XXXXXXX INDUSTRIES, INC.
Amendment to Note Agreement
Dated as of May 30, 1997
Re: Note Agreement Dated as of June 12, 1986
and
$15,000,000 8.80% Senior Notes
Due June 15, 2001
of
Xxxxxxx Industries, Inc.
PAGE
XXXXXXX INDUSTRIES, INC.
AMENDMENT TO NOTE AGREEMENT
Re: Note Agreement Dated as of June 12, 1986
and
$15,000,000 8.80% Senior Notes
Due June 15, 2001
of
Xxxxxxx Industries, Inc.
Dated as of
May 30, l997
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Note Agreement dated as of June 12, 1986, (the
"Note Agreement"), between Xxxxxxx Industries, Inc., a Michigan corporation
(the "Company"), and you, pursuant to which $15,000,000 aggregate principal
amount of 8.80% Senior Notes due June 15, 2001 (the "Notes") of the Company
were originally issued.
The Company desires to amend certain covenants contained in the Note
Agreement and hereby requests that you accept the amendments as set forth
below in the manner herein provided.
Section 1. Amendments to Note Agreement.
Section 1.1. Amendment to Section 2.1 of Note Agreement. Section 2.1
of the Note Agreement shall be amended by the addition thereto of a new
paragraph which shall read as follows:
In the event of any prepayment made pursuant to Section 2.3 in which
less than all of the Notes shall have been prepaid by the Company, the
amount of each payment required to be made pursuant to this Section 2.1
shall be reduced by a percentage equal to the aggregate principal amount
of the Notes so prepaid pursuant to Section 2.3 divided by the aggregate
principal amount of the Notes outstanding immediately prior to such
prepayment.
Section 1.2. Amendment to Section 2.3 of Note Agreement. Section 2.3
of the Note Agreement shall be amended in its entirety so that the same shall
read as follows:
Section 2.3. Prepayment upon Change in Control. (a) Notice of Change
in Control or Control Event. The Company will, within two business days after
any Responsible Officer has knowledge of the occurrence of any Change in
Control or Control Event, give written notice of such Change in Control or
Control Event to each holder of Notes unless notice in respect of such Change
in Control (or the Change in Control contemplated by such Control Event) shall
have been given pursuant to subparagraph (b) of this Section 2.3. If a Change
in Control has occurred, such notice shall contain and constitute an offer to
prepay the Notes as described in subparagraph (c) of this Section 2.3 and
shall be accompanied by the certificate described in subparagraph (g) of this
Section 2.3.
(b) Condition to Company Action. The Company will not take any action
that consummates or finalizes a Change in Control unless (i) at least 15 days
prior to such action the Company shall have given to each holder of Notes
written notice containing and constituting an offer to prepay the Notes as
described in subparagraph (c) of this Section 2.3, accompanied by the
certificate described in subparagraph (g) of this Section 2.3, and (ii)
contemporaneously with such action, the Company prepays all Notes required to
be prepaid in accordance with this Section 2.3.
(c) Offer to Prepay Notes. The offer to prepay the Notes contemplated
by subparagraphs (a) and (b) of this Section 2.3 shall be an offer to prepay,
in accordance with and subject to this Section 2.3, all, but not less than
all, of the Notes held by each holder on a date specified in such offer (the
"Proposed Prepayment Date"). If such Proposed Prepayment Date is in
connection with an offer contemplated by subparagraph (a) of this Section 2.3,
such date shall be not less than 20 days and not more than 30 days after the
date of such offer.
(d) Acceptance; Rejection. A holder of Notes may accept or reject the
offer to prepay made pursuant to this Section 2.3 by causing a notice of such
acceptance or rejection to be delivered to the Company at least five days
prior to the Proposed Prepayment Date. A failure by a holder of Notes to
respond to an offer to prepay made pursuant to this Section 2.3 shall be
deemed to constitute acceptance of such offer by such holder.
(e) Prepayment. Prepayment of the Notes pursuant to this Section 2.3
shall be at 100% of the principal amount of all Notes held by the holder or
holders accepting the Company' offer to prepay such Notes, plus a premium
equal to the premium which would have been payable if the Notes had been
prepaid in accordance with Section 2.2(b), determined for such prepayment date
with respect to such principal amount, together with interest on such Notes
accrued to the date of prepayment. The prepayment shall be made on the
Proposed Prepayment Date except as provided in subparagraph (f) of this
Section 2.3.
(f) Deferral Pending Change in Control. The obligation of the Company
to prepay the Notes pursuant to the offers required by subparagraph (b) and
accepted in accordance with subparagraph (d) of this Section 2.3 is subject to
the occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made. In the event that such Change in Control
does not occur on the Proposed Prepayment Date in respect thereof, the
prepayment shall be deferred until and shall be made on the date on which such
Change in Control occurs. The Company shall keep each holder of Notes
reasonably and timely informed of (i) any such deferral of the date of
prepayment, (ii) the date on which such Change in Control and the prepayment
are expected to occur, and (iii) any determination by the Company that efforts
to effect such Change in Control have ceased or been abandoned (in which case
the offers and acceptances made pursuant to this Section 2.3 in respect of
such Change in Control shall be deemed rescinded).
(g) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 2.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to
this Section 2.3; (iii) the principal amount of each Note offered to be
prepaid; (iv) the premium due in connection with such prepayment (calculated
as if the date of such Proposed Prepayment Date were the date of the
prepayment); (v) the interest that would be due on each Note offered to be
prepaid, accrued to the Proposed Prepayment Date; (vi) that the conditions of
this Section 2.3 have been fulfilled; and (vii) in reasonable detail, the
nature and date or proposed date of the Change in Control.
(h) Effect on Required Payments. The amount of each payment of the
principal of the Notes made pursuant to this Section 2.3 shall be applied
against and reduce each of the then remaining principal payments due pursuant
to Section 2.1 by a percentage equal to the aggregate principal amount of the
Notes so paid divided by the aggregate principal amount of the Notes
outstanding immediately prior to such payment.
(i) Terms Defined. The terms set forth below shall have the
respective meanings assigned thereto:
The term "Change in Control" means each and every issue, sale or other
disposition of shares of stock of the Company which results in any Person or
group of Persons acting in concert, other than any Designated Shareholders,
beneficially owning or controlling, directly or indirectly, more than 50% (by
number of votes) of the Voting Stock of the Company.
The term "control" means the possession of power to direct or cause the
direction of management and policies of such entity, whether through the
ownership of an equity interest, by contract or otherwise.
The term "Control Event" means:
(i) the execution by the Company or any of its Restricted Subsidiaries
or Affiliates of any agreement or letter of intent with respect to any
proposed transaction or event or series of transactions or events which,
individually or in the aggregate, may reasonably be expected to result in a
Change in Control,
(ii) the execution of any written agreement which, when fully performed
by the parties thereto, would result in a Change in Control, or
(iii) the making of any written offer by any person (as such term is
used in section 13(d) and section 14(d)(2) of the Exchange Act, or related
persons constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act) to the holders of the Voting Stock of the Company, which offer,
if accepted by the requisite number of holders, would result in a Change in
Control.
The term "Current Management Team" shall mean Xxx X. Xxxxxxx, Xxxxxxx X.
Xxxxxxxx, Xxxxx X. Hug, Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxxx.
The term "Designated Shareholders" shall mean (i) the members of the
Current Management Team; (ii) the Principal Shareholders; (iii) the spouses,
lineal descendants and spouses of the lineal descendants of the Persons named
in clause (i); (iv) the estates or legal representatives of the Persons named
in clause (i); and (v) any trust, custodianship or other fiduciary arrangement
in respect of which one or more of the Persons described in clauses (i) and
(iii) are the principal beneficiaries and such Person or Persons shall have
control of such trust, custodianship or other fiduciary arrangement.
The term "Principal Shareholders" shall mean Pioneering Management
Group, X.X. Xxxxxx & Co., Incorporated and Farmers Group Inc.
Section 1.3. Amendment to Section 2 of Note Agreement. Section 2 of
the Note Agreement shall be amended by the addition thereto of a new Section
2.4 which shall read as follows:
Section 2.4. Partial Payment Pro Rata. If there is more than one Note
outstanding, the principal amount of each required or optional partial payment
of the Notes, other than an offer to prepay the Notes pursuant to Section 2.3
which has been declined by one or more holders of Notes, will be allocated
among the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective outstanding principal amount of the Notes.
Section 1.4. Amendment to Section 3 of Note Agreement. Section 3 of
the Note Agreement shall be amended in its entirety so that the same shall
read as follows:
Section 3.1. Financial and Business Information. The Company shall
deliver to each holder of Notes:
(a) Quarterly Statements within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies of:
(i) a consolidated balance sheet of the Company and its Restricted
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in shareholders' equity
and cash flows of the Company and its Restricted Subsidiaries for
such quarter and (in the case of the second and third quarters)
for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP applicable to
quarterly financial statements generally, and certified by a
Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported
on and their results of operations and cash flows, subject to
changes resulting from normal, recurring year-end adjustments;
(b) Annual Statements within 90 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its Restricted
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders' equity
and cash flows of the Company and its Restricted Subsidiaries, for
such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP, and accompanied
(A) by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all
material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and
have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making
their audit, they have become aware of any condition or event that
then constitutes a Default or an Event of Default, and, if they
are aware that any such condition or event then exists, specifying
the nature and period of the existence thereof (it being
understood that such accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of any Default or
Event of Default unless such accountants should have obtained
knowledge thereof in making an audit in accordance with generally
accepted auditing standards or did not make such an audit);
(c) SEC and Other Reports promptly upon their becoming available,
one copy of (i) each financial statement, report, notice or proxy statement
sent by the Company or any Subsidiary to public securities holders generally,
and (ii) each regular or periodic report, each registration statement (without
exhibits except as expressly requested by such holder), and each prospectus
and all amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and of all press releases and other
statements made available generally by the Company or any Subsidiary to the
public concerning developments that are Material;
(d) Notice of Default or Event of Default promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence
of any Default or Event of Default or that any Person has given any notice or
taken any action with respect to a claimed default hereunder or that any
Person has given any notice or taken any action with respect to a claimed
default of the type referred to in Section 5.1(f), a written notice specifying
the nature and period of existence thereof and what action the Company is
taking or proposes to take with respect thereto;
(e) ERISA Matters promptly, and in any event within five days after
a Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or
an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any Reportable Event for which notice
thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening
by the PBGC of the institution of, proceedings under section 4042
of ERISA for the termination of, or the appointment of a trustee
to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in
the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Title I
or IV of ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities
or Liens then existing, could reasonably be expected to have a
Material Adverse Effect;
(f) Notices from Governmental Authority promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any Federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect;
(g) Unrestricted Subsidiaries within the respective periods provided
in Section 3.1(a) and (b) above, financial statements of the character and for
the dates and periods as provided in said Section 3.1(a) and (b) covering each
Unrestricted Subsidiary (or group of Unrestricted Subsidiaries on a
consolidated basis);
(h) Material Information with reasonable promptness, the Company
will use its best efforts to provide written notice of any Material change to
the business, operations, affairs, financial condition, assets or properties
of the Company and its Restricted Subsidiaries; and
(i) Requested Information with reasonable promptness, such other
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder
and under the Notes as from time to time may be reasonably requested by any
such holder of Notes.
Section 3.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 3.1(a) or Section 3.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 4.1 through Section 4.7 hereof,
inclusive, during the quarterly or annual period covered by the statements
then being furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such Sections,
and the calculation of the amount, ratio or percentage then in existence); and
(b) Event of Default a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and
its Restricted Subsidiaries from the beginning of the quarterly or annual
period covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence during
such period of any condition or event that constitutes a Default or an Event
of Default or, if any such condition or event existed or exists (including,
without limitation, any such event or condition resulting from the failure of
the Company or any Subsidiary to comply with any Environmental Law),
specifying the nature and period of existence thereof and what action the
Company shall have taken or proposes to take with respect thereto.
Section 3.3. Inspection. The Company shall permit the representatives
of each holder of Notes:
(a) No Default if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to
visit the principal executive office of the Company, to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with the Company's
officers, and (with the consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each Subsidiary, all
at such reasonable times and as often as may be reasonably requested in
writing; and
(b) Default if a Default or Event of Default then exists, at the
expense of the Company to visit and inspect any of the offices or properties
of the Company or any Subsidiary, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers and independent public accountants (and by this
provision the Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries), all at such times
and as often as may be requested.
Section 1.5. Amendment to Section 4 of Note Agreement. Section 4 of
the Note Agreement shall be amended in its entirety so that the same shall
read as follows:
The Company covenants that so long as any of the Notes are
outstanding:
Section 4.1. Consolidated Net Worth. The Company will not, at
any time, permit Consolidated Net Worth to be less than the sum of (a)
$95,000,000, plus (b) 25% of its aggregate Consolidated Net Income (but
only if a positive number) for the period beginning on July 1, 1997 and
ending at the end of the then most recently completed fiscal year of the
Company (or if such date of determination is the last day of any fiscal
year, then ending on such date), computed on a cumulative basis for such
entire period.
Section 4.2. Limitations on Debt. The Company will not, and will
not permit any Restricted Subsidiary to, create, assume or incur or in
any manner be or become liable in respect of any Consolidated Debt,
except:
(a) Debt evidenced by the Notes;
(b) Consolidated Debt of the Company and its Restricted
Subsidiaries outstanding as of the date of the First Amendment and
reflected on Exhibit A to the First Amendment; and
(c) additional Consolidated Debt of the Company and its
Restricted Subsidiaries, provided that at the time of issuance thereof
and after giving effect thereto and to the application of the proceeds
thereof:
(i) no Default or Event of Default exists;
(ii) Consolidated Debt does not exceed 3.5 times EBITDA for
the then most recently ended period of four consecutive fiscal
quarters of the Company; and
(iii) in the case any such Debt is Priority Debt, such Debt
is permitted by Section 4.3.
Any corporation which becomes a Restricted Subsidiary after the
date of this Agreement shall, for all purposes of this Section 4.2, be
deemed to have created, assumed or incurred, at the time it becomes a
Restricted Subsidiary, all Debt of such corporation existing immediately
after it becomes a Restricted Subsidiary.
Section 4.3. Limitations on Priority Debt. The Company will not
at any time permit Priority Debt to exceed 15% of Total Capitalization
as of the last day of the then most recently ended fiscal quarter of the
Company.
Section 4.4. Limitation on Liens. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly
create, incur, assume or permit to exist (upon the happening of a
contingency or otherwise) any Lien on or with respect to any Property or
asset (including, without limitation, any document or instrument in
respect of goods or accounts receivable) of the Company or any such
Restricted Subsidiary, whether now owned or held or hereafter acquired,
or any income or profits therefrom, or assign or otherwise convey any
right to receive income or profits, except:
(a) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the
time required by Section 4.13;
(b) any attachment or judgment Lien, unless the judgment it
secures shall not, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not have
been discharged within 30 days after the expiration of any such stay (or
such lesser period of time as applicable law allows a judgment creditor
to levy on such judgment);
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case, incurred in the ordinary course of business for sums not yet due
and payable or the payment of which is not at the time required by
Section 4.13;
(d) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance and other types of social
security or retirement benefits, or (ii) to secure (or to obtain letters
of credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other than
Capitalized Leases), performance bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or
made in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of
Property;
(e) Liens existing on the date of the First Amendment and
securing the Debt of the Company and its Restricted Subsidiaries
referred to in Exhibit B to the First Amendment;
(f) any Lien created to secure all or any part of the purchase
price, or to secure Debt incurred or assumed to pay all or any part of
the purchase price or cost of construction, of Property (other than
accounts receivable or inventory), or any improvement thereon, acquired
or constructed by the Company or a Restricted Subsidiary after the date
of the First Amendment, provided that
(i) any such Lien shall extend solely to the item or items
of such Property (or improvement thereon) so acquired or
constructed and, if required by the terms of the instrument
originally creating such Lien, other Property (or improvement
thereon) which is an improvement to or is acquired for specific
use in connection with such acquired or constructed Property (or
improvement thereon) or which is real Property being improved by
such acquired or constructed Property (or improvement thereon),
(ii) the principal amount of the Debt secured by any such
Lien shall at no time exceed an amount equal to the lesser of (A)
the cost to the Company or such Restricted Subsidiary of the
Property (or improvement thereon) so acquired or constructed and
(B) the fair market value (as determined in good faith by the
board of directors of the Company) of such Property (or
improvement thereon) at the time of such acquisition or
construction, and
(iii) any such Lien shall be created contemporaneously with
the acquisition or construction of such Property; and
(g) in addition to the Liens permitted by the preceding clauses
(a) through (f), inclusive, of this Section 4.4, Liens on Property
(other than accounts receivable or inventory of any Company) securing
Priority Debt of the Company or any Restricted Subsidiary, provided that
such Priority Debt shall be permitted by the applicable limitations set
forth in Section 4.2 and 4.3.
Section 4.5. Merger, Consolidation, etc. The Company will not,
and will not permit any of its Restricted Subsidiaries to, consolidate
with or merge with any other corporation or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to any Person (except that a Restricted Subsidiary of the
Company may (x) consolidate with or merge with, or convey, transfer or
lease substantially all of its assets in a single transaction or series
of transactions to, the Company or a Wholly-Owned Restricted Subsidiary
of the Company and (y) convey, transfer or lease all of its assets in
compliance with the provisions of Section 4.6), provided that the
foregoing restriction does not apply to the consolidation or merger of
the Company with, or the conveyance, transfer or lease of substantially
all of the assets of the Company in a single transaction or series of
transactions to, any Person so long as:
(a) the successor formed by such consolidation or the survivor
of such merger or the Person that acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety, as
the case may be (the "Successor Corporation"), shall be a solvent
corporation organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia;
(b) if the Company is not the Successor Corporation, such
corporation shall have executed and delivered to each holder of Notes
its assumption of the due and punctual performance and observance of
each covenant and condition of this Agreement and the Notes (pursuant to
such agreements and instruments as shall be reasonably satisfactory to
the Required Holders), and the Company shall have caused to be delivered
to each holder of Notes an opinion of nationally recognized independent
counsel, to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and comply
with the terms hereof; and
(c) immediately after giving effect to such transaction:
(i) no Default or Event of Default would exist, and
(ii) the Successor Corporation would be permitted by the
provisions of Section 4.2 hereof to incur at least $1.00 of
additional Debt owing to a Person other than a Restricted
Subsidiary of the Successor Corporation.
No such conveyance, transfer or lease of substantially all of the
assets of the Company shall have the effect of releasing the Company or
any Successor Corporation from its liability under this Agreement or the
Notes.
Section 4.6. Sales of Assets. Except as permitted under Section
4.5, the Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless:
(a) in the good faith opinion of the Company, the Asset
Disposition is in exchange for consideration having a Fair Market Value
at least equal to that of the Property exchanged and is in the best
interest of the Company or such Restricted Subsidiary; and
(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist; and
(c) immediately after giving effect to the Asset Disposition:
(i) the Disposition Value of all Property that was the
subject of any Asset Disposition occurring in any period of four
consecutive fiscal quarters of the Company then next ending would
not exceed 10% of Consolidated Total Assets as of the last day of
the then most recently ended fiscal quarter of the Company, and
(ii) the Disposition Value of all Property that was the
subject of any Asset Disposition occurring on or after the date of
the First Amendment would not exceed 25% of Consolidated Total
Assets as of the last day of the then most recently ended fiscal
quarter of the Company.
If the Net Proceeds Amount for any Transfer is applied to a Debt
Prepayment Application contemporaneously with such Transfer or a
Property Reinvestment Application within one year of such Transfer, then
such Transfer, only for the purpose of determining compliance with
subsection (c) of this Section 4.6 as of any date on or after the Net
Proceeds Amount is so applied, shall be deemed not to be an Asset
Disposition.
Section 4.7. Long Term Lease Rentals. The Company will not, at
any time, permit Long Term Lease Rentals for any current or future
period of 12 consecutive calendar months to exceed 10% of Total
Capitalization as of the last day of the then most recently ended fiscal
quarter of the Company.
Section 4.8. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis, which
would then be engaged in by the Company and its Restricted Subsidiaries
would be substantially changed from the general nature of the business
engaged in by the Company and its Restricted Subsidiaries on the date of
this Agreement.
Section 4.9. Transactions with Affiliates. The Company will not,
and will not permit any Restricted Subsidiary to, enter into, directly
or indirectly, any transaction or group of related transactions with any
Affiliate which, individually or in the aggregate, are Material
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service), except in the
ordinary course and pursuant to the reasonable requirements of the
Company's or such Restricted Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
Section 4.10. Compliance with Law. The Company will and will
cause each of its Restricted Subsidiaries to comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their
respective businesses, in each case to the extent necessary to ensure
that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
Section 4.11. Insurance. The Company will and will cause each of
its Restricted Subsidiaries to maintain, with financially sound and
reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of
such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained
with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and
similarly situated.
Section 4.12. Maintenance of Properties. The Company will and
will cause each of its Restricted Subsidiaries to maintain and keep, or
cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and tear),
so that the business carried on in connection therewith may be properly
conducted at all times, provided that this Section shall not prevent the
Company or any Restricted Subsidiary from discontinuing the operation
and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded
that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 4.13. Payment of Taxes and Claims. The Company will and
will cause each of its Subsidiaries to file all tax returns required to
be filed in any jurisdiction and to pay and discharge all taxes shown to
be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary
need pay any such tax or assessment or claims if (i) the amount,
applicability or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or a Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of the Company or
such Subsidiary or (ii) the nonpayment of all such taxes and assessments
in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
Section 4.14. Corporate Existence, etc. Subject to Sections 4.5
and 4.6, the Company will at all times preserve and keep in full force
and effect its corporate existence and will at all times preserve and
keep in full force and effect the corporate existence of each of its
Restricted Subsidiaries and all rights and franchises of the Company and
its Restricted Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full
force and effect such corporate existence, right or franchise could not,
individually or in the aggregate, have a Material Adverse Effect.
Section 4.15. Designation of Unrestricted Subsidiaries. The
Company may from time to time cause any Subsidiary to be designated as
an Unrestricted Subsidiary or any Unrestricted Subsidiary to be
designated a Restricted Subsidiary, provided, however, that immediately
following such action and after giving effect thereto, (a) no Default or
Event of Default would exist under the terms of this Agreement, and (b)
the Company and its Restricted Subsidiaries would be in compliance with
all of the covenants set forth in this Section 4 if tested on the date
of such action and provided, further, that once a Restricted Subsidiary
has been designated an Unrestricted Subsidiary, it shall not thereafter
be redesignated as a Restricted Subsidiary. Within ten (10) days
following any designation described above, the Company will deliver to
you a notice of such designation accompanied by a certificate signed by
a Senior Financial Officer of the Company certifying compliance with all
requirements of this Section 4.15 and setting forth all information
required in order to establish such compliance.
Section 4.16. Financial Records. The Company will, and will
cause its Subsidiaries to, keep true and correct books of records and
accounts in which full and correct entries will be made of all of its
business transactions, and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with
GAAP.
Section 4.17. Additional Guaranties. If any Restricted
Subsidiary becomes a party to any Guaranty of, or is otherwise liable
for, any Debt of the Company or any Restricted Subsidiary, the Company
will cause such Restricted Subsidiary to execute and deliver to all
holders of Notes a written Guaranty, satisfactory in scope and form to
the Required Holders, to which such Restricted Subsidiary shall
unconditionally guaranty the payment of all amounts payable hereunder by
the Company and the performance by the Company of all obligations
hereunder.
Section 1.6. Amendment to Section 5 of Note Agreement. Section 5 of
the Note Agreement shall be amended in its entirety so that the same shall
read as follows:
Section 5.1 Nature of Default. An "Event of Default" shall exist
if any of the following conditions or events shall occur and be
continuing:
(a) the Company defaults in the payment of any principal or
premium, if any, on any Note when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration
or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five business days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Sections 4.1 through 4.7, inclusive; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 5.1) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (d) of Section 5.1); or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this Agreement
or in any writing furnished in connection with the transactions
contemplated hereby proves to have been false or incorrect in any
material respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default
(as principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any Debt
that is outstanding in an aggregate principal amount of at least
$5,000,000 beyond any period of grace provided with respect thereto, or
(ii) the Company or any Restricted Subsidiary is in default in the
performance of or compliance with any term of any evidence of any Debt
in an aggregate outstanding principal amount of at least $5,000,000 or
of any mortgage, indenture or other agreement relating thereto or any
other condition exists, and as a consequence of such default or
condition such Debt has become, or has been declared, due and payable
before its stated maturity or before its regularly scheduled dates of
payment, or (iii) as a consequence of the occurrence or continuation of
any event or condition (other than the passage of time or the right of
the holder of Debt to convert such Debt into equity interests), the
Company or Restricted any Subsidiary has become obligated to purchase or
repay Debt before its regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding principal amount of at
least $5,000,000; or
(g) the Company or any Material Restricted Subsidiary (i) is
generally not paying, or admits in writing its inability to pay, its
debts as they become due, (ii) files, or consents by answer or otherwise
to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization, moratorium
or other similar law of any jurisdiction, (iii) makes an assignment for
the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property,
(v) is adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Restricted Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition
in bankruptcy or for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Material
Restricted Subsidiaries, or any such petition shall be filed against the
Company or any of its Material Restricted Subsidiaries and such petition
shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of
the Company and its Restricted Subsidiaries and which judgments are not,
within 60 days after entry thereof, bonded, discharged or stayed pending
appeal (or such lesser period of time as applicable law or rules of
court allow a judgment creditor to levy on such judgments), or are not
discharged within 60 days after the expiration of such stay (or such
lesser period of time as applicable law or rules of court allow a
judgment creditor to levy on such judgments); or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of intent
to terminate any Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Company or any ERISA Affiliate
that a Plan may become a subject of any such proceedings, (iii) the
aggregate "amount of unfunded benefit liabilities" (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed $7,500,000, (iv) the
Company or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or
together with any other such event or events, could reasonably be
expected to have a Material Adverse Effect.
As used in Section 5.1(j), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings
ssigned to such terms in Section 3 of ERISA.
Section 5.2. Notice to Holders. When any Event of Default
described in the foregoing Section 5.1 has occurred, or if the holder of
any Note or of any other evidence of Debt of the Company gives any
notice or takes any other action with respect to a claimed default, the
Company agrees to give notice within three business days of such event
to all holders of the Notes then outstanding.
Section 5.3. Default Remedies. (a) Acceleration If an Event
of Default described in paragraph (a) or (b) of Section 5.1 exists, any
holder of Notes may, at its option, exercise any right, power or remedy
permitted by law, including the right, by notice to the Company, to
declare the Notes held by such holder to be immediately due and payable.
If any Event of Default described in paragraphs (c) through (f),
inclusive, or paragraphs (i) or (j) of Section 5.1 exists, the holder or
holders of at least 51% in outstanding principal amount of the Notes
(exclusive of Notes owned by the Company, Restricted Subsidiaries and
Affiliates) may, at its or their option, exercise any right, power or
remedy permitted by law, including the right, by notice to the Company,
to declare all the outstanding Notes to be immediately due and payable.
When any Event of Default described in paragraph (g) or (h) of Section
5.1 has occurred, then all outstanding Notes shall immediately become
due and payable without presentment, demand or notice of any kind. Upon
the Notes becoming due and payable as a result of any Event of Default
as aforesaid, the Company will forthwith pay to the holders of the Notes
the entire principal and interest accrued on the Notes, determined as of
the date on which the Notes shall so become due and payable.
No course of dealing or delay or failure to exercise any right on
the part of any holder of the Notes shall operate as a waiver of such
right or otherwise prejudice such holder's rights, powers or remedies.
The Company will pay or reimburse the holders of the Notes for all costs
and expenses (including reasonable attorneys' fees) incurred by them in
collecting any sums due on the Notes or in otherwise enforcing any of
their rights.
(b) Annulment of Acceleration In the event of any declaration
pursuant to Section 5.3(a) by reason of any Event of Default described
in paragraphs (a) through (f), inclusive, or paragraphs (i) or (j) of
Section 5.1, the holder or holders of at least 75% of the outstanding
principal amount of the Notes (exclusive of Notes owned by the Company
and Affiliates) may annul such declaration and its consequences if (i)
no judgment or decree has been entered for the payment of any amount due
pursuant to such declaration, (ii) all sums payable under the Notes and
under this Agreement (except any principal or interest on the Notes
which has become payable solely by reason of such declaration) shall
have been duly paid and (iii) each and every other Default and Event of
Default shall have been made good, cured or waived pursuant to Section
8.5.
Section 1.7. Amendment to Section 6.1 of Note Agreement. Section 6.1
of the Note Agreement shall be amended in its entirety so that the same shall
read as follows:
"Acceptable Bank" means any bank or trust company (i) which is organized
under the laws of the United States of America or any State thereof or a
jurisdiction of any nation whose government is an Acceptable Foreign
Government (or any jurisdiction therein), (ii) which has capital, surplus and
undivided profits aggregating at least $250,000,000, and (iii) whose long-term
unsecured debt obligations (or the long-term unsecured debt obligations of the
bank holding company owning all of the capital stock of such bank or trust
company) shall have been given a rating of "A-" or better by Standard & Poor's
Rating Group, a division of The XxXxxx-Xxxx Companies, Inc., or "A3" or better
by Xxxxx'x Investors Service, Inc.
"Acceptable Broker-Dealer" means any Person other than a natural person
(i) which is registered as a broker or dealer pursuant to the Exchange Act,
and (ii) whose long-term unsecured debt obligations shall have been given a
rating of "A" or better by Standard & Poor's Rating Group, a division of The
XxXxxx-Xxxx Companies, Inc., "A2" or better by Xxxxx'x Investors Service, Inc.
"Acceptable Foreign Government" means the government of any foreign
nation whose debt obligations are rated at least "A-" by Standard & Poor's
Rating Group, a division of The XxXxxx-Xxxx Companies, Inc., or at least "A3"
by Xxxxx'x Investors Service, Inc.
"Acquired Business Entity" means for any period of determination
hereunder (i) any business entity the assets and related liabilities of which
have been acquired substantially as an entirety by the Company or any
Restricted Subsidiary by purchase, merger or consolidation, and (ii) any other
assets which were operated as an identifiable business unit, i.e. a branch or
division of a business entity and which have been acquired substantially as an
entirety by the Company or any Restricted Subsidiary.
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 10% or more of any class of voting or equity interests. As used
in this definition, "Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Company.
"Agreement" shall mean this Note Agreement dated as of June 12, 1986
between the Company and the original holder of Notes (including Attachments),
as amended or modified from time to time.
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Restricted Subsidiary to the Company or a
Wholly-Owned Restricted Subsidiary;
(ii) Transfer from the Company to a Wholly-Owned Restricted
Subsidiary; and
(iii) Transfer from the Company to a Restricted Subsidiary (other
than a Wholly-Owned Restricted Subsidiary) or from a Restricted
Subsidiary to another Restricted Subsidiary (other than a Wholly-Owned
Restricted Subsidiary), which in either case is for Fair Market Value,
so long as immediately before and immediately after the
consummation of any such Transfer and after giving effect thereto, no
Default or Event of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only Property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any of its Restricted
Subsidiaries or that is obsolete.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance sheet
of the lessee and its subsidiaries in accordance with GAAP.
"Closing Date" is defined in Section 1.2.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Consolidated Debt" means the total amount of all Debt of the Company
and its Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means for any period the net income of the
Company and its Restricted Subsidiaries, determined in accordance with GAAP on
a consolidated basis.
"Consolidated Net Worth" means, as of the date of any determination
thereof,
(a) the total amount of Shareholders' Equity, minus
(b) the book value of all Restricted Investments.
"Consolidated Total Assets" means, as of the date of any determination
thereof, the total amount of assets of the Company and its Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of Property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such Property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capitalized Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any Property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all of its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Debt Prepayment Application" means, with respect to any Transfer of
Property, the application by the Company or its Restricted Subsidiaries of
cash in an amount equal to the Net Proceeds Amount with respect to such
Transfer to pay Senior Debt of the Company (other than Senior Debt owing to
the Company, any of its Restricted Subsidiaries or any Affiliate and Senior
Debt in respect of any revolving credit or similar credit facility providing
the Company or any of its Restricted Subsidiaries with the right to obtain
loans or other extensions of credit from time to time, except to the extent
that in connection with such payment of Senior Debt the availability of credit
under such credit facility is permanently reduced by an amount not less than
the amount of such proceeds applied to the payment of such Senior Debt),
provided that in the course of making such application the Company shall offer
to prepay each outstanding Note in accordance with Section 2.2(b) in a
principal amount which equals the Ratable Portion for such Note. If any
holder of a Note fails to accept such offer of prepayment, then, for purposes
of the preceding sentence only, the Company nevertheless will be deemed to
have paid Senior Debt in an amount equal to the Ratable Portion for such Note.
"Ratable Portion" for any Note means an amount equal to the product of (x) the
Net Proceeds Amount being so applied to the payment of Senior Debt multiplied
by (y) a fraction the numerator of which is the outstanding principal amount
of such Note and the denominator of which is the aggregate principal amount of
all Senior Debt of the Company.
"Default" shall mean 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.
"Disposition Value" means, at any time, with respect to any Property
(a) in the case of Property that does not constitute Subsidiary
Stock, the book value thereof, valued at the time of such disposition in
good faith by the Company, and
(b) in the case of Property that constitutes Subsidiary Stock,
an amount equal to that percentage of book value of the assets of the
Subsidiary that issued such stock as is equal to the percentage that the
book value of such Subsidiary Stock represents of the book value of all
of the outstanding capital stock of such Subsidiary (assuming, in making
such calculations, that all Securities convertible into such capital
stock are so converted and giving full effect to all transactions that
would occur or be required in connection with such conversion)
determined at the time of the disposition thereof, in good faith by the
Company.
"Divested Business Entity" means for any period of determination
hereunder (i) any business entity the assets and related liabilities of which
have been sold, disposed of or otherwise divested substantially as an entirety
by the Company or any Restricted Subsidiary, and (ii) any other assets which
were operated as an identifiable business unit, i.e. a branch or division of a
business entity and which have been sold, disposed of or otherwise divested
substantially as an entirety by the Company or any Restricted Subsidiary.
"EBITDA" means for any period the difference between (a) sum of (i)
Consolidated Net Income during such period plus (to the extent deducted in
determining Consolidated Net Income), (ii) all provisions for any Federal,
state or other income taxes made by the Company and its Restricted
Subsidiaries during such period, (iii) all Interest Charges on Consolidated
Debt (including the interest component on Rentals on Capitalized Leases), and
(iv) all depreciation and amortization expense and all other non-cash charges
or expenses of the Company and its Restricted Subsidiaries during such period,
and (b) the sum of (to the extent included in determining Consolidated Net
Income) (i) all interest income on any particular Investment for which
calculations are being made, and (ii) all non-cash credits or income of the
Company and its Restricted Subsidiaries during such period. For purposes of
determining EBITDA in connection with the incurrence of any Debt in which the
proceeds shall be used to fund the acquisition of any Acquired Business
Entity, EBITDA shall be computed on a pro forma basis for such Acquired
Business Entity during such period. EBITDA shall exclude all amounts
attributable to any Divested Business Entity which has been divested by the
Company or any Restricted Subsidiary during such period.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
but not limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in Sections 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" is defined in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time and with respect to any Property,
the sale value of such Property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell).
"First Amendment" means the Amendment to Note Agreement dated as of May
30, 1997, pursuant to which certain provisions of the Agreement were amended.
"GAAP" shall mean generally accepted accounting principles at the time.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Restricted Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Restricted Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Governmental Security" means any direct obligations of, or obligation
guaranteed by, the United States of America or any Acceptable Foreign
Government or any agency or instrumentality thereof, so long as such
obligation or guarantee shall have the benefit of the full faith and credit of
the United States of America or such Acceptable Foreign Government, as the
case may be.
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any indebtedness, dividend or other obligation of any other Person in any
manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the
obligor under any Guaranty, the indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be direct obligations of such
obligor.
"Interest Charges" for any period means all interest and all
amortization of debt discount and expense on any particular Debt for which
such calculations are being made, including, without limitation, all
commissions, fees and other charges owed with respect to letters of credit and
bankers' acceptances.
"Investment" means any investment, made in cash or by delivery of
property, by the Company or any of its Subsidiaries (i) in any Person, whether
by acquisition of stock, indebtedness or other obligation or Security, or by
loan, Guaranty, advance, capital contribution or otherwise, or (ii) in any
property.
"Lien" means any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property, whether the
interest is based on common law, statute or contract (including the security
interest lien arising from a mortgage, encumbrance, pledge, conditional sale
or trust receipt or a lease, consignment or bailment for security purposes).
The term "Lien" shall not include minor reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions
and other minor title exceptions affecting Property, provided that they do not
constitute security for a monetary obligation. For the purposes of this
Agreement, the Company or a Restricted Subsidiary shall be deemed to be the
owner of any Property which it has acquired or holds subject to a conditional
sale agreement, financing lease or other arrangement pursuant to which title
to the Property has been retained by or vested in some other Person for
security purposes, and such retention or vesting shall be deemed to be a Lien.
"Long Term Lease Rentals" means, with respect to any period, the sum of
the rental and other obligations required to be paid during such period by the
Company or any Restricted Subsidiary as lessee under all leases of real or
personal Property (other than Capitalized Leases) having a term (including
terms of renewal or extension at the option of the lessor or the lessee,
whether or not such option has been exercised) expiring more than one year
after the commencement of the initial term, excluding any amount required to
be paid by the lessee (whether or not therein designated as rental or
additional rental) on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, provided that, if at the date of
determination, any such rental or other obligations are contingent or not
otherwise definitely determinable by the terms of the related lease, the
amount of such obligations (i) shall be assumed to be equal to the amount of
such obligations for the period of 12 consecutive calendar months immediately
preceding the date of determination or (ii) if the related lease was not in
effect during such preceding 12-month period, shall be the amount estimated by
a Senior Financial Officer of the Company on a reasonable basis and in good
faith.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of
the Company and its Restricted Subsidiaries taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement and the
Notes, or (c) the validity or enforceability of this Agreement or the Notes.
"Material Restricted Subsidiary" means any Restricted Subsidiary which,
either individually or together with one or more Restricted Subsidiaries, (i)
accounts for 5% or more of Consolidated Total Assets, determined as of the end
of either of the two most recently ended fiscal years, or (ii) accounts for 5%
or more of Consolidated Net Income during one of the two immediately preceding
fiscal years.
"Minority Interests" means any shares of stock of any class of a
Restricted Subsidiary (other than directors' qualifying shares as required by
law) that are not owned by the Company and/or one or more of its Restricted
Subsidiaries. Minority Interests shall be valued by valuing Minority
Interests constituting preferred stock at the voluntary or involuntary
liquidating value of such preferred stock, whichever is greater, and by
valuing Minority Interests constituting common stock at the book value of
capital and surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the foregoing
method of valuing Minority Interests in preferred stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Proceeds Amount" means, with respect to any Transfer of any
Property by any Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer,
minus
(b) all ordinary and reasonable out-of-pocket costs and expenses
actually incurred by such Person in connection with such Transfer.
"Notes" is defined in Section 1.1.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" shall mean a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to which
the Company or any ERISA Affiliate contributed or is a member or otherwise may
have any liability.
"Priority Debt" means the sum of (a) all Debt of the Company secured by
Liens permitted by Section 4.4(g), and (b) all Consolidated Debt of Restricted
Subsidiaries.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Property Reinvestment Application" means, with respect to any Transfer
of Property, the application of an amount equal to the Net Proceeds Amount
with respect to such Transfer to the acquisition by the Company of Property of
a similar nature and having a value at least equal to the value of such
Property subject to such Transfer.
"Registered Notes" is defined in Section 1.1.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of
the property) payable by the Company or a Restricted Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive
of any amounts required to be paid by the Company or a Restricted Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Repurchase Agreement" means any written agreement
(a) that provides for (i) the transfer of one or more
Governmental Securities in an aggregate principal amount at least equal
to the amount of the Transfer Price (defined below) to the Company or
any of its Restricted Subsidiaries from an Acceptable Bank or an
Acceptable Broker-Dealer against a transfer of funds (the "Transfer
Price") by the Company or such Restricted Subsidiary to such Acceptable
Bank or Acceptable Broker-Dealer, and (ii) a simultaneous agreement by
the Company or such Restricted Subsidiary, in connection with such
transfer of funds, to transfer to such Acceptable Bank or Acceptable
Broker-Dealer the same or substantially similar Governmental Securities
for a price not less than the Transfer Price plus a reasonable return
thereon at a date certain not later than 365 days after such transfer of
funds,
(b) in respect of which the Company or such Restricted
Subsidiary shall have the right, whether by contract or pursuant to
applicable law, to liquidate such agreement upon the occurrence of any
default thereunder, and
(c) in connection with which the Company or such Restricted
Subsidiary, or an agent thereof, shall have taken all action required by
applicable law or regulations to perfect a Lien in such Governmental
Securities.
"Required Holders" means, at any time, the holders of at least 51% in
aggregate principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"Restricted Investments" means all Investments except the following:
(a) Property to be used in the ordinary course of business of
the Company and its Restricted Subsidiaries;
(b) Investments in one or more Restricted Subsidiaries or any
Person that concurrently with such Investment becomes a Restricted
Subsidiary;
(c) Investments existing as of the date of the First Amendment
and disclosed in Exhibit C to such First Amendment;
(d) Investments in direct obligations of the United States of
America or any Acceptable Foreign Government or any agency or
instrumentality thereof, the payment or guarantee of which constitutes a
full faith and credit obligation of the United States of America or such
Acceptable Foreign Government, in either case, maturing within three
years for the date of acquisition thereof;
(e) Investments in certificates of deposit or time deposits
issued by an Acceptable Bank, provided that such obligations mature
within 365 days from the date of acquisition thereof;
(f) Investments in commercial paper maturing in 270 days or less
from the date of issuance which, at the time of acquisition by the
Company or any Restricted Subsidiary, are rated at least "A-1" by
Standard & Poor's Rating Group, a division of XxXxxx-Xxxx, Inc., or at
least "P-2" by Xxxxx'x Investors Service, Inc.
(g) Investments in Repurchase Agreements; and
(h) Investments other than described in the foregoing clauses
(a) through (g), above, provided that such Investments do not exceed 5%
of Consolidated Net Worth.
For purposes of this Agreement, any Investment which involves an
Acceptable Bank which is organized under the laws of a jurisdiction of a
nation whose government is an Acceptable Foreign Government, shall become a
Restricted Investment at such time as the debt obligations of such government
are not rated at least "A-" by Standard & Poor's Rating Group, a division of
The XxXxxx-Xxxx Companies, Inc., or at least "A3" by Xxxxx'x Investors
Service, Inc.
As of any date of determination, each Restricted Investment shall be
valued at the greater of:
(x) the amount at which such Restricted Investment is shown on
the books of the Company or any of its Restricted Subsidiaries (or zero
if such Restricted Investment is not shown on any such books); and
(y) either
(i) in the case of any Guaranty of the obligation of any
Person, the amount which the Company or any of its Restricted
Subsidiaries has paid on account of such obligation less any
recoupment by the Company or such Subsidiary of any such payments,
or
(ii) in the case of any other Restricted Investment, the
excess of (x) the greater of (A) the amount originally entered on
the books of the Company or any of its Restricted Subsidiaries
with respect thereto and (B) the cost thereof to the Company or
its Restricted Subsidiary over (y) any return of capital (after
income taxes applicable thereto) upon such Restricted Investment
through the sale or other liquidation thereof or part thereof or
otherwise.
"Restricted Subsidiary" shall mean any Subsidiary listed as a Restricted
Subsidiary on Attachment G hereto and any other subsidiary,
(1) organized under the laws of the United States or a
jurisdiction of any nation whose government is an Acceptable Foreign
Government (or any jurisdiction thereof);
(2) which conducts substantially all of its business and has
substantially all of its Property within the United States or the
jurisdiction of any national whose government is an Acceptable Foreign
Government;
(3) a majority of each class of common stock of which is legally
and beneficially owned by the Company and its Restricted Subsidiaries;
and
(4) which is not an Unrestricted Subsidiary.
For purposes of this Agreement, any Restricted Subsidiary which is
organized under, and conducts substantially all of its business and has
substantially all of its Property within, the jurisdiction of any nation whose
government is an Acceptable Foreign Government, shall be designated as an
Unrestricted Subsidiary at such time as the debt obligations of such
government are not rated at least "A-" by Standard & Poor's Rating Group, a
division of The XxXxxx-Xxxx Companies, Inc., or at least "A3" by Xxxxx'x
Investors Service, Inc.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Senior Debt" means all Consolidated Debt of the Company other than
Subordinated Debt.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Shareholders' Equity" means the total amount of shareholders' equity of
the Company and its Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect
thereof as of the end of the then most recently ended fiscal quarter of such
Person, based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement
relating to such Swap provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the amount
of such obligation shall be the net amount so determined.
"Subordinated Debt" means all unsecured Debt of the Company which shall
contain or have applicable thereto subordination provisions providing for the
subordination thereof to other Debt of the Company (including, without
limitation, the Notes).
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence
of contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if
more than a 50% interest in the profits or capital thereof is owned by such
Person or one or more of its Subsidiaries or such Person and one or more of
its Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of
its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Stock" means, with respect to any Person, the stock (or any
options or warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of any Subsidiary of such Person.
"Total Capitalization" means, as of the date of any determination
thereof, the sum of Consolidated Net Worth and Consolidated Debt.
"Transfer" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its
Property, including, without limitation, Subsidiary Stock. For purposes of
determining the application of the Net Proceeds Amount in respect of any
Transfer, the Company may designate any Transfer as one or more separate
Transfers each yielding a separate Net Proceeds Amount. In any such case, (a)
the Disposition Value of any Property subject to each such separate Transfer
and (b) the amount of Consolidated Total Assets attributable to any Property
subject to each such separate Transfer shall be determined by ratably
allocating the aggregate Disposition Value of, and the aggregate Consolidated
Total Assets attributable to, all Property subject to all such separate
Transfers to each such separate Transfer on a proportionate basis.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Company which
has been so designated by the Company, in accordance with Section 4.15 hereof.
"Voting Stock" shall mean Securities, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect the corporate
directors (or Persons performing similar functions).
"Weighted Average Life to Maturity" is defined in Section 2.2(d).
"Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are owned by any
one or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries at such time.
Section 1.8. Amendment to Section 6.2 of the Note Agreement. Section
6.2 of the Note Agreement shall be amended by changing the reference to
"generally accepted accounting principles" to "GAAP."
Section 2. Miscellaneous.
Section 2.1. Representation and Warranty. The Company represents and
warrants that it does not own any Subsidiary which is organized under the laws
of the United States or any jurisdiction therein.
Section 2.2. Requisite Approval. If the foregoing is acceptable to
you, please note your acceptance in the space provided below. Upon the
execution by the Company and the holders of 100% in aggregate principal amount
of the outstanding Notes, the Note Agreement shall be deemed to be amended as
set forth above. Except as amended herein, the terms and provisions of the
Note Agreement are hereby ratified, confirmed and approved in all respects.
Section 2.3. Successors and Assigns. This Amendment to Note Agreement
shall be binding upon the Company and its successors and assigns and shall
inure to your benefit and to the benefit of your successors and assigns,
including each successive holder or holders of any Notes.
Section 2.4. Counterparts. This Amendment to Note Agreement may be
executed in any number of counterparts, each executed counterpart constituting
an original but all together one and the same instrument.
Section 2.5. Fees and Expenses. The Company agrees to pay all
reasonable fees and expenses of you and your special counsel in connection
with the preparation of this Amendment to Note Agreement.
Section 2.6. No Legend Required. Any and all notices, requests,
certificates and other instruments including, without limitation, the Notes,
may refer to the Note Agreement dated as of June 12, 1986 without making
specific reference to this Amendment to Note Agreement, but nevertheless all
such references shall be deemed to include this Amendment to Note Agreement
unless the context shall otherwise require.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Note Agreement as of the day and year first above written.
Xxxxxxx Industries, Inc.
By
Its
Accepted and agreed to as of the first date written above.
THE TRAVELERS INSURANCE COMPANY
By
Its
PAGE
CONSOLIDATED DEBT
as of May 30, 1997
Lender Annual Interest Rate Principal Balance
Comerica Bank 6.75% 20,000,000
Comerica Bank 8.445% 20,000,000
Comerica Bank 8.82% 3,230,463
Massachusetts Mutual
Life Insurance Co. 9.98% 15,000,000
Travelers Insurance Co. 8.80% 3,750,000
61,980,463
EXISTING LIENS
as of May 30, 1997
NONE
PAGE
EXISTING INVESTMENTS
as of May 30, 1997
COMERICA INSTITUTIONAL CASH INVESTMENT TRUST
#74094 = $11,929,886.51 (U.S. Dollars)
COMERICA INSTITUTIONAL CASH INVESTMENT TRUST
#78791 = $1,786,629.50 (U.S. Dollars)
