DEFERRAL LOAN AND LEASE
MODIFICATION AGREEMENT
This Deferral Loan and Lease Modification Agreement (this "Agreement"),
dated as of October 12, 1999, is among Xxxxxxxxxx Industries, Inc. ("PII") and
the financial institutions listed on the signature page hereof (the Term Lenders
listed on Exhibit 1 being herein referred to as "Term Lenders," the equipment
lessors listed on Exhibit 2 being herein referred to as "Lessors" and the Term
Lenders and Lessors being sometimes herein collectively referred to as the
"Institutions").
R E C I T A L S
A. PII and the Institutions are parties to various loan, credit and lease
agreements (with all amendments and modifications thereto, but specifically
excluding the Senior Credit Agreement (as defined herein) the "Existing
Agreements"). Schedule 1 to this Agreement sets forth for each Institution
various information concerning its Existing Agreement as modified by this
Agreement.
B. PII is delinquent in certain payments under the Existing Agreements. PII
has requested, and (i) the Term Lenders have agreed to either (a) make loans to
PII to enable PII to cure any delinquent payments and prepay certain payments
under the Existing Agreements or (b) defer certain delinquent and scheduled
payments and (ii) the Lessors have agreed to reset the rent payment schedule
under their Existing Agreements, all as detailed on each Institution's schedule
within Schedule 1.
NOW, THEREFORE, the parties agree:
1. Reaffirmation of Existing Agreements.
1.1 PII acknowledges, ratifies and confirms the validity and
enforceability of each of the Existing Agreements.
1.2 PII and each of the Institutions agree that the balances due under
and the number and amount of delinquent payments (exclusive of any late charges,
default interest or other amounts resulting from the failure to pay such
payments when due) under each of the Existing Agreements are set forth on each
Institution's schedule within Schedule 1(1). PII acknowledges that its
obligations under the Existing Agreements as set forth on Schedule 1 are
enforceable according to the terms of the Existing Agreements and that no
defenses, offsets, claims or counterclaims in favor of PII exist under or with
respect to the Existing Agreements, including, without limitation, as to the
amounts set forth on Schedule 1.
1.3 All terms, covenants, conditions and obligations of PII contained
in the Existing Agreements shall continue in full force and effect, shall be
enforceable against PII in accordance with their terms, and shall, except as
expressly provided herein, be unmodified and unaffected by this Agreement,
including, without limitation, that (a) upon completion of the revised payment
schedule for the period indicated on Schedule 1, there may be monthly payments
remaining under the terms of some or all of the Existing Agreements, which
payments will be due and owing pursuant to the Existing Agreements unaffected by
this Agreement and (b) following full satisfaction of the Lessors' Existing
Agreements, PII shall retain any existing option to purchase the subject
equipment on the terms and conditions that such option is available pursuant to
the Existing Agreements.
--------------------
(1) It is understood by the parties that the payment amounts reflected on
Schedule 1 do not include any taxes, and that taxes will be billed and payable
in addition to the stated payment amounts.
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1.4 Nothing herein shall be or shall be deemed to be or construed to
be a change of character of any lease into any other type of transaction. PII
and each of the Institutions waive any right to take the position, in or outside
of bankruptcy proceedings, that any lease described in a Lessor's applicable
Existing Agreement is a conditional or disguised sale, a secured transaction or
any other transaction other than a true lease (the "Characterization Waiver").
In any event, if any Lessor's Existing Agreement is determined to be a lease
intended as security, then all of the provisions of this Agreement applicable to
Term Lenders shall be applicable to such Lessor, and the Lessor will be deemed
to be a Term Lender and its Deferred Rent (defined in Section 2.C) will be
deemed to be Deferred Loan Payments (defined in Section 2.B) in the amount of
such Deferred Rent and such Lessor shall be deemed to have timely made the
parallel elections available to a Term Lender which correspond with the
elections actually made by such Lessor pursuant to Sections 2.C and 2.D below.
2. Deferral Loans, Deferred Loan Payments and Modified Lease Payments.
2.A Deferral Loans
2.A.1 On the terms and subject to the conditions in this Agreement, on
the Closing Date (defined below) each Term Lender not electing to defer payments
pursuant to Section 2.B, severally and not jointly, shall make a loan
(individually a "Deferral Loan" and collectively the "Deferral Loans") to PII in
an amount equal to the Deferral Loan Principal Amount set forth on such Term
Lender's schedule within Schedule 1. PII hereby directs each Term Lender to
disburse the proceeds of its Deferral Loan to such Term Lender for PII's
account, and each Term Lender agrees to apply the proceeds thereof to (a) pay
the Delinquent
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Payments shown on such Term Lender's schedule within Schedule 1 and (b) apply
the balance of the Deferral Loan to prepay the number of next succeeding
payments on the Term Lender's obligation shown on Schedule 1. "Closing Date"
means October 13, 1999, or such other date as may be agreed by PII and each of
the Institutions.
2.A.2 Each Term Lender's Deferral Loan shall bear interest at the rate
of nine percent (9%) per annum commencing on August 1, 1999 and be repayable as
follows: on November 15, 1999, interest accrued for the period August 1, 1999
through October 31, 1999, and on the fifteenth day of each month thereafter
until August 15, 2000, interest only on the unpaid balance of such Term Lender's
Deferral Loan accrued to the last day of the preceding month at the rate of nine
percent (9%) per annum; and commencing on September 15, 2000, monthly payments
of principal and interest sufficient to amortize the remaining balance of the
Deferral Loan on that date with interest at the rate of nine percent (9%) per
annum over 24 months, with the unpaid balance of the Deferral Loans due and
payable in full on the earlier of (a) August 15, 2002 and (b) the stated
maturity date of the obligation under the Existing Agreement to which the
Deferral Loan relates.
2.A.3 Each Deferral Loan and any other obligations of PII hereunder
will be secured by all security interests, and the collateral therefor, existing
in favor of the respective Term Lender for such Term Lender's existing loan on
the Closing Date (such collateral herein referred to as "First Lien
Collateral"). The priority of the security interest securing the Deferral Loans
shall be the same as the priority of such Term Lender's interest in the First
Lien Collateral to secure such Term Lender's loan under the Existing Agreements
(the "Original Loan"). Any Institution with a junior lien on or security
interest in such First Lien
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Collateral or blanket security interest in PII's equipment hereby acknowledges
that the Deferral Loans are secured by the First Lien Collateral with the same
priority as existed on the Closing Date to secure the Term Lender's Original
Loan and subordinates such junior or blanket security interest to the security
interests of each Term Lender in such Term Lenders' First Lien Collateral
securing the Deferral Loans and (b) the transactions contemplated by this
Agreement shall not affect any existing security interest priority held by a
Term Lender immediately prior to the Closing Date. Any proceeds from the
disposition of a Term Lender's collateral received by a Term Lender during the
term of the Deferral Loans shall be applied to payments in the manner set forth
in the Existing Agreements; provided, that nothing herein shall be deemed to
authorize the sale of any collateral in violation of the terms of any Existing
Agreement.
2.A.4 On the Closing Date, a loan fee equal to two percent (2%) of the
principal amount of each Term Lender's Deferral Loan shall be earned by each
Term Lender. The fee shall be payable in full in cash on January 15, 2000.
2.A.5 The Deferral Loan of any Term Lender shall, at the request of
such Term Lender, be evidenced by a promissory note in form reasonably
satisfactory to such Term Lender (a "Note"). PII shall execute all documents
reasonably requested by any Term Lender to evidence and perfect the security
interest for the Deferral Loan.
2.A.6 At the election of each Term Lender to be exercised by a writing
received by PII not later than ninety (90) days following the Closing Date, each
Term Lender may elect either (a) the Common Stock conversion rights in respect
of the principal amount of the Deferral Loan on the terms set forth in Schedule
2 to this Agreement or (b) to receive an
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additional loan fee equal to three (3) percent of the principal amount of each
Term Lender's Deferral Loan, payable in cash in three (3) equal payments on the
first, second and third annual anniversaries of the Closing Date (an "Additional
Lender Fee"). In the absence of a timely election, a Term Lender shall be deemed
to have elected to receive the Additional Lender Fee.
2.B. Loan Payment Forbearance
2.B.1 In lieu of making a Deferral Loan under Section 2.A and
receiving any rights or benefits in respect thereto, a Term Lender may elect (a
"Forbearance Election"), by written notice to PII on the Closing Date, to defer
the payments due under its Existing Agreement for the months of August,
September, October, November and December, 1999 and January, 2000 as set forth
in such Term Lender's Schedule 1 (the "Deferred Loan Payments"). Commencing on
September 15, 2000, the amount of Deferred Loan Payments outstanding on that
date will be paid in equal monthly installments over 24 months (which payments
shall be in addition to the regularly scheduled payments of principal and
interest and other amounts due in connection with the Term Lender's Existing
Agreements), with the unpaid balance of the Deferred Loan Payments due and
payable in full on the earlier of (a) August 15, 2002 and (b) the stated
maturity date of the obligation under the Existing Agreement to which the
Deferred Loan Payments relate.
2.B.2 On the Closing Date, a forbearance fee equal to two percent (2%)
of the principal amount of each Term Lender's Deferred Loan Payments shall be
earned by each Term Lender which makes the Forbearance Election (a "Forbearing
Lender"). The fee shall be payable in full in cash on January 15, 2000.
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2.B.3 At the election of each Forbearing Lender to be exercised by a
writing received by PII not later than ninety (90) days following the Closing
Date, each Forbearing Lender may elect either (a) the Common Stock conversion
rights in respect of the principal amount of the Deferred Loan Payments on the
terms set forth in Schedule 2 to this Agreement or (b) to receive an additional
forbearance fee equal to three percent (3%) of the principal amount of such
Forbearing Lender's Deferred Loan Payments, payable in cash in three (3) equal
payments on the first, second and third annual anniversaries of the Closing Date
(an "Additional Forbearance Fee"). In the absence of a timely election, a
Forbearing Lender shall be deemed to have elected to receive the Additional
Forbearance Fee.
2.C. Lease Payments.
2.C.1 Effective on the Closing Date, each Lessor and PII shall be
deemed to have revised the schedule for rent payments under its lease as set
forth on such Lessor's schedule within Schedule 1 (the amount set forth in the
column titled "Deferral Payments AMORTIZATION" being referred to as "Deferred
Rent"). PII shall execute such further lease amendments and other documents
reasonably requested by Lessor to evidence the revised rent payment schedule and
lease modification.
2.C.2 At closing, a lease restructuring fee equal to two percent (2%)
of the amount of each Lessor's Deferred Rent shall be earned by each Lessor. The
fee shall be payable in full in cash on January 15, 2000 as provided in such
Lessor's schedule within Schedule 1. This lease restructuring fee shall be paid
to each Lessor notwithstanding any sale of assets or stock, merger or
reorganization by PII or any election under Section 2.D hereof.
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2.C.3 At the election of each Lessor to be exercised by a writing
received by PII no later than ninety (90) days following the Closing Date, each
Lessor may elect either (a) the Common Stock conversion rights in respect of the
Deferred Rent as specified in Schedule 2 to this Agreement or an additional
restructuring fee equal to three percent (3%) of the amount of each Lessor's
Deferred Rent (an "Additional Lessor Fee"), payable in cash in three (3) equal
payments on the first, second and third annual anniversaries of the Closing
Date. In the absence of a timely election, a Lessor shall be deemed to have
elected to receive the Additional Lessor Fee.
2.D. Transaction Election. Upon the closing of a Transaction (as
defined in Schedule 2), each Term Lender or Lessor which has elected to receive
either the Additional Lender Fee, Additional Forbearance Fee or Additional
Lessor Fee (collectively, an "Additional Fee") may elect to deem all Deferral
Loans, Deferred Loan Payments or Deferred Rent (as the case may be) to be due
and payable ninety (90) days from the date of the closing of the Transaction, in
return for a waiver of any then unpaid Additional Fee. Such election must be
made by written notice to PII received not later than seven (7) days following
the closing of the Transaction.
3. Waiver of Defaults. On the Closing Date each Institution, by
disbursement of the proceeds of its Deferral Loan or the effectiveness of its
loan payment deferral or revised rent payment schedule in accordance with this
Agreement, will be deemed to have waived any unpaid late charges, default
interest or similar amounts or charges imposed under the Existing Agreements and
accrued to the Closing Date, to have rescinded any acceleration or the
imposition of any interest at a rate other than the nondefault rate in the
Existing Agreements,
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and other than provided on Schedule 4 to have waived all monetary and other
defaults known to such Institution under the Existing Agreements as of the
Closing Date.
4. Release. In consideration of the agreements of the Institutions under
this Agreement, upon disbursement by each Term Lender of the proceeds of its
Deferral Loan or the effectiveness of a loan payment deferral in lieu of a
Deferral Loan or a revised rent payment schedule, PII hereby releases, acquits
and forever discharges such Institution, its past and present employees, agents,
attorneys, officers, directors and affiliates of and from any and all claims,
demands, damages, liabilities, obligations, actions or causes of action and
suits or causes of suits arising out of, connected with or related to the
Existing Agreements or the relationship between PII and such Institution to the
date of this Agreement; provided, that nothing in this Agreement shall be deemed
to terminate the Existing Agreements or relieve any Institution of its
obligations under this Agreement.
5. Conditions Precedent. The effectiveness of this Agreement and the
availability of the Deferral Loans, loan payments deferral or revised rent
payment schedules are subject to the satisfaction of each of the following
conditions:
5.1 PII and each Institution shall have duly executed and delivered
this Agreement.
5.2 If requested by a Term Lender making a Deferral Loan, PII shall
have executed and delivered to such Term Lender a Note. If requested by a
Lessor, PII shall have executed and delivered to such Lessor a lease amendment
or other document reasonably requested.
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5.3 PII shall have, if requested by any Institution, delivered to such
Institution: (i) copies of PII's articles of incorporation and bylaws as in
effect on the Closing Date; (ii) resolutions of PII's board of directors
authorizing the execution, delivery and performance of this Agreement; and (iii)
incumbency certificates for each of the officers of PII who is authorized to
execute this Agreement and any Note, in each case certified by a secretary or
assistant secretary of PII, together with a status certificate for PII from the
Oregon Secretary of State as of a date not more than five business days before
the Closing Date.
5.4 Each of PII's representations and warranties contained in this
Agreement is true and correct in all material respects on and as of the Closing
Date.
5.5 The Key Note and the Senior Credit Agreement shall be amended so
that the aggregate credit available to PII under the Key Note and the
"Additional Availability" provided for under the Senior Credit Agreement shall
not at any time before July 1, 2000 be less than the amount set forth on
Schedule 3. "Key Note" means that certain Promissory Note of PII to KeyBank
National Association dated July 2, 1999 in the original principal amount of
$5,000,000, as amended from time to time. "Senior Credit Agreement" means that
certain Amended and Restated Credit Agreement among PII, KeyBank National
Association as Administrative Lender and the other lenders signatory thereto, as
amended from time to time.
5.6 This Agreement shall have been executed and delivered by
Institutions holding at least sixty-seven percent (67%) of the aggregate amount
of Deferred Loans, Deferred Loan Payments and Deferred Rent identified in the
Schedule 1 to this Agreement, which must in any event include Xxxxxx Financial,
Inc.
6. Representations, Warranties and Covenants.
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6.1 PII represents and warrants to each of the Institutions that:
(a) PII is a corporation duly incorporated and validly existing
under the laws of the State of Oregon;
(b) PII has all requisite corporate power and authority to
execute, deliver and perform this Agreement;
(c) PII has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement;
(d) PII has duly executed and delivered this Agreement; and
(e) this Agreement, any Notes, any revised rent payment schedules
or any other documents executed pursuant to the terms of this Agreement (when
duly executed and delivered by PII) constitute the legal, valid and binding
obligation of PII enforceable against PII in accordance with their terms.
(f) PII has not in the past ninety (90) days and shall not enter
into any agreement effecting a forebearance or refinance of any existing
agreement related to PII's lease or purchase of equipment with any lender or
lessor not a signatory hereto on terms or conditions more favorable to such
lessor or lender in any material respect than the terms and conditions contained
in this Agreement.
6.2 Each Institution represents to PII and each other Institution,
severally and not jointly:
(a) except as described on such Institution's schedule within
Schedule 1, each Institution is the sole owner and holder of the Existing
Agreements set forth on such Institutions's schedule and the obligations
evidenced thereby; and
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(b) each Institution has the requisite corporate power and
authority, and has taken all necessary corporate action, to authorize the
execution, delivery and performance of this Agreement and has duly executed and
delivered this Agreement.
7. Default.
7.1 Any one or more of the following shall constitute an Event of
Default under this Agreement, the Notes and each Existing Agreement (which shall
be in addition to any event of default as set forth in each Existing Agreement):
(a) PII shall fail to pay (i) any installment of principal or
interest on the Deferral Loans, (ii) any Deferred Loan Payments, (iii) any
Deferred Rent or (iv) any other monetary obligation of PII under this Agreement
within ten (10) days of the due date;
(b) PII shall fail to timely perform any other obligation under
this Agreement, or any representation and warranty of PII shall fail to be true
and correct in all material respects when made;
(c) There shall have occurred, after the date of this Agreement,
an event of default (whether or not defined as such) under any Existing
Agreement of an Institution as a result of which such Institution shall have
accelerated the maturity of its obligations or terminated its lease (as the case
may be) or exercised any of the other remedies available to such Institutions
(d) PII shall (i) breach any of the covenants (a "Specified
Covenant") contained in Sections 7.16, 7.20 or 8.14 of the Senior Credit
Agreement, as amended by the Ninth Amendment to Amended and Restated Credit
Agreement dated as of October 12, 1999, or (ii) breach or fail to perform any
term, covenant or condition of any (x) Existing Agreement
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(which has not resulted in the acceleration of the obligations under or the
termination of the lease constituting such Existing Agreement), (y) other term
loan agreement, equipment or lease agreement or (z) other agreement material to
PII's business taken as a whole, and in which case at least a majority of the
Institutions holding not less than two-thirds in amount of the then outstanding
aggregate balance of the Deferral Loans, the Deferred Loan Payments, the
Deferred Rent and the obligations evidenced by the Existing Agreements (after
giving effect to the application of the Deferral Loans and effectiveness of the
revised rent payment schedules) elect to declare an Event of Default under this
Agreement;
(e) The obligations of PII under the Senior Credit Agreement
shall have become immediately due and payable, whether by acceleration or
otherwise; and
(f) PII shall have commenced a voluntary case under the
Bankruptcy Code or an involuntary case under the Bankruptcy Code shall have been
commenced against PII and such case shall not have been dismissed within 60 days
after the commencement thereof.
7.2 PII shall give each Institution prompt written notice of any
breach of a Specified Covenant or of the acceleration of the obligations under
the KeyBank Credit Agreement or by any Institution under the Existing
Agreements.
7.3 Upon the occurrence of an Event of Default, any Institution may
declare the Deferral Loan, Deferred Loan Payments, Deferred Rent and all other
amounts due under the Existing Agreements to be immediately due and payable and
exercise any other remedies under the Existing Agreements.
8. Miscellaneous.
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8.1 PII acknowledges that this Agreement shall not obligate any
Institution to extend further credit to PII or to restructure in any way PII's
obligations to such Institution except as expressly provided in this Agreement,
and shall not constitute a course of dealing or course of performance or
evidence or create any expectation or reliance on the part of PII applicable to
any future transaction between PII and such Institution.
8.2 This Agreement, together with any Notes delivered by PII to an
Institution and other documents delivered pursuant to the terms of this
Agreement, constitutes the entire understanding and agreement between PII and
such Institution with respect to the subject matter hereof; provided, however,
that nothing contained in this Agreement shall alter or amend the Existing
Agreements except as expressly provided in this Agreement.
8.3 In any litigation to construe, interpret or enforce the terms of
this Agreement, the Deferral Loans, the Deferred Loan Payments or the revised
rent schedules, the prevailing party shall be entitled to recover from the
losing party its reasonable attorney fees, costs and expenses at trial, on any
appeals therefrom or reviews thereof, and in any bankruptcy case or insolvency
proceeding. Each party shall bear its own fees and expenses, including attorneys
fees, incurred in connection with the negotiation, preparation, documentation,
review and closing of the transaction contemplated by this Agreement, and PII
shall not be required to reimburse the fees and expenses of any Lender in
connection herewith.
8.4 All notices under this Agreement shall be in writing or by
facsimile and any such notice shall become effective upon (i) personal delivery
thereof, including, without limitation, by overnight mail or courier service,
(ii) receipt thereof, in the case of notice by United States mail, certified or
registered, postage pre-paid, return receipt requested, or (iii)
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confirmation of receipt thereof, in the case of notice by facsimile, in each
case addressed to the parties hereto at the addresses set forth beneath their
respective signatures to this Agreement.
8.5 This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws (without regard to choice of law rules) of the
state of Oregon.
8.6 UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE
BY LENDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS
WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY
THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY THE LENDER TO BE ENFORCEABLE.
XXXXXXXXXX INDUSTRIES, INC.
By: XXXXXXX X. XXXXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
Address for Notices:
Xxxxxxxxxx Industries, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Fax: 000-000-0000
15
XXXXXX FINANCIAL, INC.(2)
By: XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: SVP
Address for Notices:
THE ASSOCIATES LEASING, INC.
By: XXXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Address for Notices:
Associates Leasing, Inc.
000 Xxxxxxxxx Xxxxxxx, Xxxxx 00
Xxxxxx, XX 00000
Attn: Capital Markets Group
Fax: 000-000-0000
THE CIT GROUP EQUIPMENT
FINANCING, INC.
By: XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
Address for Notices:
---------------------
(2) Provided, however, that Xxxxxx Financial, Inc. ("Xxxxxx") shall not be
deemed to have executed and delivered this Agreement in respect of the
obligations identified in Schedule 1 to this Agreement regarding Xxxxxx Loan #
1910069-00104, (which is currently beneficially owned by Diamond Lease (USA),
Inc. and Phoenixcor, Inc.) except in respect of Sections 1.4 and 2.A.3 hereof
unless and until Xxxxxx has received written consents thereto from Diamond Lease
(USA), Inc. and Phoenixcor, Inc. and has informed PII in writing of such consent
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FIFTH THIRD LEASING COMPANY
By: XXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Address for Notices:
00 Xxxxxxxx Xxxxxx Xxxxx
XX 00000X
Xxxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx
M&I FIRST NATIONAL LEASING CORP.
By:
---------------------------------------
Name:
Title:
Address for Notices:
FLEET BUSINESS CREDIT CORPORATION
By: XXXXX XXXXXXXXXXX
---------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
Address for Notices:
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
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BANC ONE LEASING CORPORATION
By:
---------------------------------------
Name:
Title:
Address for Notices:
Banc One Corporation
000 Xxxx Xxxxx Street
PO Box 710152
Columbus, OH 43271-0152
COPELCO CAPITAL, INC.
By: XXXXXX X. XXXXXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Address for Notices:
Copelco Capital, Inc.
000 Xxxx Xxxx Xxxxx
Xx. Xxxxxx, XX 00000-0000
Copy to:
Xxxx X. Xxxx
Farleigh, Wada & Xxxx, P.C
000 XX Xxxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
BANK LEUMI LEASING CORPORATION
By:
---------------------------------------
Name:
Title:
Address for Notices:
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TRANSAMERICA EQUIPMENT FINANCIAL
SERVICES CORPORATION
By: XXXXX XXXXXXX
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
Address for Notices:
Transamerica Equipment Financial Services
Corportion
00000 Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
GENERAL ELECTRIC CAPITAL
CORPORATION
By: X.X. XXXXXXX
--------------------------------------
Name: X.X. Xxxxxxx
Title: Senior Risk Manager
Address for Notices: 0000 XXX Xxxxxxx, #0000
Xxxxxx, XX 00000
BANK AMERICA LEASING CORPORATION
By:
---------------------------------------
Name:
Title:
Address for Notices:
19
PHOENIXCOR, INC.
By:
---------------------------------------
Name:
Title:
Address for Notices:
AMERICAN EQUIPMENT LEASING,
a Division of EAB Leasing Corp.
By: XXXXXXXXXXX X. XXXXXXX
---------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
Address for Notices:
American Equipment Leasing
0 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
ACKNOWLEDGMENT
KeyBank National Association ("KeyBank"), as successor in interest to
KeyBank of Washington, and KeyBank and Xxxxxx Financial, Inc. ("Xxxxxx") each as
a lender under the Senior Credit Agreement, each hereby (a) consents to and
acknowledges that (1) each Term Lender's Deferral Loan is secured by such Term
Lender's existing security interest (the "Existing Security") in PII's property,
and (2) the priority of the Existing Security is unchanged from its priority
immediately before the Closing date and (b) consents to and acknowledges that to
the extent that any Lessor's Existing Agreement with PII is deemed to be a
secured transaction rather than a true lease, such Lessor's claim against PII
arising from the Existing Agreement and the payments deferred pursuant to this
Agreement shall continue to be secured by the assets subject to the Existing
Agreement (the "Lessor Security") with the same priority as presently exists and
the priority of the Lessor Security is unchanged from its priority immediately
before the Closing Date. In the event any Lessor's lease is determined to be a
lease intended as security, then the consent and acknowledgment by KeyBank and
Xxxxxx shall be applicable to such Lessor, and the Lessor will be deemed to be a
Term Lender and its Deferred Rent (defined in Section 2A) will be deemed to be a
Deferral Loan. KeyBank and
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Xxxxxx each further agrees to join in the Characterization Waiver as set forth
in Section 1.4 of this Agreement.
KEYBANK NATIONAL ASSOCIATION, as
Lender under the Senior Credit Agreement
By: XXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
XXXXXX FINANCIAL, INC., as Lender under
the Senior Credit Agreement
By: XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: SVP
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EXHIBIT 1
---------
(Term Lenders)
Bank Leumi Leasing Corporation
Fleet Business Credit Corporation
Xxxxxx Financial, Inc.
Xxxxxx Financial, Inc., as agent for Diamond Lease (USA), Inc. and Phoenixcor,
Inc.
Transamerica Equipment Financial Services Corp.
EXHIBIT 2
---------
(Lessors)
American Equipment Leasing, Div. EAB Leasing Corp.
Associates Leasing, Inc.
Banc One Leasing Corporation
CIT Group/Equipment Financing, Inc.
Copelco Capital, Inc. (it being understood that Copelco Capital's agreements in
this agreement apply only to the leases described in Schedule 1 and not to
any other leases, loans or credit agreements of Copelco Capital or its
affiliates with PII.)
Fifth Third Leasing Company
Fleet Business Credit Corporation
General Electric Capital Corporation
M&I First National Leasing Corp.
Nationsbanc Leasing Corporation
Phoenixcor, Inc.
SCHEDULE 1
to
Deferral Loan and Lease Modification Agreement,
dated as of October 12, 1999,
among
Xxxxxxxxxx Industries, Inc.
and
the Institutions named therein
SUMMARY OF DEFERRAL AMOUNTS
Attached separately
SCHEDULE 2
to
Deferral Loan and Loan/Lease Lease Modification Agreement,
dated as of October 12, 1999,
among
Xxxxxxxxxx Industries, Inc.
and
the Lenders Institutions named therein
CONVERSION OF DEFERRAL LOANS AND DEFERRED RENT
AND AMOUNTS AVAILABLE FOR CONVERSION
Section 1.1 Right to Convert.
Subject to and upon compliance with the provisions of this Schedule, each
Institution shall have the right, at its option, at any time after January 1,
2000 until the close of business on the third anniversary of the Closing Date,
to convert the principal amount of its Deferral Loan or Deferred Loan Payments
or the aggregate amount of its deferred rent then outstanding as set forth in
the "Amount Available for Conversion" column on Schedule 1 with respect to that
Institution, as the case may be, (the "Convertible Amount"), or any portion of
such Convertible Amount, into that number of fully paid and non-assessable
shares of common stock ("Common Stock") of Xxxxxxxxxx Industries, Inc. (the
"Company") (as such shares shall then be constituted) obtained by dividing the
Convertible Amount or portion thereof to be converted by the Conversion Price in
effect at such time, and by giving notice in the manner provided in Section 1.2.
An Institution is not entitled to any rights of a holder of Common Stock until
such Institution has converted some or all of its Convertible Amount to Common
Stock, and only to the extent such Convertible Amount is deemed to have been
converted to Common Stock under this Schedule 2. Notwithstanding any other
provision of this Schedule 2, after the first anniversary of the Closing Date,
an Institution may convert no more than 75% of the Convertible Amount then
outstanding, and after the second anniversary of the Closing Date, an
Institution may convert no more than 50% of the Convertible Amount then
outstanding. Notwithstanding the first sentence of this Section 1.1, no
Institution shall have the right to convert any Convertible Amount if, on or
before December 31, 1999, the Company has entered into a definitive and binding
agreement or series of related agreements (the "Agreement") pursuant to which
there shall occur (i) the sale, lease, exchange, or other transfer of all or
substantially all of the assets of the Company, (ii) any merger or statutory
plan of exchange involving the Company ("Merger") in which the Company is not
the continuing or surviving corporation or pursuant to which Common Stock would
be converted into cash, securities or other property or (iii) a tender or
exchange offer is made for Common Stock and such offer results in a portion of
the Common Stock being purchased in the offer and the offeror after the
completion of the offer is the beneficial owner, directly or indirectly, of
Common Stock representing at least 50% of the voting power of outstanding Common
Stock (any of the foregoing, a "Transaction"). The limitation imposed by the
immediately preceding sentence shall
have no effect if the Agreement terminates prior to the completion of the
applicable transaction or if such transaction is not completed on or before
March 31, 2000.
Section 1.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends.
To exercise, in whole or in part, the conversion privilege with respect to
any Convertible Amount, the Institution shall give written notice of conversion
to the Company that the Institution elects to convert such Convertible Amount or
such portion thereof specified in said notice. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which are issuable on such conversion
shall be issued, and shall be accompanied by transfer taxes, if required
pursuant to Section 1.6. Each such conversion notice shall, unless the shares
issuable on conversion are to be issued in the same name as the Institution, be
accompanied by instruments of transfer in form satisfactory to the Company, duly
executed by the Institution, or its duly authorized attorney. The Institution
will not be required to pay any tax or duty which may be payable in respect of
the issue or delivery of Common Stock on conversion, but will be required to pay
any tax or duty which may be payable in respect of any transfer involved in the
issue or delivery of Common Stock in a name other than the same name as the
Institution.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, the Company shall issue and shall deliver to such
Institution a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such Convertible Amount or portion
thereof in accordance with the provisions of this Schedule 2. Certificates
representing shares of Common Stock will not be issued or delivered unless all
taxes and duties, if any, payable by the holder have been paid.
Each conversion shall be deemed to have been effected as to any such
Convertible Amount (or portion thereof) on the date on which the requirements
set forth above in this Section 1.2 have been satisfied as to such Convertible
Amount (or portion thereof), and the person in whose name any certificate or
certificates for shares of Common Stock are issuable upon such conversion shall
be deemed to have become on said date the holder of record of the shares
represented thereby; provided, however, that any such conversion on any date
when the Company's stock transfer books are closed shall constitute the person
in whose name the certificates are to be issued as the record holder thereof for
all purposes on the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price in effect on the date
upon which such Convertible Amount would have been otherwise converted.
Section 1.3 Conversion Price.
The Conversion Price shall be 120% of the closing price for the five days
preceding the Closing Date, subject to adjustment as provided in this Schedule
2.
Section 1.4. Adjustment of Conversion Price and Number of Shares Issuable.
The Conversion Price and the number of shares of Common Stock issuable upon
the conversion of any Convertible Amount are subject to adjustment from time to
time upon the occurrence of the events and in the circumstances enumerated in
this Section 1.4. For purposes of this Section 1.4, "Common Stock" means shares
now or hereafter authorized of any class of common stock of the Company and any
other stock of the Company, however designated, that has the right (subject to
any prior rights of any class or series of preferred stock) to participate in
any distribution of the assets or earnings of the Company without limit as to
per share amount.
(a) Adjustment for Change in Capital Stock. If the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) makes a distribution on its Common Stock in shares of its capital
stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares of its
capital stock;
then the Conversion Price in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Convertible Amount thereafter
converted may receive the aggregate number and kind of shares of capital stock
of the Company which it would have owned immediately following such action if
such Convertible Amount had been converted immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment a holder of a Convertible Amount upon conversion of
it may receive shares of two or more classes of capital stock of the Company,
the Company shall determine the allocation of the adjusted Conversion Price
between the classes of capital stock. After such allocation, the exercise
privilege and the Conversion Price of each class of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 1.4.
Such adjustment shall be made successively whenever any event listed above
shall occur.
(b) Adjustment for Rights Issue. If the Company issues any rights, options
or Warrants entitling any person to subscribe for Common Stock or securities
convertible into, or exchangeable or exercisable for, Common Stock at an
offering price (or with an initial conversion, exchange or Conversion Price plus
such offering price) which is less than the Current Market Price (as defined in
Section 1.4(f)) per share of Common Stock on the record date for such issuance
(all of the foregoing, "Rights"), the Conversion Price shall be adjusted in
accordance with the formula:
0 + NxP
---
E' = E x M
-----
0 + N
where:
E' = the adjusted Conversion Price.
E = the current Conversion Price.
O = the number of shares of Common Stock outstanding on the record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the Current Market Price per share of Common Stock on the record date.
The adjustment shall be made successively whenever any such Rights are
issued and shall become effective immediately after the record date for the
determination of shareholders entitled to receive the Rights in the case of
Rights to be issued to the holders of Common Stock. If, at the end of the period
during which such Rights are exercisable, not all Rights have been converted,
the Conversion Price shall be immediately readjusted to what it would have been
if "N" in the above formula had been the number of shares actually issued.
This subsection (b) does not apply to:
1. Rights issued to the Company's employees under bona fide employee
benefit plans adopted by the Board of Directors and approved by the holders of
Common Stock when required by law, if such Rights would otherwise be covered by
this subsection (b) (but only to the extent that the aggregate number of Rights
excluded hereby and issued after the date of this Agreement shall not exceed the
right to subscribe for more than 5% of the Common Stock outstanding on the date
of this Agreement),
2. Rights issued to persons in a bona fide public offering pursuant to a
firm commitment underwriting or
3. Rights issued to persons who are not affiliates of the Company in a bona
fide private placement through a placement agent that is a member firm of the
NASD (except to the extent that any discount from the Current Market Price
attributable to restrictions on transferability
of the Rights, as determined in good faith by the Board of Directors pursuant to
Section 1.4(n) and described in a Board resolution which shall be filed with the
Convertible Amount Agreement, shall exceed 15%).
(c) Adjustment for Other Distributions. If the Company distributes to all
holders of its Common Stock any of its assets (including cash), debt securities,
preferred stock or any rights or warrants to purchase any such securities, the
Conversion Price shall be adjusted in accordance with the formula:
E' = E x M - F
-----
M
where:
E' = the adjusted Conversion Price.
E = the current Conversion Price.
M = the Current Market Price per share of Common Stock on the record date.
F = the fair market value on the record date of the assets, securities,
rights or warrants applicable to one share of Common Stock. The Board
of Directors shall determine the fair market value pursuant to Section
2(n) based upon the trading prices of publicly traded securities where
applicable.
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
This subsection does not apply to rights, options or warrants referred to
in subsection (b) of this Section 1.4.
(d) Adjustment for Common Stock Issue. If the Company issues shares of
Common Stock for a consideration per share less than the Current Market Price
per share on the date the Company fixes the offering price of such additional
shares, the Conversion Price shall be adjusted in accordance with the formula:
P
-
E' = E x O + M
-----
A
where:
E' = the adjusted Conversion Price.
E = the current Conversion Price.
O = the number of shares outstanding immediately prior to the issuance of
such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the Current Market Price per share on the date of issuance of such
additional shares.
A = the number of shares outstanding immediately after the issuance of
such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (a), (b) and (c) of
this Section 1.4,
(2) the conversion of warrants, or the conversion or exchange of other
securities convertible or exchangeable for Common Stock,
(3) Common Stock issued to the Company's employees, consultants or advisors
under the Xxxxxxxxxx Industries, Inc. 1995 Stock Incentive Plan and the
Xxxxxxxxxx Industries, Inc. Employee Stock Purchase Plan as in effect on the
date of the Agreement, if such Common Stock would otherwise be covered by this
subsection (d),
(4) Common Stock upon the conversion of rights or warrants issued to the
holders of Common Stock,
(5) Common Stock issued to shareholders of any Person that is not
affiliated with the Company and that merges into the Company in proportion to
their stock holdings of such Person immediately prior to such merger, upon such
merger,
(6) Common Stock issued to Persons in a bona fide public offering pursuant
to a firm commitment underwriting or
(7) Common Stock issued to Persons who are not affiliates of the
Company in a bona fide private placement through a placement agent that is a
member firm of the NASD (except to the extent that any discount from the Current
Market Price attributable to restrictions on transferability of the Common
Stock, as determined in good faith by the Board of Directors pursuant to Section
1.4(n) and described in a Board resolution which shall be delivered to each
holder of any Convertible Amount, shall exceed 15%).
(e) Adjustment for Convertible Securities Issue. If the Company issues any
securities convertible into or exchangeable for Common Stock (other than
securities issued in transactions described in subsections (b) and (c) of this
Section 1.4) for a consideration per share of Common Stock initially deliverable
upon conversion or exchange of such securities less than the Current
Market Price per share on the date of issuance of such securities, the
Conversion Price shall be adjusted in accordance with this formula:
P
-
E' = E x O + M
-----
O + D
where:
E' = the adjusted Conversion Price.
E = the current Conversion Price.
O = the number of shares outstanding immediately prior to the issuance of
such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Current Market Price per share on the date of issuance of such
securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or exchange
rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of such
securities has not been issued when such securities are no longer outstanding,
then the Conversion Price shall promptly be readjusted to the Conversion Price
which would then be in effect had the adjustment upon the issuance of such
securities been made on the basis of the actual number of shares of Common Stock
issued upon conversion or exchange of such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to shareholders of any person that is not
affiliated with the Company and that merges into the Company, or with a
subsidiary of the Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger,
(2) convertible securities issued to persons in a bona fide public offering
pursuant to a firm commitment underwriting or
(3) convertible securities issued to persons who are not affiliates of the
Company in a bona fide private placement through a placement agent which is a
member firm of the NASD (except to the extent that any discount from the Current
Market Price attributable to restrictions on transferability of Common Stock
issuable upon conversion, as determined in good faith by the Board of Directors
pursuant to Section 1.4(n) and described in a Board resolution which shall be
delivered to each Institution, shall exceed 15%).
(f) Current Market Price. The current market price per share of Common
Stock (the "Current Market Price") on any date is the average of the Quoted
Prices of the Common Stock for 30 consecutive trading days commencing 45 trading
days before the date in question. The "Quoted Price" of the Common Stock is the
last reported sales price of the Common Stock as reported by Nasdaq, National
Market System, or if the Common Stock is listed on a securities exchange, the
last reported sales price of the Common Stock on such exchange which shall be
for consolidated trading if applicable to such exchange, or if neither so
reported or listed, the last reported bid price of the Common Stock. In the
absence of one or more such quotations, the Board of Directors of the Company
shall determine the Current Market Price pursuant to Section 1.4(n) in good
faith on the basis of such quotations.
(g) Consideration Received. For purposes of any computation respecting
consideration received pursuant to subsections (d) and (e) of this Section 1.4,
the following shall apply:
(1) in the case of the issuance of shares of Common Stock for cash, the
consideration shall be the amount of such cash, provided that in no case shall
any deduction be made for any commissions, discounts or other expenses incurred
by the Company for any underwriting of the issue or otherwise in connection
therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined in good
faith by the Board of Directors pursuant to Section 1.4(n), based upon the
trading prices of publicly traded securities where appropriate (irrespective of
the accounting treatment thereof), and described in a Board resolution which
shall be delivered to each Institution; and
(3) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor shall be
deemed to be the consideration received by the Company for the issuance of such
securities plus the additional minimum consideration, if any, to be received by
the Company upon the conversion or exchange thereof (the consideration in each
case to be determined in the same manner as provided in clauses (1) and (2) of
this subsection).
(h) When De Minimis Adjustment May Be Deferred. No adjustment in the
Conversion Price need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Price. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Section 1.4(h) shall be made to the nearest
1/1000th of a cent or to the nearest 1/1000th of a share, as the case may be.
(i) When No Adjustment Required. No adjustment need be made for a
transaction referred to in Subsections (a), (b), (c), (d) or (e) of this Section
1.4 if the Institutions are to participate in the transaction on a basis and
with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction.
No adjustment need be made for rights to purchase Common Stock pursuant to
a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
(j) Notice of Adjustment. Whenever the Conversion Price is adjusted as
herein provided, the Company shall promptly prepare a notice of such adjustment
of the Conversion Price setting forth the adjusted Conversion Price and the date
on which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each Institution at its last address
appearing on the Company's records within 20 days of the effective of such
adjustment. Failure to deliver such notice shall not affect the legality of any
such adjustment.
(k) Voluntary Reduction. The Company from time to time may reduce the
Conversion Price by any amount for any period of time if the period is at least
20 days and if the reduction is irrevocable during the period; provided,
however, that in no event may the Conversion Price be less than the par value of
a share of Common Stock.
Whenever the Conversion Price is reduced, the Company shall mail to
Institutions a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Conversion Price takes effect. The
notice shall state the reduced Conversion Price and the period it will be in
effect.
A reduction of the Conversion Price does not change or adjust the
Conversion Price otherwise in effect for purposes of subsections (a), (b), (c),
(d) and (e) of this Section 1.4.
(l) Notice of Certain Transactions. If:
(1) the Company takes any action that would require an adjustment in
the Conversion Price pursuant to subsections (a), (b), (c), (d) or (e) of this
Section 1.4 and if the Company does not arrange for the Institutions to
participate pursuant to subsection (i) of this Section 1.4;
(2) the Company takes any action that would require a supplemental
agreement pursuant to subsection (m) of this Section 1.4; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to the Institutions a notice stating the proposed
record date for a dividend or distribution or the proposed effective date of a
subdivision, combination,
reclassification, consolidation, merger, transfer, lease, liquidation or
dissolution. The Company shall mail the notice at least 15 days before such
date. Failure to mail the notice or any defect in it shall not affect the
validity of the transaction.
(m) Reorganization of Company. If the Company consolidates or merges with
or into, or transfers or leases all or substantially all its assets to, any
person, upon consummation of such transaction the Convertible Amounts shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of a Convertible Amount would have owned
immediately after the consolidation, merger, transfer or lease if the holder had
converted the Convertible Amount immediately before the effective date of the
transaction. Concurrently with the consummation of such transaction, the
corporation formed by or surviving any such consolidation or merger if other
than the Company, or the person to which such sale or conveyance shall have been
made, shall enter into a supplemental agreement so providing and further
providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section 1.4. The successor
Company shall mail to the Institutions a notice describing the supplemental
agreement.
If the issuer of securities deliverable upon conversion of Convertible
Amounts under the supplemental agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental agreement.
If this subsection (m) applies, subsections (a), (b), (c), (d) and (e) of
this Section 1.4 do not apply.
(n) Company Determination not Final. Any determination that the Company or
its Board of Directors must make pursuant to the Agreement shall be made in good
faith and shall be binding on the Institutions, except as set forth herein. The
Company shall give each Institution written notice of any such determination by
the Company or its Board of Directors. If a majority in interest of the
Institutions do not agree with any such determination by the Company or its
Board of Directors, such Institutions may request, in a notice delivered to the
Company not later than 30 days after the date on which the holders received
notice of such determination from the Company, that such determination be made
by an investment banking firm (or, if an investment banking firm is generally
not qualified to render such a determination, an appraisal firm) of recognized
national standing, which determination shall be final and binding on the Company
and the Institutions, absent manifest error.
(o) When Issuance or Payment May Be Deferred. In any case in which this
Section 1.4 shall require that an adjustment in the Conversion Price be made
effective as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event (i) issuing to the holder of any
Convertible Amount converted after such record date the Shares of Common Stock
and other capital stock of the Company, if any, issuable upon such exercise over
and above the shares of Common Stock and other capital stock of the Company, if
any, issuable upon such exercise on the basis of the Conversion Price and (ii)
paying to such holder any amount in cash
in lieu of a fractional share; provided, however, that the Company shall deliver
to such holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional Shares of Common Stock, other capital
stock and cash upon the occurrence of the event requiring such adjustment.
(p) Adjustment in Number of Shares. Upon each adjustment of the Conversion
Price pursuant to this Section 1.4, each Convertible Amount outstanding prior to
the making of the adjustment in the Conversion Price shall thereafter evidence
the right to receive upon payment of the adjusted Conversion Price that number
of shares of Common Stock (calculated to the nearest hundredth) obtained from
the following formula:
N' = N x E
-
E'
where:
N' = the adjusted number of Shares issuable upon conversion of a
Convertible Amount by payment of the adjusted Conversion Price.
N = the number of Shares previously issuable upon conversion of a
Convertible Amount by payment of the Conversion Price prior to
adjustment.
E' = the adjusted Conversion Price.
E = the Conversion Price prior to adjustment.
(q) No Dilution or Impairment; Capital and Ownership Structure. If any
event shall occur as to which the provisions of Section 1.4 are not strictly
applicable but the failure to make any adjustment would adversely affect the
purchase rights represented by the Convertible Amounts in accordance with the
essential intent and principles of such section, then, in each such case, the
Company shall appoint an investment banking firm of recognized national standing
that does not have a direct or material indirect financial interest in the
Company or any of its subsidiaries, which has not been, and, at the time it is
called upon to give independent financial advice to the Company, is not (and
none of its directors, officers, employees, affiliates or stockholders are) a
promoter, director or officer of the Company or any of its subsidiaries, which
shall give their opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established in Section 1.4, necessary to
preserve, without dilution, the purchase rights represented by the Convertible
Amounts. Upon receipt of such opinion, the Company will promptly mail a copy
thereof to the Institutions and shall make the adjustments described therein.
The Company will not, by amendment of its articles of incorporation or
through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of the
Convertible Amounts, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such action as may be necessary
or appropriate in order to protect the rights of the holder of the Convertible
Amounts against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (a) will take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock on
the conversion of the Convertible Amounts from time to time outstanding and (b)
will not take any action which results in any adjustment of the Conversion Price
if the total number of shares of Common Stock issuable after the action upon the
conversion of all of the Convertible Amounts would exceed the total number of
shares of Common Stock then authorized by the Company's articles of
incorporation and available for the purposes of issue upon such exercise. A
consolidation, merger, reorganization or transfer of assets involving the
Company covered by Section 1.4(m) shall not be prohibited by or require any
adjustment under this Section 1.4(q).
Section 1.5 Taxes on Shares Issued.
The issue of stock certificates on conversions of Convertible Amounts shall
be made without charge to the converting holder for any tax in respect of the
issue thereof. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
stock in any name other than that of the Institution whose Convertible Amount is
converted, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 1.6 Reservation of Shares; Shares to Be Fully Paid; Listing of Common
Stock.
The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Convertible Amounts from time to time as such Convertible Amounts are
presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Convertible Amounts, the Company shall take all
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue shares of such Common Stock at
such adjusted Conversion Price.
The Company covenants that all shares of Common Stock issued upon
conversion of Convertible Amounts will be fully paid and non-assessable by the
Company and free from all taxes, liens and charges with respect to the issue
thereof.
The Company further covenants that as long as the Common Stock is quoted on
the Nasdaq National Market, or its successor, the Company shall cause all Common
Stock issuable upon conversion of the Convertible Amounts to be eligible for
such quotation in accordance with, and at the times required under, the
requirements of such market, and if at any time the Common Stock becomes listed
on the New York Stock Exchange or any other national securities exchange,
the Company shall cause all Common Stock issuable upon conversion of the
Convertible Amounts to be so listed and kept listed.
SCHEDULE 3
to
Deferral Loan and Lease Modification Agreement,
dated as of October 12, 1999,
among
Xxxxxxxxxx Industries, Inc.
and
the Institutions named therein
ADDITIONAL CREDIT AMOUNT 1999-2000*
Month Amount
----- ------
August $ 8,261,642
September $ 8,048,783
October $ 8,675,670
November $ 7,817,362
December $ 7,060,130
January $ 6,830,230
February $ 7,135,077
March $ 7,148,729
April $ 6,956,273
May $ 6,926,894
June $ 6,418,790
----------------
* Information copied from page 6 of PII's August 4, 1999 budget. Over-Advance
limit amount trails one month.
SCHEDULE 4
to
Deferral Loan and Lease Modification Agreement,
dated as of October 12, 1999,
among
Xxxxxxxxxx Industries, Inc.
and
the Institutions named therein
Copelco Capital, Inc. does not waive, and reserves its rights and remedies
with respect to, the alleged conversion by PII of certain items of leased
equipment and with respect to the auction of certain of Copelco's leased
equipment on October 12, 1999, provided that Copelco shall forebear from
exercising its remedies due to such defaults for at least 60 days to permit PII
and Copelco to effect a resolution of these defaults.
