EXHIBIT 4.2
[COMPOSITE CONFORMED COPY]
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XXXXX & XXXXXX MANUFACTURING COMPANY
$50,000,000
7.29% Senior Notes Due 2007
NOTE AGREEMENT
November 10, 1997
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[Exhibits B and C are photocopies of each of the Opinion of Ropes and Xxxx and
the Intercreditor Agreement, respectively, as delivered. Exhibit D is conformed
to the document as executed and delivered.]
TABLE OF CONTENTS
(Not Part of Agreement)
Page
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1. AUTHORIZATION OF ISSUE OF NOTES........................................... 1
2. PURCHASE AND SALE OF NOTES................................................ 1
3. CONDITIONS OF CLOSING..................................................... 2
3A. Opinion of Purchasers' Special Counsel.......................... 2
3B. Opinion of Company's Counsel.................................... 2
3C. Representations and Warranties; No Default...................... 2
3D. Sale of Notes to Other Purchasers............................... 2
3E. Purchase Permitted by Applicable Laws........................... 3
3F. Legal Investment................................................ 3
3G. Approvals and Consents.......................................... 3
3H. Bank Credit Agreement........................................... 3
3I. Intercreditor Agreement......................................... 4
3J. Waiver of Conditions............................................ 4
3K. Proceedings..................................................... 4
3L. Private Placement Number........................................ 4
4. PREPAYMENTS, ACQUISITIONS AND PURCHASES OF NOTES.......................... 4
4A. Required Prepayments............................................ 4
4B. Optional Prepayment with Yield-Maintenance Amount............... 5
4C. Notice of Optional Prepayment................................... 5
4D. Partial Payments Pro Rata....................................... 5
4E. Retirement of Notes............................................. 5
4F. Prepayment From Disposition Proceeds............................ 6
4G. Prepayment in Connection with a Change in Control............... 6
4H. Cancellation of Notes........................................... 7
5. AFFIRMATIVE COVENANTS..................................................... 7
5A. Financial Statements............................................ 7
5B. Inspection of Property; Books and Records....................... 9
5C. Maintenance of Properties; Insurance............................ 10
5D. Corporate Existence, Etc........................................ 10
5E. Payment of Taxes and Claims..................................... 10
5F. Compliance With Laws, Etc....................................... 11
5G. Ranking......................................................... 11
5H. Covenant to Secure Notes Equally................................ 11
6. NEGATIVE COVENANTS........................................................ 11
6A. Maintenance of Adjusted Consolidated Net Worth.................. 11
6B. Limitations on Liens............................................ 12
6C. Limitations on Debt............................................. 14
6D. Interest Coverage Ratio......................................... 15
6E. Debt to EBITDA Ratio............................................ 15
6F. Consolidated Fixed Charges Coverage Ratio....................... 15
6G. Merger, Consolidation, Sale or Transfer of Assets............... 15
6H. Fundamental Changes............................................. 16
6I. Restrictive Agreements.......................................... 16
6J. Sales of Assets................................................. 17
6K. Disposition of Subsidiary Stock................................. 17
6L. Limitation on Restricted Payments and Restricted Investments.... 18
6M. Transactions With Affiliates.................................... 18
6N. Material Subsidiaries........................................... 18
7. DEFAULTS; REMEDIES........................................................ 19
7A. Events of Default............................................... 19
7B. Rescission of Acceleration...................................... 23
7C. Notice of Acceleration or Rescission............................ 23
7D. Other Remedies.................................................. 24
8. REPRESENTATIONS AND WARRANTIES............................................ 24
8A. Organization; Authority; Enforceability......................... 24
8B. Business; Financial Statements.................................. 24
8C. Actions Pending................................................. 25
8D. Outstanding Debt................................................ 25
8E. Conflicting Agreements and Other Matters........................ 26
8F. Title to Properties............................................. 26
8G. Patents, Licenses, Franchises, Etc.............................. 26
8H. Taxes........................................................... 27
8I. Offering of Notes............................................... 27
8J. Regulation G, Etc............................................... 27
8K. Environmental Matters........................................... 28
8L. Proceeds of Financing........................................... 29
8M. ERISA........................................................... 29
8N. Governmental Consent............................................ 29
8O. Compliance; Default............................................. 29
8P. Investment Company Act.......................................... 29
8Q. Public Utility Holding Company Act.............................. 30
8R. Foreign Assets Control Regulations.............................. 30
8S. Disclosure...................................................... 30
8T. Solvency........................................................ 30
9. REPRESENTATIONS OF EACH PURCHASER......................................... 30
9A. Nature of Purchase.............................................. 30
9B. Source of Funds................................................. 30
10. DEFINITIONS AND ACCOUNTING MATTERS....................................... 32
10A. Yield-Maintenance Terms........................................ 32
10B. Other Defined Terms............................................ 33
10C. Accounting Terms And Determinations............................ 45
11. MISCELLANEOUS............................................................ 45
11A. Note Payments.................................................. 45
11B. Expenses....................................................... 46
11C. Consent to Amendments.......................................... 46
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. 47
11E. Persons Deemed Owners; Participations.......................... 47
(ii)
11F. Survival of Representations and Warranties; Entire Agreement... 48
11G. Successors and Assigns......................................... 48
11H. Disclosure to Other Persons.................................... 48
11I. Notices........................................................ 49
11J. Satisfaction Requirement....................................... 49
11K. Governing Law.................................................. 49
11L. Severability................................................... 50
11M. Descriptive Headings........................................... 50
11N. Counterparts................................................... 50
11O. Severalty of Obligations....................................... 50
11P. Consent to Jurisdiction; Service of Process.................... 50
(iii)
XXXXX & XXXXXX MANUFACTURING COMPANY
Precision Park
000 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
November 10, 1997
To each of the Purchasers listed
on the Purchaser Schedule hereto
Ladies and Gentlemen:
The undersigned, Xxxxx & Xxxxxx Manufacturing Company, a Delaware
corporation (herein called the "Company"), hereby agrees with the purchasers
named in the Purchaser Schedule attached hereto (herein called the "Purchasers")
as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the
issue and sale of its senior promissory notes in the aggregate principal amount
of $50,000,000, to be dated the date of issue thereof, to mature November 10,
2007, to bear interest on the unpaid balance thereof from the date thereof until
the principal thereof shall have become due and payable at the rate of 7.29% per
annum and on overdue payments at the rate specified therein, and to be
substantially in the form of Exhibit A attached hereto. The term "Note" or
"Notes" as used herein shall include each Note delivered pursuant to any
provision of this Agreement and each Note delivered in substitution or exchange
for any such Note pursuant to any such provision.
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to
each Purchaser and, subject to the terms and conditions herein set forth, each
Purchaser agrees to purchase Notes from the Company in the principal amount set
forth opposite such Purchaser's name in the Purchaser Schedule attached hereto
at 100% of such principal amount. The Company will deliver to each Purchaser, at
the offices of Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, one or more Notes registered in such Purchaser's name (or the name of its
nominee), evidencing the Notes to be purchased by such Purchaser, in the
denomination or denominations specified with respect to such Purchaser in the
Purchaser Schedule against payment of the purchase price therefor by wire
transfer of immediately available funds for credit to the Company's account
number 193722 at Rhode Island Hospital Trust National Bank (ABA # 011-500-337),
on the date of closing, which shall be November 10, 1997 or any other date upon
which the Company and the Purchasers may mutually agree (herein called the
"Closing" or the "Closing Date").
3. CONDITIONS OF CLOSING. Each Purchaser's obligation to purchase
and pay for the Notes to be purchased by such Purchaser hereunder is subject to
the satisfaction, on or before the Closing Date, of the following conditions:
3A. Opinion of Purchasers' Special Counsel. Such Purchaser shall
have received from Xxxxxxx Xxxx & Xxxxxxxxx, who are acting as special counsel
for the Purchasers in connection with this transaction, a favorable opinion
satisfactory to such Purchaser, dated the Closing Date, as to: (i) the valid
existence and good standing of the Company; (ii) the due authorization by all
requisite corporate action, execution and delivery and the validity, legally
binding character and enforceability of this Agreement and the Notes; (iii) the
absence of any requirement to register the Notes under the Securities Act; and
(iv) such other matters incident to the matters herein contemplated as such
Purchaser may reasonably request, including the form of all papers and the
validity of all proceedings. Such opinion shall also state that, based upon such
investigation and inquiry as is deemed relevant and appropriate by such counsel,
the opinion referred to in paragraph 3B is satisfactory in form and scope to
such counsel and, while such investigation and inquiry into the matters covered
by such opinion (other than the matters specified in clauses (i), (ii) and (iii)
above) were not sufficient to enable such counsel independently to render such
opinion, nothing has come to the attention of such counsel which has caused it
to question the legal conclusions expressed in the opinion referred to in
paragraph 3B and such counsel believes that such Purchaser is justified in
relying on such opinion.
3B. Opinion of Company's Counsel. Such Purchaser shall have received
from Ropes & Xxxx, counsel for the Company, a favorable opinion satisfactory in
form and substance to such Purchaser and its special counsel, dated the Closing
Date, and substantially in the form of Exhibit B attached hereto. The Company
hereby requests such counsel to deliver such opinion.
3C. Representations and Warranties; No Default. The representations
and warranties contained in this Agreement shall be true on and as of the
Closing Date; there shall exist on the Closing Date no Event of Default or
Default; the Company shall have performed or complied with all matters required
to be performed or complied with by it hereunder; there shall have been no
material adverse change in the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken on a consolidated basis
since December 31, 1996; and the Company shall have delivered to such Purchaser
an Officer's Certificate, dated the Closing Date, to each such effect.
3D. Sale of Notes to Other Purchasers. The Company shall,
concurrently with such Purchaser's purchase of Notes hereunder, sell to the
other Purchasers the aggregate principal amount of the Notes to be purchased by
them on the Closing Date and shall receive payment in full therefor.
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3E. Purchase Permitted by Applicable Laws. The purchase of and
payment for the Notes to be purchased by such Purchaser on the Closing Date on
the terms and conditions herein provided (including the use of the proceeds of
such Notes by the Company) shall not violate any applicable law or governmental
regulation (including, without limitation, section 5 of the Securities Act or
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System)
and shall not subject such Purchaser to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation.
3F. Legal Investment. On the Closing Date such Purchaser's purchase
of Notes shall be permitted by the laws and regulations of each jurisdiction to
which it is subject, but without regard to provisions (such as section
1405(a)(8) of the New York Insurance Law or section 1320 of the Delaware
Insurance Code) permitting limited investments by insurance companies in
securities not otherwise legally eligible for investment. If requested by such
Purchaser, such Purchaser shall have received, at least three Business Days
prior to the Closing Date, an Officer's Certificate certifying as to such
matters of fact as such Purchaser may reasonably specify to enable such
Purchaser to determine whether such purchase is so permitted.
3G. Approvals and Consents. The Company shall have duly received all
material authorizations, consents, approvals, licenses, franchises, permits and
certificates by or of all United States federal, state and local Governmental
Authorities and any third parties necessary in connection with the transactions
contemplated hereby, and all thereof shall be in full force and effect on the
Closing Date. Any consents from the shareholders of the Company required to be
obtained in connection with the transactions contemplated herein shall have been
obtained. The Company shall have delivered an Officer's Certificate to such
Purchaser, dated the Closing Date, to such effect.
3H. Bank Credit Agreement. Concurrently with the closing, the
Company shall have refinanced the outstanding indebtedness of the Company under
the Bridge Note with the borrowings under the New Bank Facility (as defined
below), and all Guarantees and Liens relating thereto shall be terminated and
discharged and the Company shall have entered into a Credit Agreement dated as
of November 10, 1997 (said agreement as amended and from time to time in effect
being herein called the "New Bank Facility") with the lenders parties thereto
(the "Lenders"), The Chase Manhattan Bank, as issuing bank (the "Issuing Bank"),
and The Chase Manhattan Bank, as administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent (in such capacity, the
"Collateral Agent"), in substantially the form thereof delivered to such
Purchaser prior to the execution and delivery hereof, and no default, event of
default or other event prohibiting borrowings thereunder shall have occurred,
and the New Bank Facility shall be in full force and effect. The Company shall
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have delivered an Officer's Certificate to such Purchaser, dated the Closing
Date, to such effect.
3I. Intercreditor Agreement. The Company, the Purchasers, the
Lenders, the Administrative Agent and the Collateral Agent shall have executed
and delivered the Intercreditor Agreement in substantially the form of Exhibit
D.
3J. Waiver of Conditions. If on the Closing Date the Company fails
to tender to such Purchaser the Notes to be issued to it on such date or if the
conditions specified in this paragraph 3 have not been fulfilled, such Purchaser
may thereupon elect to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the conditions specified in this
paragraph 3 have not been fulfilled, such Purchaser may waive compliance by the
Company with any such condition to such extent as it may in its sole and
exclusive discretion determine. Nothing in this paragraph 3J shall operate to
relieve the Company of any of its obligations hereunder or to waive any of such
Purchaser's rights against the Company.
3K. Proceedings. All corporate and other proceedings taken or to be
taken by the Closing Date in connection with the transactions contemplated
hereby and all documents incident thereto shall be satisfactory in substance and
form to such Purchaser and its special counsel, and such Purchaser shall have
received all such counterpart originals or certified or other copies of such
documents as it and its special counsel may reasonably request.
3L. Private Placement Number. A Private Placement Number issued by
Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
4. PREPAYMENTS, ACQUISITIONS AND PURCHASES OF NOTES. The Notes shall
be subject to the required prepayments specified in paragraphs 4A, 4F and 4G and
the optional prepayments permitted by paragraph 4B. The Notes may be acquired
under the circumstances set forth in paragraph 4E.
4A. Required Prepayments. Until the Notes shall be paid in full, the
Company shall apply to the prepayment of the Notes, without Yield-Maintenance
Amount, the sum of $7,143,000 on November 10 in each of the years 2001 to 2006
inclusive, and such principal amounts of the Notes, together with interest
thereon to the prepayment dates, shall become due on such prepayment dates;
provided, that in the event of the acquisition or prepayment of any Notes
pursuant to paragraph 4B, 4E, 4F or 4G the aggregate principal amount of Notes
which the Company shall thereafter be required to prepay on each November 10
pursuant to this paragraph 4A shall be reduced by an amount (rounded down to the
nearest whole dollar) which bears the same ratio to the principal amount of
Notes otherwise required to be prepaid on such date as the aggregate principal
amount of Notes so prepaid or acquired pursuant to
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paragraph 4B, 4E, 4F or 4G bears to the principal amount of Notes outstanding
immediately prior to such prepayment or acquisition. The remaining aggregate
principal amount of Notes shall become due on the stated maturity date of the
Notes.
4B. Optional Prepayment with Yield-Maintenance Amount. The Notes
shall be subject to prepayment, in whole or from time to time in part (in
multiples of $1,000,000), at the option of the Company, at 100% of the principal
amount so prepaid plus interest accrued thereon to the prepayment date and the
Yield-Maintenance Amount, if any, with respect to each Note.
4C. Notice of Optional Prepayment. The Company shall give the holder
of each Note irrevocable written notice of any prepayment pursuant to paragraph
4B not less than 10 Business Days prior to the prepayment date, specifying such
prepayment date and the principal amount of the Notes, and of the Notes held by
such holder, to be prepaid on such date and stating that such prepayment is to
be made pursuant to paragraph 4B. Notice of prepayment having been given as
aforesaid, the principal amount of the Notes specified in such notice, together
with interest thereon to the prepayment date and together with the
Yield-Maintenance Amount, if any, herein provided, shall become due and payable
on such prepayment date. The Company shall, on or before the day on which it
gives written notice of any prepayment pursuant to paragraph 4B, give telephonic
notice or notice by facsimile machine of the principal amount of the Notes to be
prepaid and the prepayment date to each holder of Notes which shall have
designated a recipient of such notices in the Purchaser Schedule attached hereto
or by notice in writing to the Company. Two Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a certificate of a
Responsible Officer specifying the calculation of the Yield-Maintenance Amount
as of the specified prepayment date.
4D. Partial Payments Pro Rata. Upon any partial prepayment of the
Notes pursuant to paragraph 4A or 4B, the principal amount so prepaid shall be
allocated to all Notes at the time outstanding in proportion to the respective
outstanding principal amounts thereof.
4E. Retirement of Notes. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or
in part prior to their stated final maturity (other than by prepayment pursuant
to paragraph 4A, 4B, 4F or 4G, or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes held by each other holder of Notes at the time
outstanding on the same terms.
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4F. Prepayment From Disposition Proceeds. If the Company shall be
required to make a Proceeds Payment Offer as contemplated by paragraph 6J, the
Company will give written notice thereof to the holders of all outstanding
Notes, which notice shall (i) refer specifically to this xxxxxxxxx 0X, (xx)
describe the Proceeds Payment Offer in reasonable detail (including the amount
of Disposition Proceeds involved) and specify the Debt Reduction Prepayment Date
and the Debt Response Date (as respectively defined below) in respect thereof
and (iii) offer to prepay a portion of the Notes held by each holder of Notes
(the "Relevant Percentage") which is the same proportion of the Notes held by
such holder as the amount of such Disposition Proceeds (less the Bank Allocation
Amount) represents to the aggregate principal amount of all Notes at the time
outstanding, in each case at the price specified below on the date therein
specified (the "Debt Reduction Prepayment Date"), which shall be a Business Day
not less than 30 nor more than 60 days after the date of such notice. Each
holder of a Note will notify the Company of such holder's acceptance or
rejection of such Proceeds Payment Offer by giving written notice of such
acceptance or rejection to the Company at least seven days prior to the Debt
Reduction Prepayment Date (the "Debt Response Date"), except that the failure by
any such holder to respond in writing to such Proceeds Payment Offer on or
before the Debt Response Date shall be deemed to be a rejection of such Proceeds
Payment Offer by such holder.
On the Debt Reduction Prepayment Date the Company will prepay the
Relevant Percentage of the Notes held by the holders as to which such Proceeds
Payment Offer has been accepted, at the principal amount of each such Note,
together with interest accrued thereon to the Debt Reduction Prepayment Date,
without premium.
If any holder shall reject such Proceeds Payment Offer, such holder
shall be deemed to have waived its rights under this paragraph 4F to require
prepayment of any Notes held by such holder in respect of such Proceeds Payment
Offer but not in respect of any subsequent Proceeds Payment Offer.
4G. Prepayment in Connection with a Change in Control. Within 5
Business Days after the occurrence of a Change in Control, the Company will give
written notice thereof (and, to the extent information is available to it, of an
impending or potential Change in Control) to the holders of all outstanding
Notes, which notice shall (i) refer specifically to this paragraph 4G, (ii)
describe the Change in Control in reasonable detail and specify the Change in
Control Prepayment Date and the Change in Control Response Date (as respectively
defined below) in respect thereof and (iii) offer to prepay all Notes at the
price specified below on the date therein specified (the "Change in Control
Prepayment Date"), which shall be a Business Day not less than 30 nor more than
60 days after the date of such notice (subject to the provisions of the next
succeeding sentence and, in the case of an impending or potential Change of
Control, to
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the occurrence thereof). In the case of any Change in Control transaction
requiring the Company's participation or consent, the Company will make such
provisions as are necessary so as to provide that the Change of Control
Prepayment Date shall be the effective date of such Change in Control. Each
holder of a Note will notify the Company of such holder's acceptance or
rejection of such offer by giving written notice of such acceptance or rejection
to the Company at least seven days prior to the Change in Control Prepayment
Date (the "Change in Control Response Date"), except that the failure by any
such holder to respond in writing to such offer on or before the Change in
Control Response Date shall be deemed to be a rejection of such offer by such
holder in respect of such Change in Control.
On the Change in Control Prepayment Date the Company will prepay all
of the Notes held by the holders as to which such offer has been accepted, at
the principal amount of each such Note, together with interest accrued thereon
to the Change in Control Prepayment Date, without premium.
If any holder shall reject such offer, such holder shall be deemed
to have waived its rights under this paragraph 4G to require prepayment of all
Notes held by such holder in respect of such Change in Control but not in
respect of any subsequent Change in Control.
4H. Cancellation of Notes. Any Notes acquired pursuant to paragraph
4E or prepaid pursuant to paragraph 4A, 4B, 4F or 4G or otherwise acquired by or
on behalf of the Company or a Subsidiary, shall be canceled and shall not be
reissued and shall not be deemed to be outstanding for any purpose of this
Agreement. Any Note held by any Affiliate of the Company shall not be deemed
outstanding for the purpose of determining the aggregate principal amount of
Notes outstanding for purposes of determining whether or not any specified
percentage of holders of outstanding Notes have given any consent or taken any
other action hereunder.
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants that it will deliver
to each holder of any Note in duplicate:
(i) as soon as practicable and in any event within 90
days after the end of each fiscal year, consolidating and
consolidated statements of income and cash flows and a consolidated
statement of stockholders' equity of the Company and its
Subsidiaries for such year, and a consolidating and consolidated
balance sheet of the Company and its Subsidiaries as at the end of
such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit,
all in reasonable detail and satisfactory in form to the Required
Holder(s) and, as to the consolidated statements, reported on by
Ernst & Young L.L.P. or other independent public accountants of
recognized national standing selected by the
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Company whose report shall be without limitation as to the scope of
the audit and satisfactory in substance to the Required Holder(s)
and, as to the consolidating statements, certified by an authorized
financial officer of the Company;
(ii) as soon as practicable and in any event within 45
days after the end of each of the first three fiscal quarters of
each fiscal year of the Company, the consolidated balance sheet and
related statements of operations, stockholders' equity and cash
flows of the Company and its Subsidiaries with respect to such
fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by
an authorized financial officer of the Company as presenting fairly
in all material respects the financial condition and results of
operations of the Company and its Subsidiaries on a consolidated
basis in accordance with generally accepted accounting principles
consistently applied and with all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation and
with the absence of full footnote disclosure;
(iii) promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and reports as
it shall send to its public stockholders and copies of all
registration statements (without exhibits) and all reports which it
files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the
Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any Subsidiary by independent
accountants in connection with any annual, interim or special audit
made by them of the books of the Company or any Subsidiary;
(v) promptly after such event, written notice of the
filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting
the Company or any Affiliate thereof that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;
(vi) promptly after such event, written notice of any
other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect; and
(vii) with reasonable promptness, such other information
with respect to the business, finances and
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affairs of the Company and its Subsidiaries as such holder may
reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each holder of any Note an Officer's
Certificate (A) demonstrating (with computations in reasonable detail)
compliance by the Company and its Subsidiaries with the provisions of paragraphs
0X, 0X, 0X, 0X, 0X, 0X, 0X xxx 0X, (X) stating that there exists no Event of
Default or Default, or, if any Event of Default or Default exists, specifying
the nature and period of existence thereof and what action the Company has taken
or proposes to take with respect thereto and (C) specifying in detail the
adjustments necessary to permit the calculation of the ratios and financial
covenants and terms included herein. Together with each delivery of financial
statements required by clause (i) above, the Company will deliver to each holder
of any Note a certificate of the accountants referred to in clause (i) above
stating that, in making the audit necessary for their report on such financial
statements, they have obtained no knowledge of any Event of Default or Default,
or, if they have obtained knowledge of any Event of Default or Default,
specifying the nature and period of existence thereof. Such accountants,
however, shall not be liable to anyone by reason of their failure to obtain
knowledge of any Event of Default or Default, which Event of Default or Default
would not normally be disclosed or discovered in the course of an audit
conducted in accordance with generally accepted auditing standards. The Company
also covenants that promptly after any Responsible Officer obtains knowledge of
an Event of Default or Default or of a claimed default in respect of any Debt
described in clause (iii) of paragraph 7A which if true would constitute a
Default (and in any event within 5 Business Days of obtaining such knowledge),
it will deliver to each holder of any Note an Officer's Certificate specifying
the nature and period of existence thereof and what action the Company has taken
or proposes to take with respect thereto.
5B. Inspection of Property; Books and Records. The Company covenants
that it will permit any Person designated by any holder of a Note, at such
holder's expense or, if following any Event of Default or Default which is
continuing, at the expense of the Company, to visit and inspect any of the
properties of the Company and its Subsidiaries, to examine the corporate books
and financial records of the Company and its Subsidiaries (in the presence of a
representative of the Company, if the Company shall so desire) and make copies
thereof or extracts therefrom and to discuss the affairs, finances and accounts
of any of such corporations with a Responsible Officer of the Company together
with its independent public accountants (and by this provision the Company
hereby agrees that it will make a Responsible Officer available for any such
discussion), all at such reasonable times, upon reasonable notice, and as often
as such holder may reasonably request. The Company will maintain or cause to be
maintained the books of record and account of the Company and its Subsidiaries
in good order in accordance with sound business and financial practice and its
financial statements prepared in accordance with generally accepted accounting
principles.
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5C. Maintenance of Properties; Insurance. The Company will maintain
or cause to be maintained in good repair, working order and condition all
properties used in the business of the Company and its Subsidiaries (ordinary
wear and tear excepted) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof, all to the extent
material to the business and operations of the Company and its Subsidiaries
taken as a whole. The Company will procure and maintain in full force and effect
all franchises, certificates, licenses, permits and other authorizations from
governmental political subdivisions or regulatory authorities and all patents,
trademarks, service marks, trade names, copyrights, licenses and other rights,
in each case that are necessary in any material respect for the ownership,
maintenance and operation of the business and operations of the Company and its
Subsidiaries taken as a whole. The Company will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance (including,
without limitation, business interruption insurance) with respect to its
properties and business and the properties and businesses of its Subsidiaries
against loss or damage of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar businesses and
similarly situated, of such type and in such amounts as are customarily carried
under similar circumstances by such other corporations (which may include
reasonable and prudent levels of self insurance and deductibles as are
customarily provided in the insurance programs maintained by such other
corporations).
5D. Corporate Existence, Etc. Subject to the provisions of paragraph
6G, the Company will at all times preserve and keep in full force and effect its
and its Subsidiaries' corporate existence, rights and franchises material to the
business of the Company and its Subsidiaries taken as a whole, and will qualify,
and cause each of its Subsidiaries to qualify, to do business in any
jurisdiction where the failure to do so would reasonably be expected to have a
Material Adverse Effect.
5E. Payment of Taxes and Claims. The Company will, and will cause
each of its Subsidiaries to, pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its franchises, business, income or property before any penalty or
significant interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien upon any
of its properties or assets if the failure to pay such tax, assessment, charge
or claim would result in liability to the Company or a Subsidiary and would have
a Material Adverse Effect; provided, that no such charge or claim need be paid
if being contested in good faith and, if necessary, by appropriate proceedings
(and under circumstances where the properties or assets subject to such Lien
shall not be subject to forfeiture) and if such accrual, reserve or other
appropriate provision, if any, as shall be required by generally accepted
accounting principles shall have been made therefor.
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5F. Compliance With Laws, Etc. The Company will comply and cause its
Subsidiaries to comply with the requirements of all applicable laws, rules,
regulations and judicial or administrative orders and judgments of any
Governmental Authority (including, without limitation, those relating to
environmental protection, employee benefits and welfare and employee safety),
the noncompliance with which would have a Material Adverse effect.
5G. Ranking. The Company will ensure that, at all times, all
liabilities of the Company under the Notes will rank in right of payment (i)
pari passu to all other existing and future senior Debt of the Company
(including, without limitation, any outstanding loans and advances under the New
Bank Facility) and (ii) senior to all existing and future subordinated Debt of
the Company. All obligations of the Company under this Agreement and the Notes
(including the principal thereof, interest thereon and any Yield Maintenance
Amounts owing with respect thereto) shall constitute "Senior Indebtedness"
within the meaning of the Indenture, dated as of October 1, 1980, between the
Company and First Trust of New York, as Trustee, relating to the Company's
outstanding Convertible Subordinated Debentures.
5H. Covenant to Secure Notes Equally. The Company covenants that if
it or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6B (unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to paragraph 11C), it will
make or cause to be made effective provision satisfactory in form and substance
to the Required Holder(s) (including, without limitation, opinions of counsel
relating thereto) whereby the Notes will be secured by such Lien equally and
ratably with any and all other Debt thereby secured so long as any such other
Debt shall be so secured. Securing the Notes as provided in this paragraph 5H
shall not permit the existence of any Lien not permitted by paragraph 6B.
6. NEGATIVE COVENANTS.
6A. Maintenance of Adjusted Consolidated Net Worth. The Company
covenants that it will not at any time permit Adjusted Consolidated Net Worth to
be less than the sum of the Base Amount and the Incremental Net Worth Amount. As
of any date of determination (x) the "Base Amount" shall be an amount equal to
$112,300,000 and (y) the "Incremental Net Worth Amount" shall be an amount equal
to the sum of 50% of Consolidated Net Income for all fiscal quarters of the
Company preceding such date of determination (beginning with the quarter ending
March 31, 1997) in which Consolidated Net Income is a positive number.
6B. Limitations on Liens. The Company covenants that neither it nor
any of its Subsidiaries will create, assume or suffer to exist any Lien upon any
of its property or assets (including, without limitation, any capital stock of a
Subsidiary owned by the Company or any other Subsidiary), whether now owned or
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hereafter acquired and whether or not provision is made for equally and ratably
securing the Notes as provided in paragraph 5H; provided, however, that the
foregoing restriction and limitation shall not apply to the following Liens:
(i) Liens for taxes, assessments or governmental charges
or levies not yet delinquent or which are being contested in good
faith by appropriate proceedings for which adequate reserves have
been established in accordance with, and as permitted by, paragraph
5F;
(ii) Liens imposed by law, such as carriers',
landlords', warehousemen's and mechanics' liens and other similar
liens arising in the ordinary course of business which secure
payment of obligations not more than 30 days past due or which are
being contested in good faith by appropriate proceedings as
permitted by paragraph 5G; Liens arising out of pledges or deposits
under workers' compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or
similar legislation; servitudes, easements, rights-of-way,
restrictions, minor defects or irregularities in title and such
other encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere in any material way with the
use thereof in the business of the Company or its Subsidiaries; and
other Liens incidental to the conduct of the Company's or any
Subsidiary's business or the ownership of its property and assets
which were not incurred in connection with the borrowing of money or
the obtaining of advances or credit, and which do not in the
aggregate materially detract from the value of its property or
assets, or materially impair the use thereof in the operation of its
business;
(iii) Liens on property or assets of a Subsidiary to
secure obligations of such Subsidiary to the Company or any
Wholly-Owned Subsidiary;
(iv) deposits, bonding arrangements and Liens to secure
the performance of (or to secure obligations in respect of letters
of credit posted to secure the performance of) bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(v) Liens on any property or asset of the Company or any
Subsidiary existing on the date hereof and set forth in Schedule 6B,
provided, that (x) such Lien shall not apply to any other property
or asset of the Company or any Subsidiary and (y) such Lien shall
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secure only those obligations which it secures on the date hereof;
(vi) Liens on any tangible physical asset (including
real property) acquired by ownership or lease or developed by the
Company or such Subsidiary after the Closing Date, provided that any
such Liens (x) extend only to the asset (or portion thereof) so
acquired or developed (and improvements thereon and additions
thereto), and (y) are created within 90 days of the acquisition,
lease or development thereof and are for the sole purpose of
financing or refinancing or securing the cost of the acquisition,
lease or development of that asset or any improvements thereon;
(vii) Liens existing at the time of acquisition on any
asset (including real property) acquired or leased by the Company or
such Subsidiary after the date of this Agreement and not created in
contemplation of that acquisition or lease, provided that (x) the
aggregate amount of Debt secured by any such Lien does not exceed
the fair market value of such asset, (y) such Lien does not extend
to any other properties or assets of the Company or any of its
Subsidiaries and (z) such Lien shall secure only those obligations
which it secures on the date of such acquisition or lease;
(viii) Liens on property of a Person existing at the
time such Person is merged with or consolidated with, or is acquired
by, the Company or any Subsidiary and not created in contemplation
of that merger, consolidation or acquisition, provided that the (x)
the aggregate amount of Debt secured by any such Lien does not
exceed the fair market value of such property or asset, (y) such
Lien does not extend to any other properties or assets of the
Company or any of its Subsidiaries and (z) such Lien shall secure
only those obligations which it secures on the date of such merger,
consolidation or acquisition;
(ix) Liens granted after the date hereof securing Debt
otherwise permitted under paragraph 6C up to an aggregate amount not
exceeding, at the time of incurrence thereof, 10% of Adjusted
Consolidated Net Worth; and
(x) any extension, renewal or replacement (or successive
extensions, renewals, or replacements), as a whole or in part, of
any Lien referred to in clauses (v) through (viii) above and this
clause (x) (for amounts not exceeding the outstanding principal
amount of the Debt secured thereby) in connection with the
extension, renewal or replacement of such Debt, provided that such
extension, renewal or replacement Lien is limited to all or a part
of the same assets that secured the Debt extended, renewed or
replaced (plus improvements on and
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additions to such assets) and the Debt secured thereby is permitted
by paragraph 6C.
6C. Limitations on Debt and Subsidiary Preferred Stock. The Company
covenants that it will not, and will not permit any of its Subsidiaries to,
create, incur, assume or otherwise become or be liable with respect to any Debt
(collectively referred to herein as an "incurrence" or "to incur" such Debt, all
Debt of a Person existing at the time it shall become a Subsidiary being deemed
incurred as of that time, all Debt under a Guarantee of Debt of others being
deemed incurred at the time of the incurrence of the Debt of others so
guaranteed, and all Debt owing by the Company or any Subsidiary to any other
Subsidiary being deemed to be incurred at the time such "other Subsidiary" shall
cease to be a Subsidiary as defined herein), nor will it permit any Subsidiary
to issue or have outstanding any Preferred Stock, except:
(i) Debt represented by the Notes;
(ii) Debt in respect of the New Bank Facility limited to
$30,000,000 aggregate principal amount at any time outstanding
thereunder;
(iii) Debt of the Company or a Subsidiary existing, and
Preferred Stock of a Subsidiary outstanding, on the date hereof and
set forth on Schedule 6C;
(iv) Debt of the Company or a Subsidiary if at the time
of incurrence thereof and after giving effect thereto and to the
application of the proceeds thereof the aggregate amount of
Consolidated Debt does not exceed 50% of the sum of (x) Adjusted
Consolidated Net Worth and (y) Consolidated Debt;
(v) Debt (or Preferred Stock) of a Subsidiary owing to
(or held by) the Company or to (or held by) a Wholly-Owned
Subsidiary; and
(vi) renewals, extensions, substitutions, refinancings
or replacements of Debt permitted hereunder, in each case in an
amount not exceeding the amount so renewed, extended, substituted,
refinanced or replaced and with covenants and restrictions that are
not materially more onerous than the existing covenants and
restrictions.
In addition, the Company will not permit any Subsidiary to create,
incur, assume or permit to exist Debt or issue any Preferred Stock except as
permitted under clauses (ii), (iii) and (v) above and Debt or Preferred Stock
which when combined with outstanding Debt and the aggregate liquidation value of
all Preferred Stock of all Subsidiaries then outstanding (other than Debt under
clause (v) above) does not exceed the sum of $20,000,000 and 5% of Adjusted
Consolidated Net Worth as at the end of the most recently concluded fiscal
quarter of the Company.
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6D. Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio as at the last day of any period of four consecutive
fiscal quarters of the Company (beginning with the period of four consecutive
fiscal quarters ending on December 31, 1997) to be less than 3.00 to 1.00.
6E. Debt to EBITDA Ratio. The Company will not permit the Debt to
EBITDA Ratio as at the last day of any period of four consecutive fiscal
quarters of the Company (beginning with the period of four consecutive fiscal
quarters ending on December 31, 1997) to exceed 3.00 to 1.00.
6F. Consolidated Fixed Charges Coverage Ratio. The Company will not
permit the Consolidated Fixed Charges Coverage Ratio as at the last day of any
period of four consecutive fiscal quarters of the Company (beginning with the
period of four consecutive fiscal quarters ending on December 31, 1997) to be
less than 2.00 to 1.00.
6G. Merger, Consolidation, Sale or Transfer of Assets. The Company
covenants that it will not, and will not permit any of its Subsidiaries to, be a
party to any merger, amalgamation, consolidation, reorganization, reconstruction
or arrangement with any other Person or sell, lease or transfer or otherwise
dispose of all or substantially all of its assets to any Person, except that:
(i) subject to the provisions of clause (iv) below, as
applicable, any Subsidiary may merge or consolidate with the Company
or any one or more Subsidiaries;
(ii) any Subsidiary may sell, lease, transfer or
otherwise dispose of any of its assets to the Company or to any
Subsidiary, whether by dissolution, liquidation or otherwise;
(iii) any Subsidiary may merge or consolidate with, or
sell, lease, transfer or otherwise dispose of all or substantially
all of its assets to, any other Person subject to the provisions of
paragraph 6J and paragraph 6K; and
(iv) the Company may merge or consolidate or amalgamate
with any other corporation, or enter into a plan of arrangement, or
sell, transfer, or otherwise dispose of all or substantially all of
its assets, provided that the Company shall be the continuing or
surviving corporation, or the continuing, surviving or acquiring
corporation shall be a corporation organized under the laws of any
State of the United States or the District of Columbia which shall
expressly assume in writing (in an instrument satisfactory in form
and substance to the Required Holder(s)) all of the obligations of
the Company under this Agreement and the Notes and the other Note
Documents
-15-
and in the case of any of the transactions described in clause (iv) above, at
the time of such merger, consolidation, sale, transfer or disposition and after
giving effect thereto there shall exist no Default or Event of Default and, the
Company or the continuing, surviving or acquiring corporation, as the case may
be, could incur an additional $1 of Debt pursuant to the provisions of paragraph
6C(iv), and the Company shall have delivered to the holders of the Notes an
opinion of independent counsel for the Company to the effect that the provisions
of clause (iv) have been complied with and an Officer's Certificate to the
effect that all of the foregoing provisions have been complied with.
6H. Fundamental Changes. The Company will not, and will not permit
any of its Subsidiaries to, engage to any material extent in any business other
than businesses of the type conducted by the Company and its Subsidiaries on the
date hereof and businesses reasonably related thereto (the "Core Business").
6I. Restrictive Agreements. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement (other than the provisions of
this Agreement, the provisions of the New Bank Facility as in effect on the
Closing Date and the agreements referenced on Schedule II hereto) that
prohibits, restricts or imposes any condition upon (A) the ability of the
Company or any Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets (other than such an agreement in connection with any
Lien permitted by the provisions of paragraph 6B relating solely to the asset
subject to such permitted Lien) or (B) the ability of any Subsidiary to (i) pay
dividends or make other distributions with respect to any shares of its capital
stock, (ii) make loans, advances or any other Investments to the Company or any
other Subsidiary, (iii) repay Debt owed to the Company or any other Subsidiary,
(iv) transfer any of its properties to the Company or any other Subsidiary or
(v) Guarantee Debt of the Company or any other Subsidiary.
-16-
6J. Sales of Assets. The Company covenants that it will not, and
will not permit any of its Subsidiaries to, sell, lease, transfer or otherwise
dispose of (other than transfers permitted by paragraph 6G and sales in the
ordinary course of business) any assets of the Company or any Subsidiary (herein
called a "Disposition") except for fair value (as determined in good faith by
the board of directors of the Company) and unless, after giving effect thereto,
either (x) the Company could incur an additional $1 of Debt pursuant to the
provisions of paragraph 6C(iv) or (y) the aggregate net proceeds of Dispositions
consummated on or after the date hereof at a time when the provisions of clause
(x) are not applicable ("Disposition Proceeds") do not exceed $5,000,000 (the
"Disposition Limit"), provided that for purposes of this clause (y) there shall
be excluded the net proceeds realized upon any Disposition if and to the extent
such net proceeds are applied by the Company or a Subsidiary, as the case may
be, within 360 days after the effective date of such Disposition (i) to reinvest
in properties or assets used in the Core Business of the Company and its
Subsidiaries (either through capital expenditures or acquisitions, but not
including for such purpose Investments other than Investments in Subsidiaries
and in Persons engaged in a Core Business) or (ii) to repay senior
unsubordinated Debt of the Company or a Subsidiary, other than Debt owed to the
Company or any Affiliate or Subsidiary of the Company. If the Disposition
Proceeds exceed the Disposition Limit, the Company shall be required to make an
offer to prepay Notes in an amount equal to all Disposition Proceeds (less the
Bank Allocation Amount) pursuant to paragraph 4F (a "Proceeds Payment Offer")
with a Debt Reduction Prepayment Date occurring no later than 65 days after the
date the Disposition Limit is exceeded. The "Bank Allocation Amount" for
purposes of the foregoing shall be an amount equal to the principal amount of
Loans (as defined in the New Bank Facility) required to be prepaid by the
Company pursuant to Section 2.09(b)(1) of the New Bank Facility. The Company
agrees that it will not modify or amend Section 2.09(b)(1) of the New Bank
Facility (or any definition or provision in the New Bank Facility) which would
change the amount of Loans (as defined therein) so required to be prepaid. Upon
making a Proceeds Payment Offer as aforesaid, the Disposition Proceeds relating
thereto shall no longer be considered Disposition Proceeds for the purposes
hereof.
6K. Disposition of Subsidiary Stock. The Company covenants that it
will not, and will not permit any of its Subsidiaries to, issue, sell or
otherwise dispose of, or part with control of, any shares of capital stock of
any class of any Subsidiary, except to the Company or a Wholly-Owned Subsidiary
(other than director's qualifying shares required by law) or in accordance with
the provisions of paragraph 6C, and except that, subject in all events to the
provisions of paragraph 6J, all shares of capital stock of any Subsidiary at the
time owned by the Company and all Subsidiaries may be sold as an entirety for a
consideration which represents the fair value (as determined in good faith by
the
-17-
board of directors of the Company) at the time of sale of the shares of capital
stock so sold, provided that at the time of such sale, such Subsidiary shall not
own, directly or indirectly, any shares of capital stock or Debt of any other
Subsidiary (unless all of the shares of stock and Debt of such other Subsidiary
owned, directly or indirectly, by the Company and all Subsidiaries are
simultaneously being sold as permitted by this paragraph 6K).
6L. Limitation on Restricted Payments and Restricted Investments.
The Company covenants that it will not, and will not permit any of its
Subsidiaries to, make any Restricted Payment or Restricted Investment if
immediately after giving effect to such proposed Restricted Payment or
Restricted Investment (i) a Default or an Event of Default shall exist or (ii)
the Company would not be able to incur $1 of additional Funded Debt pursuant to
the provisions of paragraph 6C(iv) or (iii) the aggregate of all Restricted
Payments made after the date of this Agreement and the Net Amount of Restricted
Investments, would exceed the sum of:
(1) $10,000,000, plus
(2) Net Income Available for Restricted Payments and Restricted
Investments, plus
(3) the net cash proceeds received by the Company from the sale of
additional shares of its Capital Stock.
6M. Transactions With Affiliates. The Company covenants that it will
not, and will not permit any Subsidiary to, directly or indirectly, purchase,
acquire or lease any property from, or sell, transfer or lease any property to,
or otherwise deal with, in the ordinary course of business or otherwise, any
Affiliate, except in each case in transactions which are on no less favorable
terms to the Company or such Subsidiary than would be the case with a similar
transaction with an unaffiliated Person negotiated at arm's length.
6N. Material Subsidiaries.
(a) Promptly after any Person becomes a Material Domestic
Subsidiary, the Company will cause such Person to execute and deliver, or become
a party to, the Guarantee Agreement as a Guarantor pursuant to an instrument in
form and substance satisfactory to the Collateral Agent, and provide to the
holders of the Notes evidence of the due authorization, legality, validity and
binding effect thereof (including appropriate legal opinions) in form and
substance satisfactory to the Required Holders.
(b) Not later than the date three weeks after the Closing Date, the
Company (i) will pledge or cause to be pledged to the Collateral Agent, pursuant
to one or more Pledge Agreements, not less than 65% of the shares of stock of
each Material Foreign Subsidiary, and (ii) will cause to be delivered to the
Collateral Agent evidence satisfactory to it (including
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appropriate legal opinions) as to the validity, perfection and first priority of
the Liens created thereby.
(c) Promptly after any Person becomes a Material Foreign Subsidiary,
the Company will cause at least 65% of the shares or other ownership interests
of such Person to be pledged to the Collateral Agent pursuant to the Pledge
Agreement, and to be subject to, to the fullest extent possible under applicable
law, a valid first and prior perfected security interest in favor of the
Collateral Agent, and provide to the holders of the Notes evidence thereof in
form and substance satisfactory to the Required Holders.
7. DEFAULTS;.
7A. Events of Default. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence shall
be voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal
of or Yield-Maintenance Amount in respect of any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest
on any Note for a period of 5 Business Days after the same shall
become due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or as surety) in any payment of
principal of or interest on any other Debt for money borrowed, any
Capitalized Lease Obligation, any Debt under a conditional sale or
other title retention agreement, any Debt issued or assumed as full
or partial payment for property whether or not secured by a purchase
money mortgage, or any Debt under notes payable or drafts accepted
representing extensions of credit (any of the foregoing being herein
called a "Payment Default") beyond any period of grace provided with
respect thereto; or the Company or any Subsidiary fails to perform
or observe any other agreement, term or condition contained in any
agreement under which any such Debt is created (or if any other
event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to
cause, or to permit the holder or holders of such Debt (or a trustee
on behalf of such holder or holders) at such time to cause, such
Debt to become due (or to be purchased or defeased by the Company or
any Subsidiary) prior to any stated maturity (other than, in any
such case, secured Debt becoming due as a result of the voluntary
sale or transfer of the property or assets securing such Debt);
provided, however, that the aggregate amount of all Debt to which
such a Payment
-19-
Default shall occur and be continuing or such a failure or other
event causing or permitting acceleration (or repurchase or
defeasance by the Company or any Subsidiary) shall occur and be
continuing exceeds $3,000,000 individually or $5,000,000 in the
aggregate (or the equivalent amount in any foreign currency); and
provided, further, that the preceding proviso shall not apply to any
Payment Default or failure or other event causing or permitting
acceleration (or requiring repurchase) under the New Bank Facility
or any extension or refinancing thereof; or
(iv) any representation or warranty made by the Company
or a Subsidiary in any Note Document or by the Company or a
Subsidiary or any of their respective officers in any writing
furnished in connection with or pursuant to any Note Document shall
be false in any material respect on the date as of which made; or
(v) the Company fails to perform or observe any
agreement contained in paragraph 4F or 4G, in the last sentence of
paragraph 5A, in paragraph 5B, 5F or 5H or in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein, and any such failure
described in this clause (vi) shall continue unremedied for a period
of 30 days after any Responsible Officer obtains actual knowledge
thereof; or
(vii) the Company or any Subsidiary makes an assignment
for the benefit of creditors or is generally not paying its debts as
such debts become due or ceases or threatens to cease carrying on
its business permanently; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, composition, dissolution, winding up or liquidation or similar
law, whether now or hereafter in effect (herein called the
"Bankruptcy Law"), of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies
to any tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official of the Company or any Subsidiary, or of any substantial
part of the assets of the Company or any Subsidiary, or commences a
voluntary case under the Bankruptcy Law of the United States or any
proceedings (other than proceedings for the voluntary liquidation
and dissolution of a Subsidiary) relating to the Company or any
Subsidiary under the Bankruptcy Law of any other
-20-
jurisdiction or takes any corporate action to authorize any of the
actions described in this clause (ix); or
(x) any such petition or application is filed, or any
such proceedings are commenced, against the Company or any
Subsidiary and the Company or any Subsidiary by any act indicates
its or their approval thereof, consent thereto or acquiescence
therein, or an order, judgment or decree is entered appointing any
such trustee, receiver, custodian, liquidator or similar official,
or approving the petition in any such proceedings, and such order,
judgment or decree remains unstayed and in effect for more than 90
days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 90 days; or an encumbrancer takes possession
of, or a receiver or receiver manager is appointed over, all or
substantially all of the assets and the revenues of the Company; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a
split-up of the Company or such Subsidiary which requires the
divestiture of assets and such order, judgment or decree remains
unstayed and in effect for more than 90 days; or
(xiii) any judgments or attachments in an aggregate
amount in excess of $3,000,000 (or the equivalent amount in any
foreign currency) are rendered against the Company or any Subsidiary
or any of their respective properties and, within 90 days after
entry thereof, such judgments and attachments are not discharged or
execution thereof stayed pending appeal, or within 90 days after the
expiration of any such stay, such judgments and attachments are not
discharged; or
(xiv) any Plan shall fail to maintain the minimum
funding standard required by Section 412 of the Code for any plan
year, or any Plan shall become the subject of termination
proceedings under ERISA (except in the case of a standard
termination under Section 4041(b) of ERISA), or the Company or any
ERISA Affiliate shall withdraw from a Multiemployer Plan in whole or
in part or any Plan or Multiemployer Plan shall be terminated
(except in the case of a standard termination under Section 4041(b)
of ERISA); and as a result of any one or more of the foregoing there
exists a liability of the Company or any Subsidiary to the Internal
Revenue Service, the Pension Benefit Guaranty Corporation, any Plan
or any Multiemployer Plan, in an aggregate amount exceeding
$2,500,000 (or the equivalent amount in any foreign currency);
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(xv) at any time after the date of the initial execution
and delivery of the Pledge Agreement as provided in paragraph 6N(b),
the Pledge Agreement (or any individual agreement comprised therein)
shall at any time, for any reason, cease to be in full force and
effect or shall be declared to be null and void in whole or in any
material respect with respect to any pledgor thereunder (i.e.,
relating to the validity or priority of the Liens created by the
Pledge Agreement or the remedies available thereunder) by the final
judgment (which is non-appealable and non-reviewable or has not been
stayed pending appeal or review or as to which all rights to appeal
or review have expired or been exhausted) of any court or other
governmental authority having jurisdiction in respect thereof (and
which judgment is contrary to the conclusions contained in any
opinion of counsel delivered to the Collateral Agent at the time of
execution and delivery of such agreement or thereafter), or if the
validity or the enforceability of the Pledge Agreement shall be
contested by or on behalf of the Company or any Subsidiary, or the
Company or any Subsidiary shall renounce the Pledge Agreement, or
deny that it is bound by the terms of any of the Pledge Agreements;
or
(xvi) at any time after the date of the initial
execution and delivery of the Guarantee Agreement as provided in
paragraph 6N(a), the Guarantee Agreement shall at any time, for any
reason, in respect of any Guarantor, cease to be in full force and
effect or shall be declared to be null and void in whole or in any
material respect by the final judgment (which is non-appealable and
non-reviewable or has not been stayed pending appeal or review or as
to which all rights to appeal or review have expired or been
exhausted) of any court or other governmental authority having
jurisdiction in respect thereof, or if the validity or
enforceability of the Guarantee Agreement shall be contested by or
on behalf of the Company or any Subsidiary, or the Company or any
Subsidiary shall renounce the Guarantee Agreement, or deny that it
is bound by the terms of the Guarantee Agreement;
then (a) if such event is an Event of Default specified in clauses (viii), (ix)
or (x) of this paragraph 7A with respect to the Company, all of the Notes at the
time outstanding shall automatically become immediately due and payable at the
principal amount thereof together with interest accrued thereon and together
with the Yield-Maintenance Amount, if any and to the extent permitted by
applicable law, with respect to each Note without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the Company, (b) if
such event is any other Event of Default, the Required Holder(s) may, at its or
their option and in addition to any right, power or remedy permitted by law or
equity, by notice in writing to the Company, declare all of the Notes to be, and
all of the Notes shall
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thereupon be and become, immediately due and payable at the principal amount
thereof, together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company, and (c) if such event is an Event of Default
specified in clause (i) or (ii) of this paragraph 7A with respect to any Note
(other than a Note held by the Company or any of its Subsidiaries or
Affiliates), the holder of such Note may, at its option and in addition to any
right, power or remedy permitted by law or equity, by notice in writing to the
Company, declare such Note to be, and such Note shall thereupon be and become,
immediately due and payable at the principal amount thereof together with
interest accrued thereon and together with the Yield-Maintenance Amount, if any,
with respect to such Note, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company.
7B. Rescission of Acceleration. At any time after any or all of the
Notes shall have been declared immediately due and payable pursuant to paragraph
7A, the Required Holder(s) may, by notice in writing to the Company, rescind and
annul such declaration and its consequences if (i) the Company shall have paid
all overdue interest on the Notes, the principal of and Yield-Maintenance
Amount, if any, payable with respect to any Notes which have become due
otherwise than by reason of such declaration, and interest on such overdue
interest and overdue principal and Yield-Maintenance Amount at the rate
specified in the Notes, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 11C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due as a consequence of such declaration. No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
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7D. Other Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants as of the date hereof and as of the Closing Date:
8A. Organization; Authority; Enforceability. Each of the Company and
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own and operate its properties and to
carry on its business and, in the case of the Company, to enter into and perform
all of its obligations under this Agreement and the Notes and to issue and sell
the Notes. Each of the Company and its Subsidiaries is duly licensed or
qualified to do business as a foreign corporation in each state where the
failure to be so licensed or qualified would have a Material Adverse Effect and
has all corporate power, licenses, franchises and other governmental
authorizations and approvals necessary to carry on its present business, with
respect to which the failure to possess would have a Material Adverse Effect.
This Agreement is, and the Notes when issued and delivered hereunder will be,
legal, valid, binding and enforceable obligations of the Company, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (regardless
of whether enforcement is sought in equity or at law).
8B. Business; Financial Statements. The Company has furnished
each Purchaser with the following documents and financial statements:
(i) The audited and unaudited financial statements of the
Company, as described in Schedule 8B. Such financial statements are herein
collectively referred to as the "Historical Financial Statements."
(ii) The Company's Confidential Private Placement Memorandum,
dated September 1997, relating to the offering of the Notes prepared by Chase
Securities Inc., the Company's press release relating to third quarter 1997
results released on October 20, 1997, the hard copies of the presentation at the
due
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diligence meeting held at the Company's offices on October 9, 1997, including
the appendices but excluding the marketing brochures of the Company. Such
Confidential Private Placement Memorandum and such other materials are herein
collectively referred to as the "Placement Materials."
The Historical Financial Statements (including any related schedules
and/or notes) are true and correct in all material respects (subject, as to
interim statements, to changes resulting from audits and year-end adjustments)
and fairly present the consolidated financial position and the consolidated
results of the operations and consolidated cash flows of the corporations
described therein at the dates and for the periods shown, all in conformity with
generally accepted accounting principles applied on a consistent basis (except
as otherwise stated therein or in the notes thereto stated) throughout the
periods involved. None of the Company and its Subsidiaries has any contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments which are
substantial and material in amount in relation to the consolidated financial
condition of the Company, except as referred to or reflected or provided for in
the Historical Financial Statements or in the Placement Materials. There has
been no material adverse change in the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole
since December 31, 1996. The Placement Materials set forth an accurate
description in all material respects of the business presently conducted by the
Company and its Subsidiaries and the properties owned and operated in connection
therewith. The estimates and projections contained in the Placement Materials
were prepared in good faith and on a basis which the Company believes is
reasonable based on the assumptions set forth therein and otherwise on a basis
consistent with the Historical Financial Statements, but the same may not
necessarily be predictive of actual results and actual results may vary. The
financial information contained in the Placement Materials is consistent with
the information contained in the Historical Financial Statements, except where
otherwise stated in such Placement Materials.
8C. Actions Pending. There is no action or proceeding pending or (to
the best knowledge of the Company) threatened or (to the best knowledge of the
Company) investigation pending or threatened which questions the validity or
legality of or seeks damages in connection with the Note Documents or any action
taken or to be taken pursuant to the Note Documents, and, except for the matters
disclosed on Schedule II, there is no action or proceeding pending or (to the
best knowledge of the Company) threatened or (to the best knowledge of the
Company) investigation pending or threatened which could reasonably be expected
to have or result in any Material Adverse Effect.
8D. Outstanding Debt. Neither the Company nor any of its
Subsidiaries has outstanding on the date hereof any Debt except as permitted by
paragraph 6C. There exists no default or temporary
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waiver of default under the provisions of any instrument evidencing such Debt or
of any agreement relating thereto.
8E. Conflicting Agreements and Other Matters. Neither the Company
nor its Subsidiaries is a party to any contract or agreement or subject to any
charter or other corporate restriction which materially and adversely affects
the business, operations or condition (financial or otherwise) of the Company
and its Subsidiaries taken as a whole. Neither the execution nor the delivery of
this Agreement, the Notes hereunder and any other Note Documents, nor the
offering, issuance and sale of the Notes hereunder, nor fulfillment or any
compliance with the terms and provisions hereof and thereof will conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, the charter or by-laws of the Company or any of its
Subsidiaries, as the case may be, any agreement (including any agreement with
stockholders), instrument, order, judgment, decree or arbitrator's award, or any
statute, law, rule or regulation, to which the Company or any of its
Subsidiaries or their respective properties is subject. The Company is not a
party to, or otherwise subject to, any contract or agreement (including its
charter), other than the New Bank Facility, which limits the amounts of, or
otherwise imposes restrictions on the incurring of, indebtedness of the type to
be evidenced by the Notes, and the Company has received all consents necessary
with respect to such agreements in connection with the consummation of the
transactions contemplated hereby.
8F. Title to Properties. The Company has and each of its
Subsidiaries has (all to the extent material to the Company and its Subsidiaries
taken as a whole) good and marketable title to its respective real properties
(other than properties which it leases) and good title (or leasehold rights) to
all of its other respective material properties and assets, including the
properties and assets reflected in the statement of financial position as at
December 31, 1996 referred to in paragraph 8B (other than properties and assets
disposed of in the ordinary course of business), subject to no Lien of any kind
except Liens not prohibited by paragraph 6B. All leases necessary in any
material respect for the conduct of the respective businesses of the Company and
its Subsidiaries are valid and subsisting and are in full force and effect.
8G. Patents, Licenses, Franchises, Etc. The Company and its
Subsidiaries possess all franchises, certificates, licenses, permits and other
authorizations from governmental political subdivisions or regulatory
authorities and all patents, trademarks, service marks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are necessary
in any material respect for the ownership, maintenance and operation of the
properties and assets, as presently conducted, of the Company and its
Subsidiaries taken as a whole and neither the Company nor any of its
Subsidiaries is in violation of any thereof in any material respect. No event
has occurred which permits, or
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after notice or lapse of time (except expiration of the stated term thereof), or
both, would permit, the revocation or termination of any such franchise,
license, authorization or other right so as to affect adversely in any material
respect the business or condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole. All such franchises, permits, licenses and
other authorizations have been validly issued or granted to the Company or a
Subsidiary, and each such franchise, permit, license or other authorization is
valid and subsisting, in each case to the extent necessary in any material
respect for the conduct of the respective businesses of the Company and its
Subsidiaries taken as a whole. The Company and its Subsidiaries are operating
their respective businesses in material compliance with the terms and conditions
of such franchises, permits, licenses and other authorizations and are in
material compliance with all applicable statutes, laws, rules and regulations,
all to the extent material to the business of the Company and its Subsidiaries
taken as a whole.
8H. Taxes. The Company has and each of its Subsidiaries has filed
all federal, state and other income tax returns (and to the best of the
Company's knowledge all other tax returns) which are required to be filed, and
each has paid all income taxes (and to the best of its knowledge all other
material taxes) as shown on such returns and on all assessments received by it
to the extent that such taxes have become due, except such taxes as are being
contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with generally accepted accounting
principles and the Company has no knowledge of any basis for any further
material assessment to the Company and its Subsidiaries taken as a whole that
has not been adequately so provided for.
8I. Offering of Notes. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes or
any similar security of the Company from, or otherwise approached or negotiated
with respect thereto with, any Person other than the Purchasers and not more
than 70 other institutional investors, and neither the Company nor any agent
acting on its behalf has taken or will take any action which would subject the
issuance or sale of the Notes hereunder to the provisions of section 5 of the
Securities Act or to the registration provisions of any securities or Blue Sky
law of any applicable jurisdiction.
8J. Regulation G, Etc. Neither the Company nor any Subsidiary owns
or has any present intention of acquiring any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal Reserve
System (herein called "margin stock"), exceeding in value 5% of Consolidated Net
Worth. None of the proceeds of the issuance of the Notes will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any margin stock, or for the purpose of maintaining,
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any
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stock that is currently a margin stock and in any such case which will
constitute this transaction a violation of such Regulation G. 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 U, Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate Section 7 of the Exchange
Act, in each case as in effect now or as the same may hereafter be in effect.
8K. Environmental Matters. Except as set forth in Schedule II,
neither the Company nor any Subsidiary (i) has received written notice or
otherwise learned of any claim, demand, action, event, condition, report or
investigation indicating or concerning any potential or actual liability of the
Company, any Subsidiary or any Person whose liability under any Environmental
Law the Company or any Subsidiary has retained or assumed either contractually
or by operation of law, which individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect arising in connection with any
non-compliance with or violation of the requirements of any applicable federal,
state or local laws and regulations relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, ground water, land surface strata and the release or threatened release
of any toxic or hazardous waste, substance or constituent into the environment)
(collectively referred to in this paragraph 8K as "Environmental Laws"), (ii) to
the best knowledge of the Company, has any liability in connection with the
release or threatened release of any toxic or hazardous waste, substance or
constituent, or other substance, into the environment which individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect,
(iii) has received notice of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release or threatened
release of any toxic or hazardous waste, substance or constituent, or other
substance, into the environment for which the Company or any Subsidiary is or
may be liable which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect or (iv) has received notice that the
Company or any Subsidiary is or may be liable to any person under the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601 et seq. ("CERCLA") or any analogous state law
which individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect. The Company and each of its Subsidiaries is in
compliance in all material respects with the financial responsibility
requirements of all Environmental Laws to the extent applicable, including,
without limitation, those contained in 40 C.F.R., parts 264 and 265, subpart H,
and any analogous state law.
8L. Proceeds of Financing. The proceeds of the issuance of the Notes
hereunder will be used by the Company for general corporate purposes.
8M. ERISA. No material accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code),
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whether or not waived, exists with respect to any Plan. No liability to the
Pension Benefit Guaranty Corporation has been or, to the best knowledge of the
Company, is expected by the Company or any ERISA Affiliate to be incurred with
respect to any Plan by the Company, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
Neither the Company, any Subsidiary nor any ERISA Affiliate has incurred or
presently expects to incur any material withdrawal liability under Title IV of
ERISA with respect to any Multiemployer Plan. The execution and delivery of this
Agreement and the issuance and sale of the Notes to 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 next preceding sentence is made in reliance upon and subject to the
accuracy of each Purchaser's representation in paragraph 9B and any information
supplied by such Purchaser to the Company in connection with the matters
referred to in paragraph 9B.
8N. Governmental Consent. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body in connection with the execution and delivery of the Note
Documents, the offering, issuance, sale or delivery of the Notes or fulfillment
of or compliance with the terms and provisions of the Note Documents.
8O. Compliance; Default. The Company and its Subsidiaries and all of
their respective properties and facilities have complied at all times and in all
respects with all contractual obligations and all federal, state, local and
regional statutes, laws, ordinances and judicial or administrative orders,
judgments, rulings and regulations (including those relating to protection of
the environment) except where failure to comply, in the aggregate, would not
result in a Material Adverse Effect. No Default or Event of Default exists as of
the date hereof.
8P. Investment Company Act. The Company is not an "investment
company," or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
8Q. Public Utility Holding Company Act. Neither the Company nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company." as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
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8R. Foreign Assets Control Regulations. None of the transactions
contemplated by this Agreement (including the use of proceeds of the sale of the
Notes) will result in a violation of any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended), or any ruling issued thereunder or any enabling
legislation or Presidential Executive Order granting authority therefor.
8S. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith (including, without limitation, the Historical
Financial Statements and the Placement Memorandum) contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained herein and therein, in light of the circumstances in
which they were made, not misleading. There is no fact peculiar to the Company
or any of its Subsidiaries which has a Material Adverse Effect or which in the
future may (so far as the Company can now reasonably foresee) have a Material
Adverse Effect, and which has not been set forth in this Agreement or in the
Historical Financial Statements or the Placement Memorandum.
8T. Solvency. The Company is, and upon giving effect to the issuance
of the Notes will be, a "solvent institution", as such term is used in Section
1405(c) of the New York Insurance Law, whose "obligations are not in default as
to principal or interest", as such terms are used in Section 1405(c).
9. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser represents as
follows:
9A. Nature of Purchase. Such Purchaser is not acquiring the Notes to
be purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that the
disposition of such Purchaser's property shall at all times be and remain within
its control.
9B. Source of Funds. With respect to each source of funds to be used
by such Purchaser to purchase the Notes (respectively, the "Source"), at least
one of the following statements is accurate as of the Closing Date:
(i) the Source is an "insurance company general account", as such
term is defined in Prohibited Transaction Exemption ("PTE") 95-60 (issued July
12, 1995), and as of the date of this Agreement there is no "employee benefit
plan" with respect to which the aggregate amount of such general account's
reserves and liabilities for the contracts held by or on behalf of such
"employee benefit plan" and all other "employee benefit plans" maintained by the
same employer (and affiliates thereof as defined in Section V(a)(1) of PTE
95-60) or by the same employee organization (in each case determined in
accordance with the provisions of PTE 95-60) exceeds 10% of the total reserves
and
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liabilities of such general account (as determined under PTE 95-60) (exclusive
of separate account liabilities) plus surplus as set forth in the National
Association of Insurance Commissioners Annual Statement filed with such
Purchaser's state of domicile; or
(ii) the Source is either (a) an insurance company pooled separate
account, within the meaning of XXX 00-0 (xxxxxx Xxxxxxx 00, 0000), xx (x) a bank
collective investment fund, within the meaning of the PTE 91-38 (issued July 12,
1991) and, except as such Purchaser has disclosed to the Company in writing
pursuant to this clause (ii), no employee benefit plan or group of plans
maintained by the same employer or employee organization beneficially owns more
than 10% of all assets allocated to such pooled separate account or collective
investment fund; or
(iii) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of "control" in section V(e) of
the QPAM Exemption) owns a 5% or more interest in the Company and (a) the
identity of such QPAM and (b) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Company
in writing pursuant to this clause (iii); or
(iv) the Source is a governmental plan; or
(v) the Source is one or more employee benefit plans, or a separate
account or trust fund comprising one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this clause (v);
or
(vi) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph 9B, the terms "employee benefit plan",
"governmental plan" and "separate account" shall have the respective meanings
assigned to such terms in section 3 of ERISA.
10. DEFINITIONS AND ACCOUNTING MATTERS. As used herein, the
following terms shall have the following meanings (terms defined in the singular
to have the same meanings when used in the plural and vice versa):
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10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4B or is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Discounted Value" shall mean, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City time) on the Business Day which
is two Business Days preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page 678" on the Telerate Service (or
such other display as may replace Page 678 on the Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or if such yields
shall not be reported as of such time or the yields reported as of such time
shall not be ascertainable, (ii) the Treasury Constant Maturity Series yields
reported, for the latest day for which such yields shall have been so reported
as of the Business Day which is two Business Days preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
shall be determined, if necessary, by (a) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the
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Settlement Date with respect to such Called Principal if no payment of such
Called Principal were made prior to its scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid pursuant
to paragraph 4B or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, a
premium equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. Other Defined Terms.
"Adjusted Consolidated Net Worth" at any date means Consolidated Net
Worth (but excluding translation gains and losses effecting "Cumulative Foreign
Currency Translation Adjustments"), plus the amount (up to but not exceeding
$15,000,000 on an after-tax basis) of the charge properly recorded on the books
of the Company within 18 months of the Closing Date to restructure certain
operations (the "Restructuring Charge"), in each case computed as of that date
in accordance with generally accepted accounting principles.
"Administrative Agent" shall have the meaning specified in
paragraph 3H.
"Affiliate" shall mean any Person (other than a Subsidiary) (i)
which directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, the Company, (ii) which
beneficially owns or holds ten percent (10%) or more of any class of the voting
stock of the Company, (iii) ten percent (10%) or more of the voting stock (or in
the case of a Person which is not a corporation, ten percent (10%) or more of
the voting equity interest) of which is beneficially owned or held by the
Company and/or one or more Subsidiaries.
"Attributable Debt" in respect of any Sale and Lease-Back
Transaction shall mean, as of the time of determination, the total obligation
(discounted to present value at the rate of interest implicit in the lease
included in such transaction compounded semi-annually) of the lessee for rental
payments (other than amounts required to be paid on account of property taxes as
well as maintenance, repairs, insurance, assessments, utilities, operating and
labor costs and other items which do not constitute payments for property
rights) during the remaining portion of the remaining term (including extensions
which are at the option of the lessor) of the lease included in such
transaction. In the case of any lease which is terminable by the lessee upon the
payment of a
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penalty, such rental obligation shall also include the amount of such penalty,
but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"Bank Allocation Amount" shall have the meaning specified in
paragraph 6J.
"Bankruptcy Law" shall have the meaning specified in clause (viii)
of paragraph 7A.
"B&S ICC" shall mean Xxxxx & Xxxxxx International Capital
Corporation, a Delaware corporation.
"Bridge Note" shall mean the promissory note of the Company in the
principal amount of $25,000,000 dated September 30, 1997 in favor of The Chase
Manhattan Bank.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which commercial banks in New York City are required or authorized by
law to remain closed.
"Capital Stock" shall mean any and all shares of corporate stock
of the Company.
"Capitalized Lease Obligation" shall mean any rental obligation
which, under generally accepted accounting principles, would be required to be
capitalized on the books of the Company or any Subsidiary, in each case taken at
the amount thereof accounted for as indebtedness (net of interest expense) in
accordance with such principles.
"Change in Control" shall mean, with respect to the Company, (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Exchange Act and the rules of the
Securities and Exchange Commission promulgated thereunder as in effect on the
date hereof) of shares representing more than 50% (or such lesser percentage as
may be specified in any other "change in control" provision applicable to any
other Debt of the Company or a Subsidiary entitling the holders of such Debt to
repayment thereof prior to stated maturity upon the occurrence of such change in
control of the Company, so long as such provision shall remain in effect) of the
aggregate ordinary voting power of the Voting Stock of the Company, or (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Company by Persons who were neither (i) nominated by the board
of directors of the Company nor (ii) appointed by directors so nominated.
"Change in Control Prepayment Date" shall have the meaning specified
in paragraph 4G.
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"Change in Control Response Date" shall have the meaning specified
in paragraph 4G.
"Closing" shall have the meaning specified in paragraph 2.
"Closing Date" shall have the meaning specified in paragraph 2.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations and rulings promulgated thereunder.
"Collateral Agent" shall have the meaning specified in paragraph
3H.
"Consolidated Debt" as of any date shall mean the aggregate amount
of Debt of the Company and its Subsidiaries on a consolidated basis outstanding
on that date.
"Consolidated Fixed Charges Coverage Ratio" shall mean, as of the
last day of any fiscal quarter of the Company, the ratio of (x) the sum of (i)
EBITDA for the period of four consecutive fiscal quarters of the Company ending
on such date and (ii) one-third of Consolidated Rental Expense for such period
to (y) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" shall mean, for any period, the sum of
Consolidated Interest Expense and one-third of Consolidated Rental Expense for
each period.
"Consolidated Interest Debt" as of any date shall mean the aggregate
amount of Consolidated Debt at such date that bears interest or that otherwise
gives rise to interest expense, in each case computed in accordance with
generally accepted accounting principles.
"Consolidated Interest Expense" shall mean, for any period, the sum,
determined without duplication) of the aggregate amount classified as interest
expense during such period on Debt of the Company and its Subsidiaries (on a
consolidated basis), including without limitation the interest portion of
payments under Capitalized Lease Obligations and any capitalized interest, in
each case computed for such period in accordance with generally accepted
accounting principles.
"Consolidated Net Income" of the Company for any period means the
consolidated net income (loss) of the Company and its Subsidiaries for such
period, all determined in accordance with generally accepted accounting
principles, but not including in the computation of the foregoing earnings or
losses attributable to minority interests, any reversal of any contingency
reserve to the extent such contingency reserve was recorded prior to the date
hereof, any gains or losses resulting from any write-up or write-down of assets
other than in the ordinary course of business, any
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equity of the Company or any of its Subsidiaries in the unremitted earnings of
any Person which is not a Subsidiary, any portion of earnings of any Subsidiary
which for any reason is unavailable for distribution to the Company,
extraordinary items or transactions of a non-recurring or non-operating and
material nature, any earnings or losses of any Person acquired by the Company or
any of its Subsidiaries through purchase, merger or consolidation or otherwise
for any time prior to the date of acquisition, any Restructuring Charge or the
cumulative effect of a change in accounting principles.
"Consolidated Net Worth" as of any date shall mean the shareowners'
equity of the Company as would be shown on a consolidated balance sheet of the
Company and its Subsidiaries prepared as of such date in accordance with
generally accepted accounting principles.
"Consolidated Rental Expense" shall mean, for any period, the sum of
total consolidated rentals, common area maintenance and real estate taxes
payable by the Company and its Subsidiaries for such period under Operating
Leases for such period, all the foregoing being computed on a consolidated basis
for the Company and its Subsidiaries for such period and in accordance with
generally accepted accounting principles.
"Consolidated Total Capitalization" as of any date shall mean the
sum of (x) Consolidated Interest Debt and (y) Adjusted Consolidated Net Worth,
in each case computed as of that date in accordance with generally accepted
accounting principles.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Core Business" shall have the meaning specified in paragraph 6H
"Debt" of any Person as of any date shall mean and include without
duplication (i) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (ii) all obligations of such Person
evidenced by notes, bonds, debentures or similar instruments, (iii) all
obligations of such Person upon which interest charges are customarily paid,
(iv) obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (v) Capitalized Lease
Obligations of such Person, (vi) indebtedness of such Person representing the
deferred and unpaid purchase price of any property or business or services,
excluding trade payables incurred in the ordinary course of business
constituting current liabilities, (vii) obligations of such Person, contingent
or otherwise, in respect of obligations under letters of credit and letters of
guaranty (other than those constituting performance guarantees of obligations
which themselves do not constitute Debt)
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and bankers acceptances, (viii) any obligation secured by a Lien on, or payable
out of the proceeds of production from, property of such Person, even though
such obligation shall not be assumed by such Person, (ix) all Attributable Debt
of such Person and (viii) all Guarantees by such Person (A) of obligations of
others similar to those listed in clauses (i) through (ix) above or (B) to the
transferee of any assets sold or otherwise disposed of that such assets will
have a certain minimum value to the transferee. In any case in which the maximum
amount of any Guarantee of Debt cannot be determined by the provisions of the
instrument or agreement creating such Guarantee, the amount thereof at any time
shall be determined on the basis of the best available reasonable estimate of
the Company at the time as of which the amount thereof is being determined. The
Debt of any Person shall include the Debt of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such Debt
provide that such Person is not liable therefor.
"Debt Reduction" shall have the meaning specified in paragraph 4F.
"Debt Reduction Prepayment Date" shall have the meaning specified in
paragraph 4F.
"Debt Response Date" shall have the meaning specified in
paragraph 4F.
"Debt to EBITDA Ratio" shall mean, as of the last day of any fiscal
quarter of the Company, the ratio of (i) Consolidated Interest Debt as at such
day minus the aggregate amount, up to a maximum of $7,000,000, of cash and
Investments of the Company and its consolidated Subsidiaries at such time of the
type described in clauses (i), (ii), (iii), (iv) and (v) of the definition of
Permitted Investment to (ii) EBITDA for the period of four consecutive fiscal
quarters of the Company ending on such day; provided that if the Company shall
have redeemed its outstanding Convertible Subordinated Debentures referred to in
paragraph 5G on or prior to January 16, 1998, such Debentures shall not be
considered as being outstanding on December 31, 1997 for the purposes of this
definition.
"Disposition" shall have the meaning specified in paragraph 6J.
"Disposition Limit" shall have the meaning specified in paragraph
6J.
"Disposition Proceeds" shall have the meaning specified in
paragraph 6J.
"Dollar" or "$" shall mean a reference to United States dollars.
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"Domestic Subsidiary" shall mean any Subsidiary organized under the
laws of the United States or any State, territory or possession thereof.
"EBITDA" shall mean, for any period, the sum (without duplication),
determined on a consolidated basis for the Company and its consolidated
Subsidiaries, of (i) net income for such period (excluding extraordinary gains
or losses and any gains or losses from the sale or disposition of assets other
than in the ordinary course of business) plus (ii) to the extent deducted in
determining net income for such period, the sum of (a) depreciation and
amortization for such period, (b) Consolidated Interest Expense for such period,
(c) income taxes for such period, (d) any Restructuring Charge, and (e) all
other non-cash charges to the extent such charges reduced net income for such
period (and as reduced by an adjustment for the amount of cash pay-outs of
non-cash charges from prior periods, if applicable).
"Environmental Laws" shall have the meaning specified in
paragraph 8K.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which, together with the Company, would be treated as a single
employer under subsection (b), (c), (m), (n) or (o) of section 414 of the Code
or section 4001(b) of ERISA.
"Event of Default" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "Default" shall mean
any of such events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Foreign Subsidiary" shall mean any Subsidiary other than a
Domestic Subsidiary.
"Governmental Authority" shall mean the government of the United
States of America, any other national or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee Agreement" means, collectively, each Guarantee Agreement
entered into by a Material Domestic Subsidiary
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and the Collateral Agent in substantially the form of Exhibit B, as from time to
time amended.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation or asset of another,
including, without limitation, any such obligation or asset directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business) or discounted or sold with recourse by such Person,
or in respect of which such Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation or asset in effect guaranteed
by such Person through any agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire such obligation or asset or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain the solvency or any balance sheet or other
financial condition of the obligor of such obligation or asset, or to make
payment for any products, materials or supplies or for any transportation or
services regardless of the non-delivery or non-furnishing thereof, in any such
case if the purpose or intent of such agreement is to provide assurance that
such obligation will be paid or discharged or the value of any asset maintained,
or that any agreements relating thereto will be complied with, or that the
holders of such obligation or asset will be protected against loss in respect
thereof. The term "Guarantee" used as a verb shall have a correlative meaning.
The amount of any Guarantee shall be equal to the outstanding principal amount
of the obligation guaranteed, the guaranteed value of the subject asset or such
lesser amount to which the maximum exposure of the guarantor shall have been
specifically limited.
"Guarantor " means each of the Material Domestic Subsidiaries that
is or becomes a party to the Guarantee Agreement as a Guarantor.
"Historical Financial Statements" shall have the meaning
specified in paragraph 8B.
"Interest Coverage Ratio" shall mean, as of the last day of any
fiscal quarter of the Company, the ratio of (i) EBITDA for the period of four
consecutive fiscal quarters of the Company ending on such date to (ii)
Consolidated Interest Expense for such period.
"Investment" shall mean and include all investments in any Person by
stock purchase, capital contribution, loan, advance, Guarantee of any
indebtedness or creation or assumption of any other liability in respect of any
indebtedness of such Person, or otherwise.
"Issuing Bank" shall have the meaning specified in paragraph 3H.
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"Lenders" shall have the meaning specified in paragraph 3H.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, contractual deposit arrangement, lien (statutory or otherwise) or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction) or any other type of
preferential arrangement for the purpose, or having the effect, of protecting a
creditor against loss or securing the payment or performance of an obligation.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole, (b) the ability
of the Company or any Subsidiary to perform any of its obligations under this
Agreement or any of the other Note Documents or (c) the rights of or benefits
available to the holder of the Notes under this Agreement and the other Loan
Documents.
"Material Domestic Subsidiary" shall mean a Domestic Subsidiary (not
including B&S ICC) that either (i) as at the last day of the most recently
concluded fiscal quarter of the Company had 10% or more of the consolidated
total assets of the Company and its consolidated Subsidiaries or (ii) for any of
the most recent four fiscal quarters of the Company had 10% or more of the
consolidated total revenues of the Company and its consolidated Subsidiaries.
"Material Foreign Subsidiary" shall mean a Foreign Subsidiary that
either (i) as at the last day of the most recently concluded fiscal quarter of
the Company had 10% or more of the consolidated total assets of the Company and
its consolidated Subsidiaries or (ii) for any of the most recent four fiscal
quarters of the Company had 10% or more of the consolidated total revenues of
the Company and its consolidated Subsidiaries; provided, that the term "Material
Foreign Subsidiary" shall in any event include Xxxxx & Xxxxxx Group Ltd., and
Xxxxx & Xxxxxx Xxxx, S.A. and Xxxxx & Xxxxxx XXX s.p.A.
"Multiemployer Plan" shall have the meaning specified in section
4001(a)(3) of ERISA.
"Net Amount of Restricted Investments" as at any date of
determination thereof shall mean the aggregate amount expended by the Company
and its Subsidiaries after the date of this Agreement in respect of Restricted
Investments, less the aggregate amount received by the Company and its
Subsidiaries (net of amounts attributable to minority interests) in connection
with the sale, liquidation or other disposition of, or as a return of capital
on, each Restricted Investment made after the date of this Agreement and up to
and including such date of
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determination; provided that in making such computation there shall not be
included any amount in respect of any particular Restricted Investment in excess
of the original cost thereof nor any amount received as dividends, interest,
profits share or other amounts properly treated as earnings thereon; and
provided, further, that no Investment in any Person (whenever made) which at the
date of such determination is a wholly-owned Subsidiary shall be considered to
be a Restricted Investment for the purposes of this definition.
"Net Income Available for Restricted Payments and Restricted
Investments" shall mean at any date of determination 50% of Consolidated Net
Income (whether or not a positive number) for the period (taken as a single
accounting period) commencing on January 1, 1997 and ending with the date of
determination.
"New Bank Facility" shall have the meaning specified in paragraph
3H.
"Note Documents" means, collectively, this Agreement, the
Guarantee Agreement, the Pledge Agreement and the Notes.
"Notes" shall have the meaning specified in paragraph 1.
"Officer's Certificate" shall mean a certificate signed in the name
of the Company by its Chairman of the Board, its President, its Chief Financial
Officer one its Vice Presidents, its Treasurer or its Controller.
"Operating Leases" shall mean all leases of real or personal
property other than Leases under which the obligations are characterized as
Capitalized Lease Obligations.
"Permitted Investment" shall mean any of the following
investments:
(i) Investments in direct obligations of the United
States of America, or obligations of any instrumentality or agency
thereof, or obligations the payment of which is unconditionally
guaranteed by the United States of America (or by foreign
governments of comparable credit quality) or any instrumentality or
agency thereof (all of which Investments shall mature within one
year from the time of acquisition thereof);
(ii) Investments in readily marketable commercial paper
which, at the time of acquisition, are rated A-1 by Standard &
Poor's Rating Services ("S&P") or P-1 by Xxxxx'x Investor Services,
Inc. ("Moody's")and maturing within 270 days from the time of
acquisition thereof;
(iii) Investments in short-term deposit accounts in, or
negotiable certificates of deposit or
-41-
negotiable bankers acceptances issued by, any bank or trust company
and which issues senior unsecured debt securities which are rated
(or the senior unsecured debt securities of the holding company of
such bank or trust company are rated) A or better by S&P or A2 or
better by Moody's, provided that such Investments described in this
clause (iii) shall mature within twelve months from the time of
acquisition thereof and provided, further that, any such bank or
trust company shall have an aggregate of capital, surplus and
undivided profits of not less than $100,000,000 or total assets of
at least $1,000,000,000;
(iv) repurchase agreements for terms of less than 90
days with any bank or trust company satisfying the criteria set
forth in clause (iii) above, provided that such repurchase
agreements are secured and collateralized by obligations of the type
described in clause (i) above;
(v) money market mutual funds registered under the
Investment Company Act of 1940, as amended, having the highest
credit rating available from S&P and Moody's at the time of such
investment, and which have among their stated objectives the
objective of maintaining a constant net asset value per share;
(vi) Investments by the Company and its Subsidiaries in
and to Wholly-Owned Subsidiaries; and
(vii) Investments in addition to those permitted by
clauses (i) through (vi) above, provided that the aggregate amount
of such Investments shall not exceed 15% of Adjusted Consolidated
Net Worth and provided, further, that Investments made under this
clause (vii) shall be in Persons in the same line or lines of
business as the line or lines of business of the Company and its
Subsidiaries as of the date hereof.
"Person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a limited liability company, a trust, an
unincorporated organization and a government or any department or agency
thereof.
"Placement Materials" shall have the meaning specified in
paragraph 8B.
"Plan" shall mean any "employee pension benefit plan" (as such term
is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any ERISA Affiliate.
"Pledge Agreement" means, collectively, (i) each pledge agreement
entered into by the Company and/or any Subsidiary that owns shares of any
Material Foreign Subsidiary with the Collateral Agent, each in form and
substance satisfactory to the Required
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Holders, covering 65% of the shares of such Material Foreign Subsidiary, and
(ii) a pledge agreement entered into by the Company and the Collateral Agent in
form and substance satisfactory to the Required Holders, providing for the
pledge by the Company of the shares of Xxxxx & Xxxxxx International Capital
Corporation.
"Preferred Stock" shall mean any class of capital shares of the
Company or any of its Subsidiaries which is redeemable or which has a preference
upon liquidation or in the payment of dividends over the respective common
shares of the Company or any of its Subsidiaries.
"Purchasers" shall have the meaning specified in the preamble
hereto.
"Relevant Percentage" shall have the meaning specified in
paragraph 4F.
"Rent Expense" shall have the meaning specified in the definition of
Consolidated Fixed Charges.
"Required Holder(s)" shall mean at any particular time the holder or
holders of a majority of the aggregate principal amount of the Notes then
outstanding.
"Responsible Officer" shall mean with respect to any certificate,
report, notice or information to be delivered or given hereunder or knowledge of
any Default or Event of Default hereunder, unless the context otherwise
requires, the president, chief executive officer, chief financial officer,
principal accounting officer or treasurer of the Company or other executive
officer of the Company who in the normal performance of his or her operational
duties would have knowledge of the subject matter relating to such certificate,
report, notice, Default or Event of Default.
"Restricted Investment" shall mean any expenditure or the incurrence
of any liability to make any expenditure for an Investment other than Permitted
Investments.
"Restricted Payment" shall mean (i) the declaration, payment or
setting apart of any sum for payment of any dividend (except a dividend payable
in Capital Stock) in respect of, any shares of Capital Stock or capital stock of
a Subsidiary (to the extent that such stock is not owned by the Company or any
Subsidiary) or any warrants, rights or options to purchase any shares of Capital
Stock or capital stock of a Subsidiary (to the extent that such stock is not
owned by the Company or any Subsidiary), or (ii) the redemption, repurchase,
retirement or other acquisition of (or the setting apart of any sum in respect
of any of the foregoing actions) any shares of Capital Stock or
-43-
capital stock of a Subsidiary (to the extent that such stock is not owned by the
Company or any Subsidiary) or any warrants, rights or options to purchase or
acquire shares of any Capital Stock or capital stock of a Subsidiary (to the
extent that such warrants, rights or options to purchase Capital Stock or
capital stock of a Subsidiary are not owned by the Company or any Subsidiary)
except to the extent that (1) the consideration therefor consists of shares of
Capital Stock or warrants, options or other rights to acquire shares of Capital
Stock or (2) such payments are made out of the net cash proceeds received by the
Company from a substantially concurrent sale of shares of Capital Stock or of
any warrants, options or other rights to acquire shares of Capital Stock.
"Restructuring Charge" shall have the meaning specified in the
definition of Adjusted Consolidated Net Worth.
"Sale and Lease-Back Transaction" of a Person (a "Transferor") shall
mean any arrangement (other than between the Company and a Subsidiary or between
Subsidiaries) whereby (a) property has been or is to be sold or transferred by
such Transferor to any other Person with the intention on the part of such
Transferor of taking back a lease of such property pursuant to which the rental
payments are calculated to amortize the purchase price of such property
substantially over the useful life of such property, and (b) such property is in
fact so leased by such Transferor or an Affiliate of such Transferor for a
period of three years or more (including term extensions at the option of the
lessor).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Subsidiary" shall mean any Person a majority of the total combined
voting power of all classes of Voting Stock of which shall, at the time as of
which any determination is being made, be owned or Controlled by the Company
either directly or through Subsidiaries.
"Transferee" shall mean any direct or indirect transferee of all or
any part of any Note purchased by a Purchaser under this Agreement.
"Voting Stock" shall mean, with respect to any Person, any shares of
stock of or other ownership interest in such Person whose holders are entitled
under ordinary circumstances to vote for the election of directors or similar
body of such Person (irrespective of whether at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
"Wholly-Owned Subsidiary" shall mean any Subsidiary all of the
outstanding capital stock (or other equity interests) of which (other than
directors' qualifying shares, if any) is owned by the Company either directly or
indirectly through other Wholly-Owned Subsidiaries.
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10C. Accounting Terms And Determinations. All references in this
Agreement to "generally accepted accounting principles" shall mean generally
accepted accounting principles in effect in the United States at the time of
application thereof. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and certificates
and reports as to financial matters required to be furnished hereunder shall be
prepared, in accordance with generally accepted accounting principles, applied
on a basis consistent with the most recent audited consolidated financial
statements of the Company and its Subsidiaries (except as otherwise stated
therein or in the notes thereto) delivered pursuant to paragraph 5A(i), or, if
no such statements have been so delivered, the most recent audited financial
statements referred to in paragraph 8B.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as any
Purchaser shall hold any Note, it will make payments of principal of, interest
on and any Yield-Maintenance Amount payable with respect to such Note, which
comply with the terms of this Agreement, by wire transfer of immediately
available funds for credit (not later than 12:00 noon, New York City time, on
the date due) to such Purchaser's account or accounts as specified in the
Purchaser Schedule attached hereto, or such other account or accounts in the
United States as such Purchaser may designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, such Purchaser will
make a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon has
been paid. The Company agrees to afford the benefits of this paragraph 11A to
any Transferee which shall have made the same agreement as each Purchaser has
made in this paragraph 11A.
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11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser and
any Transferee harmless against liability for the payment of (i) all
out-of-pocket expenses arising in connection with such transactions, including
all document production and duplication charges and the reasonable fees and
expenses of any one counsel engaged by such Purchaser or such Transferee in
connection with the Note Documents and the transactions contemplated thereby,
(ii) all reasonable out-of-pocket expenses, including attorneys' fees of any
counsel representing any holders of the Notes, arising in connection with any
subsequent proposed modification of, or proposed consent under, any Note
Document, whether or not such proposed modification shall be effected or
proposed consent granted, and (iii) all out-of-pocket costs and expenses,
including attorneys' fees, incurred by such Purchaser or such Transferee in
enforcing (or determining whether or how to enforce) any rights under any Note
Document or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with any Note Document or the
transactions contemplated thereby or by reason of such Purchaser's or such
Transferee's having acquired any Note, including without limitation costs and
expenses incurred in any bankruptcy case. The obligations of the Company under
this paragraph 11B shall survive the transfer of any Note or portion thereof or
interest therein by any Purchaser or any Transferee and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) except
that, without the written consent of the holder or holders of all Notes at the
time outstanding, no amendment to this Agreement shall change the maturity of
any Note, or change the principal of, or the rate or time of payment of interest
on or any Yield-Maintenance Amount payable with respect to any Note, or affect
the time, amount or allocation of any prepayments, or change the proportion of
the principal amount of the Notes required with respect to any consent,
amendment, waiver or declaration, or eliminate the right of any holder of any
Note to accelerate such Note upon the occurrence of an Event of Default
specified in clause (i) or (ii) of paragraph 7A with respect to such Note. Each
holder of any Note at the time or thereafter outstanding shall be bound by any
consent authorized by this paragraph 11C, whether or not such Note shall have
been marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. The Company will not, directly or indirectly, solicit, request or obtain
any proposed waiver or amendment of or consent in respect of any of the
provisions of this Agreement or the Notes unless each holder shall be informed
thereof by the Company and shall be afforded an opportunity of considering the
same information supplied by the Company to any other holder of Notes. The
Company will not,
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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 Notes
as consideration for or as an inducement to the entering into by such holder of
Notes of any waiver or amendment of, or giving a consent in respect of, any of
the terms and provisions of this Agreement or any Note unless such remuneration
is concurrently paid, on the same terms, ratably to all such holders of Notes,
whether or not any such holder shall have entered into any such waiver or
amendment or given any such consent. The Company will give prompt written notice
of the receipt and effect of each such waiver, amendment or consent to all
holders of the Notes. As used herein and in the Notes, the term "this Agreement"
and references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes.
The Notes are issuable as registered notes without coupons in denominations of
at least $100,000 and otherwise in larger integral multiples of $1,000. The
Company shall keep at its principal office a register in which the Company shall
provide for the registration of Notes and of transfers of Notes. Upon surrender
for registration of transfer of any Note at the principal office of the Company,
the Company shall, at its expense, within 5 Business Days execute and deliver
one or more new Notes of like tenor and of a like aggregate principal amount,
registered in the name of such Transferee or Transferees. At the option of the
holder of any Note, such Note may be exchanged for other Notes of like tenor and
of any authorized denominations, of a like aggregate principal amount, upon
surrender of the Note to be exchanged at the principal office of the Company.
Whenever any Notes are so surrendered for exchange, the Company shall, at its
expense, within 5 Business Days execute and deliver the Notes which the holder
making the exchange is entitled to receive. Every Note surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer duly executed, by the holder of such Note or
such holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case
of any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company within 5 Business Days will make and
deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of, interest on and any Yield-Maintenance Amount
payable with respect to such Note and for all other purposes whatsoever,
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whether or not such Note shall be overdue, and the Company shall not be affected
by notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in such Note to any Person on
such terms and conditions as may be determined by such holder in its sole and
absolute discretion.
11F. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
11G. Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. Disclosure to Other Persons. The Company acknowledges that the
holder of any Note may deliver copies of any financial statements and other
documents delivered to such holder, and disclose any other information disclosed
to such holder, by or on behalf of the Company or any Subsidiary in connection
with or pursuant to this Agreement to (i) such holder's directors, officers,
employees, agents, investment advisers and professional consultants, (ii) any
other holder of any Note, (iii) any Person to which such holder offers to sell
such Note or any part thereof (and which agrees to be bound by the provisions of
this paragraph 11H), (iv) any Person to which such holder sells or offers to
sell a participation in all or any part of such Note (and which agrees to be
bound by the provisions of this paragraph 11H), (v) any Person from which such
holder offers to purchase any security of the Company (and which agrees to be
bound by the provisions of this paragraph 11H), (vi) any federal or state
regulatory authority having jurisdiction over such holder, (vii) the National
Association of Insurance Commissioners or any similar organization, (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (a) to effect compliance with any law, rule, regulation or order
applicable to such holder, (b) in response to any subpoena or other legal
process or informal investigative demand, (c) in connection with any litigation
to which such holder is a party, (d) in connection with the exercise of any
remedies hereunder or under any other Note Document, or (e) in order to protect
such holder's investment in such Note. Each Purchaser agrees to use its best
efforts (and any Transferee which avails itself of the benefits of paragraph
5A(vi) or (ix) or paragraph 5B shall be deemed to have agreed to use its best
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efforts) (such Purchaser and any such Transferee each herein called a "Holder")
to hold in confidence and not disclose any information (other than information
(a) which was publicly known or otherwise known to such Holder at the time of
disclosure (except pursuant to disclosure in connection with this Agreement),
(b) which subsequently becomes publicly known through no act or omission by such
Holder, or (c) which otherwise becomes known to such Holder, other than through
disclosure by the Company or any of its Subsidiaries) delivered or made
available by or on behalf of the Company or any of its Subsidiaries to such
Holder (including without limitation any non-public information obtained
pursuant to paragraph 5A or 5B) in connection with or pursuant to this Agreement
which is clearly marked or labeled as being confidential information, provided
that nothing herein shall prevent the holder of any Note from disclosing such
information as provided in the preceding sentence.
11I. Notices. All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to any Purchaser, addressed to such Purchaser at the
address specified for such communications in the Purchaser Schedule attached
hereto, or at such other address as such Purchaser shall have specified to the
Company in writing, (ii) if to any other holder of any Note, addressed to such
other holder at such address as such other holder shall have specified to the
Company in writing or, if any such other holder shall not have so specified an
address to the Company, then addressed to such other holder in care of the last
holder of such Note which shall have so specified an address to the Company, and
(iii) if to the Company, addressed to it at Precision Park, 000 Xxxxxxxxxx Xxxx,
Xxxxx Xxxxxxxxx, XX 00000, Attention: Treasurer, or at such other address as the
Company shall have specified to the holder of each Note in writing; provided,
however, that any such communication to the Company may also, at the option of
the holder of any Note, be delivered by any other means to the Company at its
address specified above or to any officer of the Company.
11J. Satisfaction Requirement. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to any Purchaser or to the Required
Holder(s), the determination of such satisfaction shall be made by such
Purchaser or the Required Holder(s), as the case may be, in the sole and
exclusive judgment (exercised in good faith) of the Person or Persons making
such determination.
11K. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK.
11L. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining
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provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11M. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11N. Counterparts. This Agreement may be executed in any number of
counterparts with different Purchasers executing separate counterparts, each of
which shall be an original but all of which together shall constitute one
instrument.
11O. Severalty of Obligations. The sales of Notes to the Purchasers
are to be several sales, and the obligations of the Purchasers under this
Agreement are several obligations. Except as provided in paragraph 3D, no
failure by any Purchaser to perform its obligations under this Agreement shall
relieve any other Purchaser or the Company of any of its obligations hereunder,
and no Purchaser shall be responsible for the obligations of, or any action
taken or omitted by, any other Purchaser hereunder.
11P. Consent to Jurisdiction; Service of Process. (a) The Company
irrevocably submits to the non-exclusive in personam jurisdiction of any New
York State or federal court sitting in the Borough of Manhattan, The City of New
York over any suit, action or proceeding arising out of or relating to this
Agreement or the Notes. To the fullest extent it may effectively do so under
applicable law, the Company irrevocably waives and agrees not to assert, by way
of motion, as a defense or otherwise, any claim that it is not subject to the in
personam jurisdiction of any such court, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
(b) The Company agrees, to the fullest extent it may effectively do
so under applicable law, that a final judgment in any suit, action or proceeding
of the nature referred to in subparagraph (a) brought in any such court shall be
conclusive and binding upon the Company subject to rights of appeal, as the case
may be, and may be enforced in the courts of the United States of America or the
State of New York (or any other courts to the jurisdiction of which the Company
is or may be subject) by a suit upon such judgment.
(c) The Company consents to process being served in any suit, action
or proceeding of the nature referred to in paragraph (a) by mailing a copy
thereof by registered or certified mail, postage prepaid, return receipt
requested, to the address of the Company specified in or designated pursuant to
paragraph 11I. The Company agrees that such service upon receipt (i) shall be
deemed in every respect effective service of process upon it in any such suit,
action or proceeding and (ii) shall, to the fullest extent
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permitted by law, be taken and held to be valid personal service upon and
personal delivery to the Company. Notices hereunder shall be conclusively
presumed received as evidenced by a delivery receipt furnished by the United
States Postal Service or any commercial delivery service.
(d) Nothing in this paragraph 11P shall affect the right of any
holder of Notes to serve process in any manner permitted by law, or limit any
right that the holders of any of the Notes may have to bring proceedings against
the Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
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If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement among the
Company and the Purchasers.
Very truly yours,
XXXXX & XXXXXX MANUFACTURING
COMPANY
By /s/ Xxx X. Xxxxxxx
---------------------------
Name: Xxx Xxxxxxx
---------------------
Title: Treasurer
--------------------
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By XXXXX X. XXXXXX
Vice President
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
U.S. PRIVATE PLACEMENT FUND
By: Prudential Private Placement Investors, L.P.,
Investment Advisor
By: Prudential Private Placement Investors, Inc.,
its General Partner
By: XXXXX X. XXXXXX
Vice President
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
PRUCO LIFE INSURANCE COMPANY
By XXXXX X. XXXXXX
Vice President
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
By XXXXXXX XXXXX
Second Vice President
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
FORT DEARBORN LIFE INSURANCE COMPANY
By: Guardian Asset Management Corp.
By XXXXXX XXXXXX
Vice President
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
NATIONWIDE LIFE INSURANCE COMPANY
By XXXXX X. XXXXXXXXXX, XX.
Vice President
Fixed Income Securities
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
HARTFORD LIFE INSURANCE COMPANY
By: Hartford Investment Services, Inc.
Its Agent and Attorney-in-Fact
By: XXXXX XXXXXXX
Senior Vice President
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
THE CANADA LIFE ASSURANCE COMPANY
By XXXXX XXXXXX
Assistant Treasurer
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
CANADA LIFE ASSURANCE COMPANY
By XXXXX XXXXXX
Assistant Treasurer
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
CANADA LIFE ASSURANCE COMPANY
By XXXXX XXXXXX
Assistant Treasurer
The foregoing Note Agreement relating to the 7.29% Senior Notes of Xxxxx &
Xxxxxx Manufacturing Company is hereby accepted as of the date first above
written.
PROVIDENTMUTUAL LIFE AND ANNUITY COMPANY OF AMERICA
By XXXXX X. XXXXXXX
Vice President
