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XXXX, INC.
AMENDED AND RESTATED NOTE AGREEMENT
DATED AS OF JANUARY 1, 1996
9.35% SERIES A SENIOR NOTES DUE JANUARY 29, 2000
9.35% SERIES B SENIOR NOTES DUE JANUARY 29, 2000
9.33% SERIES C SENIOR NOTES DUE DECEMBER 15, 2001
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TABLE OF CONTENTS
I.
PAGE
........................................................................
1. BACKGROUND; AMENDMENT AND RESTATEMENT; NON-WAIVER...................... 1
1A. Background......................................................... 1
1B. Amendment and Restatement of Existing Note Agreements.............. 2
1C. Non-waiver......................................................... 2
2. AMENDMENT AND RESTATEMENT OF EXISTING NOTES............................ 2
2A. Series A Notes..................................................... 2
2B. Series B Notes..................................................... 3
2C. Series C Notes..................................................... 4
2D. Notes.............................................................. 4
2E. Surrender of Existing Notes; Issuance of Amended and
Restated Notes..................................................... 4
3. CONDITIONS TO EFFECTIVENESS............................................ 5
3A. Opinion of Purchasers' Special Counsel............................. 5
3B. Opinion of Company's Counsel....................................... 5
3C. Representations and Warranties; No Default......................... 5
3D. Legality........................................................... 5
3E. Proceedings........................................................ 6
3F. Private Placement Numbers.......................................... 6
3G. Other Purchasers................................................... 6
3H. Expenses........................................................... 6
4. PREPAYMENTS............................................................ 6
4A. Required Prepayments............................................... 6
4B. Optional Prepayment With Yield-Maintenance Amount.................. 7
4C. Notice of Optional Prepayment...................................... 7
4D. Partial Prepayments Pro Rata....................................... 7
4E. Right to Put....................................................... 8
4F. Retirement of Notes................................................ 8
4G. Tender of Notes in Payment of Warrant Exercise Price............... 8
4H. Effect of Partial Prepayments and Acquisitions..................... 9
5. AFFIRMATIVE COVENANTS.................................................. 9
5A. Payment of Taxes and Claims........................................ 9
5B. Maintenance of Properties and Corporate Existence; Other Matters... 9
5C. Payment of Notes and Maintenance of Office......................... 10
5D. Financial Statements............................................... 10
5E. Default Notices.................................................... 13
5F. Information Required by Rule 144A.................................. 13
5G. Inspection of Property............................................. 13
5H. Covenant to Secure Notes Equally................................... 13
5I. Involuntary Prepayment............................................. 13
6. NEGATIVE COVENANTS..................................................... 15
6A. Limitations on Liens............................................... 15
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PAGE
6B. Limitations on Leases.............................................. 17
6C. Limitations on Indebtedness........................................ 18
6D. Limitations on Mergers and Sales of Assets......................... 19
6E. Adjusted Consolidated Xxxxxxxx Xxx Xxxxx Xxxxxxxxxxx............... 00
0X. Limitations on Distributions....................................... 20
6G. Fixed Charge Coverage.............................................. 21
6H. Limitations on Capital Expenditures................................ 22
6I. Private Offering................................................... 22
6J. Transactions with Affiliates....................................... 22
6K. Line of Business................................................... 22
6L. Limitation on Certain Obligations.................................. 22
6M. Incorporation of Negative Covenants................................ 23
6N. Maintenance of Senior Status....................................... 24
6O. Certain Amendments................................................. 24
6P. Sales of Assets.................................................... 25
6Q. Sale of Receivables................................................ 26
6R. Debt Ratio......................................................... 27
7. EVENTS OF DEFAULT...................................................... 27
7A. Acceleration....................................................... 27
7B. Rescission of Acceleration......................................... 30
7C. Notice of Acceleration or Rescission............................... 30
7D. Other Remedies..................................................... 30
8. REPRESENTATIONS AND WARRANTIES......................................... 31
8A. Corporate Organization and Authority............................... 31
8B. Actions Pending.................................................... 31
8C. Authorization, Enforceability...................................... 31
8D. Governmental Consent............................................... 32
8E. No Defaults........................................................ 32
9. REPRESENTATIONS OF EACH PURCHASER...................................... 32
10. DEFINITIONS............................................................ 32
10A. Yield-Maintenance Terms........................................... 32
10B. Other Terms....................................................... 34
11. MISCELLANEOUS.......................................................... 62
11A. Note Payments..................................................... 62
11B. Expenses.......................................................... 63
11C. Consent to Amendments............................................. 63
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes.... 64
11E. Persons Deemed Owners; Participations............................. 64
11F. Accounting........................................................ 64
11G. Directly or Indirectly............................................ 65
11H. Survival of Representations and Warranties; Entire Agreement...... 65
11I. Successors and Assigns............................................ 65
11J. Disclosure to Other Persons....................................... 65
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PAGE
11K. Notices........................................................... 66
11L. Payments Due on Non-Business Days................................. 67
11M. Satisfaction Requirement.......................................... 67
11N. Governing Law..................................................... 67
11O. Severability...................................................... 67
11P. Descriptive Headings.............................................. 67
11Q. Counterparts...................................................... 67
11R. Severalty of Obligations.......................................... 67
12. CONSENT; WAIVER........................................................ 68
12A. Consent to Amendment of Credit Agreement.......................... 68
12B. Waiver of Certain Provisions of Existing 9.33% Note Agreement..... 68
Annex 1 - Purchaser Schedule
Annex 2 - Information as to Company
Exhibit A1 - Form of 9.35% Series A Senior Note Due January 29, 2000
Exhibit A2 - Form of 9.35% Series B Senior Note Due January 29, 2000
Exhibit A3 - Form of 9.33% Series C Senior Note Due December 15, 2001
Exhibit B1 - Form of Purchasers' Special Counsel's Opinion
Exhibit B2 - Form of Company's General Counsel Opinion
Exhibit C - Form of Officers' Certificate
Exhibit D - Form of Secretary's Certificate
Exhibit E - Form of Notice of Sale
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XXXX, INC.
000 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
AMENDED AND RESTATED NOTE AGREEMENT
9.35% Series A Senior Notes Due January 29, 2000
9.35% Series B Senior Notes Due January 29, 2000
9.33% Series C Senior Notes Due December 15, 2001
Dated as of January 1, 1996
To each of the Purchasers
listed on Annex 1 hereto
Ladies and Gentlemen:
The undersigned, Xxxx, Inc., a Delaware corporation (herein called,
together with its successors, the "Company"), hereby agrees with the purchasers
named in the Purchaser Schedule attached hereto as Annex 1 (herein called the
"Purchasers") as follows:
1. BACKGROUND; AMENDMENT AND RESTATEMENT; NON-WAIVER.
1A. Background. The Company, previously named Xxxx Industries, Inc.,
authorized the issuance of its senior promissory notes in the aggregate
principal amount of One Hundred Million Dollars ($100,000,000), dated the date
of issue thereof, to mature on January 29, 2000, bearing interest on the unpaid
balance thereof from the date thereof until the principal thereof shall have
become due and payable at the rate of nine and thirty-five one-hundredths
percent (9.35%) per annum and on overdue payments at the rate specified therein
(as amended up to, but excluding, the Amendment Date, individually, an "Existing
9.35% Note" and, collectively, the "Existing 9.35% Notes"). The Company
authorized the issuance of its senior promissory notes in the aggregate
principal amount of Sixty-Two Million Dollars ($62,000,000), dated the date of
issue thereof, to mature on December 15, 2002, bearing interest on the unpaid
balance thereof from the date thereof until the principal thereof shall have
become due and payable at the rate of nine and thirty-three one-hundredths
percent (9.33%) per annum and on overdue payments at the rate specified therein
(as amended up to, but excluding, the Amendment Date, individually, an "Existing
9.33% Note" and, collectively, the "Existing 9.33% Notes;" the Existing 9.35%
Notes and the Existing 9.33% Notes are referred to herein collectively as the
"Existing Notes"). The Purchasers are the holders of all of the Existing Notes.
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The Existing 9.35% Notes were issued pursuant to those certain separate
Note Agreements, each dated as of January 15, 1990, between the Company and the
purchasers identified on Annex 1 thereto (collectively, as amended and restated
up to, but excluding, the Amendment Date, the "Existing 9.35% Note Agreement").
The Existing 9.33% Notes were issued pursuant to that certain Note Agreement,
dated as of December 21, 1992, between the Company and the purchasers identified
on Annex 1 thereto (as amended and restated up to, but excluding, the Amendment
Date, the "Existing 9.33% Note Agreement;" the Existing 9.35% Note Agreement and
the Existing 9.33% Note Agreement are referred to herein collectively as the
"Existing Note Agreements").
Pursuant to a certain Prepayment Agreement, dated as of June 30, 1995,
among the Company and the holders of the Existing 9.35% Notes, and a certain
Prepayment Agreement, dated as of June 30, 1995, among the Company and the
holders of the Existing 9.33% Notes, all holders of Existing Notes were offered
partial prepayments of their respective Existing Notes, on the terms set forth
in such Prepayment Agreements. Pursuant to such Prepayment Agreements, the
Company, the holders of the Existing 9.35% Notes and the holders of the Existing
9.33% Notes agreed to enter into an agreement for the purpose, among other
things, of specifying the required prepayments in respect of the Existing Notes
subsequent to the partial prepayments.
1B. Amendment and Restatement of Existing Note Agreements. Each of the
Company and, subject to the satisfaction of the conditions set forth in
paragraph 3 hereof, the Purchasers, hereby consents and agrees to the amendment
and restatement of the Existing Note Agreements, as set forth herein, including,
without limitation, the amalgamation of the Existing 9.35% Note Agreement and
the Existing 9.33% Note Agreement into this Agreement and the amendment and
restatement by the Company of the Existing Notes, as set forth herein.
1C. Non-Waiver. The terms of this Agreement shall not operate as
a waiver by any Purchaser of, or otherwise prejudice any Purchaser's rights or
remedies under, the Existing Notes, the Existing Note Agreements or applicable
law.
2. AMENDMENT AND RESTATEMENT OF EXISTING NOTES.
2A. Series A Notes. Each of the Company and, subject to the satisfaction
of the conditions set forth in paragraph 3 hereof, the Purchasers, hereby
consents and agrees to the amendment and restatement, in accordance with the
provisions of this Agreement, of the Existing 9.35% Notes with registration
numbers R-5, R-6, R-11 and R-17, which Existing 9.35% Notes are to be registered
for transfer to the holders indicated on Annex 1 hereto contemporaneously with
the consummation of the transactions contemplated by this Agreement and have an
aggregate principal amount outstanding as of the date hereof of Thirteen Million
Two Hundred Fifty Thousand Dollars ($13,250,000) (such Existing 9.35% Notes, as
amended and restated as herein provided, shall be referred to collectively as
the "Series A Notes," such term to include each Series A Note delivered from
time to time in accordance with this Agreement). Each Series A Note delivered
pursuant to this Agreement will:
2
(i) bear interest (computed on the basis of a 360-day year of twelve 30-
day months) on the unpaid principal balance thereof from the date of such Series
A Note at the rate of nine and thirty-five one-hundredths percent (9.35%) per
annum, payable monthly on the first (1st) day of each month of each year
commencing on the interest payment date next succeeding the date of such Series
A Note;
(ii) bear interest, payable monthly as aforesaid (or, at the option of the
registered holder thereof, on demand), on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount, and, to the extent permitted by applicable law, any overdue payment of
interest, at a rate equal to the lesser of
(a) the highest rate allowed by applicable law, or
(b) the greater of (I) eleven and thirty-five one-hundredths percent
(11.35%) per annum and (II) the rate of interest publicly announced by Xxxxxx
Guaranty Trust Company of New York from time to time in New York City as its
prime rate;
(iii) mature on January 29, 2000; and
(iv) be in the form of the Series A Note set out in Exhibit A1 hereto.
2B. Series B Notes. Each of the Company and, subject to the satisfaction
of the conditions set forth in paragraph 3 hereof, the Purchasers, hereby
consents and agrees to the amendment and restatement, in accordance with the
provisions of this Agreement, of the Existing 9.35% Notes with registration
numbers X-0, X-0, X-0, X-0 and R-10, which Existing 9.35% Notes have an
aggregate principal amount outstanding as of the date hereof of Thirty-Eight
Million Five Hundred Seven Thousand Twenty-Eight Dollars ($38,507,028) (such
Existing 9.35% Notes, as amended and restated as herein provided, shall be
referred to collectively as the "Series B Notes," such term to include each
Series B Note delivered from time to time in accordance with this Agreement).
Each Series B Note delivered pursuant to this Agreement will:
(i) bear interest (computed on the basis of a 360-day year of twelve 30-
day months) on the unpaid principal balance thereof from the date of such Series
B Note at the rate of nine and thirty-five one-hundredths percent (9.35%) per
annum, payable monthly on the first (1st) day of each month of each year
commencing on the interest payment date next succeeding the date of such Series
B Note;
(ii) bear interest, payable monthly as aforesaid (or, at the option of the
registered holder thereof, on demand), on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount, and, to the extent permitted by applicable law, any overdue payment of
interest, at a rate equal to the lesser of
3
(a) the highest rate allowed by applicable law, or
(b) the greater of (I) eleven and thirty-five one-hundredths percent
(11.35%) per annum and (II) the rate of interest publicly announced by Xxxxxx
Guaranty Trust Company of New York from time to time in New York City as its
prime rate;
(iii) mature on January 29, 2000; and
(iv) be in the form of the Series B Note set out in Exhibit A2 hereto.
2C. Series C Notes. Each of the Company and, subject to the satisfaction
of the conditions set forth in paragraph 3 hereof, the Purchasers, hereby
consents and agrees to the amendment and restatement, in accordance with the
provisions of this Agreement, of the Existing 9.33% Notes with registration
numbers X-0, X-0, X-0 and R-4, which Existing 9.33% Notes have an aggregate
principal amount outstanding as of the date hereof of Fifty-One Million Three
Hundred Forty-Two Thousand Nine Hundred Seventy-Two Dollars ($51,342,972) (such
Existing 9.33% Notes, as amended and restated as herein provided, shall be
referred to collectively as the "Series C Notes," such term to include each
Series C Note delivered from time to time in accordance with this Agreement).
Each Series C Note delivered pursuant to this Agreement will:
(i) bear interest (computed on the basis of a 360-day year of twelve 30-
day months) on the unpaid principal balance thereof from the date of such Series
C Note at the rate of nine and thirty-three one-hundredths percent (9.33%) per
annum, payable monthly on the first (1st) day of each month of each year
commencing on the interest payment date next succeeding the date of such Series
C Note;
(ii) bear interest, payable monthly as aforesaid (or, at the option of the
registered holder thereof, on demand), on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount, and, to the extent permitted by applicable law, any overdue payment of
interest, at a rate equal to the lesser of
(a) the highest rate allowed by applicable law, or
(b) the greater of (I) eleven and thirty-three one-hundredths percent
(11.33%) per annum and (II) one percent (1%) plus the rate of interest publicly
announced by Xxxxxx Guaranty Trust Company of New York from time to time in New
York City as its prime rate;
(iii) mature on December 15, 2001; and
(iv) be in the form of the Series C Note set out in Exhibit A3 hereto.
2D. Notes. The term "Note" as used herein shall include each Series A
Note, Series B Note and Series C Note delivered pursuant to this Agreement and
each Note
4
delivered in substitution or exchange for any such Note pursuant to
paragraph 4G or paragraph 11D hereof.
2E. SURRENDER OF EXISTING NOTES; ISSUANCE OF AMENDED AND RESTATED NOTES.
(i) Surrender and Issuance. On January 26, 1996 (the "Amendment Date") at
11:00 a.m., Eastern time, at the office of the Purchasers' special counsel, Xxxx
& Xxxxxx, a Professional Corporation, Xxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx
00000, each Purchaser will surrender to the Company all Existing Notes held by
it, whereupon the Company will execute and deliver to each Purchaser, in
accordance with the provisions hereof, one or more Notes (as set forth below its
name on Annex 1 hereto) in the Series and denominations indicated on Annex 1
hereto, dated January 1, 1996 and payable as indicated on Annex 1 hereto.
(ii) Expenses. Whether or not the conditions to effectiveness set forth in
paragraph 3 of this Agreement are satisfied, the Company shall pay all out-of-
pocket expenses of the Purchasers in connection with the negotiation,
preparation, execution and delivery of this Agreement, including, without
limitation, all the reasonable fees and expenses of special counsel engaged by
the Purchasers in connection therewith. Without limiting the generality of the
foregoing, the Company will pay, on the Amendment Date, the reasonable fees and
disbursements of the Purchasers' special counsel presented on such date, and
shall also pay, upon receipt of any statement thereof, each additional statement
for reasonable fees and disbursements of the Purchasers' special counsel
rendered after the Amendment Date in connection with this Agreement.
3. CONDITIONS TO EFFECTIVENESS.
The agreement and consent of each Purchaser to the amendment and
restatement of the Existing Note Agreements and the Existing Notes, all as
provided herein, are subject to the satisfaction, on or before the Amendment
Date, of the following conditions precedent:
A. Opinion of Purchasers' Special Counsel. Such Purchaser shall have
received from Xxxx & Xxxxxx, who is acting as special counsel for the Purchasers
in connection with this transaction, a favorable opinion satisfactory to such
Purchaser as to such matters incident to the matters herein contemplated as it
may reasonably request, substantially in the form of Exhibit B1 attached hereto.
B. Opinion of Company's Counsel. Such Purchaser shall have received from
Xxxxxxx Xxxxxx, Esq., general counsel for the Company, a favorable opinion
satisfactory to such Purchaser and substantially in the form of Exhibit B2
attached hereto.
C. Representations and Warranties; No Default. The representations and
warranties contained in paragraph 8 hereof shall be true on and as of the
Amendment Date, except to the extent of changes caused by the transactions
herein contemplated; there shall exist on the Amendment Date no Event of Default
or Default; and the Company shall have delivered to such Purchaser a certificate
dated the Amendment Date, substantially in the form
5
of Exhibit C attached hereto, and signed by the officers indicated in such form,
to such effect. The Company shall have delivered a certificate dated the
Amendment Date and signed by the Secretary or an Assistant Secretary of the
Company, substantially in the form of Exhibit D attached hereto, with respect to
the matters therein set forth.
D. Legality. The amendment and restatement of the Existing Note Agreements
and the Existing Notes, all as provided in this Agreement, shall not violate any
applicable law or governmental regulation (including, without limitation,
section 5 of the Securities Act or Regulation G, T or X of the Board of
Governors of the Federal Reserve System) and shall not subject any Purchaser to
any tax, penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and each Purchaser shall have
received such certificates or other evidence as it may request to establish
compliance with this condition.
E. Proceedings. All corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents incident
thereto shall be satisfactory in substance and form to such Purchaser, and such
Purchaser shall have received all such counterpart originals or certified or
other copies of such documents as it may reasonably request.
F. Private Placement Numbers. The Company shall have obtained or caused to
be obtained private placement numbers for the Series A Notes, the Series B Notes
and the Series C Notes from the CUSIP Service Bureau of Standard & Poor's, a
division of XxXxxx-Xxxx, Inc., and the Purchasers shall have been informed of
such private placement numbers.
G. Other Purchasers. None of the Purchasers shall have failed to execute
and deliver this Agreement.
H. Expenses. The Company shall have paid on the Amendment Date the
statement for fees and disbursements of the special counsel of the Purchasers
presented on the Amendment Date.
4. PREPAYMENTS. The Notes shall be subject to prepayment with respect to
the required prepayments specified in paragraph 4A hereof, prepayment with
respect to the optional prepayments permitted by paragraph 4B hereof, and
repurchase by the Company at the option of each holder as specified in paragraph
4E, paragraph 4G and paragraph 5I hereof.
A. Required Prepayments.
(i) Series A Notes. Until the Series A Notes shall be paid in full, the
Company shall apply to the prepayment of the Series A Notes, without premium,
the sum of Two Million Six Hundred Fifty Thousand Dollars ($2,650,000) on
January 29 in each of the years 1996 to 1999, inclusive, and such principal
amounts of the Series A Notes, together with accrued and unpaid interest thereon
to the prepayment dates, shall become due on such prepayment dates. The
remaining Two Million Six Hundred Fifty Thousand Dollars ($2,650,000) in
principal amount of the Series A Notes, together
6
with accrued and unpaid interest thereon, shall become due on the maturity date
of the Series A Notes.
(ii) Series B Notes. Until the Series B Notes shall be paid in full, the
Company shall apply to the prepayment of the Series B Notes, without premium,
the sum of Nine Million Three Hundred Seventy-Five Thousand Dollars ($9,375,000)
on January 29 in each of the years 1996 to 1999, inclusive, and such principal
amounts of the Series B Notes, together with accrued and unpaid interest thereon
to the prepayment dates, shall become due on such prepayment dates. The
remaining One Million Seven Thousand Twenty-Eight Dollars ($1,007,028) in
principal amount of the Series B Notes, together with accrued and unpaid
interest thereon, shall become due on the maturity date of the Series B Notes.
(iii) Series C Notes. Until the Series C Notes shall be paid in full, the
Company shall apply to the prepayment of the Series C Notes, without premium,
the sum of Eight Million Eight Hundred Fifty Thousand Dollars ($8,850,000) on
December 15 in each of the years 1996 to 2000, inclusive, and such principal
amounts of the Series C Notes, together with accrued and unpaid interest thereon
to the prepayment dates, shall become due on such prepayment dates. The
remaining Seven Million Ninety-Two Thousand Nine Hundred Seventy-Two Dollars
($7,092,972) in principal amount of the Series C Notes, together with accrued
and unpaid interest thereon, shall become due on the maturity date of the Series
C Notes.
B. Optional Prepayment With Yield-Maintenance Amount. The Notes shall be
subject to prepayment, in whole at any time or from time to time in part (in
multiples of $5,000,000), at the option of the Company, at one hundred percent
(100%) of the principal amount so prepaid plus accrued and unpaid interest
thereon to the prepayment date and the Yield-Maintenance Amount, if any, in
respect of the principal amount of each Series of the Notes being so prepaid.
Any partial prepayment of the Notes of any Series pursuant to this paragraph 4B
shall be applied in satisfaction of required payments of principal in inverse
order of their scheduled due dates.
C. Notice of Optional Prepayment. The Company shall give the holder of each
Note irrevocable written notice of any prepayment pursuant to paragraph 4B
hereof not less than thirty (30), nor more than sixty (60), 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 of this
Agreement. Notice of prepayment having been given as aforesaid, the principal
amount of the Notes specified in such notice, together with accrued and unpaid
interest thereon to the prepayment date and together with the Yield-Maintenance
Amount, if any, with respect thereto, 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 hereof, give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each Significant Holder which shall have designated a
recipient of such notices in the Purchaser Schedule attached hereto or by notice
in writing to the Company. In addition, the Company shall, on the day before
such prepayment date, deliver, by facsimile, a written notice to each holder of
Notes specifying the principal amount of
7
each Note to be prepaid, the interest to be paid on each such Note, accrued to
the prepayment date, and the amount of the Yield-Maintenance Amount, if any,
together with supporting calculations in reasonable detail.
D. Partial Prepayments Pro Rata.
(i) Required Prepayments. If, at the time of any payment of the principal
amount of Notes of any Series made pursuant to paragraph 4A, there is more than
one Note of such Series outstanding, the aggregate principal amount of such
payment shall be allocated among the Notes of such Series at the time
outstanding pro rata in proportion to the respective unpaid principal amounts of
all such outstanding Notes of such Series.
(ii) Optional Prepayments with Yield-Maintenance Amount. If, at the time
of any optional prepayment of the principal of the Notes made pursuant to
paragraph 4B, there is more than one Note outstanding, the aggregate principal
amount of each such optional prepayment of the Notes shall be allocated among
the Notes at the time outstanding pro rata in proportion to the respective
unpaid principal amounts of all such outstanding Notes, without regard to Series
of Notes.
E. Right to Put.
(i) Granting of Put. The Company hereby gives and grants to each holder of
Notes the option, right and privilege (such option, right and privilege herein
collectively referred to as the "Right to Put") to require the Company, upon or
after the occurrence of any Designated Event, to purchase from such holder on
the terms and conditions hereinafter set forth, and the Company agrees so to
purchase from such holder, for an amount equal to the Agreed Put Consideration,
all, but not less than all, of the Notes held by such holder.
(ii) Exercise of Put. Within ten (10) Business Days after the occurrence
of any Designated Event, the Company shall give each holder of Notes
substantially simultaneous written notice thereof describing such Designated
Event, and the facts and circumstances surrounding the occurrence thereof, in
reasonable detail. At any time prior to ninety (90) days after any holder of
Notes shall receive such notice, such holder may exercise its Right to Put by
delivering to the Company a notice of sale (a "Notice of Sale") substantially in
the form of Exhibit E hereto. If a holder of Notes shall deliver a Notice of
Sale, the Company shall purchase the Notes then held by such holder on the date
specified in such notice (which shall be not less than fifteen (15) days after
delivery of such Notice of Sale), and such holder shall sell such Notes to the
Company without recourse, representation or warranty (other than as to such
holder's full right, title and interest to such Notes free of any adverse claim
therein), at a price, payable in immediately available funds by wire transfer to
the account specified pursuant to paragraph 11A hereof or to such other account
as may be specified in such notice, equal to the Agreed Put Consideration.
Promptly after (and, in any event, within two (2) Business Days of) its receipt
of any Notice of Sale, the Company shall give substantially simultaneous written
notice thereof to all other holders of Notes. Each
8
holder of Notes shall have the rights specified in this paragraph 4E with
respect to each Designated Event which shall occur, regardless of any act or
omission to act with respect to any previous Designated Event.
F. Retirement of Notes. The Company shall not, and shall not permit any of
the 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 or paragraph 4B hereof or upon acceleration of such final maturity
pursuant to paragraph 7A hereof), or purchase or otherwise acquire, directly or
indirectly (other than pursuant to paragraph 4E, paragraph 4G or paragraph 5I
hereof), 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 (without
distinguishing among the different Series) at the time outstanding upon the same
terms and conditions. Any Notes so prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of the Subsidiaries or Affiliates shall
not be deemed to be outstanding for any purpose under this Agreement.
G. Tender of Notes in Payment of Warrant Exercise Price. The
Warrant Agreement provides that the purchase price for the Warrants issuable
thereunder may be paid, in whole or in part, by a tender of Notes. The Company
shall be deemed to have reacquired a principal amount of Notes equal to the
aggregate principal amount of Notes tendered in payment of the Warrant exercise
price, and such Notes so deemed to have been reacquired shall not be considered
outstanding for any purposes under this Agreement. In the event that less than
the entire outstanding principal amount of a Note is tendered in payment of the
Warrant exercise price, the Company shall issue and deliver to the holder
thereof a new Note, of the same Series as the tendered Note, equal in principal
amount to the outstanding principal amount of the Note so tendered less the
portion thereof applied to the Warrant exercise price. The Company and each of
the Purchasers, being all of the Persons that are party to the Warrant
Agreement, agree that the term "Note," as used and defined in the Warrant
Agreement, shall be amended to mean "Note," as defined in this Agreement,
without further action on the part of any such Person.
H. Effect of Partial Prepayments and Acquisitions. Upon any partial
prepayment of Notes of any Series pursuant to paragraph 4E or paragraph 5I, or
any acquisition of Notes of any Series permitted by paragraph 4F or paragraph
4G, each required principal payment becoming due under clause (i), clause (ii)
or clause (iii), as applicable, of paragraph 4A with respect to such Series on
and after the date of such prepayment or acquisition shall be reduced in the
same proportion as the aggregate unpaid principal amount that such Series of
Notes is reduced as a result of such prepayment or acquisition.
5. AFFIRMATIVE COVENANTS.
A. Payment of Taxes and Claims. The Company will, and will cause each
Subsidiary to, pay before they become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
it or its Property, and
9
(ii) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons that, if unpaid, will more likely
than not result in the creation of a Lien upon its Property,
provided that items of the foregoing description need not be paid while being
contested in good faith and in an appropriate manner.
B. Maintenance of Properties and Corporate Existence; Other Matters. The
Company will, and will cause each Subsidiary to,
(i) Property -- maintain its Property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto;
(ii) Insurance --
(a) maintain, with financially sound and reputable insurers, insurance (or
maintain self-insurance, including without limitation, insurance with
subsidiaries, if that shall be reasonable in the circumstances) with respect to
its Property and business against such casualties and contingencies, of such
types (including, without limitation, loss or damage, public liability, business
interruption, larceny, embezzlement or other criminal misappropriation) and in
such amounts as is reasonably appropriate for the risks associated with the
business of the Company and the Subsidiaries; and
(b) at the request of any Significant Holder, deliver to such Significant
Holder for examination, as soon as practicable, policies or certificates of
insurance or self-insurance or certificates of insurance brokers evidencing
compliance with the provisions of this clause (ii);
(iii) Financial Records -- keep true books of records and accounts in
which full and correct entries shall be made of all its business transactions so
that the financial statements required by paragraph 5D hereof may be prepared in
accordance with generally accepted accounting principles as in effect at the
time of such preparation;
(iv) Corporate Existence and Rights -- maintain, preserve and renew the
Company's existence as a corporation organized under the laws of a state of the
United States of America;
10
(v) Compliance with Law -- not be in violation of any law, ordinance or
governmental rule or regulation to which it is subject (including, without
limitation, laws, ordinances, rules or regulations relating to environmental
matters) and not fail to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its Properties or to
the conduct of its business, which violation or failure to obtain will, more
likely than not, materially adversely affect the business or financial condition
of the Company and the Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations set forth in this Agreement and in the Notes;
and
(vi) Offering of Notes -- take no action (and will allow no agent acting
on its behalf to take any action) that would subject the issuance or sale of the
Notes to the provisions of section 5 of the Securities Act or to the
registration or qualification provisions of any securities or Blue Sky law of
any applicable jurisdiction.
C. Payment of Notes and Maintenance of Office. The Company will punctually
pay, or cause to be paid, the principal and interest (and Yield-Maintenance
Amount, if any) to become due in respect of the Notes according to the terms
thereof and shall maintain an office at the address of the Company set forth in
paragraph 11K hereof where notices, presentations and demands in respect of this
Agreement or the Notes may be made upon it. Such office shall be maintained at
such address until such time as the Company shall notify in writing the holders
of the Notes of any change of location of such office.
11
D. Financial Statements. The Company covenants that it will deliver to
each Significant Holder in duplicate (or such number of copies as any holder may
request):
(i) as soon as practicable and in any event within forty-five (45) days
after the end of each quarterly period (other than the last quarterly period) in
each fiscal year, consolidated statements of income and cash flows of the
Company and the Subsidiaries for such period and for the period from the
beginning of the current fiscal year to the end of such quarterly period, and a
consolidated balance sheet of the Company and the Subsidiaries as at the end of
such quarterly period, setting forth in each case in comparative form figures
for the corresponding period in the preceding fiscal year, accompanied by
additional financial statements containing the same information prepared in
accordance with generally accepted accounting principles as then in effect if
the accounting principles applied by the Company in the preparation of the
financial statements first described in this clause (i) differ in any material
respect from generally accepted accounting principles as then in effect, in both
cases in reasonable detail and satisfactory in form to the Required Holders and
certified by an authorized financial officer of the Company, subject to changes
resulting from year-end adjustments, provided, however, that so long as the
accounting principles applied by the Company in the preparation of the financial
statements first described in this clause (i) do not differ in any material
respect from generally accepted accounting principles as then in effect,
delivery pursuant to clause (iii) below of copies of the Quarterly Report on
Form 10-Q of the Company for such quarterly period filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this clause
(i) (provided that such Form 10-Q is accompanied by any other financial
information incorporated by reference in such Form 10-Q, and provided further,
that the Company provide to each holder of Notes who so requests in writing any
document incorporated by reference in such Form 10-Q);
(ii) as soon as practicable and in any event within ninety (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 the Subsidiaries for such year, and a consolidating and consolidated
balance sheet of the Company and the Subsidiaries as at the end of such year,
setting forth in each case in comparative form corresponding consolidated
figures from the preceding annual audit, accompanied by additional financial
statements containing the same information prepared in accordance with generally
accepted accounting principles as then in effect if the accounting principles
applied by the Company in the preparation of the financial statement first
described in this clause (ii) differ in any material respect from generally
accepted accounting principles as then in effect, in both cases all in
reasonable detail and satisfactory in form to the Required Holders and, as to
the consolidated statements prepared in accordance with generally accepted
accounting principles as then in effect, reported on by independent public
accountants of recognized national standing selected by the Company whose report
shall be without limitation as to the scope of the audit and satisfactory in
form and substance to the Required Holders and, as to the consolidating
statements and financial statements not certified by such independent public
accountants, certified by an authorized financial officer of the Company,
12
provided, however, that so long as the accounting principles applied by the
Company in the preparation of the financial statements first described in this
clause (ii) do not differ in any material respect from generally accepted
accounting principles as then in effect, delivery pursuant to clause (iii) below
of copies of the Annual Report on Form 10-K of the Company for such fiscal year
filed with the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (ii) (provided that such Form 10-K is accompanied by
any other financial information incorporated by reference in such Form 10-K, and
provided further, that the Company provide to each holder of Notes who so
requests in writing any document incorporated by reference in such Form 10-K);
(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) 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 (to be
provided to each Significant Holder at such time, if any, as the contents of or
analysis contained within any such report is (or becomes likely to be)
incorporated into a Form 10-Q or a Form 10-K filing to be made by the Company
with the Securities and Exchange Commission);
(v) copies of all agreements governing and instruments evidencing Debt
(other than Debt of a type described in subsection (vi) of the definition of
Debt) of the Company or any Consolidated Subsidiary containing any Financial
Covenant, and all agreements amending, modifying or supplementing any such
agreement or instrument affecting, adding or deleting any Financial Covenant, in
each case entered into on or after the Amendment Date;
(vi) all certificates and notices delivered or required to be delivered to
the holders of any other Debt of the Company or any Consolidated Subsidiary on
or after the Amendment Date, in each case in connection with the compliance by
the Company or any Consolidated Subsidiary with any Financial Covenant; and
(vii) with reasonable promptness, such other financial data as such
Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i)
and (ii) above, the Company will deliver to each Significant Holder an Officer's
Certificate (a) demonstrating (with computations in reasonable detail, where
appropriate) compliance by the Company and the Subsidiaries with the provisions
of paragraph 6A through paragraph 6R hereof and paragraph 5I hereof, (b)
demonstrating a reconciliation in reasonable detail of the differences between
financial statements prepared in accordance with generally accepted accounting
principles as then in effect and any other similar financial statements provided
contemporaneously therewith prepared other than in accordance with generally
accepted
13
accounting principles, (c) 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 proposes
to take with respect thereto, and (d) stating whether or not there has been any
material change in the self-insurance requirements of the Company.
Together with each delivery of financial statements required by clause (ii)
above, the Company will deliver to each Significant Holder a certificate of such
accountants 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 would not be disclosed in the
course of an audit conducted in accordance with generally accepted auditing
standards.
E. Default Notices. The Company covenants that immediately after any
Responsible Officer obtains knowledge of an Event of Default or Default, it will
deliver to each Significant Holder an Officer's Certificate specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto.
F. Information Required by Rule 144A. The Company covenants that it will,
upon the request of any Significant Holder, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such Significant Holder may reasonably determine to be
necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act in connection with the resale of Notes,
except at such times as the Company is subject to the reporting requirements of
sections 13 or 15(d) of the Exchange Act. For the purpose of this paragraph 5F,
the term "qualified institutional buyer" shall have the meaning specified in
Rule 144A under the Securities Act.
G. Inspection of Property. The Company will permit any Person designated
in writing by any Significant Holder, at such Significant Holder's expense (or
if an Event of Default or a Default shall exist, at the expense of the Company),
to visit and inspect any of the Properties of the Company and the Subsidiaries,
to examine the corporate books and financial records of the Company and the
Subsidiaries and make copies thereof or extracts therefrom, all at such
reasonable times and as often as such Significant Holder may reasonably request.
In addition, so long as (i) a Default or an Event of Default shall have occurred
and be continuing, (ii) in the reasonable judgment of any Significant Holder, a
material adverse change shall have occurred with respect to the business or
financial condition of the Company and the Subsidiaries taken as a whole, or
(iii) any Significant Holder shall have a reasonable basis for questioning the
validity of any line item in any financial statement of the Company or the
validity of such financial statement as a whole, the Company will permit any
Person designated in writing by any Significant Holder to discuss the affairs,
finances and accounts of any of such corporations with the principal officers of
the Company and its independent public accountants, all at such reasonable times
and as often as such Significant Holder may reasonably request.
14
H. 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, whether
now owned or hereafter acquired, other than Liens permitted by the provisions of
paragraph 6A hereof or any similar provision incorporated herein by reference
(unless prior written consent to the creation or assumption thereof shall have
been obtained pursuant to paragraph 11C hereof), it will make or cause to be
made effective provision 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.
I. Involuntary Prepayment.
(i) Upon the occurrence of any Prepayment Event, the Company shall make an
offer to the holders of Notes to repurchase the Notes as set forth in this
paragraph 5I. Immediately upon the occurrence of the Prepayment Event but in any
event within five (5) Business Days thereafter, the Company shall give each
holder of the Notes substantially simultaneous written notice thereof describing
such Prepayment Event in reasonable detail including, without limitation, a
description of the issue of Debt giving rise to such Prepayment Event, the facts
and circumstances surrounding the occurrence thereof, the manner of the
prepayment, redemption or defeasance of such other Debt in connection therewith
and the manner specified in this paragraph 5I of accepting or rejecting such
offer by the holder. Such notice shall also contain the Company's offer (the
"Prepayment Offer") to purchase from each such holder of Notes a principal
amount of the Notes held by such holder equal to its Noteholder Share of the
Ratable Prepayment Amount at a purchase price equal to the Agreed Put
Consideration.
(ii) A holder of Notes may accept the Prepayment Offer, in whole or in
part, through a written acceptance (the "Noteholder Acceptance") delivered to
the Company within forty-five (45) days of such holder's receipt of the
Prepayment Offer (the "Offer Period"). Promptly after (and, in any event, within
two (2) Business Days of) its receipt of any Noteholder Acceptance, the Company
shall give substantially simultaneous written notice thereof to all other
holders of Notes.
(iii) If such holder shall accept the offer, the Company shall purchase
that portion (the "Prepayment Portion"), expressed as a percentage, of the
principal amount of Notes held by such holder specified in its Noteholder
Acceptance, provided that the principal amount of Notes the Company is required
to purchase shall not exceed such holder's Noteholder Share of the Ratable
Prepayment Amount. Such purchase shall be made on the fifteenth (15th) day after
the expiration of the Offer Period or, if later, the first day on which any
holder of any other issue of Debt would receive a prepayment in respect of such
Prepayment Event but in no event later than sixty (60) days after the expiration
of the Offer Period. On the date of purchase, such holder shall sell the
Prepayment Portion of such Notes to the Company without recourse, representation
or warranty (other than as to such holder's full right, title and interest to
the Prepayment Portion of such Notes free of any adverse claim created by such
holder therein), at a price, payable in immediately available funds by wire
transfer to the account specified
15
pursuant to paragraph 11A hereof or to such other account as may be specified in
such notice, equal to the Agreed Put Consideration.
(iv) Upon any partial prepayment of a Note pursuant to this paragraph 5I,
such Note may, at the option of the holder thereof, be:
(a) surrendered to the Company, in which case the Company shall promptly
execute and issue to the holder thereof a new Note, of the same Series as such
surrendered Note, in a principal amount equal to the principal amount remaining
unpaid on the surrendered Note after giving effect to such prepayment; or
(b) made available to the Company for notation thereon of the portion of
the principal so prepaid.
In case the entire principal amount of any Note is prepaid, such Note shall be
surrendered to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of the prepaid principal amount of any Note.
(v) If the occurrence of any Prepayment Event causes the Company or any
Subsidiary to defease, prepay, repurchase or have a reduction in the available
commitment under any issue of Debt prior to the time that any Notes would be
repurchased hereunder, then simultaneously with such defeasance, prepayment,
repurchase or reduction in respect of such other Debt, the Company shall pay to
each holder an amount equal to its Noteholder Share of the Ratable Prepayment
Amount at a purchase price equal to the Agreed Put Consideration, which payment
shall satisfy all obligations of the Company to the holders in respect of
clauses (i) through (iii), inclusive, of this xxxxxxxxx 0X. At the time of the
making of such payment, the Company shall notify the holder of such payment in
writing, which notice shall state that such payment is being made pursuant to
this paragraph 5I(v), shall contain a description of the issue of Debt giving
rise to such Prepayment Event, the facts and circumstances surrounding the
occurrence thereof and the manner of the prepayment, redemption or defeasance of
such other Debt in connection therewith (unless such information shall have been
contained in a previously delivered notice pursuant to paragraph 5I(i) with
respect to such Prepayment Event) and describe the procedure detailed in this
paragraph 5I(v) pursuant to which a holder may elect to rescind such payment.
In the event that a holder of Notes receiving a payment pursuant to this
paragraph 5I(v) elects to rescind the prepayment arising from such Prepayment
Event with respect to all Notes or any portion of the Notes held by such holder,
such holder shall deliver to the Company, within forty-five (45) days of such
holder's receipt of the notice specified in this paragraph 5I(v), written notice
of such recision, and shall contemporaneously pay to the Company in immediately
available funds an amount equal to the amount so paid such holder pursuant to
this paragraph 5I(v) or, in the case of a recision with respect to only a
portion of the prepayment made to such holder, an amount equal to that portion
of such prepayment which such holder wishes to rescind.
16
(vi) Each holder of Notes shall have the rights specified in this
paragraph 5I with respect to each Prepayment Event which shall occur, regardless
of any act or omission to act with respect to any previous Prepayment Event. In
the event that the Prepayment Event is also a Designated Event subject to
paragraph 4E of this Agreement, the Company shall comply with the provisions of
clause (v) of this paragraph 5I with respect to the matters contained therein;
in all other respects such Designated Event will be treated as a Designated
Event and not as a Prepayment Event, and the Company will be required to comply
with paragraph 4E in connection therewith. In the event that the Prepayment
Event would also be an event which results in an Event of Default, this
paragraph 5I shall not be deemed to in any respects limit the rights and
remedies of the holders of Notes under paragraph 7 hereof.
6. NEGATIVE COVENANTS.
A. Limitations on Liens.
(i) Negative Pledge. The Company will not, and will not permit any
Subsidiary to, create, assume, or suffer to exist any Lien upon any of the
Property of the Company or any Subsidiary, whether now owned or hereafter
acquired, except:
(a) Liens securing Debt and other obligations in an aggregate principal
amount at any time not exceeding ten percent (10%) of Consolidated Tangible Net
Worth at such time, provided, however, that neither the Company nor any
Subsidiary shall create, assume or otherwise incur any Lien upon any of its
respective Properties unless the Company is in compliance with paragraph 6L of
this Agreement;
(b) Liens arising out of transactions contemplated by the terms of the
Trade Receivables Agreement;
(c) Purchase Money Mortgages if, after giving effect thereto and to any
concurrent transactions:
(I) each such Purchase Money Mortgage secures an amount not exceeding one
hundred percent (100%) of the cost of the particular Property to which it
relates (or, in the case of a Lien existing on any Property of any corporation
at the time it becomes a Subsidiary, the Fair Market Value of such Property at
such time);
(II) such Purchase Money Mortgage encumbers only Property (A) purchased
after December 22, 1992 and (B) acquired with the proceeds of the Debt secured
thereby; and
(III) such Property was acquired in the ordinary course of business of the
corporation acquiring such Property,
17
provided, however, that neither the Company nor any Subsidiary shall create,
assume or otherwise incur any Purchase Money Mortgage unless the Company is in
compliance with paragraph 6L of this Agreement;
(d) Liens incurred in connection with Lease Transactions to the extent
that such Liens encumber Property covered by such Lease Transactions; provided,
however, that neither the Company nor any Subsidiary shall create, assume or
otherwise incur any such Liens unless the Company is in compliance with
paragraph 6L of this Agreement, and provided further that, immediately after
giving effect to the investment of the Company or the Subsidiary in such Lease
Transaction, the aggregate amount of the investments then outstanding of the
Company and the Subsidiaries in all Lease Transactions does not exceed Fifty
Million Dollars ($50,000,000), it being agreed that for the purpose of such
calculation the amount of each investment shall be determined on a Net After-Tax
Cash Basis;
(e) Liens upon San Xxxxxx Xxxxx, and the proceeds thereof, which have been
repurchased upon tender by the holders thereof in accordance with the terms of
the indenture governing such San Xxxxxx Xxxxx, until, but only until, the
trustee with respect to such San Xxxxxx Xxxxx has received the purchase price
therefor upon the remarketing thereof and the issuer of the letter of credit
that was drawn in connection with such tender has been reimbursed for such
amounts drawn; provided, however, that the Company shall actively seek to
remarket such bonds pursuant to the provisions of the IDB Financing of the
Company's San Marcos, Texas facility or, to the extent necessary in connection
with any termination of any outstanding letter of credit relating to such
facility, to modify the structure of such IDB Financing to the extent necessary
to permit a long-term reissuance of the repurchased San Xxxxxx Xxxxx; and
(f) unless, at the time of incurrence thereof, a Default or an Event of
Default shall occur or be continuing, Liens incurred in connection with the
deposit of cash collateral to secure reimbursement obligations of the Company
relating to the San Xxxxxx Xxxxx, but only in connection with the extension of
an outstanding letter of credit relating to such facility and only in an amount
of cash collateral not exceeding the maximum amount which may be drawn under
such letter of credit; provided, however, that the Company shall actively seek
to obtain a replacement letter of credit that does not require cash
collateralization (and thus relieves the Company of any requirement to deposit
cash collateral or to secure such reimbursement obligations);
it being understood that each such Lien may be allocated by the Company to any
one of the preceding categories in which it may, by the terms of such category,
be included.
(ii) Financing Statements. The Company will not, and will not permit any
Subsidiary to, sign or file a financing statement under the Uniform Commercial
Code of any jurisdiction that names the Company or such Subsidiary as debtor, or
sign any security agreement authorizing any secured party thereunder to file any
such financing
18
statement, except, in any such case, a financing statement filed or to be filed
to perfect or protect a Lien that the Company or such Subsidiary is entitled to
create, assume or incur, or permit to exist, under the foregoing provisions of
this paragraph 6A or to evidence for informational purposes a lessor's interest
in Property leased to the Company or any such Subsidiary.
B. Limitations on Leases.
(i) Limitations on Leases. The Company will not, and will not permit any
Subsidiary to, at any time be or become liable at any time as lessee under any
lease (other than a lease giving rise to a Capitalized Lease Obligation) having
an original (or then unexpired) term of one (1) year or more if:
(a) the aggregate Net Rentals payable in any period of twelve (12)
consecutive calendar months following such time under such lease and all other
such leases under which the Company or a Subsidiary is lessee, minus
(b) all amounts of a similar nature due from sub-lessees under such leases
that are reasonably expected to be collected during the same period,
would exceed ten percent (10%) of Consolidated Tangible Net Worth at such time.
(ii) Subsidiary. Any corporation that becomes a Subsidiary after the
Amendment Date shall be deemed to have become liable as lessee, at the time it
becomes a Subsidiary, under all leases (under which it is liable as lessee) of
such corporation existing immediately after it becomes a Subsidiary.
C. Limitations on Indebtedness. The Company will not, and will not permit
any Subsidiary to, create, issue, assume or guarantee any Debt (other than
Intercompany Debt) except that:
(i) on or prior to April 26, 1997:
(a) the Company may incur Debt under the Credit Agreement or an Acceptable
Replacement Credit Facility;
(b) the Company may incur the 1994 Senior Debt and the 1994 Subordinated
Debt;
(c) the Company and the Subsidiaries may incur Debt, in an aggregate
principal amount not to exceed Ten Million Dollars ($10,000,000) at any time
outstanding; provided, that no more than Five Million Dollars ($5,000,000) of
such amount may be Debt of Subsidiaries; and provided further, that all of such
Debt shall be unsecured, except that up to Two Million Dollars ($2,000,000) of
such Debt, to be incurred in connection with a loan from the State of Maryland
or an entity acting in conjunction with the State of Maryland to
19
finance the Company's purchase of equipment for its facility located in
Hagerstown, Maryland, may be secured by such equipment;
(d) the Subsidiaries may incur Debt under revolving credit facilities so
long as the aggregate amount of all such Debt outstanding at any time shall not
exceed Five Million Dollars ($5,000,000);
(e) the Company and the Subsidiaries may incur Debt described in clause
(vi) of the definition of "Debt" contained in paragraph 10B;
(f) Debt incurred in connection with the resale or remarketing of San
Xxxxxx Xxxxx, but only to the extent that:
(I) San Xxxxxx Xxxxx in an aggregate principal amount of Sixteen Million
Five Hundred Thousand Dollars ($16,500,000) were issued and outstanding and held
and owned by Persons other than the Company, any Subsidiary or any Affiliate on
May 10, 1994; and
(II) the San Xxxxxx Xxxxx to be resold or remarketed were repurchased by
the Company upon tender by the holders thereof after May 10, 1994 in accordance
with the terms of the indenture governing the San Xxxxxx Xxxxx;
and
(g) replacement unsecured San Xxxxxx Xxxxx, in an aggregate principal
amount not exceeding Sixteen Million Five Hundred Thousand Dollars
($16,500,000), if, and only if, Sixteen Million Five Hundred Thousand Dollars
($16,500,000) in aggregate amount of San Xxxxxx Xxxxx were redeemed in full as a
result of the failure of the bank which has issued any letter of credit relating
to the San Xxxxxx Xxxxx to extend or renew such outstanding letter of credit
(for the avoidance of doubt, the aggregate principal amount of San Xxxxxx Xxxxx
and replacement San Xxxxxx Xxxxx, whether outstanding on the dates of the
original issuance of the Existing Notes or thereafter issued pursuant to clause
(f) or clause (g) of this paragraph 6C(i), shall not exceed Sixteen Million Five
Hundred Thousand Dollars ($16,500,000) at any time);
in each case, so long as after the incurrence thereof, and after giving effect
thereto, no Default or Event of Default (including any Default or Event of
Default arising out of any breach of paragraph 6R hereof) shall have occurred or
be continuing; and
(ii) on or after April 27, 1997, and at any time during any period set
forth in the tables below, the Company or any Subsidiary may incur Debt if,
immediately after giving effect to such incurrence of Debt:
20
(a) Consolidated Senior Debt would not exceed the percentage applicable to
such period of the sum of Consolidated Total Debt plus Consolidated Tangible Net
Worth, all as set forth in the table immediately below:
If such time occurs during the period: Percentage:
------------------------------------- ----------
From April 27, 1997 through
and including July 31, 1998 38.00%
At all times on or after
August 1, 1998 35.00%;
and
(b) Combined Subsidiary Debt would not exceed five percent (5%) of
Consolidated Tangible Net Worth;
and so long as after the incurrence thereof, and after giving effect thereto, no
Default or Event of Default (including any Default or Event of Default arising
out of any breach of paragraph 6L or paragraph 6R hereof) shall have occurred or
be continuing.
D. Limitations on Mergers and Sales of Assets. The Company will not, and
will not permit any Subsidiary to (whether in a single transaction or a series
of transactions), consolidate with, merge into or transfer substantially all of
its Property (whether now owned or hereafter acquired) to any other Person, or
permit any other Person to consolidate with, merge into, or transfer
substantially all of its Property to, the Company, except that any Subsidiary
may merge or consolidate with or into, or transfer substantially all of its
Property to, or acquire substantially all of the Property of, any other Person
and the Company may merge or consolidate with or into, or acquire substantially
all of the Property of, any other Person, if:
(i) in the case of any merger or consolidation involving the Company, the
corporation that results from such merger or consolidation is organized under
the laws of the United States of America or any jurisdiction thereof and such
corporation expressly assumes in writing the due and punctual payment of the
principal of, and Yield-Maintenance Amount, if any, and interest on, all of the
Notes, according to their tenor, and the due and punctual performance and
observance of all the covenants in the Notes and this Agreement to be performed
or observed by the Company, all in an agreement or instrument satisfactory in
form and substance to the Required Holders;
(ii) immediately after the consummation of the transaction, and after
giving effect thereto, the Company, the corporation that results from any such
merger or consolidation with the Company or the Person that acquires such
Property from the Company, and in each case, its Subsidiaries shall be engaged
principally in the businesses of either or both of manufacturing and
distributing aerospace products or technically related products and of providing
services related to such products;
(iii) immediately after the consummation of the transaction, and after
giving effect thereto, no Event of Default or Default would exist; and
21
(iv) immediately after the consummation of the transaction, and after
giving effect thereto, the Company could incur at least One Dollar ($1.00) of
additional Debt pursuant to paragraph 6C hereof.
E. Adjusted Consolidated Tangible Net Worth Maintenance. The Company will
not permit, as of the last day of each fiscal quarter of the Company, Adjusted
Consolidated Tangible Net Worth to be less than the sum of:
(i) $125,000,000; plus
(ii) the sum of the Fiscal Quarter Net Worth Increase Amounts for each
fiscal quarter of the Company ended after July 31, 1994; plus
(iii) the aggregate amount of all capital contributions (which amount
shall include, without limitation, all amounts attributable to the conversion of
debt of the Company to equity of the Company, valued at the amount added to
stockholders' equity in accordance with generally accepted accounting
principles) received by the Company or any Consolidated Subsidiary (in each
case, other than contributions originally made by the Company or any
Consolidated Subsidiary) in cash, in Property other than cash or by conversion
of Debt of the Company at any time after May 19, 1994.
F. Limitations on Distributions.
(i) Limit on Distributions. The Company will not, and will not permit any
Subsidiary to, at any time declare or make or incur any liability to declare or
make any Distribution; provided, however, that:
(a) the Company may, repurchase, purchase, redeem or otherwise acquire
shares of its common stock or warrants, rights or options to acquire such stock
issued pursuant to Restricted Stock Plans, Stock Option Plans, Stock Incentive
Plans, the Rights Agreement, the ESOP, or Non-Employee Directors Stock-Option
Plans;
(b) the Company may declare or make any Distribution if, immediately after
giving effect to such Distribution,
(I) the Debt Ratio would not exceed 2.50:1.00;
(II) the Company could incur One Dollar ($1.00) of additional Debt
pursuant to paragraph 6C hereof;
(III) if the time of declaration or making, as the case may be, of such
Distribution is on or prior to April 26, 1997, Consolidated Senior Debt at such
time would not exceed thirty-eight percent (38%) of the sum
22
of Consolidated Total Debt plus Consolidated Tangible Net Worth at such time;
and
(IV) after giving effect to such transactions, no Event of Default or
Default would then exist; and
(c) the Company may declare or make any Permitted Preferred Dividend if,
prior to and immediately after giving effect to such Permitted Preferred
Dividend, no Default or Event of Default shall exist.
(ii) Time of Payment. The Company will not authorize a Distribution on its
capital stock which is not payable within sixty (60) days of authorization.
G. Fixed Charge Coverage. The Company will not permit, as of the last day
of each fiscal quarter of the Company, the ratio of Consolidated Net Income
Available for Fixed Charges for the period of three hundred sixty-five (365)
consecutive days (or three hundred sixty-six (366) consecutive days for any such
period that includes February 29) ending on such day to Consolidated Fixed
Charges for such period, to be less than the ratio set forth in the chart below
opposite the period set forth below in which such day occurs:
Period Ratio
------ -----
Fiscal Year 1994 1.40 to 1.00
Fiscal Years 1995 and 1996 1.55 to 1.00
1st Quarter, Fiscal Year 1997 1.60 to 1.00
2nd Quarter, Fiscal Year 1997 1.65 to 1.00
3rd Quarter, Fiscal Year 1997 1.75 to 1.00
4th Quarter, Fiscal Year 1997 1.80 to 1.00
Fiscal Year 1998 and thereafter 2.00 to 1.00.
H. Limitations on Capital Expenditures. The Company will not, and will not
permit any Subsidiary to, make, on or before April 26, 1997, any expenditures
for fixed or capital assets which would cause the aggregate of all such
expenditures made by the Company and the Subsidiaries in any period of four (4)
full consecutive fiscal quarters to exceed the sum of the amounts set forth
below opposite such four (4) fiscal quarters:
Fiscal Quarters Amount
--------------- ------
Each Fiscal Quarter 1994 $4,500,000
Each Fiscal Quarter 1995 $6,000,000
Each Fiscal Quarter 1996 $7,500,000
Each Fiscal Quarter 1997 $7,500,000
I. Private Offering. The Company will not, and will not permit anyone
acting on its behalf to, offer the Notes or any part thereof or any similar
Securities for issue or sale to, or solicit any offer to acquire any of the same
from, anyone so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act.
23
J. Transactions with Affiliates. The Company will not, and will not permit
any Subsidiary to, sell or transfer any Property to, or purchase or acquire any
Property of, or otherwise engage in any other transaction with, any Affiliate,
except at prices and on terms and conditions not less favorable to the Company
or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, provided, however, that this paragraph 6J shall not
prohibit any transaction between (i) the Company or any Subsidiary and (ii) any
Affiliate that is an EEC Affiliate, if such transaction will not have a
material, adverse effect on the business, condition (financial or otherwise) or
operations of the Company, any Subsidiary or any EEC Affiliate.
K. Line of Business. The Company shall not, nor shall it permit any
Subsidiary to, make any change in the nature of its business if such change
would constitute a material change in the nature of the business of the Company
and the Subsidiaries taken as a whole as conducted on February 2, 1990, or
commence or permit any Subsidiary to commence any major project for the
development of a new line of products or services other than aerospace products
or technically related products or services related to such products; provided
that the Company or any Subsidiary may commence any project for the development
of such new line of products or services if, and only if, the aggregate costs
and expenses related to all such projects (including, without limitation,
budgeted costs (determined from time to time) for such new project minus any
reasonably budgeted reimbursements for such costs due from parties other than
the Company or the Subsidiaries) shall not exceed ten percent (10%) of
Consolidated Tangible Net Worth at the time each such project is commenced.
L. Limitation on Certain Obligations. The Company will not at any time
permit the sum of (w) obligations secured by Liens allocated by the Company to
the category described in paragraph 6A(i)(a) hereof, (x) obligations secured by
Liens allocated by the Company to the category described in paragraph 6A(i)(c)
hereof, (y) obligations secured by Liens allocated by the Company to the
category described in paragraph 6A(i)(d) hereof which obligations were incurred
on or subsequent to February 2, 1990, and (z) Combined Subsidiary Debt, in each
case at such time, to exceed fifteen percent (15%) of Consolidated Tangible Net
Worth at such time.
M. Incorporation of Negative Covenants.
(i) During all such times as both the Credit Agreement shall remain in
force, and either any Debt shall be outstanding thereunder or the lenders party
thereto shall have any obligation to lend or make advances thereunder:
(a) the provisions of paragraph 6A (except for clauses (i)(e) and (i)(f)
thereof, to the extent provided in paragraph 6M(i)(c) below) and paragraph 6B of
this Agreement shall be of no force and effect;
(b) the provisions of Sections 5.02(b), 5.02(c), 5.02(d), 5.02(e),
5.02(g), 5.02(h) and 5.02(i) of the Credit Agreement, as in effect on May 19,
1994 (after giving effect to the Seventh Amendment to the Credit Agreement), but
without amendment, supplement or modification (except as set forth in
24
paragraph 6M(ii) hereof), and together with all relevant definitions pertaining
thereto, shall be incorporated herein by reference, mutatis mutandis;
(c) the Company shall not, nor shall it permit any Subsidiary to, create,
assume or suffer to exist any Lien securing any Debt existing on the date hereof
or incurred thereafter in connection with any IDB Financing, except for such
Liens as are expressly permitted by the provisions of clause (e) or clause (f)
of paragraph 6A(i) hereof;
provided, however, that at all times during which either the Credit Agreement
shall be of no force or effect, or there shall be no Debt outstanding thereunder
and no obligation on the part of the lenders thereto to lend or make any advance
thereunder, the provisions of paragraph 6A and paragraph 6B of this Agreement
shall be in full force and effect.
(ii) If at any time:
(a) after May 19, 1994, the Credit Agreement is amended, supplemented or
modified to provide Financial Covenants in addition to, or which are more
restrictive of the Company or the Consolidated Subsidiaries than, the provisions
of the Credit Agreement, as in effect on May 19, 1994 (after giving effect to
the Seventh Amendment to the Credit Agreement dated as of such date);
(b) after June 30, 1993, the Company enters into any other agreement
governing, or executes any other instrument evidencing, any Debt (or any
commitment to lend), other than Debt or commitments solely among the Company
and/or one or more Consolidated Subsidiaries; or
(c) after June 30, 1993, the Company enters into any amendment, supplement
or modification of any agreement governing, or any instrument evidencing, any
Debt (or any commitment to lend), other than Debt or commitments solely among
the Company and/or one or more Consolidated Subsidiaries;
then, and in each such case, each Financial Covenant set forth in such
amendment, supplement, modification or other agreement or instrument shall be
incorporated by reference herein for the remaining term of such agreement or
instrument, but only to the extent that such covenant is more restrictive of the
Company or the Consolidated Subsidiaries than the corresponding provision of
this Agreement.
(iii) In the event that any Financial Covenant contained in any other
agreement governing, or instrument evidencing, any Debt (or commitment to lend),
which Financial Covenant has been or is incorporated into this Agreement
pursuant to the provisions of paragraph 6M(ii) hereof, is amended, supplemented
or modified to make such Financial Covenant less restrictive of the Company or
the Consolidated Subsidiaries than the incorporated Financial Covenant, the more
restrictive
25
incorporated Financial Covenant shall continue to be incorporated herein for the
remaining term of such agreement or instrument notwithstanding such amendment,
supplement or modification. Notwithstanding the foregoing sentence, if the
provisions of such incorporated Financial Covenant were expressed when
incorporated to be more restrictive on a temporary basis, or more restrictive
only for a prescribed period, such more restrictive provision shall be
incorporated herein only on such temporary basis or only for such prescribed
period, as the case may be.
(iv) No Financial Covenant incorporated herein by virtue of paragraph
6M(ii) or paragraph 6M(iii) hereof shall supersede, replace, amend, supplement
or modify any other provision of this Agreement, including any covenant
contained herein which addresses a subject matter similar to that of such
incorporated Financial Covenant.
N. Maintenance of Senior Status. The Company will not take any action at
any time to amend, modify or supplement any subordination provision (or any
definition of any defined term as used in any such provision) in the Existing
Subordinated Notes, the 1994 Subordinated Debt or any indenture governing the
provisions of any thereof, or otherwise take any action which would result in
any of the Existing Subordinated Notes or 1994 Subordinated Debt not being
junior or subordinated in right of payment to the Notes to the same extent such
Existing Subordinated Notes or 1994 Subordinated Debt, as the case may be, were
subordinated to the Existing Notes on May 19, 1994 (after giving effect to the
issuance of the 1994 Subordinated Debt). The Company shall not take any action
which would result in the Notes not constituting, or not being fully entitled to
the benefits of, "Senior Indebtedness" and "Designated Senior Indebtedness" as
defined in the indenture governing the 1994 Subordinated Debt.
O. Certain Amendments. The Company shall not, nor shall it permit any
Consolidated Subsidiary to, consent to any amendment, modification, supplement
or waiver of:
(i) any of the provisions of any of Sections 3.02, 3.03, 3.04 or 3.05 of
the Credit Agreement, as in effect on May 19, 1994 (after giving effect to the
Seventh Amendment to the Credit Agreement), or any other provision referred to
therein or any defined term as used therein, other than a waiver by the banks
party thereto of any condition set forth therein; or
(ii) any other provision of the Credit Agreement or, prior to April 25,
1997, any Acceptable Replacement Credit Facility, to the extent that such
amendment, modification, supplement or waiver would have the effect of:
(a) reducing the amount or availability of credit thereunder, changing the
timing of or reducing the commitments of the lenders thereunder to lend or make
credits available pursuant thereto;
(b) making more restrictive upon the Company any condition precedent to
the funding of the credits available thereunder;
26
(c) requiring the Company or any Subsidiary to grant any lender thereunder
any Lien securing the obligations thereunder; or
(d) requiring the Company or any Subsidiary to maintain any deposit
accounts in any minimum amount, compensating balances, cash management or
clearing house relationship or similar arrangements, with the lenders
thereunder;
in each case, without the prior written consent of the Required Holders.
P. Sales of Assets. The Company will not, and will not permit any Consolidated
Subsidiary to, at any time after June 30, 1993, sell, lease, transfer or
otherwise dispose of any Property (except for sales of inventory and of obsolete
or surplus Property in the ordinary course of business, sales of accounts
receivable, the issuance of director's qualifying shares and sales, leases,
transfers or other dispositions of Property to the Company or a Consolidated
Subsidiary (collectively, "Excepted Property")); provided, however, that the
foregoing restrictions shall not apply to the sale, lease, transfer or other
disposition of any such Property to any Person if all of the following
conditions are met:
(i) the book value of all such Property then being sold, leased,
transferred or otherwise disposed of, together with the book value of all other
Property (other than Excepted Property) sold, leased, transferred or otherwise
disposed of by the Company and the Consolidated Subsidiaries since June 30, 1993
shall not, in the aggregate, exceed ten percent (10%) of Consolidated Tangible
Assets, determined as of the end of the then most recently ended fiscal quarter
of the Company;
(ii) in the case of the sale, lease, transfer or other disposition of a
Consolidated Subsidiary (whether by disposition of any capital stock of such
Consolidated Subsidiary, the Property thereof or otherwise) or a line or segment
of business of the Company or a Consolidated Subsidiary, in either case,
substantially as an entirety (except with respect to the sale, lease, transfer
or other disposition of capital stock of a Consolidated Subsidiary), the sum of:
(A) that portion, expressed as a percentage, of Gross Operating Income
attributable to or contributed by all Property of a type described in this
paragraph 6P(ii) and then being sold, leased, transferred or otherwise disposed
of, for the period of eight (8) full consecutive fiscal quarters most recently
ended on or prior to the date of such sale, lease, transfer or other
disposition; plus
(B) with respect to each other sale, lease, transfer or other disposition
of Property of a type described in this paragraph 6P(ii) occurring during the
period beginning on the later of June 30, 1993 and the beginning of the eight
full (8) fiscal quarters of the Company most recently ended prior to the
consummation of the transaction referred to in clause (A) above, and ending on
the date of the transaction referred to in clause (A) above, that portion,
expressed as a percentage, of Gross Operating Income attributable to or
contributed by such Property described in this clause (B) for the period of
eight
27
(8) full consecutive fiscal quarters most recently ended on or prior to the date
of such sale, lease, transfer or other disposition thereof;
shall not exceed ten percent (10%);
(iii) in the good faith opinion of the board of directors of the Company
(or a committee of such board to whom such matter has been properly delegated),
the sale, lease, transfer or other disposition is for Fair Market Value and is
in the best interests of the Company; and
(iv) immediately after the consummation of such sale, lease, transfer or
other disposition, and after giving effect thereto, no Default or Event of
Default would exist.
Sales and other dispositions of accounts receivable shall be subject to
paragraph 6Q of this Agreement. Sales of all or any portion of the capital
stock of a Consolidated Subsidiary shall, for purposes of determining the book
value thereof in clause (i) above, be deemed to be the sale of all or such
portion of the book value of the assets of the Consolidated Subsidiary which
shall have issued such capital stock. Sales of all or a portion of the capital
stock of any Consolidated Subsidiary shall, for purposes of determining its
contribution to Gross Operating Income in clause (ii) above, be deemed to have
contributed all or such portion of that proportion of Gross Operating Income
attributable to the Consolidated Subsidiary which shall have issued such capital
stock. As used in this paragraph 6P, the term `lease' shall mean an original
lease, as lessor, by the Company or any Consolidated Subsidiary, and the
continuance, extension or renewal of any existing lease shall not be treated as
a lease pursuant to, or restricted by, this paragraph 6P.
Q. Sale of Receivables. The Company covenants that it will not, and will
not permit any Consolidated Subsidiary to, sell with recourse or otherwise sell
for less than the face value thereof, any of its notes or accounts receivable,
except pursuant to the Trade Receivables Agreement; provided, however, that the
Company and any Consolidated Subsidiary may sell for book value the accounts
receivable owing from any Person (i) that has commenced a voluntary case under
the Bankruptcy Law of the United States or any proceedings under the Bankruptcy
Law of any other jurisdiction, or (ii) against whom any such case or proceedings
have been commenced and have remained undismissed for a period of at least sixty
(60) days.
R. Debt Ratio. The Company shall not permit the Debt Ratio, as of the last
day of each fiscal quarter of the Company, to be greater than the ratio set
forth opposite the period set forth in the chart below in which such day occurs:
28
Fiscal Year Ratio
----------- -----
1994 5.60 to 1.00
1995 5.00 to 1.00
1996 4.10 to 1.00
1997 3.20 to 1.00
1998 2.80 to 1.00
1999 and thereafter 2.50 to 1.00.
7. EVENTS OF DEFAULT.
A. Acceleration. 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 payable with respect to 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
more than five (5) days after the date due; or
(iii) the Company or any Subsidiary defaults in any payment of principal
of or interest on any obligation for money borrowed (or any Capitalized Lease
Obligation, any obligation under a conditional sale or other title retention
agreement, any obligation issued or assumed as full or partial payment for
Property whether or not secured by a Purchase Money Mortgage or any obligation
under notes payable or drafts accepted representing extensions of credit) 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 obligation 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 obligation (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due prior to any
originally stated maturity, or to be repurchased by the Company or any
Subsidiary, provided that the aggregate amount of all obligations as to which
such a payment default shall occur and be continuing or such a failure or other
event causing or permitting acceleration shall occur and be continuing exceeds
Fifteen Million Dollars ($15,000,000), and provided, further, that obligations
for the deferred purchase price of goods or services (including, without
limitation, Capitalized Lease Obligations and Purchase Money Mortgages) shall be
excluded from the operation of this clause (iii) so long as such obligations are
being contested in good faith by appropriate proceedings and adequate reserves
have been established therefor; or
29
(iv) any representation or warranty made by the Company herein, in the
Existing Note Agreements or any amendment thereto or restatement thereof or any
other amendment, modification or supplement hereto, or in the Warrant Agreement,
or by the Company or any of its officers in any writing furnished in connection
with or pursuant to this Agreement (including, without limitation, the
certificates furnished by the Company in connection with the foregoing
agreements) shall be false in any material respect on the date as of which made;
or
(v) the Company or any Subsidiary shall fail to perform or observe any
covenant contained in paragraph 6 hereof, in paragraph 4E hereof, paragraph 5E
hereof or paragraph 5I hereof; or
(vi) the Company fails to perform or observe any other agreement, term or
condition contained herein or in the Warrant Agreement or the Warrants, and such
failure shall not be remedied within thirty (30) days after the occurrence of
such failure first becomes known to any Senior Officer of the Company; or
(vii) the Company or any Subsidiary makes an assignment for the benefit of
creditors; 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, dissolution 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 the taking of 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 jurisdiction; 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 such
Subsidiary by any act indicates its 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 sixty (60) 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 sixty (60) days; or
30
(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 that requires the divestiture of Properties representing at least ten
percent (10%), or the divestiture of the stock of a Subsidiary whose assets
represent at least ten percent (10%), of the consolidated assets of the Company
and the Subsidiaries (determined in accordance with generally accepted
accounting principles) or that requires the divestiture of assets, or stock of a
Subsidiary, that shall have contributed at least ten percent (10%) to
Consolidated Net Income for any of the three (3) fiscal years most recently
ended as of the date such order, judgment or decree shall be entered, and such
order, judgment or decree remains unstayed and in effect for more than sixty
(60) days; or
(xiii) a final judgment in an amount in excess of Fifteen Million Dollars
($15,000,000) is rendered against the Company or any Subsidiary and, within
sixty (60) days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within sixty (60) days after the
expiration of any such stay, such judgment is not discharged; or
(xiv) the Company or any Subsidiary is generally not paying its debts as
such debts become due; or
(xv) the Company or any ERISA Affiliate, in its capacity as an employer
under a Multiemployer Plan, makes a complete or partial withdrawal from such
Multiemployer Plan resulting in the incurrence by such withdrawing employer of a
withdrawal liability in an amount exceeding Ten Million Dollars ($10,000,000);
or
(xvi) any lender under the Credit Agreement or any Acceptable Replacement
Credit Facility fails or refuses, or announces its intention to fail or refuse,
to make any required advance under such Credit Agreement or any Acceptable
Replacement Credit Facility, or refuses to lend due to or as a result of any
material adverse change in the business, Properties, profits or condition
(financial or otherwise) of the Company; or
(xvii) there shall occur any "Change of Control" as defined in the
indenture relating to the 1994 Subordinated Debt;
then
(a) if such event is an Event of Default specified in clause (i) or (ii)
of this paragraph 7A, the holder of any Note (other than the Company or any of
the Subsidiaries or Affiliates) may at its option, 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 par together with interest accrued thereon,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company,
(b) if such event is an Event of Default specified in clause (vii),
(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 par together
31
with interest accrued thereon, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Company, and
(c) if such event is not an Event of Default specified in clause (vii),
(viii), (ix) or (x) of this paragraph 7A with respect to the Company, the
Required Holders may at its or their option, by notice in writing to the
Company, declare all of the Notes to be, and all of the Notes shall thereupon be
and become, immediately due and payable 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, provided that the Yield-Maintenance
Amount, if any, with respect to each Note shall be due and payable upon such
declaration only if (x) such event is an Event of Default specified in any of
clauses (i) to (vi), inclusive, of this paragraph 7A, (y) the Required Holders
shall have given to the Company, at least ten (10) Business Days before such
declaration, written notice stating its or their intention so to declare the
Notes to be immediately due and payable and identifying one or more such Events
of Default whose occurrence on or before the date of such notice permits such
declaration and (z) one or more of the Events of Default so identified shall be
continuing at the time of such declaration.
B. 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
hereof, the Required Holders 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 hereof, and (iv) no judgment or decree shall have been entered
for the payment of any amounts due pursuant to the Notes or this Agreement. No
such rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.
C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A hereof or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B hereof, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
D. 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
32
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 to
each of the Purchasers as follows:
A. Corporate Organization and Authority. The Company
(i) is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation,
(ii) has all requisite power and authority to own and operate its
Properties and to carry on its business as now conducted and as presently
proposed to be conducted,
(iii) has all necessary licenses and permits to own and operate its
Properties and to carry on its business as now conducted and as presently
proposed to be conducted, except where the failure to have any such license or
permit, together with all such other failures, would not be likely to have a
material and adverse effect on the business or financial condition of the
Company and the Subsidiaries, taken as a whole, or the ability of the Company to
perform its obligations set forth in this Agreement and in the Notes,
(iv) is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in each jurisdiction where the character of
its Properties or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified and authorized in any
jurisdiction, together with all such other failures, would not be likely to have
a material and adverse effect on the business or financial condition of the
Company and the Subsidiaries, taken as a whole, or the ability of the Company to
perform its obligations set forth in this Agreement and in the Notes, and
(v) has the corporate power and authority to authorize, execute and
deliver this Agreement and the Notes and to enter into this Agreement and to
perform its obligations hereunder.
B. Actions Pending. Except as disclosed on Annex 2 hereto, it is not
reasonably foreseeable that any action, suit, investigation or proceeding or
group of similar actions, suits, investigations or proceedings (including, as
such a group, without limitation, all actions, suits, investigations or
proceedings arising out of federal or state environmental protection laws),
pending or, to the knowledge of the Company, threatened against the Company or
any of the Consolidated Subsidiaries, or any properties or rights of the Company
or any of the Consolidated Subsidiaries, by or before any court, arbitrator or
administrative or governmental
33
body would result in any material adverse change in the business, condition
(financial or otherwise) or operations of the Company and the Consolidated
Subsidiaries taken as a whole.
C. Authorization, Enforceability.
(i) Authorization. The amendment and restatement of the Existing Notes are
not, the authorization, execution and delivery by the Company of this Agreement
are not, and the performance by the Company of its obligations under this
Agreement and the Notes will not be, inconsistent with its certificate of
incorporation or by-laws, does not and will not contravene any law, governmental
rule or regulation, violate any judgment, order or award of any arbitrator
applicable to the Company, does not and will not contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument to which the Company is a party or by which any of its Property is
bound, and will not result in the imposition of a Lien upon any Property of the
Company.
(ii) Notes are Enforceable. The amendment and restatement of the Existing
Notes and the execution and delivery of this Agreement have been duly authorized
by the Company. The Notes and this Agreement constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with their terms,
except as such enforceability may be:
(a) limited by bankruptcy, insolvency or other similar laws affecting the
enforceability of creditors' rights generally; and
(b) subject to the availability of equitable remedies.
D. Governmental Consent. No consent or approval of, giving of notice to,
registration with, or taking of any other action in respect of or by, any
federal, state or local governmental authority or agency, or other Person
(except for actions that will have occurred by the Amendment Date), is required
with respect to the authorization, execution and delivery by the Company of this
Agreement and the Notes, or the performance by the Company of its obligations
under this Agreement or the Notes.
E. No Defaults. No event has occurred and no condition exists that
constitutes a Default or an Event of Default under the Existing Note Agreements
or that, upon the amendment and restatement of the Existing Notes and the
execution of this Agreement, would constitute a Default or an Event of Default
hereunder.
9. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser represents that it is
not acquiring the Notes 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.
10. DEFINITIONS. For the purpose of this Agreement, the following terms
shall have the meanings specified with respect thereto below:
34
A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the principal of
such Note that is to be prepaid or purchased pursuant to paragraph 4B, paragraph
4E or paragraph 5I hereof or is declared to be immediately due and payable
pursuant to paragraph 7A hereof, 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 of any Series, the yield to maturity implied by
(i) the yields reported, as of 10:00 a.m. (New York City time) on the
Business Day next 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
next 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. Reinvestment Yield calculated as aforesaid shall be
increased by twenty-five one-hundredths percent (0.25%) per annum (y) with
respect to the Series A Notes and the Series B Notes, in the case of any
Settlement Date occurring after January 29, 1996
35
and (z) with respect to the Series C Notes, in the case of any Settlement Date
occurring after December 15, 1998.
"Remaining Average Life" shall mean, with respect to the Called Principal
of any Note of any Series, 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 of any Series, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with respect
to such Called Principal if no payment of such Called Principal were made prior
to its scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of any
Note of any Series, the date on which such Called Principal is to be prepaid or
purchased pursuant to paragraph 4B, paragraph 4E or paragraph 5I hereof or is
declared to be immediately due and payable pursuant to paragraph 7A hereof, as
the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note of any
Series, an amount 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
36
(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.
B. Other Terms.
"1994 Senior Debt" shall mean the Company's Senior Notes Due 2003, in the
aggregate principal amount of One Hundred Million Dollars ($100,000,000) on
substantially the terms and conditions set forth under the heading "DESCRIPTION
OF SENIOR NOTES" in Amendment No. 1 to the Registration Statement on Form S-3 of
the Company, as filed with the Securities and Exchange Commission on April 19,
1994, relating thereto.
"1994 Subordinated Debt" shall mean the Company's Convertible Subordinated
Notes Due 2004, in the aggregate principal amount of up to Fifty-Seven Million
Five Hundred Thousand Dollars ($57,500,000) and which are subordinated to
payment of principal, interest and Yield-Maintenance Amount in respect of the
Notes, and all other obligations under this Agreement, on substantially the
terms and conditions set forth under the heading "DESCRIPTION OF SUBORDINATED
NOTES" in Amendment No. 2 to the Registration Statement on Form S-3 of the
Company, as filed with the Securities and Exchange Commission on April 19, 1994
relating thereto.
"Acceptable Availability" shall mean, at any time on or after the date
shown in the first column of the chart below, and on or prior to the date shown
in the second column of the chart below, the availability under the Credit
Agreement at such time reflected in the third column of the chart below:
On and after: to and including: Acceptable Availability:
------------ ---------------- -----------------------
May 19, 1994 October 24, 1995 $110,000,000
October 25, 1995 April 24, 1996 $100,000,000
April 25, 1996 October 24, 1996 $90,000,000
October 25, 1996 April 24, 1997 $80,000,000
April 25, 1997 and thereafter $0
37
"Acceptable Replacement Credit Facility" shall mean, with respect to any
replacement, refunding or refinancing of the Credit Agreement, a revolving
credit facility:
(i) making available to the Company at least the Acceptable Availability:
(ii) which, if such facility provides for extension of credit in forms
(including, without limitation, letters of credit or banker's acceptances) other
than cash, provides that, at the option of the Company, at least the Acceptable
Availability shall be available to the Company in cash; provided, however, that,
should the Company actually draw credit in forms other than cash (including,
without limitation, the issuance of one or more letters of credit), the amount
of cash available under such facility may be reduced by the aggregate amount of
such credits for so long as such credits are outstanding, so that the aggregate
amount available need not exceed the Acceptable Availability at such time;
(iii) which shall not require the maintenance of any compensating balance
or other similar arrangement in any amount greater than the difference between
the aggregate amount of cash available under such facility minus the Acceptable
Availability;
(iv) which shall not contain, at the time of the effectiveness of such
facility:
(a) any financial covenants, events of default or other conditions with
which the Company would not be able to comply at such time, based on the most
recent business plan presented to and accepted by the Board of Directors
(including updates thereto presented to and accepted by the Board of Directors
through the date of effectiveness of such facility) of the Company at such time
or, prior to January 25, 1997, that were more onerous than those contained in
the Credit Agreement at the time of the effectiveness of such facility;
(b) any borrowing base provision or similar lending constraints; or
(c) any conditions precedent to making advances thereunder that would,
based on the most recent business plan presented to and accepted by the Board of
Directors (including updates thereto presented to and accepted by the Board of
Directors through the date of effectiveness of such facility) of the Company at
such time, be reasonably likely to prevent the Company from fully utilizing the
Acceptable Availability to it under such credit facility at any time during the
term of such credit facility or, prior to January 25, 1997, that were more
onerous than those contained in the Credit Agreement at the time of the
effectiveness of such facility;
38
(v) which shall not have a maturity date earlier than that of the Credit
Agreement immediately prior to giving effect to such replacement, refunding or
refinancing; and
(vi) which shall be unsecured and shall not rank senior in right of
payment in any respect to the Notes.
"Adjusted Consolidated Debt" shall mean and include all Debt of the
Company and the Consolidated Subsidiaries.
"Adjusted Consolidated Net Income" shall mean for any period
(i) the gross revenues of the Company and the Consolidated Subsidiaries
for such period, determined on a consolidated basis; less
(ii) all operating and non-operating expenses of the Company and the
Consolidated Subsidiaries for such period, including all charges of a proper
character (including, without limitation, current and deferred taxes on income,
provision for taxes on unremitted foreign earnings which are included in gross
revenues, and current additions to reserves), determined on a consolidated
basis;
but not including in such gross revenues
(i) any gains (net of expenses and taxes applicable thereto) in excess of
losses arising from the sale, conversion or other disposition of capital assets,
other than gains arising out of any transaction or series of related
transactions in which such gains do not exceed One Hundred Thousand Dollars
($100,000);
(ii) any gain arising from any write-up of assets subsequent to July 31,
1992;
(iii) earnings of any Consolidated Subsidiary accrued prior to the date it
became a Consolidated Subsidiary;
(iv) earnings of any Person, substantially all the assets of which have
been acquired in any manner, realized by such Person prior to the date of such
acquisition;
(v) net earnings or net losses of any Person in which the Company or any
Consolidated Subsidiary shall have an ownership interest unless, in the case of
net earnings, such net earnings shall have actually been received by the Company
or such Consolidated Subsidiary in the form of cash distributions;
39
(vi) any portion of the net earnings of any Consolidated Subsidiary which
for any reason is unavailable for payment of dividends to the Company or any
other Consolidated Subsidiary;
(vii) the earnings of any Person to which assets of the Company shall have
been sold, transferred or disposed of, or into which the Company shall have
merged, prior to the date of such transaction;
(viii) any gain arising from the acquisition of any Securities of the
Company or any Consolidated Subsidiary;
(ix) any portion of the net earnings of the Company that cannot be freely
converted into United States dollars; and
(x) any deferred credit representing the excess of equity in any
Consolidated Subsidiary at the date of acquisition over the cost of investment
in such Consolidated Subsidiary.
"Adjusted Consolidated Tangible Net Worth" shall mean at any time the
excess of total assets of the Company and the Consolidated Subsidiaries at such
time, determined on a consolidated basis, over total liabilities of the Company
and the Consolidated Subsidiaries at such time, determined on a consolidated
basis, in each case determined in accordance with generally accepted accounting
principles, excluding, however, from the determination of total assets
(i) all assets that would be classified as intangible assets under such
generally accepted accounting principles, including, without limitation,
goodwill (whether representing the excess of cost over book value of assets
acquired or otherwise), patents, trademarks, trade names, copyrights,
franchises, unamortized debt discount and expense, organization costs, research
and development costs and other deferred charges (other than prepaid insurance
and taxes and pre-production and production costs including, but not limited to,
engineering and tooling costs, that are amortized over anticipated deliveries),
(ii) treasury stock and minority interests in any Person,
(iii) cash, Securities or other Property set apart and held in a sinking
or other analogous fund established for the purpose of redemption or other
retirement of capital stock,
(iv) to the extent not already deducted from total assets, reserves for
depreciation, depletion, obsolescence or amortization of Properties and all
other reserves or appropriations of retained earnings that, in accordance with
such generally accepted accounting principles, should be established in
connection with the business conducted by the relevant corporation, and
40
(v) any revaluation or other write-up in book value of assets subsequent
to July 31, 1992.
Notwithstanding the foregoing, (A) net deferred income tax assets recorded in
accordance with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes ("SFAS 109") shall be treated as a tangible asset (and not
deducted pursuant to clause (i) or (iv) of this definition) and shall be
calculated without regard to any valuation allowance with respect to such net
deferred tax asset recorded by the Company in accordance with SFAS 109, and (B)
any asset established pursuant to Statement of Financial Accounting Standards
No. 87, Employers Accounting for Pensions ("SFAS 87") which corresponds to an
additional minimum pension liability recorded pursuant to SFAS No. 87 and any
prepaid pension asset which arises from amounts funded by the Company in
accordance with Internal Revenue Service regulations (but not in excess of the
minimum amounts required to be contributed thereunder) in excess of amounts
expensed in accordance with SFAS 87, shall be treated as a tangible asset (and
not deducted pursuant to clause (i) or (iv) of this definition).
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"Agreed Put Consideration" shall mean as of the date of prepayment by the
Company upon the exercise by any holder of Notes of its Right to Put or option
to be repaid pursuant to paragraph 4E or paragraph 5I, the sum of
(i) the principal amount of the Notes held by such holder subject to the
prepayment on such date, plus
(ii) all accrued and unpaid interest to such date on such Notes, plus
(iii) the Yield-Maintenance Amount as of such date with respect to such
Notes.
"Agreement" and references thereto shall mean this Amended and Restated
Note Agreement, as it may be amended, restated or supplemented from time to
time.
"Amendment Date" shall have the meaning specified in paragraph 2E of this
Agreement.
"Bankruptcy Law" shall have the meaning specified in clause (viii) of
paragraph 7A.
41
"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 to be
closed.
"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, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"Combined Subsidiary Debt" shall mean at any time all unsecured Debt of
the Subsidiaries at such time (after eliminating intercompany transactions among
the Subsidiaries).
"Company" shall have the meaning specified in the introductory paragraph
of this Agreement.
"Confidential Information" shall mean, with respect to any holder of
Notes, any information furnished to such holder by the Company or any agent of
the Company in connection with this Agreement (including, without limitation,
any information furnished pursuant to paragraph 5D hereof) or obtained by such
holder in connection with an inspection made pursuant to paragraph 5G hereof,
that is about the Company (or in respect of which the Company has a
confidentiality obligation) and that is marked by the Company as being
confidential, other than any such information,
(i) that was publicly known, or otherwise known to such holder, at the
time the information was furnished to it,
(ii) that subsequently becomes publicly known through no act or omission
by such holder, or
(iii) that otherwise becomes known to such holder, other than through
disclosure by the Company or any Subsidiary.
"Consolidated Fixed Charges" shall mean, for any period, the sum, without
duplication, of
(i) interest expense related to Debt of the Company and the Consolidated
Subsidiaries,
(ii) amortization expense related to Debt of the Company and the
Consolidated Subsidiaries issued at a discount,
(iii) dividends in respect of preferred stock of Consolidated
Subsidiaries,
(iv) dividends in respect of Permitted Preferred Stock to the extent paid
to Persons other than the Company or any wholly-owned Consolidated Subsidiary,
plus
42
(v) rentals payable in respect of Capitalized Lease Obligations of the
Company and the Consolidated Subsidiaries,
in each case calculated for such period on a consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Net Income" shall mean for any period
(i) the gross revenues of the Company and the Subsidiaries for such
period, determined on a consolidated basis; less
(ii) all operating and non-operating expenses of the Company and the
Subsidiaries for such period, including all charges of a proper character
(including, without limitation, current and deferred taxes on income, provision
for taxes on unremitted foreign earnings which are included in gross revenues,
and current additions to reserves), determined on a consolidated basis;
but not including in such gross revenues
(i) any gains (net of expenses and taxes applicable thereto) in excess of
losses arising from the sale, conversion or other disposition of capital assets,
other than gains arising out of any transaction or series of related
transactions in which such gains do not exceed One Hundred Thousand Dollars
($100,000);
(ii) any gain arising from any write-up of assets subsequent to July 31,
1992;
(iii) earnings of any Subsidiary accrued prior to the date it became a
Subsidiary;
(iv) earnings of any Person, substantially all the assets of which have
been acquired in any manner, realized by such Person prior to the date of such
acquisition;
(v) net earnings or net losses of any Person in which the Company or any
Subsidiary shall have an ownership interest unless, in the case of net earnings,
such net earnings shall have actually been received by the Company or such
Subsidiary in the form of cash distributions;
(vi) any portion of the net earnings of any Subsidiary which for any
reason is unavailable for payment of dividends to the Company or any other
Subsidiary;
43
(vii) the earnings of any Person to which assets of the Company shall have
been sold, transferred or disposed of, or into which the Company shall have
merged, prior to the date of such transaction;
(viii) any gain arising from the acquisition of any Securities of the
Company or any Subsidiary;
(ix) any portion of the net earnings of the Company that cannot be freely
converted into United States dollars; and
(x) any deferred credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost of investment in such
Subsidiary.
"Consolidated Net Income Available for Fixed Charges" shall mean, for any
period, the sum of
(i) Adjusted Consolidated Net Income for such period, plus
(ii) the aggregate amount of
(a) Consolidated Fixed Charges;
(b) provisions for taxes on earnings;
(c) depreciation expense;
(d) the Special Charge;
(e) in the case of any such period that includes the fiscal month ending
May 2, 1993, the cumulative effect through May 2, 1993 of the accounting changes
adopted by the Company, effective as of August 1, 1992, as described in the
Company's Form 10-Q filed with the Securities and Exchange Commission for the
third quarter of its 1993 Fiscal Year;
(f) in the case of any such period that includes the fiscal month ending
May 2, 1993, the provisions and charges, not in excess of Thirty-Eight Million
Dollars ($38,000,000) in the aggregate, established by the Company in the third
quarter of its 1993 Fiscal Year;
(g) non-cash expenses incurred by the Company on or after November 1, 1995
in connection with one or more exchanges by the Company of shares of its common
stock for all or any portion of the 1994 Subordinated Debt or the Company's 7%
Convertible Subordinated Debentures due 2012, in an amount not to exceed Ten
Million Dollars ($10,000,000) in the aggregate (such non-cash expenses being
44
attributable to (I) the fair market value of the shares of common stock issued
by the Company for such exchanged Debt in excess of the shares of common stock
that would have been issued for such exchanged Debt upon the conversion thereof
in accordance with the terms of the indentures related to such Debt and (II) the
write-off of unamortized Debt issuance expense); and
(h) non-cash expenses incurred by either the Company or Xxxx Credit
Corporation in connection with (I) the Company's sale of Xxxx Credit Corporation
or (II) the sale by Xxxx Credit Corporation of all or substantially all of its
assets, in an amount not to exceed Six Million Dollars ($6,000,000) in the
aggregate (such non-cash expenses being attributable to the amount by which the
net book value of the assets sold by the Company or Xxxx Credit Corporation
exceeds the consideration received therefor that may be recognized as an asset
on the consolidated balance sheet of the Company in accordance with generally
accepted accounting principles);
in each case to the extent, and only to the extent, reflected in the computation
of Adjusted Consolidated Net Income for such period. As used in this
definition,
`Special Charge' shall mean that certain special provision of Fifty
Million Dollars ($50,000,000) taken by the Company during the third quarter of
its 1992 Fiscal Year.
"Consolidated Senior Debt" shall mean at any time Senior Debt at such
time, determined on a consolidated basis, minus Non-Recourse Debt of the Company
and the Subsidiaries at such time, determined on a consolidated basis.
"Consolidated Subsidiary" shall mean any corporation more than fifty
percent (50%) 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, directly or indirectly, by the Company.
"Consolidated Tangible Assets" shall mean, at any time, the sum of:
(i) Adjusted Consolidated Tangible Net Worth at such time; plus
(ii) the total amount of all liabilities of the Company and the
Consolidated Subsidiaries on a consolidated basis at such time.
"Consolidated Tangible Net Worth" shall mean at any time the excess of
total assets of the Company and the Subsidiaries at such time, determined on a
consolidated basis, over total liabilities of the Company and the Subsidiaries
at such time, determined on a consolidated basis, in each case determined in
accordance with generally accepted accounting principles, excluding, however,
from the determination of total assets:
45
(i) all assets that would be classified as intangible assets under such
generally accepted accounting principles, including, without limitation,
goodwill (whether representing the excess of cost over book value of assets
acquired or otherwise), patents, trademarks, trade names, copyrights,
franchises, unamortized debt discount and expense, organization costs, research
and development costs and other deferred charges (other than prepaid insurance
and taxes and pre-production and production costs including, but not limited to,
engineering and tooling costs, that are amortized over anticipated deliveries);
(ii) treasury stock and minority interests in Subsidiaries;
(iii) cash, Securities or other Property set apart and held in a sinking
or other analogous fund established for the purpose of redemption or other
retirement of capital stock;
(iv) to the extent not already deducted from total assets, reserves for
depreciation, depletion, obsolescence or amortization of Properties and all
other reserves or appropriations of retained earnings that, in accordance with
such generally accepted accounting principles, should be established in
connection with the business conducted by the relevant corporation; and
(v) any revaluation or other write-up in book value of assets subsequent
to July 31, 1992.
Notwithstanding the foregoing, (A) net deferred income tax assets recorded in
accordance with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes ("SFAS 109") shall be treated as a tangible asset (and not
deducted pursuant to clause (i) or (iv) of this definition) and shall be
calculated without regard to any valuation allowance with respect to such net
deferred tax asset recorded by the Company in accordance with SFAS 109, and (B)
any asset established pursuant to Statement of Financial Accounting Standards
No. 87, Employers Accounting for Pensions ("SFAS 87") which corresponds to an
additional minimum pension liability recorded pursuant to SFAS No. 87 and any
prepaid pension asset which arises from amounts funded by the Company in
accordance with Internal Revenue Service regulations (but not in excess of the
minimum amounts required to be contributed thereunder) in excess of amounts
expensed in accordance with SFAS 87, shall be treated as a tangible asset (and
not deducted pursuant to clause (i) or (iv) of this definition).
46
"Consolidated Total Debt" shall mean, at any time, Debt of the Company and
the Subsidiaries at such time minus Non-Recourse Debt of the Company and the
Subsidiaries at such time, determined on a consolidated basis.
"Credit Agreement" shall mean the Credit Agreement, dated as of April 26,
1989, among the Company and the lenders party thereto and the agent thereunder,
as such Credit Agreement may be amended or supplemented from time to time.
"Debt" shall mean, without duplication,
(i) indebtedness for borrowed money,
(ii) obligations evidenced by bonds, debentures, notes or other similar
instruments (as such term is defined in Article 9 of the Uniform Commercial Code
as from time to time in effect in the State of New York),
(iii) obligations to pay the deferred purchase price of Property or
services (excluding advances, deposits or partial or progress payments, unpaid
wages and related employee obligations and excluding trade payables),
(iv) obligations as lessee under Capitalized Lease Obligations,
(v) obligations under Guaranties of indebtedness or obligations of others
of the kinds referred to in clauses (i) through (iv) above,
(vi) obligations under Title IV of ERISA for each Plan and Multiemployer
Plan, in respect of unfunded accrued liabilities for such plans, if any, as of
the first day of the plan year as shown in the annual actuarial report most
recently delivered to the obligor in respect of such obligations by the actuary
for each such Plan and Multiemployer Plan, and
(vii) in the case of any Consolidated Subsidiary, all preferred stock of
such Consolidated Subsidiary held by Persons other than the Company or a wholly-
owned Consolidated Subsidiary, such preferred stock to be valued at the
aggregate liquidation preference thereof.
"Debt Ratio" shall mean, at any time, the ratio of Adjusted Consolidated
Debt to Adjusted Consolidated Tangible Net Worth.
"Default" shall mean any event or condition that, with notice or the
passage of time, or both, would become an Event of Default.
"De Minimus Payments" shall mean, with respect to any Debt of the Company
or any Subsidiary (other than Debt governed or evidenced by the Notes, the
Credit Agreement, any Acceptable Replacement Credit Facility, the 1994 Senior
Debt, the 1994 Subordinated Debt or the Existing Subordinated Notes of either
Subordinated
47
Series), payments, prepayments, defeasances and redemptions (in each case, other
than Originally Scheduled Payments) in respect of any such Debt aggregating not
more than Five Hundred Thousand Dollars ($500,000) in any Fiscal Year.
"Designated Event" shall mean the occurrence of any one or more of the
following after February 2, 1990:
(i) the direct or indirect acquisition by any person (as such term is used
in Section 13(d) and Section 14(d)(2) of the Exchange Act), or related persons
constituting a group (as such term is used in Rule 13d-5 under the Exchange
Act), of (a) beneficial ownership of issued and outstanding shares of Voting
Stock of the Company the result of which acquisition is that such person or such
group possesses in excess of fifty percent (50%) of the combined voting power of
all then issued and outstanding Voting Stock of the Company or (b) within any
period of three-hundred sixty-five (365) consecutive days, all or substantially
all of the assets of the Company; or
(ii) following the election or removal of directors, a majority of the
Company's board of directors consists of individuals who were not members of the
Company's board of directors two (2) years before such election or removal,
unless the election of each director who was not a director at the beginning of
such two-year period has been approved in advance by directors representing at
least a majority of the directors then in office who were directors at the
beginning of the two-year period; or
(iii) the consolidation with, or merger into, any Person by the Company in
a transaction in which more than thirty percent (30%) by number of votes of the
Voting Stock of the Company is exchanged (the calculation of which shall be made
by dividing the number of votes attributable to the Voting Stock so exchanged by
the aggregate number of votes attributable to the Voting Stock immediately prior
to such transaction); or
(iv) (a) any transaction or series of transactions (whether related or
unrelated) in which the Company repurchases or otherwise retires in the
aggregate, within any period of three hundred sixty-five (365) consecutive days,
thirty percent (30%) or more (by number) of the Company's outstanding common
stock (the calculation of which shall be made by dividing the number of shares
outstanding immediately after giving effect to each such repurchase or
retirement, other than any such shares owned by a Subsidiary, by the highest
number of shares outstanding at any time during the period of three hundred
sixty-five (365) consecutive days ending on (and including) the date of such
repurchase or retirement (adjusting in each case for stock splits, stock
dividends and other similar transactions, excluding in each case shares held in
treasury, and assuming in each case that all securities then convertible into,
or representing then effective rights to purchase, common stock have been
exercised at such time), or
48
(b) any Distribution made by the Company the Fair Market Value of which,
together with the aggregate Fair Market Value of all other Distributions made by
the Company during the period of three hundred sixty-five (365) days ending on
(and including) the date of such Distribution (each Distribution being valued on
the date it is made), equals or exceeds thirty percent (30%) of the Fair Market
Value the Company's outstanding common stock (determined at the commencement of
such period);
in each case if as a result of such event or events Consolidated Total Debt
shall, at any time during the period beginning on the date of such transaction
(or the date of the completion of such series of transactions, as the case may
be) and ending three hundred sixty-five (365) days thereafter, equal or exceed
seventy-five percent (75%) of the sum of Consolidated Total Debt plus
Consolidated Tangible Net Worth at such time.
"Distribution" shall mean:
(i) dividends or other distributions on or in respect of the capital stock
of the Company or any Subsidiary (except distributions solely in such stock or
in Rights, as such term is defined in the Rights Agreement and except to the
extent made to the Company or any Wholly-Owned Subsidiary);
(ii) the repurchase, purchase, redemption or acquisition of capital stock
of the Company or any Subsidiary, or of warrants, rights or other options to
purchase such stock (except when solely in exchange for such stock and except to
the extent made from the Company or a Wholly-Owned Subsidiary) unless made,
contemporaneously, from the net proceeds of a sale of such stock; and
(iii) all payments in respect of Subordinated Debt (other than mandatory
scheduled payments and prepayments), including optional or voluntary prepayments
and including all payments made to acquire Subordinated Debt (except to the
extent such payment is made to the Company or a Wholly-Owned Subsidiary).
"EEC Affiliate" shall mean any corporation organized under the laws of any
country which is a member nation of the European Economic Community (as used
herein, the "EEC") as such organization is constituted on December 22, 1992,
that has the majority of its Property located in and makes the major portion of
its sales to Persons located in the United States of America, Canada, or the
EEC, and more than fifty percent (50%) 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, directly or indirectly, by the Company.
49
"Equipment Sublease Prepayment Event" shall mean, with respect to the
Sublease Agreements, any mandatory or optional prepayment of rent or payment
made to acquire all or a portion of any sublessor's interest in any subleased
equipment, or any event which occurs that gives rise to an obligation of the
Company or any Subsidiary to make any such prepayment or payment, in each case,
other than:
(i) regularly scheduled payments of periodic rent, as scheduled on
December 31, 1994;
(ii) payments of the stipulated loss value with respect to an item of
equipment that shall become worn out, lost, stolen, destroyed, irreparably
damaged in the reasonable determination of the Company, or permanently rendered
unfit for use from any cause whatsoever;
(iii) payments of the stipulated loss value with respect to an item of
equipment that the Company has discontinued using for valid operational reasons;
(iv) payments made on or about February 28, 2000 to acquire all of a
sublessor's interests in the equipment subleased under a Sublease Agreement in
accordance with the early purchase option set forth in such Sublease Agreement;
and
(v) payments made on or after February 28, 2003, the expiration of the
basic term of the Sublease Agreements.
As used in this definition, "rent" shall mean regularly scheduled periodic rent
and shall not include any fee, cost, expense, tax, indemnity, loss or other
charge that the Company is required to pay or reimburse to a sublessor and which
may be characterized as additional or supplemental rent in a Sublease Agreement.
"Equity Issuance Acquisitions" shall mean the acquisition by the Company
of Debt (including, without limitation, the Notes, the 1994 Subordinated Debt or
the Company's 7% Convertible Subordinated Debentures due 2012), or any portion
thereof, for consideration consisting solely of common stock of the Company and
in connection with tenders of such Debt by the holders thereof in payment of the
exercise or purchase price of any rights, warrants or options to acquire such
common stock, or upon conversion of such Debt into such common stock.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall mean any corporation or trade or business that
(i) is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the IRC) as the Company, or
50
(ii) is under common control (within the meaning of Section 414(c) of the
IRC) with the Company.
"ESOP" shall mean the Salaried Employees Stock Ownership Plan, effective
August 1, 1983, as amended from time to time.
"Event of Default" shall mean any of the events specified in paragraph 7A
hereof.
"Excepted Property" shall have the meaning set forth in paragraph 6P of
this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Existing 9.35% Notes" shall have the meaning specified in paragraph 1A of
this Agreement.
"Existing 9.33% Notes" shall have the meaning specified in paragraph 1A of
this Agreement.
"Existing Notes" shall have the meaning specified in paragraph 1A of this
Agreement.
"Existing 9.35% Note Agreement" shall have the meaning specified in
paragraph 1A of this Agreement.
"Existing 9.33% Note Agreement" shall have the meaning specified in
paragraph 1A of this Agreement.
"Existing Note Agreements" shall have the meaning specified in paragraph
1A of this Agreement.
"Existing Subordinated Notes" shall mean and include:
(i) the Company's 9.25% Subordinated Debentures due 2017; and
(ii) the Company's 7% Convertible Subordinated Debentures due 2012;
and the Existing Subordinated Notes of each such series (but not the Existing
Subordinated Notes of the other series) shall be referred to collectively as a
"Subordinated Series" of Existing Subordinated Notes.
"Fair Market Value" shall mean at any time with respect to any Property,
the sale value of such Property that would be realized in an arm's-length sale
at such time between an informed and willing buyer, and an informed and willing
seller, under no compulsion to buy or sell, respectively.
51
"Financial Covenant" shall mean any covenant, agreement or provision
(including, without limitation, the definitions applicable thereto) of or
applicable to the Company or any Consolidated Subsidiary contained in any
agreement governing, or instrument evidencing, any Debt (or commitment to lend),
other than Debt or a commitment to lend among the Company and one or more
Consolidated Subsidiaries, of the Company or any Consolidated Subsidiary in an
aggregate principal amount greater than Five Million Dollars ($5,000,000), which
covenant, agreement or provision:
(i) requires the Company or any Consolidated Subsidiary to maintain
specified financial amounts or ratios or to meet other financial tests;
(ii) restricts the ability of the Company or any Consolidated Subsidiary
to:
(a) make Distributions, investments, capital expenditures or operating
expenditures of any kind;
(b) incur, create or maintain any Debt (or other obligations) or Liens;
(c) merge, consolidate or acquire or be acquired by any Person;
(d) sell, lease, transfer or dispose of any Property (other than
restrictions imposed solely upon collateral, and not upon Property of the
Company or any Consolidated Subsidiary generally, by holders of Liens thereon
which are permitted by this Agreement); or
(e) issue or sell any capital stock of any kind;
(iii) is similar to any provision in paragraph 6 of this Agreement; or
(iv) provides that a default or event of default shall occur, or that the
Company or any Consolidated Subsidiary shall be required to prepay, redeem or
otherwise acquire for value any Debt or security as a result of its failure to
comply with any provision similar to any of those set forth in any of the
foregoing clauses (i), (ii) or (iii).
"Fiscal Year" shall mean any fiscal year of the Company ending on July 31.
"Fiscal Quarter Net Worth Increase Amounts" shall mean for any fiscal
quarter of the Company, the greater of (i) Zero Dollars ($0) and (ii) fifty
percent (50%) of Adjusted Consolidated Net Income for such fiscal quarter.
"FUJI" shall mean The FUJI Bank, Limited.
52
"Gross Operating Income" shall mean for any period, sales minus costs and
expenses (other than depreciation and amortization), in each case, as reflected
as a line item on the consolidated statements of earnings and cash flows of the
Company and the Consolidated Subsidiaries for such period.
"Guaranties" shall mean, with respect to any Person (the "Guarantor"), any
obligation (except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of the Guarantor guaranteeing
or in effect guaranteeing any indebtedness, dividend or other obligation of any
other Person (the "Primary Obligor") in any manner, whether directly or
indirectly, including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Guarantor:
(i) to purchase such indebtedness or obligation or any Property
constituting security therefor;
(ii) to loan, advance or supply funds, make any capital contribution or
purchase Property from any Person
(a) for the purpose of payment of such indebtedness or obligation, or
(b) to maintain working capital or other balance sheet condition or any
income statement condition of the Primary Obligor or otherwise to advance or
make available funds for the purchase or payment of such indebtedness or
obligation;
(iii) to lease Property or to purchase Securities or other Property or
services primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of the Primary Obligor to make payment of the
indebtedness or obligation or, in the case of any such lease, under terms
providing that the obligation to make payments thereunder is absolute and
unconditional under conditions not customarily found in commercial leases then
in general use;
(iv) to contract or agree to purchase any Property or services if such
contract or agreement requires that payment for such Property or services (a)
shall be made regardless of whether delivery of such Property or services is
ever made or tendered or (b) shall be subordinated to any indebtedness (of the
purchaser or user of such Property or the Person entitled to the benefit of such
services) owed or to be owed to any Person; or
(v) otherwise to assure the owner of the indebtedness or obligation of the
Primary Obligor against loss in respect thereof.
"IDB Financing" shall mean any industrial development bond or similar
financing in which a state or other governmental authority incurs Debt to
construct,
53
improve or acquire (or, in the case of the San Xxxxxx Xxxxx, to refinance the
construction, improvement or acquisition of) fixed assets for use primarily by
the Company or a Subsidiary under a lease or similar arrangement of at least
five years' duration and in connection with which the Company or such Subsidiary
is obligated (directly or indirectly), under such lease or other arrangement, to
make payments to such state or other governmental authority which are used to
service such Debt.
"Institutional Investor" shall mean
(i) any original purchaser of any of the Notes,
(ii) the subsidiaries and affiliates of any such purchaser and nominees
controlled by any such purchaser, and
(iii) any insurance company, pension fund, mutual fund, investment
company, bank, savings bank, savings and loan association, investment banking
company, trust company, finance or credit company, any portfolio or any
investment fund managed by any of the foregoing, and any other institutional
investor, and any nominee of the foregoing controlled by any such Person,
provided that in each case such Person has assets of at least Five Hundred
Million Dollars ($500,000,000).
"Intercompany Debt" shall mean Debt owed by the Company or any Subsidiary
to the Company or any Subsidiary.
"IRC" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Lease Transaction" shall mean a transaction (including, without
limitation, a transaction with respect to qualified leased Property meeting the
requirements of Section 168(f)(8) of the IRC) pursuant to which the Company or
any Subsidiary makes an investment (as a lessor as contemplated by said Section
168(f)(8) or on an equity basis with the meaning of Section 4(1) of Revenue
Procedure 75-21, 1975-1 C.B. 715, as amended or supplemented), in all or part of
the purchase price of Property, which Property, concurrently with the purchase
thereof, is leased under a Capitalized Lease Obligation by the Company or such
Subsidiary (acting directly or through either or both of a trust or partnership
and with or without other investors) to a lessee, provided that such investment
is made in part for the purpose of saving or deferring Federal income tax
liability and that the Company or such Subsidiary incurs no obligation, and
creates no Lien in connection with such transaction except that:
(i) the Company or such Subsidiary, directly or indirectly
(a) may borrow part of the funds necessary to pay the purchase price of
such Property (and any related leases, contract rights, general intangibles or
accounts), and
54
(b) may secure such borrowings by Liens provided that such Liens do not
extend to or cover any Property other than Property referred to in subclause (a)
above and do not secure any obligations other than those incurred in connection
with such purchase and lease transaction, and
(ii) the Company or such Subsidiary may incur other obligations in
connection with such transaction (and the Company may guarantee any such
obligation of a Subsidiary) provided that such obligations and guarantee
(a) constitute Non-Recourse Debt,
(b) are incidental and necessary to effect such transaction, and
(c) are of the type frequently incurred by lessors or equity investors in
connection with the business of leasing Property.
"Letter of Credit Prepayment Event" shall mean either:
(i) the redemption, reacquisition or repurchase of any San Xxxxxx Xxxxx
(other than in connection with a Permitted IDB Acquisition); or
(ii) any deposit, after November 30, 1994, of cash collateral to secure
reimbursement obligations of the Company relating to the San Xxxxxx Xxxxx or any
letter of credit relating thereto;
in either case, solely as result of and in response to the failure of the bank
which has issued any letter of credit relating to the San Xxxxxx Xxxxx to extend
or renew such outstanding letter of credit; provided, however, that prior to
effecting such redemption, reacquisition, repurchase or cash collateralization
the Company shall have used its best efforts to retain such letter of credit.
The Company covenants, in connection with any Letter of Credit Prepayment Event
described in clause (i) above, to actively seek to remarket the redeemed,
reacquired or repurchased San Xxxxxx Xxxxx or, to the extent necessary, to
modify the structure of such IDB Financing to the extent necessary to permit a
long-term reissuance of the repurchased San Xxxxxx Xxxxx, and, in connection
with any Letter of Credit Prepayment Event described in clause (ii) above, to
continue to seek to obtain an unsecured letter of credit not requiring such cash
collateralization.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any agreement to
give any of the foregoing (but excluding negative pledge clauses in agreements
related to the borrowing of money), 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 (but excluding informational filings made in respect of
leases)) or any other type of preferential arrangement for the
55
purpose, or having the effect, of protecting a creditor against loss or securing
the payment or performance of an obligation.
"Maximum Pension Contribution" shall mean, for any fiscal year of the
Company, a contribution to any or all Plans or Multiemployer Plans not exceeding
the greater of:
(i) the sum of:
(a) the amount set forth in the chart below under the heading "Base
Contribution" for such fiscal year; plus
(b) the lesser of:
(I) the amount set forth in the chart below under the heading "Maximum
Additional Contribution" for such fiscal year; and
(II) the amount, if positive, by which cash provided by operating
activities of the Company and the Subsidiaries (calculated in a manner
consistent with the preparation of the projections contained in the Company's
February 28, 1994, financial plan, as provided to the Purchasers) for such
fiscal year exceeds the amount set forth in the chart below under the heading
"Projected Cash Flow" for such fiscal year, so long as, but only so long as, for
a period of not less than thirty (30) days prior to and thirty (30) days
following each date on which any contribution made by the Company and the
Subsidiary would cause the aggregate amount of contributions during such fiscal
year to exceed the "Base Contribution" set forth in the chart below for such
fiscal year, the amount of Debt outstanding under the Credit Agreement (or any
replacement, renewal or refinancing thereof) is Zero Dollars ($0);
and
(ii) the minimum contribution permitted during such fiscal year pursuant
to ERISA, the IRC and the rules and regulations under ERISA and the IRC.
A contribution to a Plan or Multiemployer Plan permitted by clause (b) of this
definition may be made within a period of ninety (90) days immediately following
the end of such fiscal year.
56
Maximum Projected Cash
Additional Provided by
Fiscal Year Base Contribution Contribution Operations
----------- ----------------- ------------ --------------
1994 $17,000,000 $0 $36,700,000
1995 $36,000,000 $3,200,000 $15,600,000
1996 $37,000,000 $6,900,000 $46,100,000
1997 $30,000,000 $10,500,000 $64,900,000
1998 $23,000,000 $18,200,000 $53,400,000
"Multiemployer Plan" shall mean any Plan which is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA) in respect of which the
Company or any ERISA Affiliate is an "employer" (as such term is defined in
Section 3 of ERISA).
"Multiple Employer Plan" shall mean any employee benefit plan within the
meaning of Section 3(3) of ERISA other than a Multiemployer Plan, subject to
Title IV of ERISA, to which the Company or any ERISA Affiliate and an employer
(as such term is defined in Section 3 of ERISA) other than an ERISA Affiliate or
the Company contribute.
"Net After-Tax Cash Basis" shall mean at any time in respect of any
investment made in connection with a Lease Transaction, the initial amount of
such investment made by the Company or any Subsidiary in such Lease Transaction,
less
(i) the net aggregate amount (on a cash basis) received by or distributed
to the Company or such Subsidiary, on or prior to such time, after payment and
deduction of all expenses (including but not limited to insurance and trustee's
fees and after payment of interest and principal on any loan incurred in such
Lease Transaction) to the extent all such expenses are related to and incurred
in connection with such Lease Transaction, and,
(ii) the net aggregate amount (on a cash basis), on account of reductions
in the Company's quarterly estimated tax payments to the United States and to
the State of California, on or prior to such time, as such shall be adjusted at
year-end to reflect the actual tax benefits obtained on account of reduced taxes
payable by virtue of such Lease Transaction. In computing quarterly estimated
tax payments, the Company shall take into consideration, on a consolidated
basis, the full taxable year's anticipated benefits of the Lease Transaction,
including allowable depreciation and interest, expenses, deductions, investment
and other tax credits, and net rental income.
"Net Rentals" shall mean, with respect to any period, all fixed payments
that the lessee is required to make during such period by the terms of any lease
having an
57
original term of one year or more, but shall not include amounts required to be
paid in respect of maintenance, repairs, income taxes, property taxes,
insurance, assessments or other similar charges or additional rentals (in excess
of fixed minimums) based upon a percentage of gross receipts.
"Non-Employee Directors Stock-Option Plans" shall mean the Company's 1988
Non-Employee Directors Stock-Option Plan and any other comparable future plan.
"Non-Recourse Debt" shall mean, as to any Person, in connection with a
Lease Transaction, all indebtedness and other obligations of such Person (i)
incurred in connection with such Lease Transaction and (ii) of the type
described in clause (i) of the definition of Lease Transaction; provided, that
the obligations of such Person to repay borrowed money shall be expressly
limited as to recourse solely to (A) the property subject to such Lease
Transaction (including the proceeds of such property) and (B) the amounts
payable by or on behalf of the lessee under or in connection with such Lease
Transaction.
"Note" shall have the meaning specified in paragraph 2D of this Agreement.
"Noteholder Acceptance" shall have the meaning set forth in paragraph
5I(ii) of this Agreement.
"Noteholder Share" shall mean, in respect of any holder of Notes and any
Ratable Prepayment Amount, such holder's ratable share of such Ratable
Prepayment Amount, such ratable share being determined by reference to the
outstanding principal amount of Notes held by such holder as a percentage of the
outstanding principal amount of all Notes.
"Notice of Sale" shall have the meaning specified in clause (ii) of
paragraph 4E hereof.
"Offer Period" shall have the meaning set forth in paragraph 5I(ii) of
this Agreement.
"Officer's Certificate" shall mean a certificate signed in the name of the
Company by its President, one of its Vice Presidents, its Chief Financial
Officer, its Controller, its Secretary or its Treasurer.
"Originally Scheduled Payments" shall mean and include:
(i) payment of any Debt at scheduled maturity;
(ii) with respect to any Debt, originally scheduled prepayments,
originally scheduled redemptions, originally scheduled sinking fund payments or
originally scheduled reductions in maximum commitments thereof; and
58
(iii) payments in respect of any revolving credit agreement, including,
without limitation, the Credit Agreement, which do not result in a permanent
reduction of the original commitment thereunder.
As used in the preceding sentence, "original" or "originally scheduled" means
the maturity, payments, prepayments, or reductions in commitment established as
of May 19, 1994, or, if later, at the time of execution of the relevant credit
facility but does not include any payments, prepayments or reductions in
commitment which result from the occurrence of any contingency, even if the
provision requiring such payment, prepayment or reduction as a result of such
contingency was originally contained in the agreements governing such Debt, and
even if the occurrence of such contingency was foreseeable, at the time of the
execution of the documentation of such issue of Debt.
"Permitted Existing Subordinated Debt Acquisitions" shall mean, with
respect to either Subordinated Series of Existing Subordinated Notes, the
purchase or acquisition by the Company or any Subsidiary of Existing
Subordinated Notes of such Subordinated Series in anticipation of satisfying an
Originally Scheduled Payment thereof; provided, however, that all of the
following conditions are met:
(i) no Existing Subordinated Notes may be acquired more than three hundred
sixty-four (364) days prior to the date of any such Originally Scheduled Payment
thereof;
(ii) the Company or any Subsidiary, more than one hundred eighty (180)
days, but not more than three hundred sixty-four (364) days, prior to the date
of the next succeeding Originally Scheduled Payment thereof, may acquire no more
than fifty percent (50%) of the aggregate principal amount of Existing
Subordinated Notes of such Subordinated Series required to be prepaid or
redeemed on the date of the next succeeding Originally Scheduled Payment;
(iii) the Company or any Subsidiary, not more than one hundred eighty
(180) days prior to the date of the next succeeding Originally Scheduled Payment
thereof, may acquire an aggregate principal amount of Existing Subordinated
Notes of such Subordinated Series not exceeding (together with any Existing
Subordinated Notes of such Subordinated Series acquired more than one hundred
eighty (180) days, but not more than three hundred sixty-four (364) days, prior
to the date of the next succeeding Originally Scheduled Payment thereof) one
hundred percent (100%) of the aggregate principal amount of Existing
Subordinated Notes of such Subordinated Series required to be prepaid or
redeemed on the date of the next succeeding Originally Scheduled Payment;
(iv) at the time of such acquisition:
(a) no Default or Event of Default shall be continuing;
59
(b) the Company shall not reasonably foresee the occurrence of any Default
or Event of Default at any time prior to the date of the next succeeding
Originally Scheduled Payment thereof;
(c) the Debt Ratio would not exceed 2.50:1.00; and
(d) the Company could incur $1.00 of additional Debt;
(v) the purchase price paid by the Company and the Subsidiaries in respect
of such acquisition of Existing Subordinated Notes shall be less than one
hundred percent (100%) of the principal amount of Existing Subordinated Notes so
acquired; and
(vi) the Company, on the date of each Originally Scheduled Payment in
respect of the Existing Subordinated Notes, shall actually apply, in accordance
with the provisions of such Existing Subordinated Notes, all Existing
Subordinated Notes of such Subordinated Series acquired by the Company and the
Subsidiaries to the prepayment or redemption of such Existing Subordinated Notes
required to be prepaid or redeemed on such date.
"Permitted IDB Acquisitions" shall mean:
(i) prepayments or repurchases of San Xxxxxx Xxxxx upon tender by the
holders thereof after May 10, 1994 in accordance with the terms of the indenture
governing the San Xxxxxx Xxxxx; provided, however, that San Xxxxxx Xxxxx in an
aggregate principal amount of Sixteen Million Five Hundred Thousand Dollars
($16,500,000) shall have been issued, outstanding and held and owned by Persons
other than the Company, any Subsidiary or any Affiliate on May 10, 1994 (whether
or not subsequently repurchased by the Company); and provided, further, that the
Company shall be actively seeking to either remarket the San Xxxxxx Xxxxx that
were so prepaid or repurchased pursuant to the provisions of the IDB Financing
of the Company's San Marcos, Texas facility or, to the extent necessary in
connection with any termination of any outstanding letter of credit relating to
such facility, to modify the structure of such IDB Financing to the extent
necessary to permit a long-term reissuance of the repurchased San Xxxxxx Xxxxx;
and
(ii) the redemption in full on or before June 1, 1994 of all the San
Xxxxxx Xxxxx, but solely as result of and in response to the failure of FUJI to
extend or renew its outstanding letter of credit relating to the IDB Financing
of the Company's San Marcos, Texas facility; provided, however, that:
(a) prior to effecting such redemption, the Company shall have used its
best efforts to retain such letter of credit by offering to deposit cash
collateral to secure its obligations to FUJI under the Reimbursement Agreement,
dated as of May 1, 1990, with the Company relating to such IDB Financing; and
60
(b) following the making of such redemption, the Company shall use its
best efforts to obtain a replacement unsecured letter of credit to issue
replacement unsecured San Xxxxxx Xxxxx, and shall thereafter use its best
efforts to market or sell such San Xxxxxx Xxxxx.
"Permitted Preferred Dividend" shall mean dividends in respect of any
Permitted Preferred Stock in an aggregate amount not to exceed in any period of
three hundred sixty-five (365) days (or three hundred sixty-six (366) days in
any year in which there is a February 29th) the product of
(i) the lesser of:
(a) an amount equal to one hundred (100) basis points in excess of the
yield on the U.S. Treasury security with a constant maturity of thirty (30)
years on the date of issuance of the Permitted Preferred Stock; and
(b) ten percent (10%) per annum,
times
(ii) the aggregate cash consideration paid to the Company in consideration
of the issuance of the Permitted Preferred Stock.
"Permitted Preferred Stock" shall mean any issue of preferred stock of the
Company which is not required to be redeemed, repurchased or otherwise acquired
or retired, in whole or in part, for value by the Company, upon the occurrence
of any contingency or otherwise, prior to July 1, 2003.
"Person" shall mean an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
"Plan" shall mean at any time any "employee pension benefit plan" (as such
term is defined in Section 3 of ERISA) maintained by the Company or any ERISA
Affiliate for employees of the Company or such ERISA Affiliate, excluding any
Multiemployer Plan, but including, without limitation, any Multiple Employer
Plan.
"Prepayment Event" shall mean any Letter of Credit Prepayment Event, any
Equipment Sublease Prepayment Event, any mandatory or optional defeasance,
prepayment or repurchase, in whole or in part, of any issue of Debt (other than
Debt owing solely to the Company or any Wholly-Owned Subsidiary), or reduction
in commitment in any credit facility, of the Company or any Subsidiary, or any
event which occurs that gives rise to an obligation of the Company or any
Subsidiary to make any such defeasance, prepayment, repurchase or reduction, in
each case, other than:
61
(i) Originally Scheduled Payments;
(ii) Permitted Existing Subordinated Debt Acquisitions;
(iii) Permitted IDB Acquisitions;
(iv) Equity Issuance Acquisitions; and
(v) De Minimus Payments.
Payments (excluding payments in common stock of the Company) in respect of
contributions of amounts not exceeding, during any fiscal year of the Company,
the Maximum Pension Contribution for such fiscal year to any Plan or
Multiemployer Plan that has any Debt, as described in clause (vi) of the
definition of "Debt", as of the January 1 immediately preceding the beginning of
such fiscal year, shall not give rise to a Prepayment Event, but a Prepayment
Event will result from the payment (excluding payments in common stock of the
Company) to any such Plan or Multiemployer Plan of any amount in excess of the
Maximum Pension Contribution during any fiscal year.
"Prepayment Offer" shall have the meaning set forth in paragraph 5I(i) of
this Agreement.
"Prepayment Portion" shall have the meaning set forth in paragraph 5I(iii)
of this Agreement.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"Purchase Money Mortgages" shall mean a Lien held by any Person (whether
or not the seller of such assets) on tangible assets (other than assets acquired
to replace, repair, upgrade or alter assets owned by the Company or any
Subsidiary on December 22, 1992) acquired, improved or constructed by the
Company or any Subsidiary after December 22, 1992, which Lien secures all or a
portion of the related purchase price or improvement or construction costs of
such assets (or Debt incurred to pay such purchase price or costs), or any Lien
existing on any tangible assets of any corporation at the time it becomes a
Subsidiary, and extensions (as to time), renewals and replacements of any such
Lien or the Debt secured thereby, provided that, in each such case such Lien
does not extend to any other asset of the Company or any Subsidiary; provided,
further, that any Lien on acquired Property, or on Property of a corporation at
the time it becomes a Subsidiary, was not created in contemplation of such
acquisition or such corporation becoming a Subsidiary, as the case may be.
"Purchasers" shall have the meaning specified in the introductory
paragraph of this Agreement.
62
"Ratable Prepayment Amount" shall mean, in respect of the Notes:
(i) in connection with any Equipment Sublease Prepayment Event, a
principal amount of the Notes equal to the product of:
(a) the quotient of:
(I) the aggregate amount by which regularly scheduled periodic rent under
the Sublease Agreements is to be reduced during the basic term of such Sublease
Agreements as a result of such Equipment Sublease Prepayment Event; divided by
(II) the aggregate amount of all regularly scheduled periodic rent under
the Sublease Agreements from the date of such Equipment Sublease Prepayment
Event until the end of the basic term of such Sublease Agreements (calculated
without regard to such Equipment Sublease Prepayment Event); multiplied by
(b) the outstanding principal amount of the Notes; and
(ii) in connection with any Letter of Credit Prepayment Event, a principal
amount of the Notes equal to the aggregate principal amount of San Xxxxxx Xxxxx
redeemed, reacquired or repurchased, or with respect to which cash collateral
has been deposited to secure reimbursement obligations of the Company relating
to the San Xxxxxx Xxxxx or any letter of credit relating thereto, as the case
may be, by the Company;
and
(iii) with respect to each other Prepayment Event, a principal amount of
the Notes equal to the product of:
(a) the highest percentage of any issue of Debt being prepaid, or as to
which any offer to prepay shall apply, as a result of the occurrence of such
Prepayment Event, multiplied by
(b) the outstanding principal amount of the Notes.
"Required Holders" shall mean at any time the holder or holders of at
least sixty-six and two-thirds percent (662/3%) of the aggregate principal
amount of the Notes outstanding at such time, provided that Notes owned by the
Company, any Subsidiary or any Affiliate at such time shall be deemed not to be
outstanding for purposes of determining such percentage.
63
"Responsible Officer" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company or any other officer of the Company involved principally in its
financial administration or its controllership function.
"Restricted Stock Plans" shall mean the 1969, 1970, 1972, 1974 and 1984
Restricted Stock Plans of the Company and any other comparable future plan.
"Right to Put" shall have the meaning specified in clause (i) of paragraph
4E hereof.
"Rights Agreement" shall mean the Rights Agreement dated as of August 15,
1986, between the Company and The First National Bank of Chicago, as amended
from time to time.
"San Xxxxxx Xxxxx" shall mean bonds originally issued in connection with
the IDB Financing of Company's San Marcos, Texas facility or replacement bonds
issued on substantially the same terms as the originally issued bonds.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security" shall have the meaning specified in Section 2(1) of the
Securities Act.
"Senior Debt" shall mean all Debt of Subsidiaries, all Debt of the Company
secured by any Lien and all other Debt ranking senior to or pari passu with the
Notes with respect to distributions of the Company's Property in any bankruptcy
proceeding.
"Senior Officer" shall mean with respect to any corporation each of the
Chairman, President, any Vice-President, the Chief Financial Officer, the
Secretary, and the Treasurer of such corporation.
"Series" shall mean any or all of any series of Notes issued hereunder.
"Series A Notes" shall have the meaning specified in paragraph 2A of this
Agreement.
"Series B Notes" shall have the meaning specified in paragraph 2B of this
Agreement.
"Series C Notes" shall have the meaning specified in paragraph 2C of this
Agreement.
"Significant Holder" shall mean (i) each Purchaser, so long as such
Purchaser shall hold any Note, or (ii) any other holder of at least five percent
(5%) of the aggregate principal amount of the Notes from time to time
outstanding.
64
"Stock Incentive Plans" shall mean the 1989 Stock Incentive Plan of the
Company and any other future comparable plan.
"Stock Option Plans" shall mean the 1972, 1973, 1974, 1982 and 1984 Stock
Option Plans of the Company and any other future comparable plan.
"Sublease Agreements" shall mean the Sublease Agreements, dated as of
September 14, 1992, between the Company and State Street Bank and Trust Company
of California, National Association, and an individual trustee, not in their
individual capacities but solely as owner trustees, as such Sublease Agreements
may be amended from time to time.
"Subordinated Debt" shall mean all Debt of the Company and the
Subsidiaries that is not Senior Debt.
"Subordinated Series" shall have the meaning set forth in the definition
of "Existing Subordinated Notes."
"Subsidiary" shall mean any corporation organized under the laws of any
state of the United States of America, Canada, or any province of Canada, that
has the majority of its Property located in and makes the major portion of its
sales to Persons located in the United States of America or Canada, and more
than fifty percent (50%) 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, directly or indirectly, by the Company.
"Trade Receivables Agreement" shall mean
(i) the Amended and Restated Trade Receivables Purchase and Sale Agreement
dated as of January 26, 1990 and as amended thereafter among the Company,
Corporate Asset Funding Company, Inc., Citibank, N.A. and Citicorp North
America, Inc., individually and as agent,
(ii) the Amended and Restated Trade Receivables Purchase and Sale
Agreement dated as of January 26, 1990 and as amended thereafter among the
Company, Citibank, N.A. and Citicorp North America, Inc., individually and as
agent, and
(iii) other agreements for the sale of receivables, or other amounts
payable to the Company on account of any pre-production costs, by the Company or
any Subsidiary, with recourse to the Company or such Subsidiary no greater than
as set forth in the agreement referred to in clause (i) of this definition,
provided that in no event shall
65
(a) the Company or any Subsidiary sell Property (or subject Property to
any Liens) under any such agreements other than Property of the type that may be
sold under any such agreements in accordance with the terms of any such
agreements as in effect on February 2, 1990, and in no event shall such sales be
made unless they are sales of interests in accounts and general intangibles as
such terms are defined by the Uniform Commercial Code as in effect in New York,
(b) at any time the aggregate amount of claims (whether or not asserted at
such time) against any one or more of the Company or the Subsidiaries, or assets
of any of them, arising out of such agreements (but only that portion of such
claims that represents principal) exceed the greater of,
(I) thirty-five percent (35%) of Adjusted Consolidated Tangible Net Worth,
or
(II) Sixty Million Dollars ($60,000,000), and
(c) for any period of ten (10) consecutive Business Days, the aggregate
amount of claims (whether or not asserted at such time) against any one or more
of the Company or the Subsidiaries, or assets of any of them, arising out of
such agreements (but only that portion of such claims that represents principal)
exceed ninety-one percent (91%) of the aggregate face amount of the receivables
and general intangibles with respect to which the Company may or has sold
interests under any such agreements and which receivables and general
intangibles are outstanding at such time.
"Transferee" shall mean any direct or indirect transferee of all or any
part of any Note issued under this Agreement.
"Voting Stock" shall mean, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(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).
"Warrant Agreement" shall mean that certain Warrant Agreement, dated as of
July 31, 1993, among the Company and the Persons identified on Annex 1 thereto.
"Warrants" shall mean warrants to purchase shares of the common stock of
the Company issued pursuant to the Warrant Agreement.
"Wholly-Owned Subsidiary" shall mean any Subsidiary one hundred percent
(100%) of the capital stock of which (other than directors' qualifying shares)
is held of record and beneficially owned by the Company or any other Wholly-
Owned Subsidiary.
66
11. MISCELLANEOUS.MISCELLANEOUS.
A. 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 Agreed
Put Consideration and any Yield-Maintenance Amount payable with respect to, such
Note, 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.
B. 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, all out-of-pocket
expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and
expenses of any special counsel engaged by such Purchaser or such Transferee in
connection with this Agreement, the transactions contemplated hereby and any
subsequent proposed modification of, or proposed consent under, this Agreement,
whether or not such proposed modification shall be effected or proposed consent
granted, and
(ii) the 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 this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the transactions contemplated hereby 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.
C. Consent to Amendments. This Agreement and the Notes 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 Holders
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 Agreed Put Consideration or Yield-Maintenance Amount
67
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. With
respect to waivers or consents to amendments to or concerning the provisions of
paragraph 5I hereof, the provisions of such paragraph and (except as set forth
in this sentence) the definitions used therein (as used therein) may not be
waived, amended or supplemented without the consent of each holder of Notes, but
waivers concerning the occurrence of any Prepayment Event, and waivers and
consents to amendments or supplements to the definition of Prepayment Event, may
be given by the Required Holders.
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. 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.
D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. The
Notes are issuable as registered notes without coupons in denominations of at
least One Million Dollars ($1,000,000), except as may be necessary to reflect
any principal amount not evenly divisible by One Million Dollars ($1,000,000).
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, execute and deliver one or more
new Notes, of the same Series as such surrendered Note, of like tenor and of a
like aggregate principal amount, registered in the name of the Transferee or
Transferees, provided that any such Transferee or Transferees are Institutional
Investors. At the option of the holder of any Note, such Note may be exchanged
for other Notes, of the same Series as such exchanged Note, 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, 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 will make and deliver a new Note, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated Note.
68
E. 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, 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
Institutional Investor on such terms and conditions as may be determined by such
holder in its sole and absolute discretion, provided that any such participation
shall be in a principal amount of at least One Hundred Thousand Dollars
($100,000).
F. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
contained in the Company's Quarterly Report on Form 10-Q for fiscal quarter
ended May 2, 1993. If any change in accounting principles from those used in the
preparation of such financial statements hereafter occasioned by the
promulgation of rules and regulations by or required by the Financial Accounting
Standards Board, the Cost Accounting Standards Board or the Securities and
Exchange Commission (or successors thereto or agencies with similar functions)
result in a material change in the accounting principles used to prepare the
financial statements contained in the Company's Annual Reports on Form 10-K or
Quarterly Reports on Form 10-Q, the Company and the holders of Notes agree, upon
notification of such change by the Company to the holders of Notes or by a
holder of Notes to the Company, to enter into negotiations in order to amend
paragraph 6 and the Financial Covenants incorporated by reference herein, as
applicable, so as to equitably reflect such change with the desired result that
the criteria for evaluating the Company's financial condition shall be the same
after such change as if such change had not been made.
G. Directly or Indirectly. Where any provision in this Agreement refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person, including actions taken by or on behalf of any
partnership in which such Person is a general partner.
H. 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.
69
I. 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.
J. Disclosure to Other Persons. Each Purchaser agrees to use its best
efforts to hold in confidence and not to disclose any Confidential Information,
provided, that any Purchaser will be free, after notice to the Company, to
correct any false or misleading information that may become public concerning
its relationship to the Company and the Subsidiaries or to the transactions
contemplated by this Agreement. Notwithstanding the foregoing, 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 (including, without limitation,
Confidential Information), 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 and professional
consultants,
(ii) any other holder of any Note,
(iii) any Institutional Investor to which such holder sells or offers to
sell such Note or any part thereof, provided that such Institutional Investor
signs a written agreement to comply with the confidentiality provisions of this
Agreement, regardless of whether or not such offeree purchases any Notes, and
provided further that no such agreement shall be required so long as such
Institutional Investor is furnished only with information that is not
Confidential Information,
(iv) any Institutional Investor to which such holder sells or offers to
sell a participation in all or any part of such Note, provided that such
Institutional Investor signs a written agreement to comply with the
confidentiality provisions of this Agreement, regardless of whether or not such
offeree purchases any Notes, and provided further that no such agreement shall
be required so long as such Institutional Investor is furnished only with
information that is not Confidential Information,
(v) any federal or state regulatory authority having jurisdiction over
such holder,
(vi) the National Association of Insurance Commissioners or any similar
organization or
(vii) any other Person to which such delivery or disclosure may be
necessary,
(a) in compliance with any law, rule, regulation or order applicable to
such holder,
70
(b) in response to any subpoena or other legal process, or
(c) in connection with any litigation to which such holder is a party.
K. 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:
Xxxx, Inc.
000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: Treasurer
copy to: General Counsel
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 either to the Company at its address specified above or to any
officer of the Company.
L. Payments Due on Non-Business Days. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day. If the date for any payment is extended to the
next succeeding Business Day by reason of the preceding sentence, the period of
such extension shall be included in the computation of the interest payable on
such Business Day.
M. 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 Holders, the
determination of such satisfaction shall be made by such Purchaser or the
Required Holders, as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such determination.
N. 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.
71
O. 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 provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
P. 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.
Q. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.
R. 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 3G, 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.
12. CONSENT; WAIVER.
A. Consent to Amendment of Credit Agreement. The Purchasers hereby consent
to an amendment of the definition of "Repayment Date" in the Credit Agreement
for the purpose of including the dates upon which Equipment Sublease Prepayment
Events occur. Such amendment is set forth in the eleventh amendment to the
Credit Agreement, dated as of January 19, 1996, and the Company hereby
represents and warrants that a true and correct copy of such eleventh amendment
has been delivered to each Purchaser. The aforesaid consent is given pursuant to
the requirements of paragraph 6O of this Agreement.
B. Waiver of Certain Provisions of Existing 9.33% Note Agreement. The
Purchasers hereby waive any Default or Event of Default hereunder resulting
solely as a consequence of a violation, prior to the Amendment Date, of the
provisions of the second and third paragraphs of paragraph 5D of the Existing
9.33% Note Agreement by virtue of any failure of the Company to deliver to the
holders of the Existing 9.33% Notes the Officer's Certificate and the
certificate of the Company's accountants in compliance with the requirements set
forth therein.
[Remainder of page intentionally blank. Next page is signature page.]
72
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Note Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
XXXX, INC.
By: /s/ X. X. Xxxxxxx
-----------------
Name: X. X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Xxxxxxx Xxxxxxx
-------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: Counsel
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: Assistant Director
Investment Securities
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
73
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
LIFE INSURANCE COMPANY OF NORTH
AMERICA
Each of these entities, severally and not jointly, is either the registered
owner of one or more securities pertaining hereto or is a beneficial owner of
one or more securities owned by and registered in the name of a nominee for that
entity.
By CIGNA Investments, Inc.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
SUN LIFE ASSURANCE COMPANY
OF CANADA
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, U.S. Private
Placements - for President
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Associate Counsel - for
Secretary
SUN LIFE ASSURANCE COMPANY
OF CANADA (U.S.)
By: /s/ X. Xxxxx Xxxxxxx
--------------------
Name: X. Xxxxx Thomson
Title: Treasurer
