jurisdiction and Waiver of I . . . 33
14.10 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 33
14.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 34
14.12 Construction of Certain Provisions . . . . . . . . . . . . . 34
14.13 Integration and Severability . . . . . . . . . . . . . . . . 34
14.14 Usury . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6
8
REVOLVING CREDIT AGREEMENT
THIS AGREEMENT, is made and entered into to be effective on February 28,
1996, by and among ▇. ▇. ▇▇▇▇▇ CORPORATION, an Ohio corporation (hereinafter
called the "Borrower"), THE BANK OF NEW YORK, a New York trust company, NBD
BANK, a Michigan banking corporation of Detroit, Michigan, and THE HUNTINGTON
NATIONAL BANK, a national banking association of Columbus, Ohio (hereinafter
collectively called the "Banks" and each individually a "Bank");
The Borrower and the Banks hereby agree as follows:
SECTION 1. COMMITMENTS.
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1.1 BASIC COMMITMENT TERMS. The Borrower has applied to the Banks for
revolving credit loans up to an aggregate principal amount of $51,000,000, the
proceeds of which are to be used by the Borrower for general corporate
purposes, including, without limitation, seasonal financing of inventory and
accounts receivable. Each of the Banks is willing to make such loans to the
Borrower upon the terms and subject to the conditions hereinafter set forth up
to a maximum aggregate principal amount not in excess of the amount set forth
opposite its name below and otherwise in accordance with the pro rata
requirements of Section 4 hereof (said amount being hereinafter called the
"Commitment" of such Bank and collectively called the "Commitments"):
BANK ADDRESS COMMITMENT
---- ------- ----------
The Bank of New York ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ $17,000,000
The Huntington ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $17,000,000
NBD Bank ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $17,000,000
1.2 COMMITMENT LIMITATIONS. Notwithstanding the foregoing, during the
following periods in each year occurring during the term of this Agreement the
aggregate Commitments of the Banks (each Bank's individual Commitment being one
third (1/3) of the aggregate) shall be in an amount equal to the lesser of the
following amounts or the amount to which the Commitments have been reduced
pursuant to Section 4.6 hereof:
9
Period Commitment
------ ----------
From 01/01 through 01/31 $ 6,000,000
From 02/01 through 03/31 $24,000,000
From 04/01 through 06/30 $37,500,000
From 07/01 through 11/29 $51,000,000
From 11/30 through 12/31 $37,500,000
SECTION 2. REPRESENTATIONS AND WARRANTIES.
-------------------------------
The Borrower represents and warrants to the Banks:
2.1 ORGANIZATION, CORPORATE POWER, ETC. Each of the Borrower and each
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was incorporated, and
each has the corporate power and authority to own its property and to carry on
its business as now being conducted and each is duly qualified (or is in the
process of becoming qualified) and where qualified, is in good standing, to do
business in every jurisdiction where such qualification is necessary, except
where failure to qualify would not have a material adverse effect upon the
financial condition, business or operations of the Borrower and its
Subsidiaries, taken as a whole. The Borrower has the corporate power to
execute, deliver and perform this Agreement, to borrow hereunder and to execute
and deliver the Notes herein referred to and to do so will not violate any
laws, rules, regulations, orders or decrees, its Articles of Incorporation or
Code of Regulations or any other agreement or instrument to which it is a
party.
2.2 LITIGATION. Except as set forth in Exhibit "C", there is no
litigation or proceeding pending against the Borrower, or any Subsidiary of the
Borrower, nor to the knowledge of the officers of the Borrower or its
Subsidiaries threatened, which, if decided adversely to the Borrower or any
such Subsidiary, would have a material adverse effect upon the financial
condition, business or operations of the Borrower and its Subsidiaries, taken
as a whole.
2.3 FINANCIAL CONDITION. The audited financial statements of the Borrower
for the fiscal year ended December 31, 1994 certified by KPMG Peat Marwick,
independent certified public accountants, and the interim unaudited financial
statements for the thirty-eight (38) week period ended September 23, 1995,
fairly reflect the financial condition of the Borrower and each Subsidiary and
the results of their operations as of the dates and for the periods stated, and
no material adverse change in the financial condition, business or operations
of the Borrower and its Subsidiaries, taken as a whole, has occurred since the
dates of such financial statements and interim statements. Such financial
statements are consolidated statements and have been prepared in accordance
with generally accepted accounting principles.
2
10
2.4 TITLE TO PROPERTIES. Each of the Borrower and each Subsidiary has
good and marketable title to its property and assets. Such property and assets
of the Borrower and its Subsidiaries are not subject to a mortgage or lien
except as shown on Exhibit F attached hereto except for properties leased by
the Borrower or its Subsidiaries under Industrial Revenue Bond financing and
except for current property taxes not yet due.
2.5 LIABILITIES. The Borrower and its Subsidiaries have no liabilities,
direct or contingent, except (i) those disclosed in the audited financial
statements and interim statements referred to in Section 2.3 above, and (ii)
those incurred in the ordinary course of business since the dates of such
reports and interim statements referred to in Section 2.3 above, having in the
aggregate no materially adverse effect on the financial condition, business or
operations of the Borrower and its Subsidiaries, taken as a whole.
2.6 INVESTMENTS. The Borrower and its Subsidiaries have made no material
investments in, advances to or Guaranties of the obligations of any
corporation, individual or other entity except those disclosed in the interim
statements referred to in Section 2.3 above and the Permitted Investments.
2.7 RENEGOTIATION OF GOVERNMENT CONTRACTS. The Borrower and its
Subsidiaries are not subject to the renegotiation of any government contract in
any material amount.
2.8 TAXES. The Borrower and its Subsidiaries have filed all required
federal, state and local tax returns and paid all required federal, state and
local taxes as they have become due. Federal income taxes have been audited
through 1987, and no material claims have been assessed and are unpaid with
respect to such taxes except as shown in the audited financial statements or
interim financial statements referred to in Section 2.3 above.
2.9 ERISA. The Borrower and its Subsidiaries (i) have made prompt payment
of all contributions required to meet the minimum funding standards set forth
in Sections 302 and 305 of the Employee Retirement Income Security Act of 1974
as amended from time to time ("ERISA") with respect to any employee benefit
plan ("plan"), and (ii) have not:
(a) engaged in any "Prohibited Transaction", as that term is defined in
Section 406 of ERISA for which there is no exemption under Section 408 of
ERISA, or
(b) terminated any such plan in a manner which would result in the
imposition of a lien on the property of the Borrower pursuant to Section
4068 of ERISA.
2.10 USE OF PROCEEDS. The proceeds of all borrowings hereunder will be
used for general corporate purposes, but not directly or indirectly to
purchase or to carry
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any margin stock as defined by Regulation U of the Board of Governors of the
Federal Reserve System, and the Borrower is not in the business of extending
credit to purchase or carry margin stock.
2.11 COMPLIANCE WITH LAW. The Borrower and its Subsidiaries are not in
violation of, whether foreign or domestic, any laws, ordinances, governmental
rules, regulations, judgments or agreements to which they are subject and have
not failed to obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership of their properties or to the conduct
of their businesses, which violation or failure to obtain might materially and
adversely affect the business, prospects, properties or condition (financial or
otherwise) of the Borrower.
2.12 GOVERNMENT CONSENT. Neither the nature of the Borrower or its
Subsidiaries, or of their businesses or properties, nor any relationship
between the Borrower or its Subsidiaries and any other entity or person, nor
any circumstance in connection with the execution of this Agreement, is such as
to require a consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of the Borrower or
its Subsidiaries as a condition to the execution, delivery, performance,
validity or enforceability of this Agreement (including as to each borrowing
hereunder), the Notes and documents contemplated herein.
2.13 LEGAL AND BINDING OBLIGATION. (i) The Board of Directors of the
Borrower has duly authorized the execution, delivery and performance of this
Agreement and the Notes and this Agreement and the Notes will constitute valid
and binding obligations of the Borrower enforceable in accordance with their
terms; and (ii) the execution of this Agreement, the Notes and related
documents and compliance by the Borrower with all the provisions of this
Agreement are within the corporate powers of the Borrower, are legal and will
not conflict with, result in any breach of any of the provisions of, constitute
a default under, or result in the creation of any lien or encumbrance upon any
property of the Borrower under the provisions of, any agreement, charter
instrument, bylaw or other instrument to which the Borrower is a party or by
which it is bound.
2.14 INVESTMENT COMPANY ACT. None of the Borrower or any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3. CERTAIN DEFINITIONS.
--------------------
As used herein the following words and terms shall have the following
meanings, respectively:
3.1 "Affiliate" means any Person which, directly or indirectly, controls
or is controlled by or is under common control with the Borrower or a
Subsidiary or which beneficially owns or holds or has the power to direct the
voting power of 5% or more of the
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voting stock of the Borrower or a Subsidiary or which has 5% or more of its
voting stock (or, in the case of a Person which is not a corporation, 5% or
more of its equity interest) beneficially owned or held, directly or
indirectly, by the Borrower or a Subsidiary, and any director or officer of the
Borrower or its Subsidiaries. For purposes of this definition, "control" means
the power to direct the management and policies of a Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlled by" and "under common control with" have
meanings correlative to the foregoing. Subsidiaries are not included within
the definition of Affiliate.
3.2 "Alternate Base Rate" means, as to each Bank, for any day, a rate per
annum equal to the higher of (i) such Bank's Prime Rate in effect on such day
or (ii) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
3.3 "Business Day" means a day other than a Saturday, Sunday or other day
on which a Bank is not open for the transaction of substantially all of its
banking functions.
3.4 "Capitalized Lease" means and includes at any time any lease of
property, real or personal, which in accordance with GAAP would at such time be
required to be capitalized on a balance sheet of the lessee.
3.5 "Capitalized Lease Obligation" means at any time the capitalized
amount of the rental commitment under a Capitalized Lease which in accordance
with GAAP would at such time be required to be shown on a balance sheet of the
lessee.
3.6 "Consolidated Current Assets" means the assets of the Borrower and its
Subsidiaries that would (determined on a consolidated basis in accordance with
GAAP consistently applied) be classified as "current assets" on its
consolidated balance sheet.
3.7 "Consolidated Current Liabilities" means (i) the liabilities of the
Borrower and its Subsidiaries that would (determined on a consolidated basis in
accordance with GAAP consistently applied) be classified as "current
liabilities" on its consolidated balance sheet, (ii) Guaranties by the Borrower
of Current Debt of other Persons, and (iii) debt owed to banks.
3.8 "Consolidated Funded Debt" means the aggregate amount of Funded Debt
of the Borrower and its Subsidiaries, as consolidated in accordance with GAAP
and after eliminating intercompany items.
3.9 "Consolidated Net Income" means the aggregate of the Net Income of the
Borrower and its Subsidiaries, after eliminating all intercompany items and
portions of earnings properly attributable to minority interests, if any, in
the capital stock of such Subsidiaries, all computed and consolidated in
accordance with GAAP.
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3.10 "Consolidated Net Interest Expense" means the aggregate of the
interest expense of the Borrower and its Subsidiaries less aggregate interest
income of the Borrower and its Subsidiaries, all computed and consolidated in
accordance with GAAP.
3.11 "Consolidated Net Tangible Assets" means as of the date of any
determination thereof, Consolidated Total Assets as of such date less the sum
of (i) Consolidated Current Liabilities and (ii) assets properly classified as
intangible assets in accordance with GAAP.
3.12 "Consolidated Net Worth" means as of the date of any determination
thereof the sum of all amounts which, in accordance with GAAP, would be
included under shareholders' equity plus (to the extent not included in
shareholders' equity) preferred stock, as determined on a consolidated basis,
on the balance sheet of the Borrower and its Subsidiaries.
3.13 "Consolidated Tangible Net Worth" means as of the date of any
determination thereof the sum of all amounts which, in accordance with GAAP,
would be included under shareholders' equity plus (to the extent not included
in shareholders' equity) preferred stock, as determined on a consolidated
basis, on the balance sheet of the Borrower and its Subsidiaries, MINUS assets
properly classified as intangible assets in accordance with GAAP.
3.14 "Consolidated Senior Funded Debt" means the aggregate amount of Senior
Funded Debt of the Borrower and its Subsidiaries, as consolidated in accordance
with GAAP and after eliminating intercompany items.
3.15 "Consolidated Total Assets" means, as of the date of any determination
thereof, the total amount of all assets of the Borrower and its Subsidiaries as
determined on a consolidated basis in accordance with GAAP.
3.16 "Current Debt" of any Person shall mean as of the date of any
determination thereof (i) all indebtedness of such Person for borrowed money
other than Funded Debt of such Person, including, without limitation, debt owed
to banks, and (ii) Guaranties by such Person of Current Debt of others.
3.17 "Debt" of any Person means all Current Debt of such Person and all
Funded Debt of such Person.
3.18 "Default" means any event which, with the lapse of time or the giving
of notice pursuant to the terms of this Agreement, or both, becomes an Event of
Default.
3.19 "Dollars" and "$" mean the lawful money of the United States of
America.
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3.20 "Domestic Loans" means the Loans carrying interest at rates based upon
the Alternate Base Rate.
3.21 "Eurodollar Interest Rate" means LIBOR plus one percent (1%).
3.22 "Eurodollar Loans" means the Loans carrying interest at rates based
upon the Eurodollar Interest Rate.
3.23 "Event of Default" has the meaning specified in Section 13 hereof.
3.24 "Federal Funds Rate" means, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day which is a Business Day, the average of quotations for such day on such
transactions received by the Banks, or any of them, from three Federal funds
brokers of recognized standing selected by the Banks, or any of them.
3.25 "Funded Debt" of any Person means (i) indebtedness of such Person for
borrowed money or which has been incurred in connection with the acquisition of
assets or services, in each case having a final maturity of more than one year
from the date of creation thereof (or which is renewable or extendible at the
option of the obligor for a period or periods more than one year from the date
of creation), including all payments in respect thereof that are required to be
made within one year from the date of any determination of Funded Debt, whether
or not the obligation to make such payments shall constitute a current
liability of the obligor under GAAP, (ii) Capitalized Lease Obligations of such
Person, (iii) obligations secured by any Lien upon property or assets owned by
such Person, even though such Person has not assumed or become liable for the
payment of such obligations, (iv) obligations created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event of default
are limited to repossession or sale of property, and (v) all Guaranties by such
Person of Funded Debt of others. Funded Debt excludes debt owed to banks.
3.26 "GAAP" means generally accepted accounting principles as in effect at
the time of application to the provisions hereof.
3.27 "Guaranties" by any Person means all obligations of such Person
guaranteeing, or in effect guaranteeing, any Current Debt or Funded Debt of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person (i) to purchase such Debt or
any property or assets constituting security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of such Debt, (y) to maintain
working capital or other balance sheet condition or otherwise to advance or
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make available funds for the purchase or payment of such Debt, (iii) to lease
property or to purchase securities or other property or services primarily for
the purpose of assuring the owner of such Debt of the ability of the primary
obligor to make payment of such Debt, or (iv) otherwise to assure the owner of
such Debt against loss in respect thereof. Guaranties does not included
endorsement of instruments for deposit or collection in the ordinary course of
business.
3.28 "Interest Period" means:
3.28.1 In the case of Eurodollar Loans, an initial period commencing, as
the case may be, on the day such a Loan shall be made by a Bank, or on the
day of conversion of any then outstanding Loan to a Loan of such type, and
ending on the date one, two, three or six months thereafter, as the Borrower
may elect, provided that (A) any Interest Period with respect to a
Eurodollar Loan, which shall commence on the last LIBOR Business Day of a
calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on
the last LIBOR Business Day of the appropriate subsequent calendar month;
and (B) each Interest Period with respect to a Eurodollar Loan which would
otherwise end on a day which is not a LIBOR Business Day shall end on the
next succeeding LIBOR Business Day or, if such next succeeding LIBOR
Business Day falls in the next succeeding calendar month, on the next
preceding LIBOR Business Day.
3.28.2 With respect to Domestic Loans, an initial period commencing, as
the case may be, on the day such a Loan shall be made by a Bank, or on the
day of conversion of any then outstanding Loan to a Loan of such type, and
ending on the last Business Day of the next March, June, September or
December, whichever is first to occur, and thereafter on the last Business
Day of each March, June, September or December.
Notwithstanding the provisions of 3.28.1 and 3.28.2 above, no Interest Period
may extend beyond the Termination Date.
3.29 "Investment" means any loan, advance, extension of credit or
contribution of capital or any investment in, or purchase or other acquisition
of, stock, notes, debentures or other securities.
3.30 "LIBOR" means, with respect to any Eurodollar Loan, the London
Interbank Offered Rate, which is the per annum rate of interest at which
deposits in Dollars for the related Interest Period and in an aggregate amount
comparable to the amount of such Eurodollar Loan are offered to the Bank making
such Eurodollar Loan by other prime banks in the London interbank market,
selected in such Bank's discretion, at approximately 11:00 a.m. London time, on
the second LIBOR Business Day prior to the first day of the
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related Interest Period; all as conclusively determined by such Bank, such sum
to be rounded up, if necessary, to the nearest whole multiple of 1/100 of 1%.
3.31 "LIBOR Business Day" means a day which is both a Business Day and a
day on which dealings in Dollar deposits are carried out in the London
interbank market.
3.32 "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or other encumbrance of any kind in respect of such
asset. For the purposes hereof, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capitalized Lease or
other title retention agreement relating to such asset.
3.33 "Loan" or "Loans" means any borrowings by the Borrower from any Bank
under Section 3 hereof.
3.34 "Metropolitan Agreement" means that certain note agreement between the
Borrower and Metropolitan Life Insurance Company dated July 5, 1994 with
respect to a $15,000,000 extension of credit, a copy of which is attached
hereto as Exhibit B.
3.35 "Net Income" means for any period the net income (or the net deficit,
if expenses and charges exceed revenues and other proper income credits) of a
corporation or other Person for such period determined in accordance with GAAP.
3.36 "Note" or "Notes" means the Revolving Credit Notes as defined in
Section 3.2.
3.37 "Permitted Investments" means Investments consisting of:
3.37.1 loans or advances by the Borrower and its Subsidiaries to
Subsidiaries in the ordinary course of business;
3.37.2 Investments in corporate debt obligations maturing in one year or
less from the date of issuance which, at the time of acquisition by the
Borrower or any Subsidiary, are rated "A" or better (or the equivalent) by
Standard & Poor's Ratings Group (currently a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.)
(hereinafter called "Standard and Poor's") or ▇▇▇▇▇'▇ Investors Service,
Inc. (hereinafter called "Moody's");
3.37.3 Investments in direct obligations of the United States of
America or any agent or instrumentality of the United States of America,
the payment or guarantee of which constitutes a full faith and credit
obligation of the United States of America, in either case maturing in
twelve months or less from the date of acquisition thereof;
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3.37.4 Investments in certificates of deposit maturing within one year
from the date of issuance thereof, issued by a bank or trust company
organized under the laws of the United States or any state thereof, having
capital, surplus and undivided profits aggregating at least $200,000,000;
3.37.5 loans or advances in the ordinary course of business to
suppliers, officers, directors and employees for expenses (including moving
expenses related to a transfer) incidental to carrying on the business of
the Borrower or any Subsidiary not exceeding $2,000,000 in the aggregate;
3.37.6 receivables arising from the sale of goods and services in the
ordinary course of business of the Borrower and its Subsidiaries;
3.37.7 other debt Investments by the Borrower and its Subsidiaries not
exceeding $5,000,000, maturing in six months or less from the date of
issuance thereof; and
3.37.8 other Investments by the Borrower and its Subsidiaries not
exceeding $1,000,000.
For purposes of this definition, at any time when a corporation becomes a
Subsidiary, all Investments of such corporation at such time shall be deemed to
have been made by such corporation, as a Subsidiary, at such time.
3.38 "Person" means and includes an individual, a corporation, a
partnership, a firm, a joint venture, a limited liability company, a trust, an
unincorporated organization or a government or an agency or political
subdivision thereof.
3.39 "Prime Rate" means (x) as to borrowings from The Huntington National
Bank, the prime commercial lending rate of The Huntington National Bank, as
such rate is established and made available from time to time based on its
consideration of economic, money market, business and competitive factors, and
it is not necessarily such Bank's most favored rate, (y) as to borrowings from
The Bank of New York, the prime commercial lending rate of such Bank as
publicly announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such
rate, and (z) as to borrowings from NBD Bank, the prime commercial lending rate
of such Bank as publicly announced to be in effect from time to time, such rate
to be adjusted automatically, without notice, on the effective date of any
change in such rate.
3.40 "Senior Funded Debt" mean all Funded Debt other than Subordinated
Funded Debt.
3.41 "Subordinated Funded Debt" means any unsecured Funded Debt of the
Borrower which (x) is subordinated in right of payment to the Notes, (y) does
not provide
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for optional prepayments with respect thereto prior to the Termination Date in
effect at the time the particular unsecured Funded Debt is entered into and (z)
has a maturity extending beyond the Termination Date, PROVIDED that any sinking
fund or other mandatory payments or prepayments required to be made in
connection with any such Debt prior to the Termination Date shall be deemed to
be Senior Funded Debt.
3.42 "Subsidiary" means any corporation 50% or more of the outstanding
voting stock of which at the time is owned directly or indirectly by the
Borrower.
3.43 "Termination Date" means December 31, 1998 or such later date(s) to
which the Commitments may be extended from time to time pursuant to the
provisions of this Agreement.
3.44 "Total Capitalization" means, as of any date, the sum of (i)
Consolidated Funded Debt outstanding on such date, and (ii) Consolidated Net
Worth determined as of such date.
SECTION 4. BORROWING PROVISION.
--------------------
4.1 AMOUNT OF REVOLVING CREDIT. Relying on the foregoing
representations and warranties and subject to the agreements and covenants
hereinafter contained, each Bank agrees to make Loans (which may be either
Domestic Loans or Eurodollar Loans, or any combination) to the Borrower, from
time to time from the date hereof to the Termination Date, at such times and in
such amounts as the Borrower shall request, in the aggregate not in excess of
such Bank's Commitment. The Borrower shall give each Bank written or
telephonic notice by 12:00 Noon, such Bank's local time, three Business Days
prior to the date of intended borrowing with respect to any Eurodollar Loan
hereunder and written or telephonic notice by 12:00 Noon, such Bank's local
time, on the same Business Day with respect to any Domestic Loan, which notice
shall specify the proposed date of borrowing, the amount thereof, whether such
loan is to be a Domestic Loan or a Eurodollar Loan, and if a Eurodollar Loan,
the Interest Period selected. Each Bank shall notify the Borrower of the
relevant Eurodollar Interest Rate at approximately 11:00 a.m., New York time,
two Business Days prior to the date of intended borrowing. The Borrower shall
accept or reject such Eurodollar Rate upon such notification by such Bank, and
such acceptance or rejection shall be irrevocable. In the event of rejection
such Loan shall be a Domestic Loan. Each Loan shall be in the amount of
$100,000 or an integral multiple thereof in the case of a Domestic Loan or in
an amount of not less than $1,000,000 and increments of $250,000 thereafter in
the case of a Eurodollar Loan. Notwithstanding the foregoing, the Borrower
shall not have outstanding any more than seventeen (17) Eurodollar Loans per
Bank at any one time. The Loans shall be evidenced by Revolving Credit Notes
(as defined in Section 4.2 hereof).
4.2 EVIDENCE OF LOANS MADE UNDER REVOLVING CREDIT. All Loans made by each
Bank pursuant to such Bank's Commitment shall be evidenced by a promissory
note,
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substantially in the form attached hereto as Exhibit "A" (hereinafter
collectively called the "Revolving Credit Notes"), payable to the order of such
Bank, duly executed on behalf of the Borrower, dated the date of this
Agreement. Each Bank is hereby authorized by the Borrower to note on the
schedule attached to any Revolving Credit Note held by such Bank the date,
amount and type of each Loan made to the Borrower, the duration of the related
Interest Period if applicable, the amount of each payment or prepayment of
principal thereon, and the other information provided for on such schedule,
which schedule shall constitute PRIMA FACIE evidence of the information so
noted; provided, that failure of such Bank to make any such notation shall not
relieve the Borrower of its obligation to repay the outstanding principal
amount of any Loan or Loans made to it, all accrued interest thereon and all
other amounts payable in accordance with the terms of any Revolving Credit Note
or this Agreement. Interest on the Loans evidenced by such Revolving Credit
Notes shall be payable at the rates specified in Sections 3.2 and 3.21 hereof
and on each Interest Payment Date, as hereinafter defined. The terms and
conditions of this Agreement are incorporated in the Revolving Credit Notes by
reference as though the same were written therein.
4.3 COMMITMENT FEES. The Borrower agrees to pay to each Bank on or prior
to the execution of this Agreement a one-time commitment fee in the amount of
$25,000. The Borrower further agrees to pay each Bank an annual commitment fee
(hereinafter called the "Commitment Fee") of three-eighths of one percent (3/8
of 1%) per annum (computed on the basis of a 360-day year for the actual number
of days elapsed in each computation period) of the average daily unused amount
of the Commitment of such Bank available to Borrower pursuant to Section 1.1
above taking into consideration the seasonal adjustment. The Commitment Fee
shall commence to accrue on the date hereof through and including the
Termination Date, and shall be paid quarterly in arrears on the last day of
March, June, September and December in each year commencing March 31, 1996 and
on the termination of the Commitments.
4.4 CONVERSION OF LOANS. The Borrower may elect to continue a Loan as a
Eurodollar Loan or a Domestic Loan or convert a Loan of one type to a Loan of
another type by giving telephonic notice thereof to each Bank not later than
11:00 a.m., such Bank's local time, three LIBOR Business Days prior to the day
on which the continuation of a Eurodollar Loan or conversion to a Eurodollar
Loan is to be effective, and not later than 11:00 a.m., such Bank's local time,
three Business Days prior to the proposed day of conversion of a Eurodollar
Loan to a Domestic Loan, provided, that an outstanding Loan may only be
converted on the last day of the then current Interest Period with respect to
such Loan, and PROVIDED, FURTHER, that upon the continuation or conversion of a
Loan such notice shall also specify the Interest Period (if applicable) to be
applicable thereto upon such continuation or conversion. If the Borrower shall
fail to timely provide notice with respect to any outstanding Eurodollar Loan,
the Borrower shall be deemed to have elected to convert such Loan to a Domestic
Loan on the last day of the Interest Period with respect to such Loan.
Telephonic notice shall in each instance be followed within a reasonable period
of time by written notice substantially in the form of Exhibit "D" hereto. In
the event
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of any conflict between telephonic and written notice, the telephonic notice
shall control to the extent that such notice has been relied upon by the Bank
making the applicable Loan.
4.5 PREPAYMENT. The Borrower may at any time, upon three (3) Business
Days prior written notice to the Banks, repay any or all of the Loans without
penalty, except that Eurodollar Loans may only be paid at the end of the
applicable Interest Period and the Borrower may not prepay any portion of any
Loan as to which an election for a continuation of or a conversion to a
Eurodollar Loan is pending. Any prepayment shall be in the minimum amount of
$100,000 or multiples thereof. All partial prepayments under this Section 4.5
shall be accompanied by the payment of all accrued interest. The Borrower
shall make such prepayments as are necessary to keep the amounts outstanding to
the Banks hereunder within the Commitment limitations identified in Section 1.2
hereof.
4.6 TERMINATION OR REDUCTION OPTIONS. The Borrower shall have the right
at any time prior to the Termination Date, upon three (3) Business Days prior
written notice to the Banks, (i) to terminate or reduce permanently the
aggregate principal amount of the Commitments of the Banks to make Loans
hereunder by written notice to the Banks; provided that any such reduction
shall be made between the Banks pro rata in accordance with their respective
Commitments; provided further that any permanent reduction of the Commitments
of the Banks to make Loans must be accompanied by the repayment of any
outstanding principal amount in excess of the amount of each Bank's Commitment,
as thereby reduced together with interest accrued thereon; and provided further
that no such termination or reduction which would require prepayment of any
Eurodollar Loan shall be permitted except at the end of the applicable Interest
Period.
4.7 INTEREST PAYMENT DATES. "Interest Payment Date" shall mean (a) the
last day of each Interest Period in the case of each Eurodollar Loan, except
that in the case of any Interest Period that is longer than three (3) months
for any such Loan, "Interest Payment Date" shall also include the ninetieth
(90th) day of such Interest Period; and (b) in the case of each Domestic Loan,
the last Business Day of each March, June, September and December.
4.8 PAYMENT METHOD. All payments to be made by the Borrower hereunder
will be made in Dollars and in immediately available funds to the applicable
Bank at its address set forth in Section 14.2 hereof not later than 3:00 p.m.
such Bank's local time on the date on which such payment shall become due.
Payments received after 3:00 p.m. the applicable Bank's local time shall be
deemed to be payments made prior to 3:00 p.m. such Bank's local time on the
next succeeding Business Day. At the time of making each such payment, the
Borrower shall specify to such Bank that obligation of the Borrower to which
such payment is to be applied, or, in the event that the Borrower fails to so
specify or if an Event of Default shall have occurred and be continuing, such
Bank may apply such payments to indebtedness due hereunder as it may determine
in its sole discretion, subject to Section 12 hereof.
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4.9 NO SETOFF OR DEDUCTION. All payments of principal and interest on the
Loans and other amounts payable by the Borrower hereunder shall be made by the
Borrower without setoff or counterclaim, and free and clear of, and without
deduction or withholding for, or on account of, any present or future taxes,
levies, imposts, duties, fees, assessments, or other charges of whatever
nature, imposed by any governmental authority, or by any department, agency or
other political subdivision or taxing authority.
4.10 PAYMENT ON NON-BUSINESS DAY; PAYMENT COMPUTATIONS. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan outstanding hereunder or any other
amount due hereunder, becomes due and payable on a day which is not a Business
Day, the maturity thereof shall be extended to the next succeeding Business Day
and, in the case of any installment of principal, interest shall be payable
thereon at the rate per annum determined in accordance with this Agreement
during such extension. Computations of interest and other amounts due under
this Agreement shall be made on the basis of a year of 360 days for the actual
number of days elapsed, including the first day but excluding the last day of
the relevant period.
4.11 EXTENSION OF COMMITMENTS. The Borrower may request, once each year,
extension of the Termination Date and the Commitments for periods of one year
each by making such request following delivery of the Borrower's annual
financial statement and current year's operating plan. Upon receipt of any
request for extension, each Bank shall have 60 days to approve or reject such
request. Should less than all of the Banks agree to an extension, then the
Termination Date and the Commitments will be extended only to extent of the
Commitments of the Bank or Banks agreeing to the extension. Any Loans
outstanding hereunder to the Bank or Banks electing not to extend shall be paid
when due. The decision as to whether to grant such an extension shall be in
the absolute discretion of each of the Banks. The Borrower shall request any
extension not later than 60 days prior to the Termination Date of any existing
Commitment.
SECTION 5. PRO RATA TREATMENT.
------------------
Each borrowing hereunder and each payment and prepayment of principal of the
Notes and each payment of Commitment Fee payable hereunder shall be made
between the Banks pro rata in accordance with the Commitments to the extent
required to equalize the outstanding principal amount of their Loans and the
Commitment Fee payable. Each borrowing hereunder will be divided into three
equal parts and each of the Banks shall receive their respective shares of each
borrowing. Notwithstanding anything in Section 4.1 hereof to the contrary,
each borrowing must be divided into either three Domestic Loans or three
Eurodollar Loans, subject, however, to a deviation from this normal borrowing
pattern (e.g. two (2) Eurodollar Loans and one (1) Domestic Loan or vice
versa) due to impossibility of performance and other circumstances as provided
in Sections 7.3 and 7.4 hereof and the increment and time limitations in
Section 4.1 hereof. Any deviation from normal lending patterns caused by an
impossibility or other circumstance under Sections 7.3
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or 7.4 hereof shall be remedied as soon as the impossibility or other
circumstance is removed.
SECTION 6. CONDITIONS OF LENDING.
----------------------
The obligations of the Banks hereunder are subject to the following
conditions precedent:
6.1 OPINION OF COUNSEL FOR BORROWER. On or before the date of first
borrowing hereunder, the Banks shall have received the favorable written
opinion of counsel for the Borrower acceptable to the Banks, addressed to the
Banks, and satisfactory to counsel for the Banks (i) confirming the accuracy of
the representations and warranties set forth in Section 2.1 hereof (except such
confirmation may exclude ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, S.A., ▇▇▇▇▇ de Mexico, S.A., ▇▇▇▇▇ de
Zacatecas, S.A. and ▇▇▇▇▇ ▇▇▇▇▇▇, S.A. and any opinion as to the Borrower's
qualification to do business in states other than Ohio), and to the best
knowledge of such counsel, confirming the accuracy of the representations and
warranties set forth in Sections 2.2, 2.12 and 2.14 hereof and those portions
of Section 2.13 hereof not described in Section 6.1 (ii) hereof; (ii) stating
that (1) this Agreement has been duly executed and delivered by the Borrower
and constitutes the legal, valid and binding obligation of the Borrower
enforceable in accordance with its terms and (2) the Notes when duly executed
and delivered by the Borrower to the Banks in accordance with the provisions
hereof, will constitute the legal, valid, and binding obligations of the
Borrower enforceable in accordance with their terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency and similar
laws and to moratorium laws from time to time in effect and to such other
exceptions as the Banks may deem acceptable); and (iii) confirming that the
terms of this Agreement will not violate any of the terms or conditions of the
Metropolitan Agreement.
6.2 SUPPORTING DOCUMENTS. Each Bank shall have received on or before the
date of the first borrowing hereunder (i) a copy of the resolutions of the
Board of Directors of the Borrower authorizing the execution, delivery and
performance of this Agreement, the borrowings contemplated hereunder and the
execution and delivery of the notes provided for herein, (ii) a copy certified
by the Secretary of State of Ohio of the Articles of Incorporation of the
Borrower; (iii) a copy of the Bylaws or Code of Regulations of the Borrower,
certified as true and correct by its secretary or assistant secretary, (iv) a
certificate of the secretary or assistance secretary of the Borrower
identifying the officers authorized to sign this Agreement and the Notes
provided for herein and to borrow hereunder, together with samples of each of
their signatures, (v) a certificate of good standing as to the Borrower from
the Secretary of State of Ohio and of each state in which the Borrower is doing
business and required to qualify, and (vi) such additional documents as counsel
for any of the Banks may reasonably request.
6.3 NO DEFAULT. Each borrowing hereunder shall constitute a certification
by the Borrower that (i) the Borrower and each Subsidiary are in compliance
with all of the
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terms and provisions set forth herein on their part to be observed and
performed, (ii) no Default or Event of Default has occurred or is continuing at
the time of such borrowing and (iii) each of the representations and warranties
made in Section 2 hereof are true and correct with the same effect as though
such representations and warranties had been made at the time of such
borrowing, except that the representations and warranties made in Sections 2.3
and 2.5 hereof shall be deemed to refer to the last audited financial
statements or interim financial statement delivered to the Banks pursuant to
Section 8.1 hereof and further excepting that the occurrence of any material
adverse change or effect shall be determined by reference to the Borrower's
financial condition, business and operations on the date of this Agreement.
6.4 DELIVERY OF NOTES. The Borrower shall have executed and delivered the
Notes to the Banks.
SECTION 7. PROVISIONS RELATING TO EURODOLLAR LOANS.
----------------------------------------
7.1 ADDITIONAL COSTS. In the event that any applicable law, treaty, rule
or regulation (whether domestic or foreign) now or hereafter in effect, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any of the
Banks with any request or directive of any such authority (whether or not
having the force of law), shall (i) impose taxes on, or affect the basis of
taxation of, payments to any of the Banks of any amounts payable by the
Borrower under this Agreement (other than taxes imposed on the overall net
income of any of the Banks by the jurisdiction, or by any political subdivision
or taxing authority of any such jurisdiction, in which such Bank has its
principal office), or (ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, such Bank, or (iii) shall impose any
other condition, requirement or charge with respect to this Agreement, the
Notes or the Eurodollar Loans (including without limitation any capital
adequacy requirement, any requirement which affects the manner in which the
Banks allocate capital resources to their commitments or any similar
requirement), and the result of any of the foregoing is to increase the cost to
any of the Banks of making or maintaining any Loan, to reduce the amount of any
sum receivable by any of the Banks thereon, or to reduce the rate of return on
any of the Banks' capital, then the Borrower shall pay to such Bank, from time
to time, upon request of such Bank, additional amounts sufficient to compensate
such Bank for such increased cost, reduced sum receivable or reduced rate of
return to the extent such Bank is not compensated therefor in the computation
of the interest rates applicable to the Loans. A detailed statement as to the
amount of such increased cost, reduced sum receivable or reduced rate of
return, prepared in good faith and submitted by a Bank to the Borrower, shall
be conclusive and binding for all purposes relating to such Bank, absent
manifest error in computation.
7.2 ADDITIONAL EUROCURRENCY RESERVES. Without limiting the effect of the
provisions of Section 7.1 above, the Borrower shall, upon request by any of the
Banks,
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pay to such Bank on each Interest Payment Date with respect to each Eurodollar
Loan at any time outstanding with respect to such Bank, additional amounts for
each day upon which such Bank is required to maintain reserves against
"Eurocurrency liabilities" under Regulation D of the Board of Governors of the
Federal Reserve System, which additional amount shall be calculated by such
Bank with respect to its outstanding Eurodollar Loans as follows:
R 1
----- ---
Additional amount = P x (1-r) - R x 360
where
P = the principal amount of such Loan outstanding on such date;
R = LIBOR applicable to such Loan for such date (expressed as a decimal);
and
r = the stated rate (expressed as a decimal) at which such reserve
requirements are imposed on such Bank as determined by such Bank.
Upon making a request to the Borrower pursuant to this Section 7.2, the
requesting Bank shall notify the other Banks thereof. This provision is for
the benefit of the Banks and is not intended to increase the expected yield to
the Banks above the rates of interest provided for in this Agreement.
7.3 LIMITATIONS OF REQUESTS AND ELECTIONS. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
Eurodollar Loan pursuant to Section 4.1 hereof, or a request for a continuation
of a Eurodollar Loan as a Eurodollar Loan pursuant to Section 4.4 hereof, or
conversion of a Domestic Loan to a Eurodollar Loan pursuant to Section 4.4
hereof, (i) deposits in Dollars for periods comparable to the Interest Period
elected by the Borrower are not available to any Bank in the London interbank
market, or (ii) it is otherwise impossible for any reason to determine LIBOR,
or (iii) LIBOR will not adequately and fairly reflect the cost to any Bank of
making or maintaining the related Eurodollar Loan, or (iv) by reason of
national or international financial, political or economic conditions or by
reason of any applicable law, treaty, rule or regulation (whether domestic or
foreign) now or hereafter in effect, or the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank with any request or directive
of such authority (whether or not having the force of law), including without
limitation exchange controls, it is impracticable, unlawful or impossible for
any Bank (x) to make the relevant Eurodollar Loan or (y) to continue such Loan
as a Eurodollar Loan or (z) to convert a Loan to a Eurodollar Loan, then the
Borrower shall not be entitled, so long as such circumstances continue, to
request or receive a Eurodollar Loan pursuant to Section 4.1 hereof or a
continuation of or conversion to such Loans pursuant to Section 4.4 hereof from
such Bank. In the event that such circumstances no longer exist, such Bank
shall again
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consider requests for Eurodollar Loans pursuant to Section 4.1 hereof, and
requests for continuations of and conversions to such Loans pursuant to Section
4.4 hereof.
7.4 ILLEGALITY AND IMPOSSIBILITY. In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any of the Banks with any request or directive of such authority
(whether or not having the force of law), including without limitation exchange
controls, shall make it unlawful or impossible for any of the Banks to maintain
any Loan under this Agreement, the Borrower shall upon receipt of notice
thereof from any of the Banks, repay in full the then outstanding principal
amount of all Loans made by the Banks so affected together with all accrued
interest thereon to the date of payment and all amounts due to such Banks under
Sections 4 and 7.5 hereof, (i) on the last day of the then current Interest
Period, if any, applicable to such Loan if such Bank may lawfully continue to
maintain such Loan to such day, or (ii) immediately if such Bank may not
continue to maintain such Loan to such day. This provision is for the benefit
of the Banks and is not intended to increase the yield to the Banks above the
rates of interest provided for in this Agreement.
7.5 INDEMNIFICATION. If the Borrower makes any payment of principal with
respect to any Loan on any other date than the last day of an Interest Period
applicable thereto (whether pursuant to Sections 4.5, 7.4 or 13.2 hereof or
otherwise), or if the Borrower fails to borrow, continue or convert any Loan
after notice has been given to any Bank in accordance with Section 4.1 or 4.4
hereof, or fails to make any payment of principal or interest in respect of a
Loan when due, or fails to make any prepayment after notice of intention to
prepay has been given to the Banks, the Borrower shall reimburse each Bank on
demand for any resulting loss or expense incurred by such Bank, including
without limitation any loss incurred in obtaining, liquidating or employing
deposits from third parties. A detailed statement as to the amount of such
loss or expense, prepared in good faith and submitted by a Bank to the Borrower
shall be conclusive and binding for all purposes absent manifest error in
computation.
7.6 SURVIVAL OF OBLIGATIONS. The provisions of this Section 7 shall
survive the termination of the Commitments and the payment in full of all Notes
outstanding pursuant to this Agreement.
SECTION 8. AFFIRMATIVE COVENANTS.
----------------------
For as long as the Banks are obligated to lend hereunder and until payment
in full of the Notes and interest thereon, the Borrower covenants that it will
and will cause each Subsidiary, except in the case of Sections 8.1, 8.2, 8.9
and 8.10 hereof and unless the Banks shall otherwise consent in writing, to:
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8.1 FINANCIAL STATEMENTS. Furnish each Bank a copy of the report of the
certified audit of the Borrower and its Subsidiaries for each fiscal year
prepared by a certified public accountant of recognized standing and a balance
sheet and related statements of income and retained earnings and cash flow of
the Borrower and of the Subsidiaries as of the end of and for each quarter
certified as to fairness of presentation by an officer of the Borrower and/or
the respective Subsidiaries. All financial statements will be consolidated
financial statements, will be prepared in accordance with generally accepted
accounting principles, and will be in a form satisfactory to the Banks. The
annual audits and quarterly statements shall be in the format required for
filing with the Securities and Exchange Commission. The engagement of the
certified public accountant will require the reporting of any and all Defaults
and Events of Default as of the last day of the fiscal year of the Borrower
which have come to the attention of such accountant or that no Defaults or
Events of Default have come to its attention as of such date. Quarterly
financial statements will be accompanied by an officer's certificate, in the
form attached hereto as Exhibit G, indicating whether a Default or Event of
Default has occurred and, if so, stating the facts with respect thereto and
whether the same has been cured prior to the date of such certificate. In the
event that any certificate furnished under this paragraph shall state that a
Default or Event of Default has occurred and is continuing, such certificate
shall be accompanied by a statement executed by the chief financial officer of
the Borrower as to the action taken and proposed to be taken by the Borrower to
cure such Default or Event of Default. Quarterly financial statements shall
also be accompanied by an officer's compliance certificate in the form attached
hereto as Exhibit E. Such annual and quarterly statements shall be delivered
to the Banks within 120 days and 60 days respectively, after the close of the
fiscal period.
The Borrower will also furnish the Banks promptly after sending or filing
thereof, copies of all financial statements and reports which it sends to its
stockholders and copies of all regular and periodic reports and registration
statements which it files with the Securities and Exchange Commission. The
Borrower will furnish the Banks within a reasonable period of time such
additional information and financial statements as any of the Banks may from
time to time request.
8.2 OUT OF POCKET EXPENSES. Pay all out-of-pocket expenses of the Banks
arising in connection with the transactions contemplated by this Agreement,
whether or not consummated, including the reasonable fees and expenses of each
of the Banks' counsel for services rendered in connection with the transaction
contemplated hereby including the preparation of this Agreement and related
documents, and any amendments or modifications thereto.
8.3 COMPLIANCE WITH STATUTES; PAYMENT OF TAXES. Comply with all valid and
applicable statutes and governmental regulations and pay promptly when due all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
other obligations, which, if unpaid might become a lien against the property of
the Borrower or any Subsidiary, except liabilities being contested in good
faith by appropriate proceedings and
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against which the Borrower or applicable Subsidiary has set up adequate
reserves in conformity with GAAP.
8.4 INSURANCE. Maintain insurance in such amounts as is customarily
maintained by companies of the same relative size in the same or similar
businesses.
8.5 CORPORATE EXISTENCE. Maintain its corporate existence in good
standing and comply with all valid and applicable statutes, rules and
regulations, and maintain its properties in good operating condition, except a
Subsidiary may be merged into the Borrower or consolidated with another
Subsidiary.
8.6 ERISA. The Borrower and its Subsidiaries shall with respect to any
employee benefit plan under ERISA in effect now or in the future:
(a) at all times make prompt payment of contributions required to meet
the minimum funding standards set forth in Sections 302 through 305 of
ERISA with respect to such plan,
(b) if requested by any of the Banks, promptly, after the filing thereof,
furnish to the Banks copies of each annual report required to be filed
pursuant to Section 103 of ERISA in connection with such plan for the plan
year most recently ended, including any certified financial statements or
actuarial statements required pursuant to said Section 103,
(c) notify the Banks immediately of any fact, including, but not limited
to, any "Reportable Event," as that term is defined in Section 4043 of
ERISA, arising in connection with such plan which might constitute grounds
for termination thereof by the Pension Benefit Guaranty Corporation, or
any successor thereto, or for the appointment by the appropriate United
States District Court of a trustee to administer such plan, and
(d) notify the Banks of any "Prohibited Transaction" as that term is
defined in Section 406 of ERISA for which there is no exemption under
Section 408 of ERISA.
8.7 BOOKS AND RECORDS. Maintain books and records in which full and
correct entries will be made of all its business transactions.
8.8 INSPECTION OF BOOKS AND RECORDS. Permit each of the Banks upon its
reasonable request to inspect the books and records of the Borrower, to make
copies and abstracts thereof and to discuss the affairs of the Borrower with
the Borrower's officers.
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8.9 NOTIFICATION BY BORROWER. Give the Banks prompt written notice of:
(a) the occurrence of any Default or Event of Default or any event or
condition which, with notice or lapse of time, or both, would constitute
an Event of Default, and
(b) any development in the business or affairs of the Borrower or any of
its Subsidiaries which has resulted in or which is likely in the
reasonable judgment of the Borrower to result in a material adverse change
in the business, properties, operations or condition, financial or
otherwise, of the Borrower or any of its Subsidiaries.
8.10 AMENDMENTS TO METROPOLITAN AGREEMENT. Furnish each Bank promptly with
a copy of every amendment of the Metropolitan Agreement.
8.11 NOTICE OF CLAIMS. Give the Banks prompt written notice of any claim in
excess of $1,000,000, or in which no monetary amount is specified, that is
asserted against the Borrower or any of its Subsidiaries in any litigation to
which the Borrower or such Subsidiary is a party.
8.12 RESTRICTION ON CONSOLIDATED ASSETS. Maintain sixty-seven percent
(67%) of consolidated tangible assets, excluding intercompany assets which are
eliminated when consolidated in accordance with GAAP, under the ownership of
and in the name of the Borrower. In the event the Borrower fails to maintain
sixty-seven percent (67%) of its consolidated tangible assets under its
ownership or in its own name, then the Borrower, within a reasonable time
thereafter, shall make all significant Subsidiaries, as determined in a
commercially reasonable manner by the Banks, obligors on all indebtedness owing
to the Banks under this Agreement, either by assumption of such indebtedness as
a co-maker with Borrower or the guaranty of such indebtedness, as the Borrower
may elect.
SECTION 9. NEGATIVE COVENANTS.
------------------
For as long as the Banks are obligated to lend hereunder and until payment
in full of the Notes and interest thereon, the Borrower covenants that it will
not, without the prior written consent of the Banks:
9.1 CURRENT RATIO. Permit the ratio of Consolidated Current Assets to
Consolidated Current Liabilities to be less than (i) 1.25 to 1 at the end of
the first and fourth fiscal quarters in each fiscal year of the Borrower, and
(ii) 1.0 to 1 at the end of the second and third fiscal quarters in each fiscal
year of the Borrower.
9.2 LIMITATIONS ON DEBT. Permit the ratio of (x) Consolidated Senior
Funded Debt to Total Capitalization to exceed 50%, or (y) Consolidated Funded
Debt to Total Capitalization to exceed 55%.
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9.3 ADDITIONAL LIMITATIONS ON DEBT. Incur any Current Debt except:
9.3.1 unsecured Current Debt owing to banks, insurance companies and
similar financial institutions, PROVIDED that during each period from
November 1 to March 31 of the following year, there shall be a period of at
least sixty (60) consecutive days during which on each and every day during
such sixty (60) day period, the aggregate amount of such Current Debt of the
Borrower outstanding at the close of business on each such day (or if such
day is not a Business Day, on the next preceding Business Day) during such
sixty (60) day period, if deemed to be unsecured Funded Debt of the
Borrower, could then be outstanding without a violation of Section 9.2
hereof, and
9.3.2 Current Debt secured by Liens permitted by Section 9.8.6 hereof.
9.4 MAINTENANCE OF CONSOLIDATED TANGIBLE NET WORTH. Permit
Consolidated Tangible Net Worth to be less than the sum of $34,000,000 PLUS 50%
of Consolidated Net Income computed on a cumulative basis for the period from
and after December 31, 1995 to and including the end of the fiscal year for
which the determination is being made, PROVIDED that if Consolidated Net Income
for any fiscal year in said period is a deficit figure, the amount added to
determine the required amount of Consolidated Tangible Net Worth for said
fiscal year shall be zero.
9.5 INTEREST COVERAGE. Permit the ratio of Consolidated Net Income PLUS
Consolidated Net Interest Expense, consolidated taxes, consolidated
amortization and consolidated depreciation to Consolidated Net Interest Expense
to be less than 1.3 to 1.0 on a four quarter rolling basis.
9.6 RESTRICTED PAYMENTS. Declare or pay any dividends (other than
dividends payable in capital stock of the Borrower) on any shares of any class
of its capital stock or apply any of its property or assets to the purchase,
redemption or other retirement of, or make any other distribution, by reduction
of capital or otherwise, in respect of, or permit any Subsidiary to purchase,
any shares of any class of stock of the Borrower (herein, collectively,
"Restricted Payments"), unless, immediately after giving effect to such action,
there exists no Event of Default or Default, and the sum of
9.6.1 the amounts declared and paid as dividends (other than dividends
paid in capital stock of the Borrower) on all shares of stock of all
classes of the Borrower or distributed in respect to such shares of stock
subsequent to December 31, 1995, and
9.6.2 the amounts applied to the purchase (including purchases by
Subsidiaries), redemption or retirement of shares of stock of all classes
of the Borrower subsequent to December 31, 1995,
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will not be in excess of the sum of $1,000,000 PLUS 50% of cumulative
Consolidated Net Income (or, in the case of a negative cumulative Consolidated
Net Income, MINUS 100% of such deficit) for the period (taken as one accounting
period) from January 1, 1995 to the date of such action, MINUS any Restricted
Payments made after December 31, 1995.
9.7 CAPITAL EXPENDITURES. Permit total capital expenditures (including
expenditures in respect of capital lease obligations) of the Borrower and its
Subsidiaries in any one fiscal year to exceed $4,500,000.
9.8 PERMITS AND LIENS. Permit, and will not permit any of its
Subsidiaries to, incur, create, assume or permit to exist any Lien on any
property, whether owned on January 1, 1996 or thereafter acquired, except:
9.8.1 Liens on property of the Borrower or a Subsidiary existing on January
1, 1996, as identified on Exhibit F attached hereto;
9.8.2 Liens, pledges or deposits made or incurred by the Borrower or a
Subsidiary in connection with worker's compensation, social security or
unemployment insurance or to secure the performance of letters of credit,
bids, tenders, sales contracts, leases, statutory obligations, surety, appeal
and performance bonds and other similar obligations incurred in the ordinary
course of business and not in connection with the borrowing of money, the
obtaining of advances or the payment of the deferred purchase price of
property;
9.8.3 Liens incurred by the Borrower or a Subsidiary for taxes, assessments
or governmental charges or levies to the extent permitted to remain unpaid by
Section 8.3 hereof and materialmen's and warehousemen's Liens securing
obligations not overdue, or if overdue, being contested in good faith by
appropriate proceedings, PROVIDED that adequate reserves are established in
accordance with GAAP;
9.8.4 attachment, judgment and other similar Liens arising in connection
with judicial proceedings, PROVIDED that the execution or other enforcement
of such Lien is effectively stayed and the claims secured thereby are being
contested in good faith by appropriate proceedings in such manner that the
property subject to such Lien is not subject to forfeiture or sale and
PROVIDED FURTHER that adequate reserves are established in accordance with
GAAP;
9.8.5 encumbrances in the nature of zoning restrictions, easements,
restrictions of record on the use of real property, and landlords' and
lessors' Liens, in each case arising or existing in the ordinary course of
business of the Borrower or a Subsidiary and which do not materially impair
the Borrower's or a Subsidiary's use of the property subject thereto; and
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9.8.6 other Liens on property of the Borrower securing Current Debt or
Funded Debt of the Borrower, PROVIDED that at the time of incurrence of any
such Lien and after giving effect to the Debt secured thereby, (A) the
aggregate principal amount of all such Debt secured by Liens permitted by
this Section 9.8.6 shall not exceed 15% of Consolidated Tangible Net Worth,
and (B) the Borrower shall be in compliance with Section 9.2 hereof.
Any corporation which becomes a Subsidiary on or after December 31, 1995
shall be deemed to have incurred, at the time it becomes a Subsidiary, any Debt
or Lien of such corporation existing immediately after it becomes a Subsidiary.
9.9 RESTRICTIONS ON SUBSIDIARIES. Permit any Subsidiary to:
9.9.1 issue or dispose of any shares of its capital stock to any Person
other than the Borrower or a Subsidiary, except to the extent, if any,
required to qualify directors under any applicable law or required to be
issued to other stockholders of such Subsidiary by virtue of their exercise
of preemptive rights or as their PRO RATA share of any stock dividend; or
9.9.2 except as permitted by the proviso in Section 9.13 hereof, sell,
assign, transfer, dispose of or in any way part with control of any share of
capital stock of any other Subsidiary owned by it, or any Debt owing to it
from another Subsidiary, except in either case to the Borrower or a
Subsidiary; or
9.9.3 except for Current Debt or Funded Debt of Subsidiaries (a) owing to
Borrower or another Subsidiary, or (b) owing at the time a business entity
becomes a Subsidiary of Borrower, incur any Current Debt or Funded Debt.
9.10 DISPOSITION OF ASSETS. Permit, and will not permit any Subsidiary to,
sell, lease, transfer or otherwise dispose of all or any substantial part of
its properties and assets, or consolidate with or merge into any other Person,
or permit another Person to merge into it, except that:
9.10.1 any Subsidiary may permit any corporation to merge into such
Subsidiary, or may consolidate with or merge into, or sell, lease or
otherwise dispose of its assets as an entirety or substantially as an
entirety to the Borrower, a Subsidiary or any corporation which thereupon
becomes a Subsidiary, PROVIDED that immediately after the consummation of any
such transaction and after giving effect thereto, (A) the Borrower shall be
in compliance with the provisions of Section 9.2 hereof, (B) the Borrower is
able to incur at least $1 of Debt secured by Liens permitted by Section 9.8.6
hereof, and (C) no Default or Event of Default shall exist;
9.10.2 the Borrower may permit any corporation to merge into it or may
consolidate with any solvent corporation organized in the United States of
America,
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PROVIDED that immediately after the consummation of any such transaction and
after giving effect thereto, (A) the Borrower is the surviving corporation,
(B) the Borrower is in compliance with the provisions of Section 9.2 hereof,
(B) the Borrower is able to incur at least $1 of Debt secured by Liens
permitted by Section 9.8.6 hereof, and (C) no Default or Event of Default
shall exist;
9.10.3 the Borrower or any Subsidiary may sell or otherwise dispose of any
of its assets in the ordinary course of its business; and
9.10.4 in addition to transactions permitted by Sections 9.10.1, 9.10.2
and 9.10.3 above, the Borrower or any Subsidiary may sell or otherwise
dispose of any of its assets (including shares of stock and Debt of
Subsidiaries) at the fair market value thereof (as determined in good faith
by the Board of Directors of the Borrower) if the aggregate net proceeds
received by the Borrower and its Subsidiaries from all such sales and all
other sales and dispositions during the twelve (12) consecutive calendar
months immediately preceding any such sale or other disposition shall not
exceed 15% of Consolidated Net Tangible Assets as of the end of the fiscal
year of the Borrower immediately preceding such sale or disposition.
9.11 SALE-LEASEBACK. Permit, and will not permit any Subsidiary to, sell
or transfer any property to any Person and thereupon lease, as lessee, the same
or similar property unless (A) (i) such lease is a Capitalized Lease and the
Borrower is the lessee thereunder, (ii) immediately after giving effect
thereto, the Borrower is in compliance with the provisions of Section 9.2
hereof, (iii) immediately after giving effect thereto, the Borrower is able to
incur at least $1 of Debt secured by Liens permitted by Section 9.8.6 hereof,
and (iv) all of the provisions of Section 9.10.4 hereof are complied with in
connection with such sale or (B)(i) such lease is an operating lease and the
Borrower is the lessee thereunder, (ii) such property is acquired after January
1, 1996 and is sold and leased-back by the Borrower within 120 days after such
acquisition, (iii) all of the provisions of Section 9.10.4 hereof are complied
with in connection with such sale, and (iv) immediately after giving effect to
such sale and lease-back (x) the aggregate net proceeds received by the
Borrower from all such sales made in connection with transactions contemplated
by this Section 9.11 after December 31, 1995 (other than such sales with
respect to which the related lease-back has expired or otherwise terminated)
shall not exceed 5% of Consolidated Net Worth on the last day of the fiscal
quarter immediately preceding such sale, and (y) the present value of the
aggregate rent payable under all such operating leases then outstanding,
discounted at the rate of 12 1/2% per annum, shall not exceed 5% of
Consolidated Net Worth on the last day of the fiscal quarter immediately
preceding such sale, PROVIDED that this Section 9.11 shall not apply to (xx)
leases having a term (inclusive of renewal and extension terms) of less than
three years, and (yy) leases of motor vehicles, computers and office and data
processing equipment.
9.12 TRANSACTIONS WITH AFFILIATES. Permit, and will not permit any
Subsidiary to, engage in any material transaction with an Affiliate on terms
more favorable
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to such Affiliate than would have been obtainable in arm's length dealing in
the ordinary course of business with a Person not an Affiliate.
9.13 RESTRICTIONS ON BORROWER. The Borrower will not:
9.13.1 sell, assign, transfer, dispose of, or in any way part with control
of, any share of capital stock of any Subsidiary except (A) to the extent, if
any, required to qualify directors of such Subsidiary under any applicable
law, or (B) to any Subsidiary; or
9.13.2 sell, assign, transfer, dispose of, or in any way part with control
of, any Debt owing from any Subsidiary to the Borrower except to any
Subsidiary;
PROVIDED, HOWEVER, that all shares of capital stock of all classes, together
with all Debt, of any Subsidiary owned by the Borrower and/or its other
Subsidiaries may be sold for the fair market value thereof (as determined in
good faith by the Board of Directors of the Borrower), as an entirety, if the
Subsidiary whose shares of capital stock and Debt are so sold does not own any
shares of capital stock or Debt of any other Subsidiary not being
simultaneously disposed of as permitted by this proviso and if such sale is
permitted by Section 9.10.4 hereof.
9.14 PERMITTED INVESTMENTS. Permit, and will not permit any Subsidiary to,
make any Investment other than Permitted Investments.
9.15 LIMITATION ON RESTRICTIVE COVENANTS. Except for the covenants in the
Metropolitan Agreement as existing on the date of this Agreement, incur, or
suffer to exist, any Funded Debt or Current Debt with covenants more
restrictive than the covenants contained herein. In the event the Borrower
does enter into any Current Debt or Funded Debt with covenants more restrictive
than the covenants contained herein (the "Restricted Debt") then the more
restrictive covenants shall automatically and immediately be incorporated
herein without further action or amendment to this Agreement. Once the
Restricted Debt has been paid in full and all documents in connection therewith
terminated, the covenants in this Agreement shall automatically and immediately
revert back to the covenants which existed on the date of this Agreement, or as
subsequently modified by agreement of the Borrower and the Banks, without
further action or amendment to this Agreement.
9.16 LOAN, ADVANCES AND PURCHASES OF STOCK. Make or permit to remain
outstanding or permit any Subsidiary to make or permit to remain outstanding
any loan or advance to, or own, purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any person or entity, PROVIDED that this Section 9.16 shall not prohibit or
restrict the Borrower's ability to own, purchase or acquire any stock,
obligations or securities of, or any other interest in, any Subsidiary, and
PROVIDED FURTHER that the Borrower or any Subsidiary may:
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9.16.1 own, purchase or acquire stock, obligations or securities of a
Subsidiary or of a corporation which immediately after such purchase or
acquisition will be a Subsidiary; and
9.16.2 acquire and own stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to the
Borrower or any Subsidiary.
SECTION 10. FURTHER ASSURANCE.
------------------
The Borrower shall furnish at the reasonable request of any of the Banks
opinions of legal counsel and certificates of its officers satisfactory to the
Banks regarding matters incident to this Agreement. The Borrower agrees to
provide such other documents and information and to take such further action as
any of the Banks may reasonably require in connection with the execution and
delivery of this Agreement and the Borrower's performance hereunder.
SECTION 11. TAXES AND STAMPS.
-----------------
If in connection with any borrowing hereunder any documentary or recording
tax should be assessed or the affixing of any stamps be required by state or
federal governments, the Borrower will pay the tax and the cost of the stamps.
SECTION 12. ARRANGEMENT BETWEEN BANKS.
-------------------------
Upon the written request of Borrower, any of the provisions of this
Agreement may be waived or amended by agreement of all of the Banks.
Should one Bank fail to make advancements hereunder under claim that an
Event of Default has occurred and is continuing, the other Banks shall not be
obligated to make advancements until such issue as to the existence of an Event
of Default has been settled.
The Banks agree between themselves that, in the event that any of the Banks
shall obtain payment of the principal of or interest on any Loan or Loans made
by it or of any Commitment Fees through the exercise of a right of set off,
banker's lien or counterclaim or otherwise, any such sum received shall be
shared by the Banks such that, following receipt by each Bank of its share of
such sum, the outstanding principal balance on each Banks' Notes will be equal,
all interest accrued on any principal sum reduced by the receipt of such share
will be paid and the payment of Commitment Fees will be made ratably. The Bank
initially obtaining such sum by the exercise of a right of set off, banker's
lien, counterclaim or otherwise shall promptly purchase from the other Banks
for cash such participation in the Notes held by the other Banks as shall be
equitable to the end that all of the Banks share such payment in the manner
provided in this paragraph. The Borrower
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agrees that the Bank so purchasing a participation in such Loans by the other
Banks may, to the fullest extent permitted by law, exercise all rights of
payment, including set off, banker's lien or counterclaim, with respect to such
participation as fully as if such Banks were a holder of such Loan made
hereunder in the amount of such participation. Should an Event of Default
occur and be continuing as a result of which the Banks commence proceedings to
enforce the agreements of the Borrower, all expenses thereof shall be shared by
the Banks pro rata in proportion to the outstanding principal balance of the
Notes held by each Bank and shall be paid by the Borrower pursuant to the
provisions of Section 13.5 hereof.
The Banks further agree between themselves that if payment to a Bank
obtained by such Bank through the exercise of a right of set off, banker's lien
or counterclaim or otherwise as aforesaid shall be rescinded or must otherwise
be restored, the Bank which shall as selling bank have shared the benefit of
such payment shall, by repurchase of participations theretofore sold, or
otherwise, return its share of benefit to the Bank whose payment shall have
been rescinded or otherwise restored.
Each Bank agrees and warrants that it will acquire the Notes hereunder only
to evidence the Borrower's indebtedness to it as heretofore or hereafter
incurred for funds loaned in accordance with the terms hereof and in the
ordinary conduct of such Bank's commercial banking business, and not with a
view to the public distribution of such Notes.
All covenants, agreements, undertakings, representations and warranties made
herein shall survive the closings hereunder unless and except as otherwise
indicated, and shall not be affected by any investigation made by any party.
SECTION 13. DEFAULT.
-------
13.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events will constitute an Event of Default, unless waived
collectively by the Banks pursuant to Section 13.2 hereof:
13.1.1 Default shall be made in the due and punctual payment of any
principal of any Note when and as the same shall become due and payable,
whether at maturity or by acceleration or otherwise;
13.1.2 Default shall be made in the due and punctual payment of any
installment of interest on any Note or Commitment Fees or other amounts
hereunder, when and as such payments shall become due and payable, and such
default shall have continued for a period of 10 days;
13.1.3 Default shall be made in the performance or observance of any
covenants, agreements or conditions contained in this Agreement or any Note,
other than
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as set forth in Sections 13.1.1 and 13.1.2 hereof, and such default shall have
continued for a period of 30 days after any officer of the Borrower becomes
aware thereof;
13.1.4 Default shall occur with respect to any indebtedness of the
Borrower or any Subsidiary (other than the Notes) for borrowed money,
including, but not limited to, failure to pay when due any payments required
pursuant to such indebtedness, or any other default shall occur with respect to
such indebtedness, and such other default shall continue for more than any
applicable grace period and the effect of such other default is to cause such
indebtedness to remain unpaid or to cause or permit the obligee to cause such
indebtedness to become immediately due;
13.1.5 The Borrower or any of its Subsidiaries shall (A) admit in
writing its inability to pay its debts or be unable to pay its debts generally
as they become due, (B) file a petition in bankruptcy or a petition to take
advantage of any insolvency act, (C) make an assignment for the benefit of its
creditors, (D) consent to the appointment of a receiver of itself or the whole
or any substantial part of its property, (E) file a petition or answer seeking
reorganization, arrangement or winding-up under the Federal bankruptcy laws or
any other applicable law or statute of the United States of America or any
State thereof or any other country or jurisdiction, (F) have a petition in
bankruptcy filed against it and such petition shall remain undismissed for a
period of 60 days, or (G) file any answer admitting or not contesting the
material allegations of a petition filed against the Borrower or any of its
Subsidiaries in any such case or proceeding, or the Borrower or any of its
Subsidiaries seeks, approves, consents to or acquiesces in any such case or
proceeding or in the appointment of any custodian, trustee, receiver,
liquidator or fiscal agent of the Borrower or any of its Subsidiaries for all
or a substantial part of the properties or assets of the Borrower or any of its
Subsidiaries;
13.1.6 A court of competent jurisdiction shall enter an order, judgment
or decree appointing, without the consent of the Borrower or the Subsidiary
involved, a receiver or custodian of the Borrower or any of its Subsidiaries or
of the whole or any substantial part of their properties, or approving a
petition filed against the Borrower and/or any Subsidiary seeking
reorganization, arrangement or winding-up of the Borrower and/or such
Subsidiary under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any State thereof or any other
country or jurisdiction, and such order, judgment or decree shall not be
vacated or set aside or stayed within 15 days from the date of assumption of
such custody or control;
13.1.7 Under the provisions of any other law for the relief or aid of
debtors, any court of competent jurisdiction shall assume custody or control of
the Borrower or any of its Subsidiaries or of the whole or any substantial part
of their respective properties and such custody or control shall not be
terminated or stayed within 60 days from the date of assumption of such custody
or control;
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13.1.8 Final judgment or judgments for the payment of money in the
aggregate in excess of $2,000,000 shall be rendered by a court of record
against the Borrower and/or any of its Subsidiaries, either individually or
some combination thereof, and the Borrower or such Subsidiary or Subsidiaries
shall not discharge the same or provide for its discharge in accordance with
its terms, or procure a stay of execution thereof within 30 days from the date
of entry thereof and within said period of 30 days, or such longer period
during which execution of such judgment shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal;
13.1.9 A representation or warranty by the Borrower in this Agreement or
in any financial statement, certificate, report or opinion delivered pursuant
to this Agreement proves to have been incorrect in any material respect when
made or deemed made or delivered; or
13.1.10 (A) either the Borrower or any of its Subsidiaries shall engage
in any "prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time)
involving any pension or profit-sharing plan ("Plan"); (B) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan; (C) a Reportable Event (as
defined in ERISA) shall occur with respect to, or proceedings shall commence to
have a trustee appointed (or a trustee shall be appointed) to administer, or to
terminate, any Single Employer Plan (as defined ERISA), which Reportable Event
or commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of any of the Banks, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (D) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA; (E) the Borrower or any Subsidiary
shall, or is, in the reasonable opinion of any of the Banks, likely to, incur
any liability in connection with a withdrawal from, or the insolvency or
reorganization of, a Multiemployer Plan (as defined in ERISA); or (F) any other
event or condition shall occur or exist with respect to a Plan; and in each
case in clauses (A) through (F) above, such event or conditions, if any, could
reasonably be expected to subject the Borrower or any of its Subsidiaries to
any tax, penalty or other liabilities in the aggregate material in relation to
the business, operations, property or financial condition of the Borrower.
13.2. Remedies.
--------
13.2.1 Upon the occurrence and during the continuance of any Event of
Default, any of the Banks may by notice to the Borrower terminate the
Commitments of all the Banks or declare to be immediately due and payable the
outstanding principal of, and accrued interest on, all Notes and all other
amounts due and payable hereunder, or both, whereupon the Commitments of the
Banks shall terminate forthwith or all such amounts shall become immediately
due and payable, or both, as the case may be, without further notice or demand,
provided that in the case of any event or condition described in Section 13.1.5
or 13.1.6 hereof with respect to the Borrower, all Commitments shall
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automatically terminate forthwith and all such amounts shall automatically
become immediately due and payable without notice or demand. The Borrower
hereby expressly waives presentment, notice of dishonor, protest, notice of
protest, diligence in bringing suit against any party and all other similar
formalities.
13.2.2 Upon the occurrence and during the continuance of any Event of
Default, each of the Banks may, in addition to the remedies provided in Section
13.2.1 hereof, enforce its rights either by suit in equity, or by action at
law, or by other appropriate proceedings, whether for the specific performance
(to the extent permitted by law) of any covenants or agreements contained in
this Agreement or the Notes or in aid of the exercise of any power granted in
this Agreement or the Notes and may enforce the payment of the Notes and any of
its rights available at law or in equity.
13.2.3 Upon the occurrence and during the continuance of any Event of
Default, each Bank, subject to the provisions of Section 12 of this Agreement,
is hereby authorized at any time and from time to time, without notice to the
Borrower (any requirement for such notice being expressly waived by the
Borrower) to set off and apply against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Bank to or for the credit or the
account of the Borrower and any property of the Borrower from time to time in
possession of such Bank, irrespective of whether or not such Bank shall have
made any demand hereunder and although such obligations may be contingent and
unmatured. The rights of each Bank under this Section 13.2.3 are in addition
to other rights and remedies (including, without limitation, other rights of
setoff) which such Bank may have.
SECTION 14. MISCELLANEOUS
-------------
14.1 AMENDMENTS, ETC. This Agreement may be amended from time to time and
any provision hereof may be waived by the parties hereto. No such amendment or
waiver of any provision of this Agreement nor consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be in
writing and signed by all of the Banks, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
14.2 NOTICES. Except as otherwise provided in this Agreement, all notices,
requests, consents and other communications hereunder shall be in writing and
shall be delivered or sent to the Borrower at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇.▇.,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice
President/Finance; to The Bank of New York at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; to The Huntington National Bank at ▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; and to
NBD Bank at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇, or to such other address as may be designated by the Borrower or any of
the Banks by notice to the other parties. All notices shall be deemed to have
been
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given at the time of actual delivery thereof to such address, or if sent by
certified or registered mail, postage prepaid, to such address, on the third
day after the date of mailing.
14.3 CONDUCT NO WAIVER; REMEDIES CUMULATIVE. No course of dealing on the
part of any of the Banks, nor any delay or failure on the part of any of the
Banks in exercising any rights, powers or privileges hereunder, shall operate
as a waiver of such rights, powers or privileges or otherwise prejudice any
Bank's rights and remedies hereunder; nor shall any single or partial exercise
thereof preclude any further exercise thereof or the exercise of any other
right, power or privilege by any of the Banks. No right or remedy conferred
upon or reserved to any of the Banks under this Agreement is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy given hereunder or
now or hereafter existing under any applicable law. Every right and remedy
given by this Agreement or by applicable law to any of the Banks may be
exercised from time to time as often as may be deemed expedient by any of the
Banks.
14.4 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms, covenants,
agreements, representations and warranties of the Borrower made herein or in
any certificate or other document delivered pursuant hereto shall be deemed to
be material and to have been relied upon by the Banks, notwithstanding any
investigation heretofore or hereafter made by the Banks or on the Banks'
behalf, and those covenants and agreements of the Borrower set forth in Section
8 and Section 14.5 hereof shall survive the repayment in full of the Loans and
the termination of the Commitments.
14.5 Expenses.
---------
14.5.1 The Borrower agrees to pay and save the Banks harmless from
liability for the payment of the reasonable fees and expenses of counsel to
each of the Banks in connection with the preparation, execution and delivery of
this Agreement and the Notes and the consummation of the transactions
contemplated hereby, and in connection with any amendments, waivers or consents
in connection therewith, and all reasonable costs and expenses of all of the
Banks (including reasonable fees and expenses of counsel) in connection with
any Event of Default or the enforcement of this Agreement or any of the Notes.
14.5.2 The Borrower agrees to pay, and indemnify and hold harmless each
Bank from and against, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the use of proceeds of the Loans.
14.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and shall inure to the benefit of the Banks and their respective
successors and assigns. Each Bank may assign its entire interest in this
Agreement, its Commitment and the Loans to another financial institution,
including, but not limited to, one of the Banks'
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affiliates. With the prior written consent of the Borrower, which consent
shall not be unreasonably withheld, each Bank may sell participations in its
Commitment and Loans to any financial institution or institutions, provided
that, prior to a Default or an Event of Default, such Bank retains full power
to make all decisions with respect to any waiver relating to this Agreement,
and makes any interest rate quotations based on circumstances relating to it
and not to any participant. The Borrower shall not, without the prior consent
of all of the Banks, assign its rights or obligations hereunder or, as the case
may be, under the Notes and the Banks shall not be obligated to make any Loans
hereunder to any entity other than the Borrower.
14.7 ASSIGNMENT TO FEDERAL RESERVE BANKS. Any Bank may at any time assign
all or any portion of its rights under this Agreement and its Note to a Federal
Reserve Bank. No such assignment shall release the transferor Bank from its
obligations hereunder.
14.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
14.9 GOVERNING LAW, CONSENT TO JURISDICTION AND WAIVER OF IMMUNITY.This
Agreement is a contract made under, and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with, the
laws of the State of Ohio applicable to contracts made and to be performed
entirely within such State. The Borrower further agrees that any legal action
or proceeding with respect to this Agreement or the Notes or the transactions
contemplated hereby, may be brought in any court of the State of New York or
the State of Ohio or the State of Michigan, or in the United States courts for
the Southern District of New York, or the Southern District of Ohio or the
Southern District of Michigan, and the Borrower hereby irrevocably submits to
and accepts generally and unconditionally the jurisdiction of those courts with
respect to its person, property and revenues and irrevocably consents to
service of process in any such action or proceeding by the mailing thereof by
U.S. mail to the Borrower at the Borrower's address set forth in Section 14.2
hereof. To the extent permitted by applicable law, the Borrower hereby waives
and agrees not to assert in any such action or proceeding, by way of motion, as
a defense or otherwise, any claim that (i) it is not personally subject to the
jurisdiction of the aforesaid courts, (ii) except as required by applicable
law, its property is exempt or immune from attachment or execution, (iii) any
such action or proceeding brought in any one of the aforesaid courts is brought
in an inconvenient forum, (iv) the venue of any such action or proceeding
brought in any one of the aforesaid courts is improper, or (v) this Agreement
or any document contemplated herein or the subject matter hereof or thereof may
not be enforced in or by any such Court.
Nothing in this paragraph shall affect the right of any Bank to serve
process in any other manner permitted by law or limit the right of any Bank to
bring any such action or proceeding against the Borrower or to obtain execution
on any judgment, in any other
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jurisdiction or in any other manner permitted by law.
14.10 WAIVER OF JURY TRIAL. THE BORROWER WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i) UNDER THIS
AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (ii) ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
14.11 HEADINGS. The headings of the various subdivisions hereof are for the
convenience of reference only and shall in no way modify any of the terms and
provisions hereof.
14.12 CONSTRUCTION OF CERTAIN PROVISIONS. All computations required
hereunder and all financial terms used herein shall be made or construed in
accordance with generally accepted accounting principles. If any provision of
this Agreement refers to any 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, whether or not
expressly specified in such provision.
14.13 INTEGRATION AND SEVERABILITY. This Agreement embodies the entire
agreement and understanding between the Borrower and the Banks, and supersedes
all prior agreements and understandings, relating to the subject matter hereof.
In case any one or more of the provisions of this Agreement or the Notes shall
be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby, and such invalidity, illegality
or unenforceability in one jurisdiction shall not affect the validity, legality
or enforceability of the provisions of this Agreement or the Notes in any other
jurisdiction.
14.14 USURY. Notwithstanding any provisions of this Agreement or the
Notes, in no event shall the amount of interest paid or agreed to be paid by
the Borrower exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of this Agreement or the Notes at the time
performance of such provision shall be due shall involve exceeding the interest
rate limitation validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, IPSO FACTO, the obligations to
be fulfilled shall be reduced to an amount computed at the highest rate of
interest permissible under applicable law, and if for any reason whatsoever any
of the Banks shall ever receive as interest an amount which would be deemed
unlawful under such applicable law such interest shall be automatically applied
by such Bank to the payment of principal of such Bank's Loans outstanding
hereunder (whether or not then due and payable) and not to the payment of
interest, or shall be refunded to the Borrower if such principal has been paid
in full.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in triplicate originals as of the year and day first above written.
ATTEST: ▇. ▇. ▇▇▇▇▇ CORPORATION
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________________ By:_____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
THE BANK OF NEW YORK
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
THE HUNTINGTON NATIONAL BANK
/s/ ▇▇▇▇▇▇ ▇. Friend
By:____________________________
▇▇▇▇▇▇ ▇. Friend, Vice President
NBD BANK
/s/ ▇▇▇▇ ▇▇▇▇▇▇
By:____________________________
▇▇▇▇ ▇▇▇▇▇▇, Vice President
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EXHIBIT A
REVOLVING CREDIT NOTE
____________________, 1996 $17,000,000
FOR VALUE RECEIVED, the undersigned, ▇.▇. ▇▇▇▇▇ CORPORATION, an Ohio
corporation, promises to pay to ________________________________________
(hereinafter called the "Bank") or order, at its office at
_________________________, ____________________________, in lawful money of the
United States of America and in immediately available funds, the principal sum
of Seventeen Million Dollars ($17,000,000), or such lesser amount as is then
outstanding under this Note as indicated on the records of the Bank, for money
loaned with interest upon the unpaid principal balance hereof from time to time
outstanding, payable, in like money and funds, in arrears on each interest due
date after the date hereof.
This Note evidences Eurodollar Loans and/or Domestic Loans and shall
bear interest at the rates, respectively, as specified in the Credit Agreement
described below, which is incorporated herein by reference. Such interest
shall be payable on a Domestic Loan on the last Business Day of each March,
June, September and December beginning March 31, 1996, and on the date of
conversion thereof to a Eurodollar Loan. Interest shall be payable on a
Eurodollar Loan on each Interest Payment Date. Interest will be computed on
the basis of a 360-day year for the actual number of days in each Interest
Period. After an Event of Default or after maturity, whether by acceleration
or otherwise, this Note shall bear interest at the highest rate permitted by
applicable law not to exceed 150% of the Prime Rate.
This Note represents Loans made pursuant to the Bank's Commitment under
the Revolving Credit Agreement dated as of ___________________, 1996 as it may
be from time to time amended (the "Credit Agreement"), among the undersigned,
the Bank and certain other banks and the terms and conditions set forth in the
Credit Agreement shall be considered a part hereof to the same extent as if
written herein, and upon the occurrence of an Event of Default as defined in
the Credit Agreement then the entire principal sum and any accrued interest on
this Note shall, at the option of the holder of this Note except as to any
event or condition described in Section 13.1.5 or 13.1.6 of the Credit
Agreement, at once and without notice become due and payable. Capitalized
terms used but not defined in this Note shall have the respective meanings
assigned to them in the Credit Agreement. The entire unpaid principal and
interest on this Note shall be due and payable on the Termination Date.
The Bank is hereby authorized by the undersigned to note on the
schedule attached to this Note the date, amount and type of each Loan, the
interest rate and duration
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of the related Interest Period (if applicable), the amount of each payment or
prepayment of principal thereon and the other information provided for on such
schedule, which schedule shall constitute PRIMA FACIE evidence of the
information so noted, provided, that any failure by the Bank to make any such
notation shall not relieve the undersigned of its obligation to repay the
outstanding principal amount of this Note, all accrued interest hereon and any
amount payable in accordance with the terms of this Note and the Credit
Agreement.
All parties to this Note, including endorsers, sureties and guarantors,
if any, hereby waive presentment for payment, demand, protest, notice of
non-payment or dishonor, and of protest, and any and all other notices and
demands whatsoever, and agree to remain bound until the interest and principal
are paid in full notwithstanding any extension or extensions of time for
payment which may be granted, even though the period of extension may be
indefinite, and notwithstanding any inaction by, or failure to assert any legal
right available to, the holder of this Note.
This Note shall be construed in accordance with and governed by the
laws of the State of Ohio.
The undersigned authorizes any attorney at law to appear in any Court
of Record in the State of Ohio or in any other state or territory of the United
States after the above indebtedness becomes due, whether by acceleration or
otherwise, to waive the issuing and service of process, and to confess judgment
against the undersigned in favor of the Banks for the amount then appearing due
together with costs of suit, and thereupon to waive all errors and all rights
of appeal and stays of execution.
----------------------------------------
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE.
----------------------------------------
▇.▇. ▇▇▇▇▇ CORPORATION
By:___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
37
45
EXHIBIT B
▇.▇. ▇▇▇▇▇ CORPORATION
July 5, 1994
Metropolitan Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Dear Sirs:
▇.▇. ▇▇▇▇▇ Corporation, an Ohio corporation (herein called the "Company"),
hereby agrees with you as follows:
1. THE LOAN. Subject to the terms and conditions hereof, you will lend to
the Company, and the Company will borrow from you, on July 5, 1994 (herein
called the "Closing Date"), the amount of $15,000,000. Said loan shall be
evidenced by, and be made against delivery to you on the Closing Date at your
Home Office, One Madison Avenue, New York, New York, of, the Company's 9.70%
senior promissory note due July 5, 2004 (the "Note"), substantially in the form
of Exhibit A hereto, made in the principal amount of $15,000,000, dated the
Closing Date, registered in your name and duly executed by the Company. Delivery
of the Note shall be made against the advance by you to the Company of
immediately available funds in the amount of $15,000,000.
2. THE NOTES. The term "Notes" as used herein shall include the Note
delivered to you on the Closing Date as provided in Section 1 hereof and any
promissory note delivered in substitution or exchange therefor or in lieu
thereof, and, where applicable, shall include the singular number as well as the
plural. The term "Note" shall mean one of the Notes. Each Note shall be
substantially in the form of Exhibit A hereto.
3. REPLACEMENT OF NOTES. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of any Note and, in the
case of any such loss, theft or destruction, upon delivery of indemnity
reasonably satisfactory to the Company (except that if you or your nominee is
the holder of such Note, your own agreement of indemnity shall be deemed to be
satisfactory), or, in the case of any such mutilation, upon the surrender of
such Note to the Company at the office or agency maintained pursuant to Section
7.1 of the Notes for cancellation of such Note, the Company will make and
deliver a new Note, of like tenor, dated the date from which unpaid interest has
then accrued, in lieu of such lost, stolen, destroyed or mutilated Note.
46
4. FINANCIAL STATEMENTS, COMPLIANCE CERTIFICATES AND OTHER DOCUMENTS AND
INFORMATION. So long as any Note shall be outstanding:
(a) The Company will deliver to you, in duplicate, so long as you
shall hold any Note
(i) within 60 days after the end of each of the first three
quarterly periods in each fiscal year of the Company, consolidated
statements of income, shareholders' equity and cash flows of the
Company and its Subsidiaries for that period and for the portion of
such fiscal year ended with that period and a consolidated balance
sheet of the Company and its Subsidiaries as at the end of that
period, setting forth in each case in comparative form the
corresponding figures for the corresponding period or periods of the
preceding fiscal year, all in reasonable detail and certified (subject
to year-end audit adjustments) by an authorized financial officer of
the Company;
(ii) within 120 days after the end of each fiscal year of the
Company, consolidated statements of income, shareholders' equity and
cash flows of the Company and its Subsidiaries for such year and a
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such year, setting forth in each case in comparative form
the corresponding figures for the previous fiscal year, all in
reasonable detail and accompanied by a report of independent public
accountants of recognized national standing selected by the Company;
(iii) concurrently with the delivery of the financial statements
described in clauses (i) and (ii), a certificate signed on behalf of
the Company by an authorized financial officer of the Company (1)
stating that a review of the activities of the Company and its
Subsidiaries during the fiscal period covered by such financial
statements has been made with a view to determining whether the
Company has kept, observed, performed and fulfilled all its
obligations under this Agreement and the Notes, (2) stating that no
Default or Event of Default existed at the end of such fiscal period
or, if any such Default or Event of Default then existed, specifying
all such Defaults and Events of Default and the status thereof and the
action taken, being taken or proposed to be taken by the Company with
respect thereto, and (3) accompanied by reasonably detailed
calculations showing that the Company was in compliance, as of the
end of the relevant fiscal
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47
period, with the requirements of Sections 8.1, 8.2, 8.5, 8.6,
8.7, 8.9, 8.10 and 8.11 of the Notes;
(iv) concurrently with their being provided to the recipients
thereof,
(1) copies of all financial statements, proxy statements and
reports which the Company shall send to its stockholders or any
of its Subsidiaries shall send to its stockholders other than the
Company; and
(2) copies of all regular and periodic reports, if any,
which the Company or any of its Subsidiaries shall file with the
Securities and Exchange Commission, or any governmental agency or
agencies substituted therefor, or with any national securities
exchange;
(v) immediately upon a responsible officer of the Company's
becoming aware of the occurrence of any (1) "reportable event," as
defined in Section 4043 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or (2) nonexempted "prohibited
transaction," as defined in Sections 406 and 408 of - ERISA and
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), in connection with any "employee pension benefit plan," as
defined in Section 3 of ERISA established or maintained by the Company
or any of its Subsidiaries for the benefit of its employees (a
"Plan"), or any trust created thereunder, a written notice specifying
the nature thereof, what action the Company is taking or proposes to
take with respect thereto and, when known, any action taken or
proposed to be taken by the Internal Revenue Service or the Pension
Benefit Guaranty Corporation with respect thereto;
(vi) immediately upon the Company's becoming aware of the
existence of any Event of Default or any Default, a written notice
specifying the nature and status thereof and what action the Company
is taking or proposes to take with respect thereto; and
(vii) immediately upon the Company's becoming aware that the
holder of any Note or of any other evidence of Debt of the Company or
any Subsidiary of the Company has demanded payment, given notice or
taken any other action with respect to a claimed Event of Default or a
claimed default in respect of or under such other evidence of Debt, a
written notice specifying the demand made, notice given or action
taken by such holder and the nature and status
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48
of the claimed Event of Default or default and what action the Company
is taking with respect thereto.
(b) The Company will furnish to you such other information with
respect to the business, operations, properties or financial condition of
the Company or any of its Subsidiaries as you may, from time to time,
reasonably request (including, without limitation, such information as may
be required to be delivered by the Company to a holder of the Notes and/or
any prospective purchasers thereof in accordance with Rule 144A under the
Securities Act of 1933, as amended) and at your request will make available
for examination copies of any special or extraordinary reports or
statements (which the Company will promptly advise you of the existence of)
which the Company or any of its Subsidiaries may make to or file with any
governmental department, commission, board, bureau or agency, Federal or
state, which might be helpful to you in evaluating your investment in the
Notes.
5. INSPECTION. So long as you shall hold any Note, you may visit and
inspect any of the properties of the Company or its Subsidiaries, examine its
books of account and the books of account of its Subsidiaries, and discuss the
affairs, finances and accounts of the Company and its Subsidiaries with its and
their officers and independent accountants, all at such reasonable times and as
often as you may reasonably desire.
6. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
that:
(a) FINANCIAL STATEMENTS. The consolidated balance sheets of the
Company and its Subsidiaries as at December 30, 1989, December 29, 1990,
December 28, 1991, January 2, 1993 and January 1, 1994, and the related
consolidated statements of income, stockholders' equity and cash flows for
the fiscal years ended on said dates, including in each case the related
schedules and notes, if any, all certified by independent public
accountants and heretofore delivered to you, fairly present (i) the
financial condition of the Company and its Subsidiaries as at the
respective dates of said balance sheets and (ii) the results of operations
and cash flows of the Company and its Subsidiaries for such fiscal years.
Except as otherwise stated therein or in the notes thereto, all such
financial statements have been prepared in accordance with GAAP applied on
a consistent basis throughout the periods involved.
(b) NO MATERIAL CHANGES. There has been no material adverse change in
the business, operations, properties or condition, financial or other, of
the Company and its Subsidiaries taken as a whole since January 4, 1994.
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49
(c) DUE ORGANIZATION AND QUALIFICATION OF COMPANY. The Company is a
corporation duly organized and existing in good standing under the laws of
the State of Ohio and is duly qualified and in good standing as a foreign
corporation in every jurisdiction wherein the failure to so qualify would
have a material adverse effect upon the business, operations, properties or
financial condition of the Company and its Subsidiaries taken as a whole.
(d) BUSINESS AND SUBSIDIARIES. The annual report of the Company on
Form 10-K for the fiscal year ended January 1, 1994 (the "10-K") and the
quarterly report of the Company on Form l0-Q for the fiscal period ended
March 26, 1994 (the "10-Q"), each as filed with the Securities and Exchange
Commission and a copy of each of which has heretofore been furnished to
you, together correctly describe the general nature of the business
conducted during the fiscal year ended January 1, 1994, and presently
conducted and presently proposed to be conducted, by the Company and its
Subsidiaries and correctly sets forth the principal properties then owned
or leased by the Company and its Subsidiaries. Except for the contemplated
acquisition of Vesture Corporation and the agreement to lease a
distribution center in Laredo, Texas, since January 1, 1994, there has been
no material change in the general nature of the business conducted and
presently proposed to be conducted, or in the principal properties owned or
leased, by the Company and its Subsidiaries. The only present Subsidiaries
of the Company are those specifically referred to in the 10-K, each of
which is duly organized and existing in good standing under the laws of its
jurisdiction of incorporation and is duly qualified and in good standing as
a foreign corporation in every jurisdiction wherein the failure to so
qualify would have a material adverse effect upon the business, operations,
properties or financial condition of the Company and its Subsidiaries taken
as a whole. The Company owns all outstanding shares of capital stock of
each such Subsidiary except for directors' qualifying shares and all shares
of such stock have been validly issued and are fully paid and
non-assessable.
(e) TITLE TO PROPERTIES. Either the Company or one of its Subsidiaries
has good and marketable fee title to all the real properties and good title
to all other properties and assets reflected in the balance sheet as at
January 1, 1994, referred to in subsection (a) above, or purported to have
been acquired after said date, except, however, property subject to
Capitalized Leases or Properties and assets sold or otherwise disposed of
in the ordinary course of business subsequent to said date. Except as
permitted by Section 8.2 of the Notes, there are no Liens on any of the
present properties or assets of the
-5-
50
Company or its Subsidiaries.
(f) TRADEMARKS, PATENTS, ETC. The Company and its Subsidiaries possess
all trademarks, trademark rights, trade names, trade name rights,
copyrights, patents, patent rights and licenses necessary to conduct their
respective businesses as now operated without known conflict with any valid
trademarks, trade names, copyrights, patents or licenses of others.
(g) LITIGATION. Other than as referred to in the 10-K and the 10-Q,
there are no actions, suits or proceedings (whether or not purportedly on
behalf of the Company or any of its Subsidiaries) pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any of its Subsidiaries, at law or in equity or before or by any Federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which is likely to
result in any material adverse change in the business, operations,
properties or condition, financial or other, of the Company and its
Subsidiaries taken as a whole; and neither the Company nor any of its
Subsidiaries is in default with respect to any order, writ, injunction or
decree of any court, arbitrator or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
(h) LEASES, ETC. None of the assets or property reflected in the
balance sheet as at January 1, 1994, referred to in subsection (a) above is
held by the Company or its Subsidiaries as lessee under any lease or land
purchase contract or as conditional vendee under any conditional sales
contract or other title retention agreement other than properties or assets
subject to Capitalized Leases reflected in said balance sheet as at January
1, 1994 and other than leasehold improvements not exceeding in the
aggregate $3,800,000 net book value.
(i) BURDENSOME PROVISIONS. Neither the Company nor any of its
Subsidiaries is a party to any agreement or instrument or subject to any
charter or other corporate or legislative restriction materially and
adversely affecting the business, operations, properties or condition,
financial or other, of the Company and its Subsidiaries, taken as a whole.
(j) COMPLIANCE WITH OTHER INSTRUMENTS. Neither the Company nor any of
its Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
any bond, debenture, note or other evidence of Debt of the
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51
Company or any of its Subsidiaries or contained in any instrument under or
pursuant to which any thereof has been issued or made and delivered and no
other event of default or default exists thereunder or with respect
thereto. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with
the terms and provisions hereof or of the Notes will conflict with, result
in a breach of or violate (x) any law, or any rule, regulation, order,
judgment or decree of any governmental department or agency or of any court
or arbitrator which is applicable to the Company or any of its property, or
(y) any of the terms, conditions or provisions of the Company's certificate
of incorporation or by-laws or of any agreement or instrument to which the
Company or any of its Subsidiaries is a party, or constitute a default
thereunder, or result in the creation or imposition of any Lien upon any of
the property or assets of the Company or any of its Subsidiaries pursuant
thereto.
(k) FORCE MAJEURE. Since January 1, 1994, the business, properties and
assets of the Company and its Subsidiaries have not been materially and
adversely affected in any way as the result of any fire, explosion,
earthquake, accident, strike, labor disturbance, requisition or taking of
property by governmental authority, flood, drought, embargo, riot, activity
of armed forces, or act of God or the public enemy.
(l) FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the execution,
delivery or performance of this Agreement or the Notes by the Company nor
the consummation by the Company of the transactions contemplated hereby
will violate the Trading with the Enemy Act, as amended, the International
Emergency Economic Powers Act or the Executive Orders of the President of
the United States issued pursuant to such Acts, or any regulations or
orders issued under such Acts or Executive Orders, including, without
limitation, the foreign assets control regulations of the United States
Treasury Department (31 C.F.R. Subtitle B, Chapter V, as amended).
(m) TAX LIABILITY. The Company and its Subsidiaries have filed all tax
returns which, to the knowledge of their respective officers, are required
to be filed and have paid all taxes which have become due and payable
pursuant tp such returns or pursuant to any assessment received by the
Company or any Subsidiary other than those being contested in good faith by
the Company or such Subsidiary. The Federal income tax liability of the
Company has been finally determined by the Internal Revenue Service and
satisfied for all taxable years up to and including the taxable year ended
on or about
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52
December 31, 1987. In the opinion of the Company all tax liabilities were,
as of January 1, 1994, and are now, adequately provided for on the books of
the Company and its Subsidiaries.
(n) USE OF PROCEEDS; REGULATION G. The proceeds of the loan to be made
by you hereunder will be used by the Company (i) to refinance indebtedness
originally incurred by the Company for working capital and (ii) for general
corporate purposes.
No part of the proceeds from such loan will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation G (12 C.F.R., Chapter II, Part 207) of the
Board of Governors of the Federal Reserve System, and margin stock does not
constitute, and the Company does not intend or foresee that margin stock
will at any time constitute, more than 20% of the total assets of the
Company. Neither the Company nor any agent acting on its behalf has taken
or will take any action which might cause this Agreement or the Notes to
violate Regulation G, Regulation T, Regulation X or any other regulation of
the Board of Governors of the Federal Reserve System or to violate the
Securities Exchange Act of 1934, in each case as in effect on the date
hereof or as the same may hereafter be in effect.
(o) DISCLOSURE. Neither this Agreement, nor the financial statements
referred to in subsection (a) of this Section 6, nor the 10-K or the l0-Q
or any certificate or other data furnished to you in writing by or on
behalf of the Company in connection with the transactions contemplated by
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading. There is no fact peculiar to the Company which
materially and adversely affects or in the future may (so far as the
Company can now reasonably foresee) materially and adversely affect the
business, operations, properties, prospects, assets or condition, financial
or other, of the Company and its Subsidiaries, taken as a whole, which has
not been disclosed to you in writing.
(p) ERISA. No accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists
with respect to any Plan. No liability to the Pension Benefit Guaranty
Corporation has been or is expected by the Company or any ERISA Affiliate
to be incurred with respect to any Plan by the Company or any ERISA
Affiliate which is or would be material and adverse to the business,
operations,
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53
-8-
properties, assets, or condition, financial or other, of the Company and
its Subsidiaries taken as a whole. Neither the Company nor any ERISA
Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA which is or would be material and adverse
to the business, operations, properties, assets or condition, financial or
other, of the Company and its Subsidiaries taken as a whole. The execution
and delivery of this Agreement and the making of the loan by you hereunder
will be exempt from, or will not involve any transaction which is subject
to, the prohibitions of Section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under
Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975
of the Code. The representation by the Company in the preceding sentence is
made in reliance upon and subject to the accuracy of your representation in
Section 7(b) hereof as to the source of the funds to be used by you to make
the loan hereunder.
7. (a) ACQUISITION FOR INVESTMENT; PRIVATE OFFERING. You represent that you
are acquiring the Note specified in Section 1 hereof for your own account for
investment and not with a view to, or for sale in connection with, the
distribution of such Note, nor with any present intention of distributing or
selling such Note, PROVIDED that the disposition of your property shall at all
times be within your control. The Company represents that it has not, either
directly or through any agent, offered any of the Notes or other similar
securities of the Company to, or solicited offers to acquire any thereof from,
or otherwise approached or negotiated or communicated in respect of any thereof
with, any Person or Persons other than you and not more than 34 other Persons,
all of whom are institutional investors and were offered the Notes (or a portion
thereof) at private sale for investment. Neither the Company nor any agent on
its behalf will offer any of the Notes or other similar securities of the
Company to, or solicit any offers to acquire any thereof from, or otherwise
approach or negotiate in respect of any thereof with, any Person or Persons so
as thereby to bring the offering and issuance of the Notes within the provisions
of Section 5 of the Securities Act of 1933, as amended.
(b) SOURCE OF FUNDS. You represent that the source of funds to be used by
you to make the loan hereunder and to acquire the Notes will not consist of
assets of any separate account (as defined in ERISA) maintained by you.
8. CONDITIONS OF LOAN. Your obligation to advance the loan on the Closing
Date, as provided in Section 1 hereof, shall be subject to the performance by
the Company of all its agreements theretofore to be performed hereunder and to
the accuracy of its representations and warranties herein contained
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54
and to the satisfaction, prior to or concurrently with the making of said loan,
of the following further conditions:
(a) OPINION OF COMPANY'S COUNSEL. You shall have received from Vorys,
▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, counsel for the Company, an opinion dated the
Closing Date, in form and substance satisfactory to you, to the effect that
(i) the Company is a duly organized and existing corporation in
good standing under the laws of the State of Ohio and has the
corporate power and authority to own its properties and to carry on
its business as now conducted and to enter into this Agreement and to
issue the Notes;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms;
(iii) the Note delivered to you on the Closing Date has been duly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company enforceable in
accordance with its terms;
(iv) it is not necessary in connection with the offering and
delivery of the Notes under the circumstances contemplated by this
Agreement, to register the Notes under the Securities Act of 1933, as
amended and as then in effect, or to qualify an indenture in respect
thereof under the Trust Indenture Act of 1939, as amended and as then
in effect;
(v) no authorization, consent, approval or exemption from, or
filing with, any governmental or public body is required in connection
with the execution and delivery of this Agreement and the Notes;
and as to such other matters incident to the transactions contemplated by
this Agreement as you may desire.
(b) NO EVENT OF DEFAULT. No Default or Event of Default shall exist on
the Closing Date; and the Company shall have delivered to you on the
Closing Date a certificate signed by an authorized officer of the Company
to such effect.
(c) CORRECTNESS OF REPRESENTATIONS, ETC. The representations and
warranties by the Company in Sections 6 and 7(a) hereof shall be true on
and as of the Closing
- 10 -
55
Date with the same effect as though such representations and warranties had
been made on and as of the Closing Date; and the Company shall have
delivered to you on the Closing Date a certificate signed by an authorized
officer of the Company to such effect.
(d) LEGALITY. The Note being acquired by you on the Closing Date shall
qualify on the Closing Date as a legal investment for mutual life insurance
companies under the New York Insurance Law (without resort to any provision
of such Law, such as Section 1405 (a) (8) thereof, permitting limited
investments by you without restriction as to the character of the
particular investment) and such acquisition shall not subject you to any
penalty or other onerous condition under or pursuant to any applicable law
or governmental regulation.
(e) PROCEEDINGS, DOCUMENTS, ETC. All proceedings to be taken in
connection with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be satisfactory in form and substance to
you; and you shall have received copies of all documents which you may
reasonably request in connection with said transactions and copies of the
records of all corporate proceedings in connection therewith in form and
substance satisfactory to you.
9. HOME OFFICE PAYMENT. Notwithstanding any provision to the contrary
contained in the Notes, the Company will promptly and punctually pay to you by
wire transfer of immediately available funds, not later than 12:00 noon, New
York time, on the date payment is due, to Account No. 002-2-410591, Account
Name: Metropolitan Life-Corporate Investments, Reference: PPN 068798A*8, at The
Chase Manhattan Bank, N.A., Metropolitan Branch, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ABA No. ▇▇▇▇▇▇▇▇▇, or such other account or address as may be
designated in writing by you, all amounts payable in respect of the principal
of, premium, if any, and interest on, any Notes then held by you or your
nominee, without any presentment thereof and without any notation of such
payment being made thereon.
In the event you shall sell any Note you will, prior to the delivery
thereof, make a notation thereon of the date to which interest has been paid
thereon and, if not theretofore made, a notation thereon of the extent to which
any payment has been made on account of the principal thereof.
10. EXPENSES. Whether or not the loan herein contemplated shall be
consummated, the Company shall pay you $15,000 as a transaction fee to cover
your expenses in preparing for and documenting the transaction contemplated by
this Agreement, You agree that, upon payment of said
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56
transaction fee, the Company will not otherwise be liable for the payment of any
expenses incurred by you in connection with preparing for, documenting and
closing the transaction contemplated by this Agreement, including, without
limitation, any legal fees and expenses, travel expenses, and word processing
costs. The Corporation will, however, pay all of your out-of-pocket expenses,
including the reasonable fees and disbursements of your special counsel, if any,
in connection with any waiver, modification or consent under or in respect of
this Agreement or the Notes, whether or not the same become effective. The
Company will save you harmless against any and all liability with respect to, or
resulting from any delay in paying, stamp or other documentary taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of the Notes or of any modification of any thereof. The
Company's obligations under this Section 10 shall survive the payment or
prepayment of the Notes.
11. DEFINITIONS. Any terms used herein shall have, unless otherwise herein
defined or the context otherwise requires, the respective meanings assigned to
them in Exhibit A hereto.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; SUCCESSORS AND ASSIGNS. All
covenants, agreements, representations and warranties made herein and in
certificates delivered pursuant hereto shall survive the making by you of the
loan herein contemplated and the execution and delivery to you of the Notes
evidencing such loan and shall continue in full force and effect so long as any
Note is outstanding and unpaid and as provided in Section 10 hereof. Whenever in
this Agreement either of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party (including, in the
case of you, any subsequent holder of any of the Notes); and all covenants,
promises and agreements in this Agreement contained by or on behalf of the
Company, or by or on behalf of you, shall bind and inure to the benefit of the
respective successors and assigns of such party hereto (including, in the case
of you, any subsequent holder of any of the Notes); PROVIDED, HOWEVER, that you
shall not be required to advance the loan as provided in Section 1 hereof to any
Person other than the presently existing ▇.▇. ▇▇▇▇▇ Corporation, an Ohio
corporation.
13. NOTICES. All communications provided for hereunder or under the Notes
(other than payments in respect thereof which shall be made in accordance with
Section 9 hereof) shall be in writing and, if to you, mailed by registered or
certified mail or delivered Personally or by reputable overnight courier service
to Metropolitan Life Insurance Company, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Treasurer, with a copy to Metropolitan Life Insurance Company,
Capital Markets Group-Central Territory, One Lincoln Centre, Suite 800,
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57
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice-President, or, if to the
Company, mail by registered or certified mail or delivered personally or by
reputable overnight courier service to the Company's office at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer, or at any other
office that the Company or you may hereafter designate by written notice to the
other.
14. LAW GOVERNING: No Oral Change. This Agreement shall be construed in
accordance with the laws of the State of Ohio and cannot be waived, changed,
terminated or discharged orally but only by an agreement in writing and signed
by the party against whom enforcement of any waiver, change, termination or
discharge is sought.
15. HEADINGS. The headings of the Sections and subsections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Upon your signing the form of acceptance on the enclosed counterpart of
this Agreement and returning such counterpart to the Company, this Agreement
shall become a binding agreement between you and the Company
Very truly yours,
▇.▇. ▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
The foregoing agreement is hereby accepted.
METROPOLITAN LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Vice-President
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EXHIBIT A
▇.▇. ▇▇▇▇▇ CORPORATION
9.70% Senior Promissory Note
Due July 5, ▇▇▇▇
▇▇▇. ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
$ , 19
▇.▇. ▇▇▇▇▇ CORPORATION (herein called the "Company"), a corporation duly
organized and existing under the laws of the State of Ohio, for value received,
hereby promises to pay to , or registered assigns, on the fifth
day of July, 2004, the principal sum of
Dollars ($ ) (or
so much thereof as shall not have been prepaid) in such coin or currency of the
United States of America as at the time of payment shall be legal tender for
public and private debts, at the principal office of The Chase Manhattan Bank,
N.A. in the Borough of Manhattan, The City of New York, State of New York, and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the unpaid balance of said principal sum from the date hereof at said
office, in like coin or currency, semi-annually on the fifth day of July and the
fifth day of January in each year, commencing on the first such day after the
date hereof, at the rate of nine and seventy one-hundredths per centum (9.70%)
per annum until the principal hereof shall have become due and payable. Any
payment of principal of, premium, if any, or, to the extent lawful, interest on
this Note which is not paid when due shall bear interest at the greater
(determined on a daily basis) of eleven and seventy one-hundredths per centum
(11.70%) per annum or the rate per annum which The Chase Manhattan Bank, N.A.
announces publicly from time to time as its corporate base rate of interest (or
such lesser rate, if any, which is the maximum rate permitted by applicable law)
(the "Overdue Interest Rate") for the period that the same is overdue.
1. NOTES. This Note is one of the 9.70% senior promissory notes due July 5,
2004 of the Company (the "Notes") issued pursuant to a loan agreement dated July
5, 1994 between the Company and Metropolitan Life Insurance Company (the
"Agreement"), in the aggregate principal amount of $15,000,000, each in the
denomination of $100,000 or a multiple thereof, and bearing interest payable at
the same rate and on the same semi-annual dates as the interest on the principal
amount of this Note.
59
2. REGISTER. The Notes are issuable only as registered notes. The Company
shall keep at the office or agency maintained Pursuant to Section 7.1 hereof a
register in which the Company shall register the names and addresses of the
holders of the Notes and shall register the transfer of Notes as provided
herein.
Upon due presentment for registration of transfer of any Note at such
office or agency, the Company will execute, register and deliver in exchange
therefor a new Note or Notes, each in a minimum denomination of $100,000
principal amount, or any multiple of $1,000 in excess thereof, equal in
aggregate principal amount to the unpaid principal amount of the Note so
presented for registration of transfer, dated the date from which unpaid
interest has then accrued thereon and registered in the name or names of the
transferee or transferees. At any time at the request of the holder of any Note
and upon surrender of such Note for such purpose to the Company at such office
or agency, the Company will execute, register and deliver in exchange therefor a
new Note or Notes, each in a minimum denomination of $100,000 principal amount,
or any multiple of $1,000 in excess thereof, equal in aggregate principal amount
to the unpaid principal amount of the Note so surrendered, dated the date from
which unpaid interest has then accrued thereon and registered in such name or
names as such holder may request. Each Note presented or surrendered for
registration of transfer shall be duly endorsed by, or accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company duly
executed by, the holder thereof or his attorney duly authorized in writing.
All exchanges and registrations of transfer of Notes shall be at the
expense of the Company other than any taxes incurred by reason of a transfer of
title.
The Company may deem and treat the registered holder hereof as the absolute
owner hereof (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon by anyone other than the Company)
for the purpose of receiving payment of or on account of the principal of,
premium, if any, or interest on this Note and for all other purposes, and the
Company shall not be affected by any notice to the contrary. All payments made
to the registered holder hereof shall be valid and effectual to satisfy and
discharge the liability upon this Note to the extent of the sum or sums so paid.
3. PREPAYMENTS.
3.1. MANDATORY PREPAYMENTS. The Company covenants and agrees that it shall
prepay $2,143,000 principal amount of Notes on July 5 in each of the years 1998
through 2003, inclusive; PROVIDED, HOWEVER, that, upon any partial prepayment
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of the Notes pursuant to Section 3.2 hereof, the principal amount of each
mandatory prepayment of Notes becoming due under this Section 3.1 on or after
the date of such prepayment pursuant to Section 3.2 shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such prepayment pursuant to Section 3.2.
Each prepayment pursuant to this Section 3.1 shall be in the principal
amount thereof plus accrued interest to the date of such prepayment, but without
premium.
3.2. OPTIONAL PREPAYMENTS. Upon notice given as provided in Section 3.3
hereof, the Company at its option may prepay the Notes as a whole at any time or
in part from time to time (in multiples of $100,000 principal amount) at the
Yield Maintenance Price. Each such notice shall specify the date on which such
prepayment is to be made (an "Optional Prepayment Date"), the principal amount
of the Notes of each holder so to be prepaid and the interest accrued thereon to
the Optional Prepayment Date.
On the Calculation Date, the Computing Holder shall give written notice to
the Company of the amount of the Yield Maintenance Price so to be prepaid, which
notice shall set forth in reasonable detail the computation thereof; PROVIDED,
HOWEVER, that the failure of the Computing Holder to make such determination
shall not affect the obligation of the Company to pay such Yield Maintenance
Price when due in accordance with the terms of the Notes and the Computing
Holder shall have no liability to the Company or any other holder of the Notes
for its failure to make such determination. The Yield Maintenance Price set
forth in such notice shall be binding on the Company and all of the holders of
the Notes, absent demonstrable error. If the Computing Holder shall not have
given the notice contemplated by this Section 3.2 by the end of the third
Business Day after the Calculation Date, the Company shall be entitled to
determine the Yield Maintenance Price in accordance with the terms hereof and
such calculation shall be binding on the Computing Holder and all other holders,
absent demonstrable error.
Promptly after the Calculation Date, the Company shall deliver to each
holder on or before the Optional Prepayment Date a certificate signed by a
senior financial officer of the Company setting forth the Yield Maintenance
Price of the Notes held by such holder so to be prepaid, accompanied by a copy
of the written notice by the Computing Holder referred to above.
Upon notice of any prepayment pursuant to this Section 3.2 being given as
provided in Section 3.3 hereof, the Company covenants and agrees that it will
prepay on the Optional Prepayment Date the principal amount of the Notes so to
be prepaid as specified in such notice at the Yield Maintenance
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Price thereof, together with interest accrued thereon to such date fixed for
prepayment.
3.3. NOTICE OF PREPAYMENT AND OTHER NOTICES. The Company shall give written
notice of any prepayment of this Note or any portion hereof pursuant to Section
3.2 not less than 30 nor more than 60 days prior to the date fixed for such
prepayment in such notice, which notice shall specify the amount so to be
prepaid, together with the interest to be paid thereon and the date fixed for
such prepayment. Any notice of prepayment and all other notices to be given to
any holder of this Note shall be given by registered or certified mail or by
personal delivery or delivery by reputable overnight courier service to such
holder at its address designated on the date of such notice on the register
maintained by the Company.
4. ALLOCATION OF PREPAYMENTS. If less than the entire principal amount of
all the Notes at the time outstanding shall be prepaid at any time pursuant to
Section 3.1 or 3.2 hereof, the Company will allocate the principal amount so
prepaid (but only in units of $1,000) among the registered holders of Notes in
proportion, as nearly as may be, to the respective principal amount of Notes,
not theretofore called for prepayment, of which they shall be registered
holders.
5. SURRENDER OF NOTES; NOTATION THEREON. Upon any prepayment of a portion
of the principal amount of this Note, the registered holder hereof, at its
option, may require the Company to execute and deliver at the expense of the
Company a new Note dated the date from which unpaid interest has then accrued
thereon and payable to such Person or Persons as may be designated by such
holder for the aggregate principal amount of this Note then remaining unpaid,
upon surrender of this Note, or may present this Note to the Company for
notation hereon of the payment of the portion of the principal of this Note so
prepaid.
6. INTEREST AFTER DATE FIXED FOR PREPAYMENT. If this Note or a portion
hereof is called for prepayment as herein provided, this Note or such portion,
as the case may be, shall cease to bear interest from and after the date fixed
for such prepayment; PROVIDED, HOWEVER, that if, upon presentation for the
purpose, the Company shall fail to pay this Note or such portion, as the case
may be, this Note or such portion, as the case may be, shall bear, so far as may
be lawful, interest at the Overdue Interest Rate until paid and, so far as may
be lawful, any overdue installment of interest shall also bear interest at such
Overdue Interest Rate.
7. AFFIRMATIVE COVENANTS. The Company covenants and
agrees that so long as this Note shall be outstanding:
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7.1. MAINTENANCE OF OFFICE. The Company will maintain an office or agency
in the United States where the Notes may be presented for payment, registration
of transfer, replacement or exchange as provided herein and in the Agreement and
where notices, presentations and demands to or upon the Company in respect of
the Notes may be given or made. Unless another office or agency is designated by
the Company, the office of the Company for the purpose of this Section 7.1 shall
be ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
7.2. PAYMENT OF TAXES AND CLAIMS. The Company will promptly pay and
discharge, and will cause its Subsidiaries to promptly pay and discharge, when
due all taxes, assessments and governmental charges or levies imposed upon the
Company or any Subsidiary or upon the income and profits of the Company or any
Subsidiary, or upon any property, real, personal or mixed, belonging to the
Company or any Subsidiary, or upon any part thereof, before the same shall
become in default, as well as all claims for labor, materials and supplies
which, if unpaid, might become a Lien upon such properties or any part thereof;
PROVIDED; HOWEVER, that the Company shall not be required to pay and discharge,
or to cause to be paid and discharged, any such tax, assessment, charge, levy or
claim so long as the validity or amount thereof shall be contested in good faith
by appropriate proceedings which will prevent the sale or forfeiture of any
property of the Company or such Subsidiary and the Company or such Subsidiary,
as the case may be, shall set aside on its books reserves with respect to any
such tax, assessment, charge, levy or claim so contested in amounts deemed
adequate by the Company.
7.3. CORPORATE EXISTENCE. Except as provided in Section 8.6 hereof, the
Company will do, and will cause each of its Subsidiaries to do, all things
necessary to preserve and keep in full force and effect its corporate existence,
rights and franchises, PROVIDED that this Section 7.3 shall not prevent the
termination of the corporate existence of a Subsidiary if such termination is
desirable in the conduct of the business of the Company and not disadvantageous
in any material respect to the holders of the Notes.
7.4. MAINTENANCE OF PROPERTIES. The Company will at all times maintain,
preserve, protect and keep, and will cause its Subsidiaries to maintain,
preserve, protect and keep, its property in good repair, working order and
condition, and from time to time make, or cause to be made, all necessary
repairs, renewals, replacements, betterments and improvements thereto, so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times, provided that the Company or any
Subsidiary may discontinue the maintenance of any property if such
discontinuance is desirable in the conduct of its business and not
disadvantageous in any material respect to the holders of the Notes.
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7.5. INSURANCE. The Company will keep adequately insured, and will cause
each of its Subsidiaries to keep adequately insured, by financially sound and
reputable insurers, all property of a character usually insured by corporations
engaged in the same or a similar business similarly situated against loss or
damage of the kinds customarily insured against by such corporations, and will
carry, and will cause each of its Subsidiaries to carry, such other insurance as
is usually carried by corporations engaged in the same or a similar business
similarly situated, PROVIDED that the Company shall be permitted to self-insure,
if adequate reserves are maintained in connection therewith, against (i) loss or
damage to motor vehicles at any time owned or leased by the Company and its
Subsidiaries, and (ii) flood loss or damage to the Company's facility in
Goldsboro, North Carolina. The Company shall furnish to the holders of the
Notes, upon request made by any holder not more frequently than annually, a
certificate of an authorized officer describing in reasonable detail all
insurance and self-insurance maintained pursuant to this Section 7.5.
7.6. BOOKS AND RECORDS. The Company will keep, and will cause each of its
Subsidiaries to keep, true and complete books of record and account in
accordance with GAAP.
8. NEGATIVE COVENANTS. The Company covenants and agrees that so long as
this Note shall be outstanding:
8.1. LIMITATIONS ON DEBT.
(i) The Company will not any time permit the ratio of (x) Consolidated
Senior Funded Debt to Total Capitalization to exceed 50%, or (y)
Consolidated Funded Debt to Total Capitalization to exceed 55%.
(ii) The Company will not incur any Current Debt except:
(A) unsecured Current Debt owing to banks, insurance companies
and similar financial institutions, PROVIDED that during each period
of twelve (12) consecutive calendar months (such a period being deemed
to commence on the first day of every month after May, 1994) , there
shall be a period of at least sixty (60) consecutive days during which
on each and every day during such sixty (60) day period, the aggregate
amount of such Current Debt of the Company outstanding at the close of
business on each such day (or if such day is not a Business Day, on
the next preceding Business Day) during such sixty (60) day period, if
deemed to be unsecured Funded Debt of the Company, could then be
outstanding without a violation of clause (i) of this Section
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8.1, and
(B) Current Debt secured by Liens permitted by clause (vi) of
Section 8.2 hereof.
(iii) The Company will not permit any Subsidiary to incur or be liable
in respect of any Current Debt or Funded Debt except (A) unsecured and (to
the extent permitted by clause (vi) of Section 8.2 hereof) secured Current
Debt or Funded Debt owing to the Company or to a Wholly-Owned Subsidiary
and (B) in the case of Vesture Corporation, Debt secured by Liens on its
accounts receivable, PROVIDED that at the time of incurrence of such Debt
by Vesture Corporation and immediately after giving effect thereto, (x) the
aggregate outstanding principal amount of such Debt shall not exceed $1
million, (y) the Company shall be in compliance with Section 8.1(i) and (z)
the Company could incur at least $1 of Debt secured by Liens permitted by
Section 8.2(vi), and PROVIDED, FURTHER, that no such Debt shall be incurred
or exist after January 5, 1996.
8.2. LIMITATIONS ON LIENS. The Company will not, and will not permit any of
its Subsidiaries to, incur, create, assume or permit to exist any Lien on any
property, whether owned on July 5, 1994 or thereafter acquired, except
(i) Liens on property of the Company or a Subsidiary existing on July
5, 1994 and, if securing Current Debt or Funded Debt, described in Exhibit
B to the Agreement;
(ii) Liens, pledges or deposits made or incurred by the Company or a
Subsidiary in connection with worker's compensation, social security or
unemployment insurance or to secure the performance of letters of credit,
bids, tenders, sales contracts, leases, statutory obligations, surety,
appeal and performance bonds and other similar obligations incurred in the
ordinary course of business and not in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase
price of property;
(iii) Liens incurred by the Company or a Subsidiary for taxes,
assessments or governmental charges or levies to the extent permitted to
remain unpaid by Section 7.2 hereof and materialmen's and warehousemen's
Liens securing obligations not overdue, or if overdue, being contested in
good faith by appropriate proceedings, PROVIDED that adequate reserves are
established in accordance with GAAP;
(iv) attachment, judgment and other similar Liens arising in
connection with judicial proceedings, PROVIDED that the execution or other
enforcement of such Lien is
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effectively stayed and the claims secured thereby are being contested in
good faith in such manner that the property subject to such Lien is not
subject to forfeiture or sale and PROVIDED FURTHER that adequate reserves
are established in accordance with GAAP;
(v) encumbrances in the nature of zoning restrictions, easements,
restrictions of record on the use of real property, and landlords' and
lessors' Liens, in each case arising or existing in the ordinary course of
business of the Company or a Subsidiary and which do not materially impair
the Company's or a Subsidiary's use of the property subject thereto; and
(vi) other Liens on property of the Company or any Subsidiary securing
Current Debt or Funded Debt of the Company or such Subsidiary, PROVIDED
that at the time of incurrence of any such Lien and after giving effect to
the Debt secured thereby, (A) the aggregate principal amount of all such
Debt secured by Liens permitted by this clause (vi) shall not exceed 15% of
Consolidated Net Tangible Assets, and (B) the Company shall be in
compliance with clause (i) of Section 8.1 hereof.
Any corporation which becomes a Subsidiary on or after July 5, 1994 shall
be deemed to have incurred, at the time it becomes a Subsidiary, any Debt or
Lien of such corporation existing immediately after it becomes a Subsidiary.
8.3. RESTRICTIONS ON SUBSIDIARIES. The Company will not permit any
Subsidiary to
(i) issue or dispose of any shares of its capital stock to any Person
other than the Company or a Wholly-Owned Subsidiary, except to the extent,
if any, required to qualify directors under any applicable law or required
to be issued to other stockholders of such Subsidiary by virtue of their
exercise of preemptive rights or as their PRO RATA share of any stock
dividend; or
(ii) except as permitted by the proviso in Section 8.4 hereof, sell,
assign, transfer, dispose of or in any way part with control of any share
of capital stock of any other Subsidiary owned by it, or any Debt owing to
it from another Subsidiary, except in either case to the Company or a
Wholly-Owned Subsidiary.
8.4. DISPOSITION OF SECURITIES BY COMPANY. The Company will not
(i) sell, assign, transfer, dispose of, or in any way part with
control of, any share of capital stock of any
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Subsidiary except (A) to the extent, if any, required to qualify directors
of such Subsidiary under any applicable law, or (B) to any Wholly-Owned
Subsidiary; or
(ii) sell, assign, transfer, dispose of, or in any way part with
control of, any Debt owing from any Subsidiary to the Company except to any
Wholly-Owned Subsidiary;
PROVIDED, HOWEVER, that all shares of capital stock of all classes, together
with all Debt, of any Subsidiary owned by the Company and/or its other
Subsidiaries may be sold for the fair market value thereof (as determined in
good faith by the Board of Directors of the Company), as an entirety, if the
Subsidiary whose shares of capital stock and Debt are so sold does not own any
shares of capital stock or Debt of any other Subsidiary not being simultaneously
disposed of as permitted by this proviso and if such sale is permitted by
Section 8.6(iv) hereof.
8.5. RESTRICTED PAYMENTS. The Company will not declare or pay any dividends
(other than dividends payable in capital stock of the Company) on any shares of
any class of its capital stock or apply any of its property or assets to the
purchase, redemption or other retirement of, or make any other distribution, by
reduction of capital or otherwise, in respect of, or permit any Subsidiary to
purchase, any shares of any class of stock of the Company, unless, immediately
after giving effect to such action, there exists no Event of Default or Default,
and the sum of
(i) the amounts declared and paid as dividends (other than dividends
paid in capital stock of the Company) on all shares of stock of all classes
of the Company or distributed in respect of such shares of stock subsequent
to January 1, 1994, and
(ii) the amounts applied to the purchase (including purchases by
Subsidiaries), redemption or retirement of shares of stock of all classes
of the Company subsequent to January 1, 1994,
will not be in excess of the sum of $4,000,000 PLUS 50% of cumulative
Consolidated Net Income (or, in the case of a negative cumulative Consolidated
Net Income, MINUS 100% of such deficit) for the period (taken as one accounting
period) from January 2, 1994 to the date of such action, PLUS the aggregate
amount of the net consideration received by the Company (other than from
Subsidiaries) from the issuance or sale after January 1, 1994 of shares of
capital stock of the Company, including treasury stock.
The amount of any consideration from the issuance or sale
after January 1, 1994 of shares of stock received by the
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67
Company in the form of property other than cash shall be deemed to be the fair
market value of such property (as determined in good faith by the Board of
Directors of the Company) at the time of the receipt of such property by the
Company.
8.6. DISPOSITIONS OF ASSETS; MERGER; CONSOLIDATION. The Company will not,
and will not permit any Subsidiary to, sell, lease, transfer or otherwise
dispose of all or any substantial part of its properties and assets, or
consolidate with or merge into any other Person, or permit another Person to
merge into it, except that
(i) any Subsidiary may permit any corporation to merge into such
Subsidiary, or may consolidate with or merge into, or sell, lease or
otherwise dispose of its assets as an entirety or substantially as an
entirety to, the Company, a Wholly-Owned Subsidiary or any corporation
which thereupon becomes a Wholly-Owned Subsidiary, PROVIDED that
immediately after the consummation of any such transaction and after giving
effect thereto, (A) the Company shall be in compliance with the provisions
of Section 8.1(i), (B) the Company is able to incur at least $1 of Debt
secured by Liens permitted by Section 8.2(vi), and (C) no Default or Event
of Default shall exist;
(ii) the Company may permit any corporation to merge into it or may
consolidate with or merge into, or sell or otherwise dispose of (except by
lease) its assets as an entirety or substantially as an entirety to, any
solvent corporation organized in the United States of America which
expressly assumes in writing the due and punctual payment of the principal
of, and interest and premium on, the Notes and the due and punctual
performance of the obligations of the Company under the Agreement and the
Notes, PROVIDED that immediately after the consummation of any such
transaction and after giving effect thereto, (A) the Company (or such
successor or transferee corporation, as the case may be) shall be in
compliance with the provisions of Section 8.1(i), (B) the Company (or such
successor or transferee corporation, as the case may be) is able to incur
at least $1 of Debt secured by Liens permitted by Section 8.2(vi), and (C)
no Default or Event of Default shall exist;
(iii) the Company or any Subsidiary may sell or otherwise dispose of
any of its assets in the ordinary course of its business; and
(iv) in addition to transactions permitted by subsections (i), (ii),
and (iii) above, the Company or any Subsidiary may sell or otherwise
dispose of any of its assets (including shares of stock and Debt of
Subsidiaries) at the fair market value thereof (as
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determined in good faith by the Board of Directors of the Company) if the
aggregate net proceeds received by the Company and its Subsidiaries from
all such sales and other dispositions during the twelve (12) consecutive
calendar months immediately preceding any such sale or other disposition
shall not exceed 15% of Consolidated Net Tangible Assets as of the end of
the fiscal year of the Company immediately preceding such sale or
disposition.
8.7. SALE-LEASEBACK TRANSACTIONS. The Company will not, and will not permit
any Subsidiary to, sell or transfer any property to any Person and thereupon
lease, as lessee, the same or similar property unless (A) (i) such lease is a
Capitalized Lease and the Company is the lessee thereunder, (ii) immediately
after giving effect thereto, the Company is in compliance with the provisions of
Section 8.1(i), (iii) immediately after giving effect thereto, the Company is
able to incur at least $1 of Debt secured by Liens permitted by Section 8.2(vi),
and (iv) all of the provisions of Section 8.6(iv) are complied with in
connection with such sale or (B) (i) such lease is an operating lease and the
Company is the lessee thereunder, (ii) such property is acquired after July 5,
1994 and is sold and leased-back by the Company within 120 days after such
acquisition, (iii) all of the provisions of Section 8.6(iv) hereof are complied
with in connection with such sale, and (iv) immediately after giving effect to
such sale and lease-back, (x) the aggregate net proceeds received by the Company
from all such sales made in connection with transactions contemplated by this
Section 8.7(B) after July 5, 1994 (other than such sales with respect to which
the related lease-back has expired or otherwise terminated) shall not exceed 5%
of Consolidated Net Worth on the last day of the fiscal quarter immediately
preceding such sale, and (y) the present value of the aggregate rent payable
under all such operating leases then outstanding, discounted at the rate of
12 1/2% per annum, shall not exceed 5% of Consolidated Net Worth on the last
day of the fiscal quarter immediately preceding such sale, PROVIDED that this
Section 8.7 shall not apply to (xx) leases having a term (inclusive of renewal
and extension terms) of less than three years, and (yy) leases of motor
vehicles, computers and office and data processing equipment.
8.8. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not
permit any Subsidiary to, engage in any transaction with an Affiliate on terms
more favorable to the Affiliate than would have been obtainable in arm's length
dealing in the ordinary course of business with a Person not an Affiliate.
8.9. MAINTENANCE OF CONSOLIDATED NET WORTH. The Company will not, on the
last day of any fiscal quarter of the Company, permit Consolidated Net Worth to
be less than the sum of (i) $25,000,000, PLUS (ii) 50% of Consolidated Net
Income computed
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69
on a cumulative basis for the period from and after January 2, 1994 to and
including the end of the fiscal quarter for which the determination is being
made, PROVIDED that if Consolidated Net Income for any fiscal quarter in said
period is a deficit figure, the amount added pursuant to clause (ii) for said
fiscal quarter shall be zero.
8.10. MAINTENANCE OF CURRENT RATIO. The Company will not permit the ratio
of Consolidated Current Assets to Consolidated Current Liabilities to be less
than (i) 1.25 to 1 at the end of the first and fourth fiscal quarters in each
fiscal year of the Company, and (ii) 1.0 to 1 at the end of the second and
third fiscal quarters in each fiscal year of the Company.
8.11. INVESTMENTS. The Company will not, and will not permit any Subsidiary
to, make any Investment other than Permitted Investments.
9. AMENDMENT AND WAIVER. (A) Any provision of the Agreement or of the Notes
may, with the consent of the Company, be amended or waived (either generally or
in a particular instance and either retroactively or prospectively), by one or
more substantially concurrent written instruments signed by the holders of
66 2/3% of the aggregate unpaid principal amount of the Notes; PROVIDED that:
(i) no such amendment or waiver shall, without the consent of the
holders of all the Notes then outstanding, change the rate or time of
payment of interest on any of the Notes, or modify any of the provisions of
the Notes with respect to the payment or prepayment thereof or with respect
to the payment of premium in respect thereof, or change the percentage of
the principal amount of the Notes the holders of which are required to
effectuate or rescind any acceleration of the Notes, or modify any
provision of this Section 9, and
(ii) no such waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon.
Each holder of any Note at the time or thereafter outstanding shall be bound by
any such amendment or waiver, whether or not a notation thereof shall have been
placed on the Note.
(B) The Company shall not, and shall not permit any of its Affiliates to,
solicit, request or negotiate for or with respect to any proposed waiver or
amendment of any of the provisions of the Agreement or the Notes unless each
holder of a Note (irrespective of the principal amount of Notes then held by it)
shall be informed thereof by the Company and shall be afforded the opportunity
of considering the same and shall be supplied by the Company with sufficient
information to enable
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it to make an informed decision with respect thereto and any information
delivered to any other holder of a Note. The Company shall not, and shall not
permit any of its Affiliates to, directly or indirectly, pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any holder of a Note as consideration for or as an inducement to
the entering into by such holder of any such amendment or waiver, unless such
remuneration is concurrently paid, on the same terms, ratably to all holders of
all of the Notes then outstanding, whether or not such holders shall have
consented to such waiver or amendment.
10. DEFINITIONS. For the purpose of this Note, unless otherwise defined or
the context otherwise requires:
"AFFILIATE" means any Person which, directly or indirectly, controls or is
controlled by or is under common control with the Company or a Subsidiary or
which beneficially owns or holds or has the power to direct the voting power of
5% or more of the Voting Stock of the Company or a Subsidiary or which has 5% or
more of its Voting Stock (or, in the case of a Person which is not a
corporation, 5% or more of its equity interest) beneficially owned or held,
directly or indirectly, by the Company or a Subsidiary, and any/director or
officer of the Company or its Subsidiaries. For purposes of this definition,
"control" means the power to direct the management and policies of a Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlled by" and "under common control
with" have meanings correlative to the foregoing.
"AGREEMENT" shall have the meaning specified in Section 1 hereof.
"BUSINESS DAY" means and includes any day on which banks are required to be
open to carry on their normal business in the States of New York and Ohio.
"CALCULATION DATE" means the date on which the Yield Maintenance Price on
the Notes being prepaid pursuant to Section 3.2 hereof or accelerated pursuant
to Section 11 hereof, as the case may be, is to be determined by the Computing
Holder with respect to such Notes. If the Notes are being prepaid pursuant to
Section 3.2 hereof, the Calculation Date shall be the fifth Business Day prior
to the Optional Prepayment Date established pursuant to Section 3.2. If the
Notes are being accelerated pursuant to Section 11 hereof, the Calculation Date
shall be the date of acceleration of such Notes.
"CAPITAL ASSETS" means all of the assets of the Company and its
Subsidiaries other than (i) licenses, patents,
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copyrights, tradenames or trademarks, goodwill, experimental or organizational
expense, unamortized debt discount and expense and all other assets which in
accordance with GAAP are deemed intangible, and (ii) inventories, accounts
receivable or securities of, or other Investments in, any Person.
"CAPITALIZED LEASE" means and includes at any time any lease of property,
real or personal, which in accordance with GAAP would at such time be required
to be capitalized on a balance sheet of the lessee.
"CAPITALIZED LEASE OBLIGATION" means at any time the capitalized amount of
the rental commitment under a Capitalized Lease which in accordance with GAAP
would at such time be required to be shown on a balance sheet of the lessee.
"COMPUTING HOLDER" means as of a Calculation Date with respect to (a) the
prepayment of Notes pursuant to Section 3.2 hereof or acceleration of the Notes
pursuant to clause (3) of the first paragraph of Section 11 hereof, as the case
may be, the holder at such date of the largest aggregate principal amount of the
outstanding Notes or (b) acceleration pursuant to clause (2) of the first
paragraph of Section 11 hereof, the holder of the Notes at such date so being
accelerated. For purposes of such determination, the holder of any Note and any
of its affiliates or subsidiaries that are holders of any Notes shall be treated
as one holder.
"CONSOLIDATED CURRENT ASSETS" means the assets of the Company and its
Subsidiaries that would (determined on a consolidated basis in accordance with
GAAP consistently applied) be classified as "current assets" on its consolidated
balance sheet.
"CONSOLIDATED CURRENT LIABILITIES" means (i) the liabilities of the Company
and its Subsidiaries that would (determined on a consolidated basis in
accordance with GAAP consistently applied) be classified as "current
liabilities" on its consolidated balance sheet, and (ii) Guaranties by the
Company of Current Debt of other Persons.
"CONSOLIDATED FUNDED DEBT" means the aggregate amount of Funded Debt of the
Company and its Subsidiaries, as consolidated in accordance with GAAP and after
eliminating intercompany items .
"CONSOLIDATED NET INCOME" means the aggregate of the Net Income of the
Company and its Subsidiaries, after eliminating all intercompany items and
portions of earnings properly attributable to minority interests, if any, in
the capital stock of such Subsidiaries, all computed and consolidated in
accordance with GAAP; PROVIDED, HOWEVER, that Consolidated Net Income shall not
include:
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(1) the Net Income of any Person (other than a Subsidiary) in which
the Company or any Subsidiary has an ownership interest unless such Net
Income shall have been actually received by the Company or any Subsidiary
in the form of cash dividends or similar cash distributions;
(2) the Net Income of any Subsidiary prior to the date it became a
Subsidiary; and
(3) any gains or losses on the sale or other disposition of Capital
Assets, and any taxes on such gains and any tax deductions or credits on
account of such losses.
"CONSOLIDATED NET TANGIBLE ASSETS" means as of the date of any
determination thereof, Consolidated Total Assets as of such date less the sum of
(i) Consolidated Current Liabilities and (ii) assets properly classified as
intangible assets in accordance with GAAP.
"CONSOLIDATED NET WORTH" means as of the date of any determination thereof
the sum of all amounts which, in accordance with GAAP, would be included under
shareholders' equity plus (to the extent not included in shareholders' equity)
preferred stock, as determined on a consolidated basis, on the balance sheet of
the Company and its Subsidiaries.
"CONSOLIDATED SENIOR FUNDED DEBT" means the aggregate amount of Senior
Funded Debt of the Company and its Subsidiaries, as consolidated in accordance
with GAAP and after eliminating intercompany items.
"CONSOLIDATED TOTAL ASSETS" means, as of the date of any determination
thereof, the total amount of all assets of the Company and its Subsidiaries as
determined on a consolidated basis in accordance with GAAP.
"CURRENT DEBT" of any Person shall mean as of the date of any determination
thereof (i) all indebtedness of such Person for borrowed money other than Funded
Debt of such Person, and (ii) Guaranties by such Person of Current Debt of
others.
"DEBT" of any Person means all Current Debt of such Person and all Funded
Debt of such Person.
"DEFAULT" means any event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, constitute an Event of
Default.
"EVENT OF DEFAULT " has the meaning specified in Section 11 hereof.
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"FUNDED DEBT" of any Person means (i) indebtedness of such Person for
borrowed money or which has been incurred in connection with the acquisition of
assets or services, in each case having a final maturity of more than one year
from the date of creation thereof (or which is renewable or extendible at the
option of the obligor for a period or periods more than one year from the date
of creation), including all payments in respect thereof that are required to be
made within one year from the date of any determination of Funded Debt, whether
or not the obligation to make such payments shall constitute a current liability
of the obligor under GAAP, (ii) Capitalized Lease Obligations of such Person,
(iii) obligations secured by any Lien upon property or assets owned by such
Person, even though such Person has not assumed or become liable for the payment
of such obligations, (iv) obligations created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person, notwithstanding the fact that the rights and remedies of the
seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of property, and (v) all Guaranties by such
Person of Funded Debt of others.
"GAAP" means generally accepted accounting principles as in effect at the
time of application to the provisions hereof.
"GUARANTIES" by any Person shall mean all obligations of such Person
guaranteeing, or in effect guaranteeing, any Current Debt or Funded Debt of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person (i) to purchase such Debt or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Debt, (y) to maintain working
capital or other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such Debt, (iii) to lease
property or to purchase securities or other property or services primarily for
the purpose of assuring the owner of such Debt of the ability of the primary
obligor to make payment of such Debt, or (iv) otherwise to assure the owner of
such Debt against loss in respect thereof.
"INVESTMENT" means any loan, advance, extension of credit or contribution
of capital or any investment in, or Purchase or other acquisition of, stock,
notes, debentures or other securities.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or other encumbrance of any kind in respect of such
asset. For the purposes hereof, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale
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agreement, Capitalized Lease or other title retention agreement relating to such
asset.
"NET INCOME" means for any period the net income (or the net deficit, if
expenses and charges exceed revenues and other proper income credits) of a
corporation or other Person for such period determined in accordance with GAAP.
"PERMITTED INVESTMENTS" means Investments consisting of:
(a) loans or advances by the Company and its Subsidiaries to
Subsidiaries in the ordinary course of business;
(b) Investments in corporate debt obligations maturing in one year or
less from the date of issuance which, at the time of acquisition by the
Company or any Subsidiary, are rated "A" or better (or the equivalent) by
Standard & Poor's Rating Group (currently a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.)
or ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) Investments in direct obligations of the United States of America
or any agency or instrumentality of the United States of America, the
payment or guarantee of which constitutes a full faith and credit
obligation of the United States of America, in either case maturing in
twelve months or less from the date of acquisition thereof;
(d) Investments in certificates of deposit maturing within one year
from the date of issuance thereof, issued by a bank or trust company
organized under the laws of the United States or any state thereof, having
capital, surplus and undivided profits aggregating at least $200,000,000;
(e) loans or advances in the ordinary course of business to suppliers,
officers, directors and employees for expenses (including moving expenses
related to a transfer) incidental to carrying on the business of the
Company or any Subsidiary;
(f) receivables arising from the sale of goods and services in the
ordinary course of business of the Company and its Subsidiaries;
(g) other debt Investments by the Company and its Subsidiaries not
exceeding $5,000,000, maturing in six months or less from the date of
issuance thereof; and
(h) other Investments by the Company and its
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Subsidiaries not exceeding $1,000,000.
For purposes of this definition, at any time when a corporation becomes a
Subsidiary, all Investments of such corporation at such time shall be deemed to
have been made by such corporation, as a Subsidiary, at such time.
"PERSON" means and includes an individual, a corporation, a partnership, a
firm, a joint venture, a trust, an unincorporated organization or a government
or an agency or political subdivision thereof.
"SENIOR FUNDED DEBT" mean all Funded Debt other than Subordinated Funded
Debt.
"SUBORDINATED FUNDED DEBT" means any unsecured Funded Debt of the Company
which (x) is subordinated in right of payment to the Notes by provisions
substantially identical to those set forth in Schedule I hereto, (y) does not
provide for optional prepayments with respect thereto prior to July 5, 2004 and
(z) has a maturity extending beyond July 5, 2004, PROVIDED that any sinking fund
or other mandatory payments or prepayments required to be made in connection
with any such Debt prior to July 5, 2004 shall be deemed to be Senior Funded
Debt for purposes of all calculations pursuant to Section 8 of the Notes.
"SUBSIDIARY" means any corporation more than 50% of the outstanding Voting
Stock of which at the time is owned directly or indirectly by the Company and/or
by one or more Subsidiaries.
"TOTAL CAPITALIZATION" means, as of any date, the sum of (i) Consolidated
Funded Debt outstanding on such date, (ii) deferred Federal income tax
liabilities appearing on a consolidated balance sheet of the Company and its
Subsidiaries prepared as of such date in accordance with GAAP, and (iii)
Consolidated Net Worth determined as of such date.
"VOTING STOCK" of a corporation means the capital stock of such corporation
of the class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the board of directors (or
Persons performing similar functions) of such corporation.
"WEIGHTED AVERAGE LIFE TO FINAL MATURITY" of any indebtedness (including
the Notes) as of the time of determination thereof means the number of years
(rounded to the nearest one-twelfth) obtained by dividing the then Remaining
Dollar-Years of such indebtedness by the then outstanding principal amount of
such indebtedness. For the purposes of this definition, "REMAINING DOLLAR-YEARS"
means the sum of the amounts obtained by multiplying the amount of each then
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remaining sinking fund, serial maturity or other required repayment, including
repayment at final maturity, by the number of years (calculated to the nearest
one-twelfth) which will elapse between the time of such determination and the
date such repayment is scheduled to be made.
"WHOLLY-OWNED SUBSIDIARY" means any Subsidiary all of whose outstanding
stock (other than directors' qualifying shares) shall at the time be owned by
the Company and/or by one or more Wholly-owned Subsidiaries.
"YIELD MAINTENANCE PRICE" means, with respect to any Notes being prepaid
pursuant to Section 3.2 hereof or accelerated pursuant to Section 11 hereof, as
the case may be, the greater of (1) the sum of the respective Payment Values of
each prospective interest payment (excluding from the first Prospective interest
payment any amount of interest accrued to the applicable date of prepayment or
acceleration), prospective mandatory principal prepayment and the principal
payment at maturity in respect of such Notes (the amount of each such payment
being herein referred to as a "PAYMENT"), or (2) the unpaid principal amount of
such Notes. The Payment Value of each Payment shall be determined by discounting
such Payment at the Reinvestment Rate for the period from the scheduled date of
such Payment to the applicable date of prepayment or acceleration, as the case
may be. The "REINVESTMENT RATE" is a rate per annum equal to the sum of (a) .50%
and (b) the yield imputed from the yields of those actively traded "On The Run"
United States Treasury securities having maturities as close as practicable to
the Weighted Average Life to Final Maturity of the Notes so to be prepaid or
accelerated, as the case may be. The yields of such United States Treasury
securities shall be determined as of 10:00 a.m., Eastern Time, on the
Calculation Date by reference to Telerate Access Service (page 500 or the
relevant page at the date of determination indicating such yields, or if such
data ceases to be available, any publicly available source of similar market
data).
11. EVENTS OF DEFAULT. If one or more of the following events, herein
called "Events of Default", shall happen (for any reason whatsoever and whether
such happening shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) default shall be made in payment of the principal of any Note,
with the premium thereon, if any, when and as the same shall become due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise; or
(b) default shall be made in the payment of any
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installment of interest on any Note when and as the same shall become due
and payable and such default shall continue for a period of five Business
Days; or
(c) default shall be made in the due observance or performance of any
covenant, condition or agreement on the part of the Company contained in
Sections 8.1, 8.2, 8.5, 8.6, 8.7, 8.9, 8.10 or 8.11 hereof or in Section
4(a) (vi) of the Agreement; or
(d) default shall be made in the due observance or performance of any
other covenant, condition, or agreement on the part of the Company to be
observed or performed pursuant to the terms hereof or of the Agreement and
such default shall continue for thirty days after the earlier of (i)
written notice thereof, specifying such default and requiring the same to
be remedied, shall have been given to the Company by the registered holder
of any Note, or (ii) actual knowledge thereof by the chief executive
officer, the chief financial officer or the treasurer of the Company; or
(e) the Company or any Subsidiary shall be adjudicated a bankrupt or
insolvent, or shall consent to the appointment of a receiver, trustee or
liquidator of itself or of any substantial part of its property, or shall
admit in writing its inability, or shall fail, to pay its debts generally
as they come due, or shall make a general assignment for the benefit of
creditors, or shall file a voluntary petition in bankruptcy, or a voluntary
petition or an answer seeking reorganization in a proceeding, under any
bankruptcy law (as now or hereafter in effect), or an answer admitting the
material allegations of a petition filed against the Company or any
Subsidiary in any such proceeding, or shall, by voluntary petition, answer
or consent, seek relief under the provisions of any now existing or future
bankruptcy or other similar law providing for the reorganization or winding
up of corporations, or the Company or its directors or stockholders shall
take action looking to the dissolution or liquidation of the Company
(except in connection with a consolidation with, or a merger of the Company
with or into, another corporation pursuant to Section 8.6 hereof); or
(f) an order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of the Company or a
Subsidiary, a receiver, trustee or liquidator of the Company or such
Subsidiary or of any of its property, and such receiver, trustee or
liquidator shall not have been removed or discharged within sixty days
thereafter, or any of the property of the Company or a Subsidiary shall be
sequestered and shall
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78
not be returned to the possession of the Company or such Subsidiary within
sixty days thereafter; or
(g) a petition against the Company or any Subsidiary in a proceeding
under any bankruptcy law (as now or hereafter in effect) shall be filed and
shall not be dismissed within sixty days after such filing, or, in case the
approval of such petition by a court of competent jurisdiction is required,
shall be filed and approved by such a court as properly filed and such
approval shall not be withdrawn or the proceeding dismissed within sixty
days thereafter, or if, under the provisions of any other similar law
providing for reorganization or winding up of corporations and which may
apply to the Company or any Subsidiary, any court of competent jurisdiction
shall assume jurisdiction, custody or control of the Company or such
Subsidiary or of any of its property and such jurisdiction, custody or
control shall not be relinquished or terminated within sixty days
thereafter; or
(h) (i) default shall be made in the payment of any principal,
interest or premium on any bond, debenture, note or other evidence of Debt
(other than the Notes) of, or assumed by, the Company or any Subsidiary,
when the same shall become due and payable, whether at maturity, by
declaration, by call for prepayment or redemption, or otherwise, and such
default shall continue for any period of grace provided therein with
respect thereto, or (ii) any other default or event of default shall occur
with respect to any such evidence of Debt of the Company or any Subsidiary,
and the holders of such Debt (or a trustee therefor) shall be permitted by
the terms thereof or of any agreement or instrument relating thereto to
accelerate the same; PROVIDED, HOWEVER, that the aggregate outstanding
principal amount of all such bonds, debentures, notes or other evidences of
Debt with respect to which a payment or other default or event of default
shall have occurred is in excess of $500,000; or
(i) any final judgment or judgments for the payment of money
aggregating in excess of $2,000,000 shall be rendered against the Company
and/or its Subsidiaries and any one of such judgments shall remain
undischarged for a period of thirty days during which execution shall not
be effectively stayed; or
(j) any representation or warranty made by the Company in the
Agreement or in any certificate or other instrument delivered thereunder or
under the Notes shall prove to be false, incorrect or breached in any
material respect on the date as of which made;
then (1) upon the occurrence of any Event of Default described
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in Sections 11(e) or (g) hereof with respect to the Company (each a "Bankruptcy
Default"), all of the Notes shall automatically become immediately due and
payable, (2) upon the occurrence of any Event of Default described in Sections
11(a) or (b) hereof, the holder of any Note may at any time during its
continuance, by written notice to the Company, declare such Note to be due and
payable, whereupon such Note shall forthwith mature and become due and payable
or (3) upon the occurrence of any Event of Default other than a Bankruptcy
Default, the holder or holders of at least a majority in principal amount of the
Notes then outstanding (exclusive of any Notes held by the Company or any
Affiliate) may at any time during its continuance, by written notice to the
Company, declare all of the Notes to be due and payable, whereupon in each case
all of the Notes shall forthwith mature and become due and payable.
The amount payable upon the occurrence of a Bankruptcy Default shall be the
entire unpaid principal amount of the Notes, together with interest accrued
thereon, to the extent permitted by law, to the date of payment, and such amount
shall be payable without presentment, demand, protest or other requirement of
any kind, all of which are expressly waived by the Company. The amount payable
upon an acceleration based on any other Event of Default shall be, to the extent
permitted by law, the Yield Maintenance Price of the Notes so accelerated,
together with interest accrued on the unpaid principal amount of the Notes so
accelerated to the date of payment, and such amount shall be payable without
presentment, demand, protest or further notice, all of which are expressly
waived by the Company.
On the Calculation Date, the Computing Holder shall give written notice to
the Company (and the Company shall promptly send a copy of such notice to all
the other holders of the Notes of the amount of the Yield Maintenance Price of
the Notes so accelerated, which notice shall set forth in reasonable detail the
computation thereof; PROVIDED, HOWEVER, that the failure of the Computing Holder
to make such determination shall not affect the obligation of the Company to pay
such Yield Maintenance Price when due in accordance with the terms of the Notes
and the Computing Holder shall have no liability to the Company or any other
holder of the Notes for its failure to make such determination. The Yield
Maintenance Price set forth in such notice shall be binding on the Company and
all the holders of the Notes, absent demonstrable error.
12. SUITS FOR ENFORCEMENT. In case an Event of Default shall occur and be
continuing, the registered holder of this Note may proceed to protect and
enforce its rights by suit in equity, action at law and/or by other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Note or in aid of the exercise of any power granted in this
Note, or may proceed to enforce the
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80
payment of this Note or to enforce any other legal or equitable right of the
holder of this Note. If any registered holder of a Note shall demand payment
thereof or take any action in respect of a Default or an Event of Default, the
Company will forthwith give written notice, as Provided in Section 3.3 hereof,
to the other registered holders of Notes, specifying such action and the nature
of such Default or Event of Default. The notice to the Computing Holder shall
also set forth the respective names and addresses of, and principal amounts of
the Notes held by, the other holders of the Notes.
13. REMEDIES NOT WAIVED. No course of dealing between the holder hereof and
the Company or any delay on the part of the holder hereof in exercising any
rights hereunder shall operate as a waiver of any rights of any holder hereof.
14. REMEDIES CUMULATIVE. No remedy herein conferred upon the holder hereof
is intended to be exclusive of any other remedy and each and every remedy shall
be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise.
15. COSTS AND EXPENSES. If any Eyent of Default shall occur, the Company
shall pay to each registered holder hereof, to the extent permitted under
applicable law, all out-of-pocket expenses incurred by such holder in connection
with such Event of Default and such further amount as shall be sufficient to
cover the costs and expenses of collection, including (without limitation)
reasonable attorneys' fees.
16. LAW GOVERNING. This Note shall be governed by the laws of the State of
Ohio.
17. SUCCESSORS AND ASSIGNS. All the covenants, stipulations, promises and
agreements in this Note contained by or on behalf of the Company shall bind its
successors and assigns, whether so expressed or not.
18. HEADINGS. The headings of the Sections and subsections of this Note are
inserted for convenience only and do not constitute a part of this Note.
IN WITNESS WHEREOF, ▇.▇. ▇▇▇▇▇ Corporation has caused this Note to be
signed in its corporate name by one of its officers thereunto duly authorized
and this Note to be dated as of the day and year first above written.
▇.▇. ▇▇▇▇▇ CORPORATION
By__________________________
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SCHEDULE I
9.70% Senior Promissory Note due July 5, 2004
------------------------
SUBORDINATION PROVISIONS
------------------------
"SUBORDINATION. Anything in this Subordinated Note to the contrary
notwithstanding, the indebtedness evidenced by this Subordinated Note shall be
subordinate and junior in right of payment, to the extent and in the manner
hereinafter set forth, to all obligations of the Company in respect of
principal, interest, premium and any other amount payable with respect to Senior
Funded Debt (as defined in the Company's 9.70% Senior Promissory Note due 2004)
(including interest accruing on such Senior Funded Debt after commencement of
any bankruptcy, insolvency, reorganization or similar proceeding relative to the
Company or its creditors in their capacity as creditors of the Company, whether
or not such interest constitutes an allowed claim in such proceeding), whether
such Senior Funded Debt is outstanding on July 5, 1994 or is thereafter created
or incurred (all such principal, interest, premium and any other amount payable
with respect thereto to which this Subordinated Note is subordinate as aforesaid
being sometimes hereinafter referred to as 'Superior Indebtedness'):
(a) NO SUBORDINATED NOTE PAYMENTS IN CERTAIN CIRCUMSTANCES.
(i) WHEN SUPERIOR INDEBTEDNESS IS DUE IN WHOLE OR IN PART. Upon the
due date of all or any part of the Superior Indebtedness, whether on a
regularly scheduled principal or interest payment date, at maturity, by
lapse of time, acceleration or otherwise, such Superior Indebtedness then
due shall first be paid in full, or such payment shall be fully provided
for in cash or in a manner satisfactory to the holders of such Superior
Indebtedness, before any payment by the Company is made on account of the
principal of or premium, if any, or interest on, or any other amount
payable with respect to, this Subordinated Note.
(ii) UPON SUPERIOR INDEBTEDNESS DEFAULT. In the event and during the
continuation of (x) a default in any payment with respect to any Superior
Indebtedness or (y) an event of default (as defined in such Superior
Indebtedness or in the instrument under which the same is outstanding,
other than a
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default in the payment of amounts due thereon) with respect to any Superior
Indebtedness permitting the holders thereof to accelerate the maturity
thereof (PROVIDED that any event that would become such an event of default
only upon the giving of notice of such event to the Company and the lapse
of time shall constitute such an event of default for purposes of this
Subordinated Note if such notice has been given to the Company) (such
default and event of default being referred to in this Subordinated Note as
a 'Superior Indebtedness Default'), no payment shall be made by the Company
on or with respect to the principal of, or premium, if any, or interest on,
or any other amount payable with respect to, this Subordinated Note unless
and until such Superior Indebtedness Default shall have been remedied, nor
shall any such payment be made if after giving effect, as if paid, to such
payment, any Superior Indebtedness Default would exist. In any such event,
the holder of this Subordinated Note shall not demand, accept or receive
any direct or indirect payment (in cash or property or by setoff, exercise
of contractual or statutory rights or otherwise) of or on account of this
Subordinated Note, notwithstanding the terms of this Subordinated Note or
of any agreement or instrument which governs this Subordinated Note, and no
such payment shall be due.
(iii) PRIOR TO DUE DATE OR DATE PAYMENT PERMITTED HEREBY. Unless and
until all principal of, premium, if any, and interest on, and all other
obligations of the Company with respect to, the Superior Indebtedness shall
have been paid in full, the Company shall not make, and the holder of this
Subordinated Note shall not demand, accept or receive (in cash or property
or by setoff, exercise of contractual or statutory rights or otherwise), or
attempt to collect or commence any legal proceedings to collect, any direct
or indirect payment on account of this Subordinated Note prior to the date
such payment becomes due and payable pursuant to the terms thereof or, if
later, prior to the first date such amount is not prohibited from
being paid pursuant to this Subordinated Note.
(b) NO COMMENCEMENT OF OR JOINDER IN BRINGING INVOLUNTARV BANKRUPTCY
PROCEEDING. Unless and until all principal of, premium, if any, and
interest on, and all other obligations of the Company in respect of, the
Superior Indebtedness shall have been paid in full, the holder of this
Subordinated Note will not commence or maintain any action, suit or any
other legal or equitable proceeding against the Company, or join with any
creditor in bringing any such proceeding, under any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar law, unless the
holders of Superior Indebtedness shall also join in bringing such
proceeding, provided that this clause
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(b) shall not prohibit the holder of this Subordinated Note from filing a
proof of claim or otherwise Participating in any such proceeding not
commenced by it.
(c) SUBORDINATED NOTE SUBORDINATED TO PRIOR PAYMENT OF ALL SUPERIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE COMPANY.
In the event of any insolvency, bankruptcy, receivership, liquidation,
reorganization or other similar proceedings relative to the Company or to
its creditors, in their capacity as creditors of the Company, or to
substantially all of the Company's property, or in the event of any
proceedings for liquidation, dissolution or other winding up of the
Company, whether or not involving insolvency or bankruptcy, then
(i) the holders of all Superior Indebtedness shall first be entitled
to receive payment in full of the principal of, premium, if any, interest
and all amounts payable on or with respect to, such Superior Indebtedness
(whether accruing before or after the commencement of any proceedings
described above) before the holder of this Subordinated Note is entitled to
receive any payment on account of the principal of, premium, if any, or
interest on, or any other amount payable with respect to, this Subordinated
Note;
(ii) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities to which the holder
of this Subordinated Note would be entitled, but for the provisions of this
Subordinated Note, shall be paid or distributed by the liquidating trustee
or agent or other Person making such payment or distribution, directly to
the holders of Superior Indebtedness (pro rata to such holders on the basis
of the respective amounts of Superior Indebtedness held by such holders) or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Superior
Indebtedness may have been issued, as their respective interests may appear
(such representatives or trustees being referred to in this Subordinated
Note as "Representative" or "Representatives"), to the extent necessary to
make payment in full of all principal, premium, if any, interest on, arid
all other amounts payable with respect to, Superior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution to
the holders of Superior Indebtedness;
(iii) the holder of this Subordinated Note irrevocably authorizes and
empowers (without imposing any obligation on) each holder of Superior
Indebtedness to demand, ▇▇▇ for, collect and receive all payments and
distributions in
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84
respect of this Subordinated Note, and to file and prove all claims
therefor and take all such other action not inconsistent with the foregoing
(including the right to vote with respect to this Subordinated Note) in the
name of the holder or otherwise, as such holder of Superior Indebtedness or
any Representative on behalf of holders of Superior Indebtedness may
determine to be necessary or appropriate for the enforcement of this
Subordinated Note; and
(iv) the holder of this Subordinated Note shall execute and deliver to
each holder of Superior Indebtedness or any Representative all such further
instruments confirming the above authorization, and all such powers of
attorney, proofs of claim, assignments of claim and other instruments, and
shall take all such other action as may be reasonably requested by any
holder of Superior Indebtedness or any Representative, in order to enable
such holder of Superior Indebtedness or any Representative to enforce all
claims upon or in respect of this Subordinated Note.
(d) TREATMENT OF PAYMENTS RECEIVED ON THIS SUBORDINATED NOTE;
SUBROGATION RIGHTS. (i) Should any payment or distribution or security or
the proceeds of any thereof be collected or received by the holder in
respect of this Subordinated Note, and such collection or receipt is
prohibited hereunder prior to the payment in full of the Superior
Indebtedness, such holder will forthwith deliver the same to the holders of
Superior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Superior Indebtedness held by such holders) or their
Representatives in precisely the form received (except for the endorsement
or the assignment of such payment or distribution by the holder of this
Subordinated Note where necessary) for application to payment in full of
all Superior Indebtedness, after giving effect to any concurrent payment or
distribution to the holders of the Superior Indebtedness and, until so
delivered, the same shall be held in trust by the holder of this
Subordinated Note as the property of the holders of the Superior
Indebtedness;
(ii) all payments and distributions received by any holder of Superior
Indebtedness or by any Representative of holders of Superior Indebtedness
on behalf of such holders of Superior Indebtedness in respect of this
Subordinated Note, to the extent received in or converted into cash, may be
applied by such holder or such Representative first to the payment of any
and all reasonable out-of-pocket expenses (including attorney's fees and
legal expenses) paid or incurred by such holder or such Representative in
enforcing the provisions hereof or in endeavoring to collect or receive
upon this Subordinated Note or any security therefor, and any balance
thereof shall, solely as between
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85
the holder of this Subordinated Note, on the one hand, and the holders of
Superior Indebtedness, on the other hand, be applied by such holder or such
Representative, in such order of application as such holder or such
Representative may from time to time select, toward the payment of Superior
Indebtedness remaining unpaid;
(iii) the holder of this Subordinated Note shall not be subrogated to
the rights of the holders of Superior Indebtedness to receive payments or
distributions of assets of the Company until all amounts payable with
respect to all Superior Indebtedness shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders
of Superior Indebtedness of any cash, property or securities to which the
holder of this Subordinated Note would be entitled except for these
provisions shall, as among the Company, its creditors other than the
holders of Superior Indebtedness, and the holder of this Subordinated Note,
be deemed to be a payment by the Company to or on account of the Superior
Indebtedness. The provisions of this Subordinated Note are intended solely
for the purpose of defining the relative rights of the holder of this
Subordinated Note, on the one hand, and the holders of the Superior
Indebtedness, on the other hand; and
(iv) subject to the payment in full of all Superior Indebtedness, the
holder of this Subordinated Note shall be subrogated to the rights of the
holders of Superior Indebtedness to receive payments or distributions of
cash, property or securities of the Company applicable to the Superior
Indebtedness until all amounts owing on this Subordinated Note shall be
paid in full. For purposes of such subrogation, no payments or
distributions to the holder of this Subordinated Note of cash, property,
securities or other assets by virtue of the subrogation herein provided
which otherwise would have been made to the holders of Superior
Indebtedness shall, as among the Company, its creditors other than the
holders of Superior Indebtedness, and the holder of this Subordinated Note,
be deemed to be a payment to or on account of this Subordinated Note. The
holder of this Subordinated Note agrees that, in the event that all or any
part of any payment made on account of the Superior Indebtedness is
recovered from the holders of Superior Indebtedness as a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law, any payment or distribution received by the holder of this
Subordinated Note on account of this Subordinated Note at any time after
the date of the payment so recovered, whether pursuant to the right of
subrogation provided for in this clause (iv) or otherwise, shall be deemed
to have been received by the holder of this Subordinated Note in trust as
the property of the holders of
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86
Superior Indebtedness and the holder of this Subordinated Note shall
forthwith deliver the same to the holders of Superior Indebtedness for the
equal and ratable benefit of the holders of Superior Indebtedness for
application to payment of all Superior Indebtedness in full.
(e) WAIVERS AND AGREEMENTS OF HOLDER OF SUBORDINATED NOTE. The holder
of this Subordinated Note by its acceptance hereof waives any and all
notice of renewal, extension, accrual or increase in the amount of any of
the Superior Indebtedness, present or future, and agrees and consents that
without notice to or assent by the holder hereof:
(i) the obligations and liabilities of the Company or any other party
for or upon the Superior Indebtedness (or any promissory note, security
document or guaranty evidencing or securing the same) may, from time to
time, in whole or in part, be renewed, extended, increased, modified,
amended, accelerated, compromised, supplemented, terminated, sold,
exchanged, waived or released;
(ii) any Representative acting on behalf of the holders of Superior
Indebtedness and any holder of Superior Indebtedness may exercise or
refrain from exercising any right, remedy or power granted by or in
connection with any agreements relating to the Superior Indebtedness; and
(iii) any balance or balances of funds with any holders of the
Superior Indebtedness at any time outstanding to the credit of the Company
may, from time to time, in whole or in part, be surrendered or released;
all as any Representative acting on behalf of the holders of Superior
Indebtedness and any holder of Superior Indebtedness may deem advisable and
all without impairing, abridging, diminishing, releasing or affecting the
subordination of this Subordinated Note to the Superior Indebtedness
provided for herein.
(f) COMPANY'S OBLIGATIONS WITH RESPECT TO SUBORDINATED NOTE ABSOLUTE.
Nothing contained in this Subordinated Note is intended to or shall impair,
as among the Company, its creditors other than the holders of Superior
Indebtedness, and the holder of this Subordinated Note, the obligation of
the Company, which is absolute and unconditional, to pay to the holder of
this Subordinated Note the principal of, premium, if any, and interest on,
and all other amounts payable with respect to, this Subordinated Note, as
and when the same shall become due and payable (except as otherwise
provided above), by lapse of time, acceleration or otherwise, in accordance
with its terms, or is intended to
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87
or shall affect the relative rights of the holder of this Subordinated Note
and other creditors of the Company other than the holders of Superior
Indebtedness, nor shall anything herein prevent the holder of this
Subordinated Note (i) from taking all appropriate actions to preserve its
rights under this Subordinated Note in a manner not inconsistent with the
rights of the holders of Superior Indebtedness under this Subordinated
Note, or (ii) from exercising all remedies otherwise permitted by
applicable law upon default under this Subordinated Note, subject to the
rights, if any, under this Subordinated Note of the holders of Superior
Indebtedness in respect of cash, property or securities of the Company
otherwise payable or deliverable to such holders upon the exercise of any
such remedy.
(g) (i) MISCELLANEOUS No present or future holder of the Superior
Indebtedness shall be prejudiced in its right to enforce the subordination
contained herein in accordance with the terms hereof by any act or failure
to act on the part of the Company or the holder of this Subordinated Note.
The subordination provisions contained herein are for the benefit of the
holders of Superior Indebtedness and, so long as Superior Indebtedness is
outstanding, may not be rescinded, cancelled or modified in any way adverse
to the holders of Superior Indebtedness without the prior written consent
of each holder of Superior Indebtedness affected thereby.
(ii) This Subordinated Note shall be binding upon the Company and the
holder of this Subordinated Note, and their respective successors and
assigned, and shall inure to the benefit of the holders of Superior
Indebtedness and their respective successors and assigns."
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88
EXIHIBIT C
LITIGATION AND ASSESSMENTS
1. IN RE: ▇.▇. ▇▇▇▇▇ CORPORATION SECURITIES LITIGATION, Case No.
C2-94-1190, in the United States District Court for the Southern District of
Ohio. This case is a consolidation of three separate shareholders' suits.
Plaintiffs seek to recover on behalf of a class of purchasers of stock of the
Borrower who purchased between April and early December, 1994. The plaintiffs
seek monetary damages in an as yet unspecified amount, equitable
relief (including the imposition of a constructive trust on assets), and the
costs of suit. On July 11, 1995, the Borrower and individual defendants filed a
Motion to Dismiss the Amended and Consolidated Class Action Complaint. In
October, 1995, briefs were filed, and the parties are awaiting the District
Court's decision. The matter is presently pending.
2. ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ V. R.G. ▇▇▇▇▇ CORPORATION ET AL., Case No.
94CV-420, in the Court of Common Pleas of Fairfield County, Ohio. Plaintiff, a
former employee of the Borrower alleges wrongful termination and serious
emotional distress and is seeking damages in an unspecified amount. The matter
is presently pending.
3. The Pension Benefit Guaranty Corporation ("PBGC") has made an initial
assessment of interest and penalties against the Borrower in the amount of
$33,154.45 with respect to the non-salaried plan and $733.04 with respect to the
salaried plan as a result of the Borrower's late filings of premiums to PBGC for
the Borrower's defined benefit pension plan for salaried employees and the
Borrower's defined benefit pension plan for non-salaried employees. The Borrower
intends to seek a waiver of penalties in the amount of$27,701.44 with respect to
the non-salaried plan. The matter is presently pending.
4. The Borrower is a party to several products liabilities cases. The
Borrower maintains product liability insurance to cover product liability
claims.
The disclosure of this Exhibit to the Banks is given with the Banks'
understanding and agreement that the Borrower is not waiving the
attorney-client privilege with respect to the information contained in this
Exhibit.
89
EXHIBIT D
NOTICE
FROM: ▇. ▇. ▇▇▇▇▇ CORPORATION
TO: THE HUNTINGTON NATIONAL BANK/
THE BANK OF NEW YORK/
NBD BANK
ATTENTION: ------------------------
FAX: -------------------
TELE:-------------------
FROM: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
TELE: 614-864-6400
DATE: ------------------------
SUBJECT: REVOLVING CREDIT LOANS
EFFECTIVE DATE OF REQUEST:---------------
REQUEST:
APPROVED AND AUTHORIZED BY:
▇. ▇. ▇▇▇▇▇ CORPORATION
By-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
90
EXHIBIT E
▇. ▇. ▇▇▇▇▇ CORPORATION
Compliance Calculations for the Period Ending ----------------
9.1 Current Ratio
-------------
Current Assets -------------(A)
Current Liabilities -------------(B)
Ratio (A/B) -------------
Requirement (1.25:1 in first and fourth quarter, -------------
1.00:1 in second and third quarter)
9.2 Limitation on Debt
------------------
Funded Debt:
Indebtedness greater than 1 year* ------
Plus: Capitalized Leases ------
Obligations secured by liens ------
Guarantees of Other's Funded Debt ------
Total Funded Debt -------------(A)
Senior Funded Debt:
Funded Debt ------
Less: Subordinated Debt ------
Total Senior Funded Debt -------------(B)
Total Capitalization:
Funded Debt ------
Plus: Deferred Income Tax ------
Consolidated Net Worth ------
Total Capitalization -------------(C)
Ratio of Senior Funded Debt to Total
Capitalization (B/C) -------------
Requirement Less than 50%
OR
Ratio of Funded Debt to Total
Capitalization (A/C) -------------
Requirement Less than 55%
*Excludes Bank debt except during a 60 day period between November 1 and March 31.
91
9.4 Maintenance on Consolidated Tangible Net Worth
----------------------------------------------
Consolidated Net Worth ------
Less: Intangibles ------
Consolidated Tangible Net Worth -------------
Requirement: Base $34,000,000
Plus: 50% of Cumulative Net Income
after 12/31/95 (If cumulative total
is less than $0, then $0) ------
Total -------------
9.5 Interest Coverage (for the twelve month period)
----------------------------------------------
Consolidated Net Income ------
Plus: Interest Expense ------(A)
Income Tax Expense ------
Depreciation Expense ------
Amortization Expense ------
Less: Interest Income ------(B)
Total -------------(C)
Net Interest Expense (A-B) -------------(D)
Interest Coverage Ratio (C/D) -------------
Requirement 1.30:1
9.6 Restricted Payments
-------------------
Restricted Payment Basket:
Base $1,000,000
Plus: 50% of Consolidated Net Income
since 1/1/95 ------
Less: 100% of Consolidated Net Losses
since 1/1/95 ------
Restricted Payments since 12/31/95 ------
Total -------------
9.7 Capital Expenditures
--------------------
Capital Expenditures during fiscal year -------------
Requirement (per annum) $4,500,000
92
EXHIBIT F
---------
LIENS
-----
1. Lien on the Company's headquarters at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ pursuant to a Lease, dated June 1, 1974, between the County
of Fairfield, Ohio, as lessor, and the Company, as lessee, relating to
$1,800,000 County of Fairfield, Ohio Industrial Development First Mortgage
Revenue Bonds.
93
EXHIBIT G
OFFICER'S CERTIFICATE
The undersigned certifies pursuant to Section 8.1 of the Revolving
Credit Agreement between ▇. ▇. ▇▇▇▇▇ Corporation ("Borrower"), The Bank of New
York, The Huntington National Bank, and NBD Bank dated February 28, 1996, that
there has been no material adverse change in the financial condition or
results of operations of the Borrower since execution of the Revolving Credit
Agreement; that Borrower is in compliance with all terms and provisions set
forth in the Revolving Credit Agreement on its part to be observed and
performed; that the quarterly financial statements attached hereto, including a
balance sheet, related statements of income and retained earnings and cash flow
of the Borrower and each of its Subsidiaries, are a fair presentation of
Borrower's finances as of the last day of such quarter; and that no Default or
Event of Default has occurred.
Certified this _____ day of _______________ 199-.
▇ ▇ ▇▇▇▇▇ CORPORATION
BY: -----------------------
ITS: -----------------------
