SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
THE INTERLAKE CORPORATION
- ----------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
- ----------------------------------------------------------------------------
(Title of Class of Securities)
465741 10 6
- ----------------------------------------------------------------------------
(CUSIP Number)
John F. Keane
Tinicum Investors
990 Stewart Avenue
Garden City, New York 11530
(516) 222-2874
Copy to:
Paul T. Schnell, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
- ----------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JULY 17, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box: |_|
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
(Continued on following pages)
CUSIP NO. 465741 10 6 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Tinicum Investors
I.R.S. ID No. 13-3800339
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC, BK
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER - 1,614,420 (See Item 5)
NUMBER OF
SHARES -------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER - 0
OWNED BY
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER - 1,614,420 (See Item 5)
PERSON
WITH -------------------------------------------------------
10. SHARED DISPOSITIVE POWER - 0
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,614,420 (See Item 5)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|_|
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.151%
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN
- ----------------------------------------------------------------------------
CUSIP NO. 465741 10 6 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Seth M. Hendon
S.S. No. ###-##-####
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER - 4,000 (See Item 5)
NUMBER OF
SHARES -------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER - 0
OWNED BY
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER - 4,000 (See Item 5)
PERSON
WITH -------------------------------------------------------
10. SHARED DISPOSITIVE POWER - 0
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,000 (See Item 5)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|_|
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.017%
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- ----------------------------------------------------------------------------
CUSIP NO. 465741 10 6 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Robert J. Kelly
S.S. No. ###-##-####
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER - 4,000 (See Item 5)
NUMBER OF
SHARES -------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER - 0
OWNED BY
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER - 4,000 (See Item 5)
PERSON
WITH -------------------------------------------------------
10. SHARED DISPOSITIVE POWER - 0
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,000 (See Item 5)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|_|
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.017%
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- ----------------------------------------------------------------------------
CUSIP NO. 465741 10 6 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Edward R. Civello
S.S. No. ###-##-####
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7. SOLE VOTING POWER - 5,000 (See Item 5)
NUMBER OF
SHARES -------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER - 0
OWNED BY
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER - 5,000 (See Item 5)
PERSON
WITH -------------------------------------------------------
10. SHARED DISPOSITIVE POWER - 0
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,000 (See Item 5)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|_|
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.022%
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- ----------------------------------------------------------------------------
CUSIP NO. 465741 10 6 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Joseph A. Marino
S.S. No. ###-##-####
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER - 1,000 (See Item 5)
NUMBER OF
SHARES -------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER - 0
OWNED BY
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER - 1,000 (See Item 5)
PERSON
WITH -------------------------------------------------------
10. SHARED DISPOSITIVE POWER - 0
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000 (See Item 5)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|_|
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.004%
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- ----------------------------------------------------------------------------
CUSIP NO. 465741 10 6 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
John F. Keane
S.S. No. ###-##-####
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER - 2,000 (See Item 5)
NUMBER OF
SHARES -------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER - 0
OWNED BY
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER - 2,000 (See Item 5)
PERSON
WITH -------------------------------------------------------
10. SHARED DISPOSITIVE POWER - 0
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000 (See Item 5)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|_|
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.009%
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- ----------------------------------------------------------------------------
CUSIP NO. 465741 10 6 13D
- ----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Putnam L. Crafts, Jr.
S.S. No. ###-##-####
- ----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- ----------------------------------------------------------------------------
3. SEC USE ONLY
- ----------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
- ----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- ----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------------------
7. SOLE VOTING POWER - 179,380 (See Item 5)
NUMBER OF
SHARES -------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER - 0
OWNED BY
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER - 179,380 (See Item 5)
PERSON
WITH -------------------------------------------------------
10. SHARED DISPOSITIVE POWER - 0
- ----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
179,380 (See Item 5)
- ----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|_|
- ----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.683 %
- ----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
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ITEM 1. SECURITY AND ISSUER
This statement relates to shares of common stock, no par value (the
"Shares"), of The Interlake Corporation, a Delaware corporation (the
"Issuer"). The principal executive offices of the Issuer are located at
550 Warrenville Road, Lisle, Illinois 60532-4387.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c), (This statement is being jointly filed by Tinicum
Investors, a Delaware general partnership ("Investors"), Seth M. Hendon,
Robert J. Kelly, Edward R. Civello, Joseph A. Marino, John F. Keane and
Putnam L. Crafts, Jr. (together with Investors, the "Reporting Persons").
Any disclosures herein with respect to persons other than the Reporting
Persons are made on information and belief after making inquiry to the
appropriate party.
Investors is a private investment company with its principal business
address and principal office at 990 Stewart Avenue, Garden City, New York
11530. The managing partners of Investors are Eric M. Ruttenberg and Derald
H. Ruttenberg. The other general partners are RUTCO Incorporated, a
Delaware corporation ("RUTCO"), John C. Ruttenberg, Katherine T.
Ruttenberg, Hattie Ruttenberg, Tinicum Associates, Inc., a Delaware
corporation ("Associates"), Tinicum Enterprises, Inc., a Delaware
corporation ("Enterprises"), Tinicum Foreign Investments Corporation, a
Delaware corporation ("Foreign"), Seth M. Hendon and Robert J. Kelly. The
principal occupation of each of Eric M. Ruttenberg and Derald H. Ruttenberg
is that of managing partner of Investors with their business address at 990
Stewart Avenue, Garden City, New York 11530. The principal occupation of
John C. Ruttenberg is executive of Tensilica Inc. Systems with his business
address at 447 Moody St., Waltham MA 02154. Katherine T. Ruttenberg and
Hattie Ruttenberg are private investors. The business address of each of
Katherine T. Ruttenberg and Hattie Ruttenberg is 990 Stewart Avenue, Garden
City, New York 11530. The address of the principal business and the
principal office of each of RUTCO, Associates, Enterprises, and Foreign is
990 Stewart Avenue, Garden City, New York 11530. The principal occupation
of each of Robert J. Kelly and Seth M. Hendon is that of general partner of
Investors with their business address at 990 Stewart Avenue, Garden City,
New York 11530. Each of the managing partners and individual general
partners of Investors is a United States citizen. The principal occupation
of each of Edward R. Civello, Joseph A. Marino and John F. Keane is that of
employee of Enterprises with their business address at 990 Stewart Avenue,
Garden City, New York 11530. Each of Edward R. Civello, Joseph A. Marino
and John F. Keane is a United States citizen.
Putnam L. Crafts, Jr.'s business address is 130 Stevens Lane, Far
Hills, New Jersey 07931, and his present principal occupation is private
investor. Mr. Crafts is a United States citizen.
(d) and (e). During the last five years, none of the Reporting Persons
has (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding and
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Investors purchased directly 1,614,420 Shares for a total
consideration of approximately $6,457,612.49 Investors paid for such Shares
from its working capital and from borrowings in the ordinary course of
business under a previously existing credit facility available for general
corporate purposes, including purchases of marketable securities. Such
loans bear interest, at the option of the borrower, at the London interbank
offered rate plus 2% per annum , or the prime rate (as announced by
Citibank N.A.) minus 1%. Borrowings under the facility are secured by a
security interest in certain collateral and certain guarantees by general
partners of Investors and other related parties. This facility was not made
available for the specific purpose of acquiring Shares. A copy of
Investors' Demand Loan and Pledge Agreement dated as of March 5, 1997 is
filed herewith as Exhibit 2, the complete terms and provisions of which are
incorporated herein by reference.
Seth M. Hendon purchased directly 4,000 shares for a total
consideration of approximately $18,984.40. Mr. Hendon paid for his Shares
from his personal funds.
Robert J. Kelly purchased directly 4,000 shares for a total
consideration of approximately $18,984.40. Mr. Kelly paid for his Shares
from his personal funds.
Edward R. Civello purchased directly 5,000 shares for a total
consideration of approximately $23,593.75. Mr. Civello paid for his Shares
from his personal funds.
Joseph A. Marino purchased directly 1,000 shares for a total
consideration of approximately $4,125.00. Mr. Marino paid for his Shares
from his personal funds.
John F. Keane purchased directly 2,000 shares for a total
consideration of approximately $8,562.50. Mr. Keane paid for his Shares
from his personal funds.
Putnam L. Crafts, Jr. purchased 158,380 shares from Investors on July
24, 1998 and an additional 21,000 shares were purchased directly on July
27, 1998 for a total consideration of approximately $733,827.37. Mr. Crafts
paid for his Shares from his personal funds.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons acquired the Shares reported in Item 5 below
for investment purposes. The Reporting Persons view the Shares as an
attractive investment opportunity at this time.
The Reporting Persons intend to review their investment in the Issuer
on a continuing basis and reserve the right to acquire additional Shares in
the open market or in privately negotiated transactions or otherwise, to
maintain their holdings at current levels or to sell all or a portion of
their holdings in the open market or in privately negotiated transactions
or otherwise. Any such actions will depend upon, among other things, the
availability of Shares for purchase at satisfactory price levels; the
continuing evaluation of the Issuer's business, financial condition,
operations and prospects; general market, economic and other conditions;
the relative attractiveness of alternative business and investment
opportunities; the availability of financing; and other future
developments. As part of their ongoing review, the Reporting Persons may
have discussions with management of the Issuer regarding ways of improving
the Issuer's performance and value.
Except as set forth above, the Reporting Persons have no present
plans or intentions which would result in or relate to any of the
transactions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the close of business on July 27, 1998, the Reporting
Persons owned in the aggregate 1,809,800 Shares, which represent
approximately 7.809% of the 23,175,142 Shares outstanding as of April 15,
1998, as reported in the Issuer's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998. In accordance with Rule 13d-5(b)(1) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Reporting Persons as a group may be
deemed to beneficially own such shares. As of the close of business on July
27, 1998, Investors, Mr. Hendon, Mr. Kelly, Mr. Civello, Mr. Marino, Mr.
Keane and Mr. Crafts have direct beneficial ownership of 1,614,420, 4,000,
4,000, 5,000, 1,000, 2,000 and 179,380 Shares, respectively.
(b) Each of the Reporting Persons has sole power to vote or to direct
the vote and sole power to dispose or to direct the disposition of Shares
of which it has direct beneficial ownership.
(c) Within the past 60 days, the Reporting Persons purchased Shares
in the manner, in the amounts, on the dates and at the prices set forth on
Schedule I attached hereto and incorporated herein by reference.
(d) Not Applicable.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Reporting Persons may consult each others on matters relating to
the voting, holding, acquisition and disposition of Shares. The Reporting
Persons also have an oral understanding to pay their respective pro-rata
shares of all out-of-pocket costs and fees incurred by Investors on behalf
of the investor group in connection with their investment in Shares. Mr.
Crafts and Investors have an understanding regarding Mr. Crafts reimbursing
Investors for the carrying costs associated with these Shares from their
date of purchase until their transfer to Mr. Crafts.
As a result of the foregoing understandings, the Reporting Persons
may be deemed to be a "group" within the meaning of the rules and
regulations promulgated under the Exchange Act. Except as set forth herein,
none of the Reporting Persons has any contracts, arrangements,
understandings or relationships (legal or otherwise) with any person with
respect to any securities of the Issuer, including but not limited to any
contracts, arrangements, understandings or relationships concerning the
transfer or voting of such securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or losses, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1. Joint Filing Agreement, dated as of July 27, 1998.
Exhibit 2. Demand Loan and Pledge Agreement, dated as of March
5, 1997.
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated:July 27, 1998
TINICUM INVESTORS
By: /s/ Eric M. Ruttenberg
---------------------------
Name: Eric M. Ruttenberg
Title: General Partner
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated:July 27, 1998
/s/ Seth M. Hendon
--------------------------------
SETH M. HENDON
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated:July 27, 1998
/s/ Robert J. Kelly
--------------------------------
ROBERT J. KELLY
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated:July 27, 1998
/s/ Edward R. Civello
---------------------------------
EDWARD R. CIVELLO
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated:July 27, 1998
/s/ Joseph A. Marino
---------------------------------
JOSEPH A. MARINO
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated:July 27, 1998
/s/ John F. Keane
---------------------------------
JOHN F. KEANE
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated:July 27, 1998
/s/ Putnam L. Crafts, Jr.
---------------------------------
PUTNAM L. CRAFTS, JR.
SCHEDULE I
The Reporting Persons have engaged in the following transactions in
Shares during the past 60 days. All transactions, unless otherwise noted,
involved purchases of Shares on the NASDAQ National
Market.
Transaction Date Number of Shares Avg. Price Per Share(1) Purchaser
- ---------------- ---------------- ----------------------- ---------
6/2/98 7,000 $4.06 Investors
6/3/98 20,000 $4.25 Investors
6/4/98 44,000 $4.03 Investors
6/5/98 40,500 $4.07 Investors
6/11/98 1,000 $4.25 John F. Keane
6/11/98 1,000 $4.31 John F. Keane
6/17/98 20,900 $4.23 Investors
6/22/98 4,000 $4.25 Investors
6/23/98 2,000 $4.19 Investors
6/24/98 5,000 $4.19 Investors
6/26/98 9,300 $4.25 Investors
7/2/98 36,300 $4.19 Investors
7/7/98 15,400 $4.12 Investors
7/8/98 4,600 $4.06 Investors
7/9/98 3,000 $4.06 Investors
7/10/98 4,300 $4.06 Investors
7/13/98 201,500 $3.94 Investors
7/14/98 25,000 $3.88 Investors
7/14/98 1,000 $4.13 Joseph A. Marino
7/15/98 25,000 $3.88 Investors
7/16/98 100,000 $3.63 Investors
7/17/98 525,000 $3.56 Investors
7/24/98(2) 158,380 $4.17 Mr. Crafts
7/27/98 189,000 $3.50 Investors
7/27/98 21,000 $3.50 Mr. Crafts
- ------------
1 Excluding commissions.
2 Mr. Crafts' Shares were purchased from Investors.
EXHIBIT INDEX
Location in Sequential
Exhibit Description Numbering System
- ------- ----------- ----------------------
1 Joint Filing Agreement, dated 23
as of July 27, 1998
2 Demand Loan and Pledge 24
Agreement, dated as of
March 5, 1997.
EXHIBIT I: AGREEMENT PURSUANT TO RULE 13d-1(f) FILED HEREWITH
Pursuant to Rule 13d-1(f) of Regulation 13D-G of the General Rules
and Regulations of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, the undersigned agree that the
statement to which this Exhibit is attached is filed on behalf of each of
them in the capacities set forth below.
This Agreement may be executed in one or more duplicate counterparts
and when signed by all of the parties listed below shall constitute a
single binding agreement.
TINICUM INVESTORS
By: /s/ Eric M. Ruttenberg
-------------------------------
Name: Eric M. Ruttenberg
Title: General Partner
/s/ Seth M. Hendon
----------------------------------
SETH M. HENDON
/s/ Robert J. Kelly
----------------------------------
ROBERT J. KELLY
/s/ Edward R. Civello
----------------------------------
EDWARD R. CIVELLO
/s/ Joseph A. Marino
----------------------------------
JOSEPH A. MARINO
/s/ John F. Keane
----------------------------------
JOHN F. KEANE
/s/ Putnam L. Crafts, Jr.
------------------------------------
PUTNAM L. CRAFTS, JR.
EXHIBIT II
DEMAND LOAN AND PLEDGE AGREEMENT
This DEMAND LOAN AND PLEDGE AGREEMENT ("Agreement") is entered into
as of March 5, 1997, between TINICUM INVESTORS (the "Borrower") and
CITIBANK, N.A. (the "Lender").
ARTICLE I
DEFINITIONS
1.1 Definitions. The singular shall include the plural and vice versa
and any gender shall include any other gender as the context may require.
The following terms shall have the following meanings:
"Ancillary Documents" means the Demand Note, power of attorney, each
of the Guaranties and any other documents, instruments, agreements or
certificates executed and delivered by the Borrower or any of the
Guarantors in connection with the transactions contemplated by this
Agreement.
"Base Rate" means a fluctuating interest rate per annum which shall
at all times be equal to the higher of (a) the rate of interest announced
publicly by Citibank, N.A. (referred to in this definition as the "Bank")
in New York, New York, from time to time, as the Bank's base rate; or (b)
the sum (adjusted to the nearest 1/4 of one percent or, if there is no
nearest 1/4 of one percent, to the next higher 1/4 of one percent) of (i)
1/2 of one percent per annum, plus (ii) the rate per annum obtained by
dividing (A) the latest three-week moving average of secondary market
morning offering rates in the United States for three month certificates of
deposit of major United States money market banks, such three-week moving
average being determined weekly on each Monday (or if any such day is not a
Business Day (as defined below), on the next succeeding Business Day) for
the three-week period ending on the previous Friday by the Bank on the
basis of such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for such rates
received by the Bank from three New York certificate of deposit dealers of
recognized standing selected by the Bank, by (B) a percentage equal to 100%
minus the average of the daily percentages specified during such three-week
period by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, but
not limited to, any emergency, supplemental or other marginal reserve
requirement) for the Bank in respect of liabilities consisting of or
including (among other liabilities) three-month U.S. dollar nonpersonal
time deposits in the United States, plus (iii) the average during such
three-week period of the annual assessment rates estimated by the Bank for
determining the then current annual assessment payable by the Bank to the
Federal Deposit Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of the Bank in the United States; minus, in the case of (a)
or (b), 1%.
"Base Rate Loan" means any Loan bearing interest at the Base Rate.
"Borrowing" means each borrowing of a Loan pursuant to a Notice of
Borrowing having the same Interest Period.
"Business Day" means any day, excluding (i) Saturday, and Sunday;
(ii) any day on which commercial banks in New York City, New York are
authorized or required by law or other governmental action to close; (iii)
any day on which the New York Stock Exchange is closed; and, so long as the
Loan shall bear interest at the LIBOR Rate, (iv) any day on which
commercial banks are not open for international business (including
dealings in U.S. dollar deposits) in the London interbank market.
"Code" means the Internal Revenue Code of 1986 and the rules and
regulations thereunder, collectively, as now or hereafter in effect, or any
successor thereto.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower, are treated as a
single employer under Section 414(b) or 414(c) of the Code.
"Current Market Value" means, as of any day and with respect to any
number of shares of common stock of a specified class issued by any Issuer
(other than an Issuer the common stock of which is not publicly traded), a
dollar amount, as determined by the Lender in accordance with the terms of
this Agreement, equal to the product of (i) the price quoted on the NASDAQ
National Market System, or, if not so listed, on such national securities
exchange on which such shares are listed for trading, for a share of the
applicable class of common stock issued by such Issuer as of the close of
the Business Day immediately preceding such day times (ii) such number of
shares. Securities issued by issuers the equity securities of which are not
listed for trading on a national securities exchange or the NASDAQ shall be
deemed to have no Current Market Value.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations as lessee which are or should be capitalized in accordance
with GAAP, and (iv) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to
in clauses (i), (ii) and (iii) above.
"Demand Note" means the Borrower's promissory note issued hereunder
in the maximum principal amount of $10,000,000.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Rate" means, for any Interest Period, an interest rate
per annum equal to the rate per annum obtained by dividing (i) the rate per
annum at which deposits in U.S. dollars are offered by the London office of
the Lender to leading banks in the London Interbank Market at 11:00 a.m.
(London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to the Principal Balance and for a
period equal to such Interest Period by (ii) a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage for such Interest Period. The
Eurodollar Rate for each Interest Period shall be determined by the Lender
two Business Days before the first day of such interest Period.
"Eurodollar Rate Reserve Percentage" means, for any Interest Period,
the reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for the
Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on the Loan is determined) having a term equal to such Interest Period.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.
"Guarantor" means each of Derald H. Ruttenberg, Eric M. Ruttenberg,
John C. Ruttenberg, Hattie Ruttenberg and Katherine T. Ruttenberg; referred
to collectively, together with another Guarantor, as the "Guarantors."
"Guaranty" means the Guaranty dated the date hereof and made by one
of the Guarantors, as amended, modified, supplemented or extended from time
to time; referred to collectively, with another Guaranty or other
Guaranties, as the "Guaranties."
"Interest Period" means any one-month or any consecutive two-,
three-, six-, nine- or twelve-month period, such periods to be determined
at the option of the Borrower in accordance with the provisions hereof, the
first of which Interest Periods shall commence on the first day of a
Borrowing hereunder and shall end on such day in the immediately following
calendar month or the second, third, sixth, ninth or twelfth next following
calendar month, as the case may be, as determined at the option of the
Borrower in accordance with the provisions hereof; provided, however, that
(i) in the case of a Base Rate Loan, all Interest Periods will be one
month; (ii) if such date shall not be a Business Day, the Interest Period
shall be extended to the next succeeding Business Day, unless, so long as
the Loan shall bear interest at the LIBOR Rate, such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, in which event the last day of such Interest Period shall
occur on the next preceding Business Day; (iii) if the Borrower shall fail
to timely elect an interest period as contemplated hereby, the next
succeeding interest Period shall be the period determined in accordance
with Section 2.3.1; (iv) if the first day of an Interest Period is the last
Business Day of a calendar month, the last day of such Interest Period will
be the last Business Day of the calendar month one, two, three, six, nine
or twelve months later, depending on the length of the interest Period
selected; and (v) all Interest Periods will expire upon the Lender's demand
for payment of amounts due on the Demand Note, or otherwise upon
acceleration of the Demand Note.
"Issuer" means any Person that has issued shares of common stock
constituting part of the Pledged Collateral; referred collectively,
together with another Issuer, as the "Issuers," and listed on schedule 1
hereto.
"Lender" means Citibank, N.A.
"Liabilities" means all of the obligations, liabilities, covenants
and duties of the Borrower to the Lender, whether under the Demand Note,
this Agreement, any of the Ancillary Documents, or otherwise, including,
without limitation, any obligations arising out of or relating to any
interest rate swap or other hedging arrangement, any extension, renewal or
modification of any thereof, or under any other agreement, liability or
obligation, whether contingent or matured, direct or indirect, now existing
or hereafter arising of the Borrower to the Lender.
"LIBOR Loan" means any Loan bearing interest at the LIBOR Rate.
"LIBOR Rate" applicable to a particular Interest Period means a rate
per annum equal to the Eurodollar Rate applicable to such particular
Interest Period, plus 2% per annum.
"Loan" means any loan made to the Borrower pursuant to Section 2.1.1
hereof,
"Notice of Borrowing" has meaning given to such term in Section 2.2.1.
"Partnership Agreement" means the Borrower' s agreement of
partnership dated December 31, 1994.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political subdivision
or agency thereof.
"Plan" means any employee pension or other benefit plan which is
subject to Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and is either (i) established or maintained
by the Borrower or any member of the Controlled Group or (ii) established
or maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to
which the Borrower or any member of the Controlled Group is making or
accruing an obligation to make contributions or has within the preceding
five Plan years made contributions.
"Pledged 144 Shares" means Pledged Shares (i) issued by an Issuer of
which the Borrower or any of the Guarantors is at any date of
determination, or was within the 90 days preceding a date of determination,
an "affiliate" within the meaning of Rule 144 promulgated by the Securities
and Exchange Commission -under the Securities Act of 1933, as amended, or
(ii) which are "restricted securities" within the meaning of such Rule.
"Pledged Shares" means the shares of common stock of Issuers
described on Schedule 1 hereto and pledged to the Lender hereunder.
"Principal Balance" shall mean the outstanding principal balance of the
Demand Note from time to time.
"Re-Set Date" means the first day of each Interest Period.
"Roll Over Date" applicable to a particular interest Period means the
last day of such Interest Period.
1.2 Accounting Terms and Determinations. Unless otherwise defined or
specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared and all records shall
be maintained in accordance with GAAP.
1.3 Other Definitional Terms. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of
this Agreement, and section, schedule, exhibit and like references are to
this Agreement unless otherwise specified. Any reference in this Agreement
to any statute or regulation or provision thereof shall be deemed to be a
reference to such statute, regulation or provision, as amended from time to
time, and to any successor statute, regulation or provision.
ARTICLE II
THE LOAN
2.1 No Commitment; Principal Amounts of Borrowings; Fees.
2.1.1 No Commitment. Lender has made no commitment, and does not
hereby make any commitment, to advance funds to Borrower hereunder or under
the Demand Note nor to forebear from demanding payment under the Demand
Note. Lender may demand payment under the Demand Note at any time, for any
reason or for no reason, and, in any such event, Borrower will make payment
of all amounts due under the Demand Note and hereunder in accordance with
the terms hereof and thereof. The Loans made pursuant hereto by the Lender
shall, at the option of the Borrower, be either Base Rate Loans or LIBOR
Loans, but the Loans made pursuant to a single Borrowing must bear interest
at either the Base Rate or the LIBOR Rate. In no event may the aggregate
principal amount of Loans outstanding at any time exceed $10,000,000. There
may be more than one Borrowing on any day. Within the foregoing limits and
subject to satisfaction of the conditions set forth in this Agreement and
subject at all times to Lender's right in its sole and absolute discretion
to not make any advance hereunder or to demand payment of amounts due under
the Demand Note and hereunder, the Borrower may borrow, repay and reborrow
pursuant to the terms set forth in this Article II.
2.1.2 Principal Amounts of Borrowings. The aggregate principal amount
of each Borrowing hereunder shall be not less than (i) for LIBOR Loans,
$300,000, and in integral multiples of $100,000, and (ii) for Base Rate
Loans, $50,000, and in integral multiples of $50,000. No more than ten
Borrowings shall be outstanding at any one time and the minimum amount of
Borrowings that may be outstanding at any one time shall be $100,000.
2.1.3 Fees. The Borrower shall pay to the Lender custody fees for the
period commencing on the date of this Agreement to and including the date
all amounts due hereunder are paid in full computed at an annual rate of
.05% on the average aggregate fair market value of the Pledged Securities
held by the Lender hereunder and under any of the Guaranties, payable
quarterly in arrears on the last Business Day of each March, June,
September and December, commencing March 31, 1997. Fees payable hereunder
may not be refunded.
2.2 Borrowings; Demand Note; Interest, Payment Dates, Default Rate.
2.2.1 Borrowings. (a) Whenever the Borrower desires to make a
Borrowing hereunder, it shall give the Lender (i) in the case of a Base
Rate Loan, prior to 10:00 A.M. (New York City time) on the date of the
requested Borrowing, written notice of each Base Rate Loan, and (ii) in the
case of a LIBOR Loan, at least five Business Days' prior written notice of
each LIBOR Loan to be made hereunder. Each such notice (each, a "Notice of
Borrowing") shall be irrevocable and specify the aggregate principal amount
of the Loan to be made pursuant to such Borrowing, the anticipated use of
proceeds of such Borrowing, the aggregate amount of Loans to be outstanding
on the date of Borrowing, the date of Borrowing (which shall be a Business
Day), whether the Loans being made pursuant to such Borrowing are to be
Base Rate Loans or LIBOR Loans and (in the case of LIBOR Loans) the
Interest Period to be applicable thereto. Each such Notice of Borrowing
shall be substantially in the form of Exhibit 2.2 hereto.
(b) without in any way limiting the Borrower's obligation to
provide written notice, the Lender may act without liability upon the basis
of telephonic notice believed by the Lender in good faith to be from the
Borrower prior to receipt of a written confirmation. In each such case, the
Borrower hereby waives the right to dispute the Lender's record of the
terms of such telephonic notice.
2.2.2 Demand Note. The Borrower's obligation to pay the principal of
and interest on the Loans made by the Lender shall be evidenced by the
Demand Note. The date, amount, whether the Loan is a Base Rate Loan or a
LIBOR Loan and, in case of a LIBOR Loan, the interest Period with respect
to the making or payment of each Loan made by the Lender shall be recorded
on the schedule (or continuation thereof) attached to the Demand Note. The
failure to record, or any error in recording, any Loan or repayment on such
schedule (or continuation thereof) shall not, however, affect the
obligations of the Borrower hereunder or under any Demand Note to repay the
principal amount of the applicable Loans, together with all interest
accruing thereon or any other amount due and payable hereunder. Each such
schedule (or continuation thereof) as maintained by a Bank shall constitute
prima facie evidence of the outstanding amount of Loans evidenced thereby.
2.2.3 Interest, Payment Dates, Default Rate. The Borrower agrees to
pay interest in respect of the unpaid principal amount of any Loan from the
date thereof until payment in full of all amounts due on the Demand Note
and hereunder (whether by voluntary payment, upon demand or otherwise) at
(i) in the case of a Base Rate Loan, a fluctuating rate per annum which
shall be equal to the Base Rate in effect from time to time, and (ii) in
the case of each LIBOR Loan, at a rate per annum which shall be equal to
the LIBOR Rate applicable to such Borrowing. Payments of interest on the
Loan will be due and payable on each of the following dates; (i) the last
day of each calendar month, unless such day shall not be a Business Day, in
which event such payment shall be due and payable on the next succeeding
Business Day, and (ii) upon payment of any portion of the Principal
Balance, and (iii) for any LIBOR Loan, on each Roll Over Date. Any amount
of principal not paid when demanded hereunder and, to the extent permitted
by law, any payment of interest not paid when due hereunder, will bear
interest, payable on demand, until such amount is paid in full, at a rate
per annum equal to 4% in excess of the rate otherwise applicable hereunder,
but in no event in excess of the legally maximum rate.
2.3 Roll Over at Lender's Option in Absence of Notice; Notice of
LIBOR Rate.
2.3.1 Roll Over at Lender's Option in Absence of Notice. Upon each
Re-Set Date, unless Lender shall in its sole and absolute discretion demand
repayment of the Principal Balance then outstanding, the portion of the
Principal Balance then coming due shall automatically roll over for an
additional Interest Period having the same length as the expiring Interest
Period unless (i) Borrower has timely given a Notice of Borrowing pursuant
to Section 2.2.1 and (ii) Lender has elected in its sole and absolute
discretion to make the borrowing requested by such Notice of Borrowing;
provided, however, that if the conditions precedent to the making or
maintenance of a LIBOR Loan have not been met, the Loan will automatically
be converted to a Base Rate Loan.
2.3.2 Notice of LIBOR Rate. The Lender shall, as soon as practicable
after 9:00 a.m. (New York City time) two Business Days prior to the
commencement of a particular Interest Period, determine the LIBOR Rate
which will be in affect during such Interest Period and, upon request of
the Borrower, inform the Borrower of the LIBOR Rate so determined (which
determination shall be conclusive and binding upon the Borrower absent
manifest error). Except as otherwise specifically provided to the contrary,
the entire Principal Balance shall bear interest at the LIBOR Rate so
determined from and including the first day of such particular Interest
Period to, but not including, the Roll Over Date of such Interest Period.
2.4 Unavailability of LIBOR Rate; Change in Law; After Conversion to
a Base Rate.
2.4.1 Unavailability of LIBOR Rate. If on the day occurring two
Business Days prior to the commencement of any Interest Period, the Lender
shall have determined in good faith (which determination shall be
conclusive and binding upon the Borrower) that U.S. dollar deposits in an
amount approximately equal to the Principal Balance are not generally
available at such time in the London Interbank Market, or reasonable means
do not exist for ascertaining a LIBOR Rate for such particular Interest
Period, the Lender shall so notify the Borrower and the interest rate
applicable to the entire Principal Balance shall automatically remain at or
convert to the Base Rate as of the next occurring Roll Over Date.
2.4.2 Change in Law. If any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for the
Lender to make or maintain a LIBOR Rate with respect to the Principal
Balance or any portion thereof or to fund the Principal Balance or any
portion thereof at a LIBOR Rate in the London Interbank Market or to give
effect to its obligations as contemplated hereby, then, upon notice by the
Lender to the Borrower, the interest rate applicable to the entire
Principal Balance shall either remain at or be automatically converted to
the Base Rate, it being agreed that any notice given by the Lender to the
Borrower pursuant to this sentence shall be effective on the last day of
the then existing Interest Period.
2.4.3 After Conversion to Base Rate. After a conversion of the
interest rate on the Loan to the Base Rate as contemplated in Section 2.4.1
or 2.4.2, the Base Rate shall remain in effect with respect to the entire
Principal Balance thereafter unless and until the Lender shall have
determined in good faith (which determination shall be conclusive and
binding upon the Borrower) that the aforesaid circumstances no longer
exist, whereupon the interest rate applicable to the Principal Balance
shall, at the option of the Borrower (exercised in accordance with the
provisions hereof), be converted to a LIBOR Rate determined in the manner
set forth herein.
2.5 Additional Costs.
2.5.1 Increased Costs. The Borrower recognizes that the cost to the
Lender of making or maintaining a LIBOR Rate with respect to the Principal
Balance or any portion thereof may fluctuate and the Borrower agrees to pay
the Lender an additional amount or amounts as the Lender shall reasonably
determine will compensate the Lender for additional costs incurred by the
Lender in maintaining a LIBOR Rate on the Principal Balance or any portion
thereof as a result of:
(i) the imposition after the date hereof, or changes
after the date hereof in the reserve requirements promulgated by the
Board of Governors of the Federal Reserve System of the United States,
including, but not limited to, any reserve on Eurocurrency Liabilities
as defined in Regulation D of the Board of Governors of the Federal
Reserve System of the United States at the ratios provided in such
Regulation D from time to time. If the Principal Balance is bearing
interest at a LIBOR Rate, such indebtedness shall be deemed to
constitute Eurocurrency Liabilities, as defined by such Regulation D,
and such Eurocurrency Liabilities shall be deemed to be subject to such
reserve requirements without benefit of, or credit for, prorations,
exceptions or offsets that may be available to the Lender from time to
time under such Regulation D, and irrespective of whether the Lender
actually maintains all or any portion of such reserve; or
(ii) any change, after the date hereof, in applicable
law, rule or regulation or in the interpretation or administration
thereof by any domestic or foreign governmental authority charged with
the interpretation or administration thereof (whether or not having the
force of law) or by any domestic or foreign court changing the basis of
taxation or payments to the Lender of the Principal Balance or interest
on the Principal Balance or any portion thereof or any other fees or
amounts payable hereunder (other than taxes imposed on all or any
portion of the overall net income of the Lender by the State of New
York or the Federal government or by any political subdivision or
taxing authority of the State of New York or the Federal government),
or imposing, modifying or applying any reserve, special deposit or
similar requirement against assets of, deposits with or for the account
of, credit extended by, or any other acquisition of funds for loans by
the Lender on the London Interbank Market, so long as the Loan bears
interest at the LIBOR Rate, or any other condition resulting from any
change, after the date hereof, in applicable law, rule or regulation or
in the interpretation or administration thereof by any domestic or
foreign governmental authority charged with interpretation or
administration thereof, affecting the Loan or the Principal Balance so
as to increase the cost to the Lender of making or maintaining the Loan
with respect to the Principal Balance or any portion thereof or to
reduce the amount of any sum received or receivable by the Lender
hereunder (whether of principal, interest or otherwise), by an amount
deemed by the Lender in good faith to be material, but without
duplication for payments required under subparagraph (i) above.
2.5.2 Capital Adequacy. If after the date hereof, the Lender shall
have determined that the applicability of any law, rule, regulation or
guideline regarding capital adequacy, or any change therein, or any change
in any of the foregoing by any domestic or foreign governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Lender with any request or
directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the Lender's capital as a
consequence of the Lender's obligations with respect to the Loan, to a
level below that which the Lender could have achieved but for such
adoption, change or compliance (taking into consideration the Lender's
policies with respect to capital adequacy) by an amount deemed by the
Lender to be material, then from time to time, the Borrower shall pay to
the Lender such additional amount or amounts as will compensate for such
reduction.
2.5.3 Payment of Additional Costs. Any amount or amounts payable by
the Borrower to the Lender pursuant to Section 2.5.1 or 2.5.2 shall be paid
by the Borrower to the Lender within ten days of receipt by the Borrower
from the Lender of a statement setting forth the amount or amounts due and
the basis for the determination from time to time of such amount or
amounts, which statement shall be conclusive and binding upon the Borrower
absent manifest error. Failure on the part of the Lender to demand
compensation for any increased costs in any Interest Period shall not
constitute a waiver of the Lender's right to demand compensation for any
increased costs incurred during any such Interest Period or in any other
subsequent or prior Interest Period.
2.6 Indemnification; Prepayment.
2.6.1 Indemnification. The Borrower shall indemnify the Lender
against any loss or expense that the Lender may sustain or incur as a
consequence of any default by the Borrower in the payment of any portion of
the Principal Balance, or any part thereof or interest accrued thereon, as
and when due and payable, or the occurrence of any Event of Default
hereunder, including, but not limited to, any loss or expense sustained or
incurred by the Lender in liquidating or reemploying deposits from third
parties acquired to affect or maintain a LIBOR Rate with respect to all or
any portion of the Principal Balance. The Lender shall provide to the
Borrower a statement explaining the amount of any such loss or expense,
which statement shall be conclusive and binding upon the Borrower absent
manifest error.
2.6.2 Prepayment. (i) The Loan is subject to payment upon demand made
at any time in the sole and absolute discretion of the Lender, to automatic
acceleration without demand in certain events, to mandatory partial
repayments in certain events and, upon compliance with the provisions of
this paragraph, to voluntary prepayment in whole or in part at election of
the Borrower from time to time. At any payment of Principal Balance as a
result of demand, acceleration, mandatory repayment or voluntary prepayment
is referred to in this paragraph as a "Prepayment."
(ii) No Prepayment Premium shall be payable on any
Prepayment (A) if such Prepayment occurs on a Roll Over Date; or (B) of
a Base Rate Loan; or (C) the Prepayment is made upon a demand for
payment by the Lender in the absence of the occurrence of any Event of
Default. If such Prepayment does not occur on a Roll Over Date, the
Borrower shall pay to the Lender contemporaneously with such Prepayment
a Prepayment premium equal to the portion of the Principal Balance
being prepaid, multiplied by a per annum interest rate equal to the
difference between the then applicable Eurodollar Rate and the 360-day
equivalent interest yield, as adjusted to reflect interest payments on
a monthly basis (hereinafter called the "Reinvestment Rate"), on any
U.S. Government Treasury obligations selected by the Lender, in its
sole and absolute discretion, in an aggregate amount comparable to the
portion of the Principal Balance being prepaid, and with maturities
comparable to the next occurring Roll Over Date, calculated over a
period of time from and including the date of prepayment to, but not
including, such next occurring Roll Over Date. The Lender shall not be
obligated or required to have actually reinvested the prepaid portion
of the Principal Balance in any U.S. Government Treasury Obligations as
a condition precedent to the Borrower being obligated to pay a
Prepayment premium calculated in accordance with the provisions of this
paragraph. If the then applicable Eurodollar Rate is equal to or less
than the Reinvestment Rate no Prepayment premium shall be due. No
Prepayment premium payable under this paragraph shall in any event or
under any circumstances be deemed or construed to be a penalty. The
Lender shall deliver to the Borrower a statement setting forth the
amount and basis of determination of the Prepayment premium, if any,
due in connection with a Prepayment of the Principal Balance. In the
absence of manifest error, any such statement or the method of
calculation set forth therein shall be binding and conclusive. The
Borrower shall, upon the receipt of such statement and
contemporaneously with any such prepayment of the Principal Balance,
remit to the Lender the prepayment premium, if any, due in connection
therewith, as calculated pursuant to the provisions of this paragraph.
The Lender shall not be obligated to accept any prepayment of the
Principal Balance unless it is accompanied by the Prepayment premium,
if any, due in connection therewith. The provisions of this paragraph
shall be applicable to any Prepayment of the Principal Balance in whole
or in part.
2.7 Repayment of Each Loan Subject to LIBOR Rate; Voluntary Repayment.
2.7.1 Repayment of Each Loan Subject to LIBOR Rate. The Borrower
shall repay to the Lender the unpaid principal amount of each Loan made
hereunder, together with all accrued and unpaid interest thereon, on the
last day of the Interest Period in respect of such Loan.
2.7.2 Voluntary Repayment. The Borrower may make voluntary
prepayments of the Principal Balance in whole, or in part, together with
all interest and other sums then due and payable hereunder, upon not less
than five Business Days' prior written irrevocable notice to the Lender
specifying the amount to be prepaid and the intended date of prepayment,
which date of prepayment shall not be more than forty-five days after the
date of such notice. Any partial voluntary prepayment shall be in a minimum
amount of at least $100,000. No partial voluntary prepayment of the
Principal Balance shall be permitted if such partial prepayment would
reduce the Principal Balance below $100,000. The portion of the Principal
Balance specified in any such irrevocable notice of voluntary prepayment
shall, notwithstanding anything to the contrary contained herein, be
absolutely and unconditionally due and payable on the date specified in
such notice.
2.8 Payment and Computations. The Borrower shall make each payment
hereunder and under the Demand Note not later than 11:00 a.m. (New York
City time) on the day when due in U.S. dollars to the Lender at its address
set forth on the signature page hereof. All computations of interest and
fees shall be made on the basis of a year of 360 days for the actual number
of days elapsed. Each determination of an interest rate hereunder by the
Lender shall be conclusive and binding for all purposes absent manifest
error.
ARTICLE III
THE PLEDGE
3.1 Grant of Security Interest. The Borrower hereby grants to the
Lender, as security for the prompt and complete payment, observance and
performance of the Liabilities, a security
interest in the following:
(i) the Pledged Shares and the certificates representing
the Pledged Shares, and all dividends, cash, instruments, subscription
warrants and any other rights, options or other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(ii) all additional shares of common stock issued by any
of the Issuers and delivered from time to time by the Borrower to the
Lender pursuant to this Agreement, and the certificates representing
such additional shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares
(the "Additional Shares"; the Pledged Shares and Additional Shares are
sometimes referred to collectively as the "Pledged Securities"); and
(iii) all proceeds thereof (the Pledged securities, the
property and interests in property described in Section 3.7 hereof,
dividends and distributions payable with respect to the Pledged
Securities pursuant to Section 3.5 hereof, and all proceeds of any of
the foregoing, being hereinafter collectively referred to as the
"Pledged Collateral").
The Borrower agrees to execute and deliver to the Lender (i) stock powers
in the form of Exhibit 3.1 attached hereto and made a part hereof,
appropriately endorsed in blank, with respect to the Pledged Securities,
(ii) powers of attorney relating to the sale and disposition of the Pledged
144 Shares, and (iii) such other documents of transfer as the Lender may
from time to time reasonably request to enable the Lender to transfer or
reregister any or all of the Pledged Securities into its name or the name
of its nominee(s), including any Clearing Corporation or Custodian Bank, as
defined in the Uniform Commercial Code in effect from time to time in New
York State, and any nominee(s) thereof, which the Borrower agrees may be
done at the Lender's sole discretion at any time before or after the
payment is due on any of the Liabilities, and with or without notice to the
Borrower (all of the foregoing are hereinafter collectively referred to as
the "Powers").
3.2 Perfection of Security Interest. The Borrower agrees (i)
immediately to deliver to the Lender or the Lender's nominee all
certificates evidencing any of the Pledged Collateral which may at any time
come into the possession of such Borrower, (ii) to execute and deliver to
the Lender such financing statements as the Lender may request with respect
to the Pledged Collateral, and (iii) to take such other steps as the Lender
may from time to time reasonably request to perfect the Lender's security
interest in the Pledged Collateral under applicable law. The Borrower
further agrees, at the request of the Lender, to use its best efforts to
cause an Issuer to issue, in substitution for existing certificates
evidencing any of the Pledged Collateral, one or more new certificates
("Substitute Certificate(s)") intended to evidence the Pledged Collateral
evidenced by the certificates which are exchanged for the Substitute
Certificate(s), and the Borrower shall immediately thereafter deliver such
Substitute Certificates to the Lender, together with appropriate Powers.
The Borrower agrees that this Agreement or a photocopy of this Agreement
shall be sufficient as a financing statement.
3.3 Further Assurances. The Borrower agrees that it will cooperate
with the Lender and will execute and deliver, or cause to be executed and
delivered, all such other stock powers, proxies, instruments and documents,
and will take all such other action as the Lender may reasonably request
from time to time in order to carry out the provisions and purposes hereof.
3.4 Voting Rights. So long as the Lender shall not have demanded
payment of amounts due on the Demand Note and hereunder and the Demand Note
shall not have become automatically due without demand, the Borrower shall
have the right to vote the Pledged Securities and exercise any voting
rights pertaining to the Pledged Collateral and to give consents,
ratifications and waivers with respect thereto, for all purposes not
prohibited by the terms of this Agreement or the Demand Note. The Lender
shall, at the request of the Borrower, provide the Borrower with
appropriate proxies and any other documents necessary or appropriate to
permit it to exercise the rights set forth in the preceding sentence. After
the Lender shall have demanded payment of amounts due on the Demand Note or
hereunder or the Demand Note shall have become automatically due without
demand, the Lender shall be entitled, at the Lender's option exercisable by
giving written notice to the Borrower, to exercise all voting powers
pertaining to the Pledged Collateral, and to give, exclusively, consents,
ratifications and waivers with respect thereto for all purposes. Such
powers and rights will remain with the Borrower until and unless the Lender
so exercises its rights hereunder.
3.5 Dividends and Other Distributions. So long as the Lender shall
not have demanded payment of amounts due on the Demand Note or hereunder
and the Demand Note shall not have become automatically due without demand,
the Borrower shall be entitled to receive all dividends and other
distributions payable with respect to the Pledged Collateral. After the
Lender shall have demanded payment of amounts due on the Demand Note or
hereunder or the Demand Note shall have become automatically due without
demand, such dividends and/or distributions shall be paid to the Lender and
applied to the Liabilities then due and the Borrower shall, if the Lender
shall so request, send a written notice to any or all of the Issuers as
designated by the Lender (with a copy thereof sent to the Lender) no later
than two Business Days after the Lender's request therefor instructing such
Issuer or Issuers to remit all dividends and other distributions payable
with respect to the Pledged Collateral to the Lender.
3.6 Subsequent Changes Affecting Pledged Collateral. The Borrower
represents to the Lender that it has made its own arrangements for keeping
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe,
payment of dividends, reorganization or other exchanges, tender offers and
voting rights), and the Borrower agrees that the Lender shall have no
responsibility or liability for informing it of any such changes or
potential changes or for taking any action or omitting to take any action
with respect thereto; provided, however, that the Lender will forward to
the Borrower at the address set forth on the signature page hereto any
mailings or materials the Lender receives from the issuers of the Pledged
Securities relating to such matters.
3.7 Pledged Securities Adjustments. In the event that, so long as any
amount shall be outstanding under the Demand Note or hereunder, any stock
dividend, reclassification, readjustment or other change is declared or
made in the capital structure of any of the Issuers (including, without
limitation, the issuance of additional equity securities of any Issuer),
then the Lender shall have a security interest in (i) the number of
additional equity securities of such Issuer required, if any, so that the
Lender shall have a security interest in issued and outstanding equity
securities of such Issuer having a Current Market Value as of the date of
such change equal to or exceeding the Current Market Value of the Pledged
Securities of that Issuer as of the Business Day immediately preceding such
change and (ii) all non-equity securities issued to or acquired by the
Borrower on account of the Pledged Securities by reason of any such change,
and such shares or other securities shall become part of the Pledged
Collateral.
3.8 Collateral Loanable Value. In considering whether the Lender
elects to advance credit to Borrower hereunder at any time or to forebear
from demanding payment hereunder and under the Demand Note, the Lender will
act on its sole and absolute discretion, which may, but need not, include
consideration of the creditworthiness of the Borrower or the value of the
Pledged Collateral. If the Lender does consider creditworthiness of the
Borrower or the value of the Pledged Collateral in determining whether or
not to advance credit or forebear from demanding payment hereunder or under
the Demand Note, the Lender may consider, among other things, the fair
market value of Pledged Collateral, the market capitalization of the
Issuers of any Pledged Securities, the levels of trading volume of any
Pledged Securities, as well as such other matters as the Lender may desire
to consider. Even if the Pledged Collateral meets the Loanable Value
criteria set forth below, the Lender may in its sole and absolute
discretion decline to advance funds hereunder and it may at any time demand
payment hereunder and on the Demand Note, but in no event will the Lender
advance credit hereunder, or forebear from demanding payment hereunder and
on the Demand Note if the amount due the Lender hereunder and under the
Demand Note exceeds at any time or would, after giving effect to any
proposed advance of funds or release of Pledged Collateral, exceed the
Loanable Value, as defined below. In addition, "Loanable Value" as used
herein does not constitute or reflect and shall in no event be deemed to
constitute or reflect any agreement of the Lender concerning a sufficient
or adequate level of collateral coverage, nor shall it be deemed to
constitute any commitment or agreement of the Lender or advance any funds
hereunder or to forebear from demanding payment of amounts due on the
Demand Note or hereunder. The "Loanable Value" for each type of Pledged
Collateral is the dollar equivalent of the aggregate Market Value (as
defined below) of that type of collateral multiplied by its maximum
loanable percentage ("Loanable Value Percentage") provided in the "Pledged
Collateral Table" below, except that pledged securities with a Market Value
of less than $5.00 per share shall be deemed to have no Loanable Value. The
Market Value of (i) marketable securities shall be determined by reference
to the most recent closing bid price reported by the applicable securities
exchange or quoted by the National Association of Securities Dealers
Automated Quotation System or on such other basis as the Lender may
reasonably determine and (ii) cash equivalents on any day shall be their
market value as determined by reference to the most recent closing bid
price reported by the applicable exchange or on such other basis as the
Lender may reasonably determine. The Loanable Value for the pool of Pledged
Collateral is the sum of the Loanable Value for each type of Pledged
Collateral.
PLEDGED COLLATERAL TABLE
TYPE OF PLEDGED COLLATERAL LOANABLE VALUE PERCENTAGE
1. Cash and cash equivalents consisting of 100% (remaining tenor
insured certificates of deposit issued by less than 12 mos.)
a commercial bank that is a member of the 90% (remaining tenor
Federal Reserve System equal to or greater
than 12 mos.)
2. Government Obligations (Direct or Guaranteed)
a. Treasury bills and zeroes (remaining tenor
less than 12 mos.) 100%
b. Floaters and straights (remaining tenor
less then 12 mos.) 95%
c. Straights (remaining tenor equal to or
greater than 12 mos. but less than 5 years) 90%
d. Zeros (remaining tenor equal to or greater
than 12 mos. but less than 5 years) 85%
e. Straights (remaining tenor equal to or
greater than 5 years but less than 10 years) 85%
f. Straights (remaining tenor equal to or
greater than 10 years) 75%
g. Zeros (remaining tenor equal to or greater
than 5 years but less than 10 years) 70%
h. Zeros (remaining tenor equal to or greater
than 10 years) 60%
3. State and municipal obligations (S&P rated BBB
or higher) 80%
4. Corporate Debt Obligations 90%
a. Floaters with semi annual coupons (no tenor
limitation) 90%
b. Straights or zeros (remaining tenor less
than 12 mos.) 90%
c. Straights (remaining tenor equal to or
greater than 12 mos. but less than 5 years) 85%
d. Zeros (remaining tenor equal to or greater
than 12 mos. but less than 5 years) 80%
e. Straights (remaining tenor equal to or
greater than 5 years but less than 10 years) 80%
f. Straights (remaining tenor equal to or
greater than 10 years) 70%
g. Convertibles 70%
h. Zeros (remaining tenor equal to or greater
than 5 years but less than 10 years) 65%
i. Zeros (remaining tenor equal to or greater
than 10 years but less than 20 years) 50%
5. New York Stock Exchange listed securities 70%
6. American Stock Exchange listed securities 60%
7. Marginable Over The Counter Listed Securities 50%
ARTICLE IV
CONDITIONS OF LOANS
The Lender shall in no event have any obligation or commitment
to make any Loan hereunder and may in its sole and absolute discretion
demand repayment of the amounts outstanding at any time. If Lender shall
make any Loan hereunder, the Borrower shall, prior to the making of any
such Loan::
4.1 Prior to Initial Loans. Prior to the making of the initial
Loan hereunder, the Lender shall have received the following, each dated as
of the date hereof (except where not applicable), duly executed and in form
and substance satisfactory to the Lender:
(a) a duly completed Demand Note payable to the order of
the Lender;
(b) copies of all consents, licenses and approvals, if
any, obtained by the Borrower in connection with the execution, delivery,
performance, validity and enforceability of this Agreement and each of the
Ancillary Documents; and all such consents, licenses and approvals shall be
in full force and affect;
(c) a certificate of a general partner of the Borrower,
addressed to the Lender and dated hereof, to the effect that, to the best
of its knowledge and belief after due inquiry, (i) there exists no Event of
Default, (ii) all representations and warranties of the Borrower contained
in this Agreement or otherwise made in writing to the Lender in connection
herewith by or on behalf of the Borrower are true and correct on and as of
such date, with the same force and effect as if made on and as of such
date, (iii) all of the conditions set forth in this Article IV have been
satisfied on and as of such date, and (iv) after giving effect to the
execution and delivery of this Agreement and the Ancillary Documents, the
making of the initial Loans hereunder and the other transactions
contemplated to be effected by this Agreement, the Borrower will be able to
pay its debts as they mature and the Borrower will not be insolvent or
have unreasonably small capital to conduct its present and prospective
businesses, all in form and substance satisfactory to the Lender;
(d) a copy of the Partnership Agreement of the Borrower,
as amended through the date hereof, certified by a managing general
partner;
(e) copies of any document, if any, evidencing the
approval by the Borrower's governing general partner or partners approving
this Agreement, the Demand Note, the borrowings hereunder and all the
Ancillary Documents being executed by the Borrower and delivered to the
Lender;
(f) executed original copies of each of the Guaranties,
executed by the respective Guarantors, together with all certificates,
documents and instruments required in connection with each of such
Guaranties;
(g) if requested by the Lender, UCC-1s covering the
Pledged Collateral, executed by the Borrower as debtor, naming the Lender
as secured party, in a form satisfactory for filing in the appropriate
filing offices;
(h) an opinion of Cravath, Swaine & Moore, counsel to the
Borrower and an opinion of Cravath, Swaine & Moore counsel to each of the
Guarantors, in each case addressed to the Lender and covering such other
matters as the Lender may reasonably request;
(i) such other certificates, opinions, documents and
instruments confirming or otherwise relating to the transactions
contemplated hereby as the Lender may
reasonably request.
4.2 Prior to Each Loan. At the time of the making each Loan,
including the initial Loan (before as well as after giving effect to such
Loan and to the proposed use of the proceeds thereof):
(a) the Lender shall have received the relevant notice of
Borrowing;
(b) there shall exist no Event of Default; and
(c) all representations and warranties contained herein
and in the Ancillary Documents shall be true and correct with the same
effect as though such representations and warranties had been made on and
as of the date of such Loan, except as to any matters that have changed in
accordance with or as permitted by this Agreement.
Each request for a Borrowing and the acceptance by the Borrower of the
proceeds thereof shall constitute a representation and warranty by the
Borrower, as of the date of the Loans comprising such Borrowing, that the
conditions specified in subsections (b) and (c) of this Section 4.2 have
been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
5.1 Organization and Qualification. The Borrower (a) is a
general partnership formed, existing and in good standing under the laws of
the state of Delaware, (b) has all requisite power to own its property and
conduct its business as now conducted and as presently contemplated and (c)
is duly qualified and in good standing as a foreign partnership and is duly
authorized to do business in each jurisdiction wherein the nature of its
properties or business requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, financial condition, assets or properties of the Borrower. The
Borrower is not: (i) an "investment company" or a company controlled by an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or (ii) subject to regulation
under any Federal or State statute or regulation which limits its ability
to incur Debt other than usury laws.
5.2 Authority. The Execution, deliver and performance by the
Borrower of this Agreement, the Demand Note and the Ancillary Documents and
the transactions contemplated hereby and thereby are within the partnership
power and authority of the Borrower, and have been authorized by all
required action, and do not and will not contravene any provision of law,
charter document, partnership agreement or contravene any provision of, or
constitute an event of default or event which, with the lapse of time or
the giving of notice, or both, would constitute an event of default under
any other agreement, instrument or undertaking binding on the Borrower.
5.3 No Conflict. The execution, delivery and performance by the
Borrower of this Agreement and each of the Ancillary Documents do not
contravene any law or contractual restriction binding on or affecting it
and do not result in or require the creation of any lien, security interest
or other charge or encumbrance upon or with respect to any of the
Borrower's properties, except as contemplated hereby or thereby.
5.4 Approvals. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by the
Borrower of this Agreement and each of the Ancillary Documents.
5.5 Enforceability. This Agreement, the Demand Note and each of
the other Ancillary Documents is the legal, valid and binding obligation of
the Borrower, enforceable against it in accordance with their respective
terms.
5.6 Legal Proceedings. There is no pending or threatened action
or proceeding affecting the Borrower before any court, governmental agency
or arbitrator which could adversely affect its financial condition or which
purports to or could affect the legality, validity or enforceability of
this Agreement, the Demand Note or any of the other Ancillary Documents.
5.7 Margin. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
U.S. Federal Reserve System), and the proceeds of any Loan made hereunder
will not be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock or for
any other purpose in violation of the provisions of Regulations G, T, U or
X of the Board of Governors of the Federal Reserve System as such are now
and may from time to time hereafter be in effect.
5.8 Title to Pledged Shares. The Borrower has good and
marketable title to, and is the sole, direct, legal and beneficial owner of
the Pledged Shares, free and clear of all liens, security interests and
other charges or encumbrances, except those securing the Loan and those
attached hereto as Exhibit 5.8.
5.9 Authorization and Transferability. Each of the Pledged
Shares has been duly authorized and is fully paid and non-assessable and,
to the best of the Borrower's knowledge, transferable on the books and
records of its Issuer. Set forth on Schedule 1 hereto is a statement
setting forth the nature of the transaction in which the Borrower acquired
the Pledged Shares.
5.10 Current Market Value. As of the date hereof, the Pledged
Shares have a Current Market Value of not less than $[number],
5.11 Security Interest. Upon delivery of the Pledged Collateral
to the Lender, the pledge of the Pledged Collateral pursuant to this
Agreement creates a valid and perfected first priority security interest in
the Pledged Collateral, securing the prompt and complete payment,
observance and performance of the Liabilities.
5.12 Rule 144. Except as set forth on Exhibit 5.12, the
Borrower has beneficially owned each of the Pledged 144 Shares for at least
the three year holding period required under paragraph (k) of Rule 144 as
promulgated by the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended ("SEC Rule 144") and the purchase price
has been paid in full for at least three years and the sale by the Lender
of any of the Pledged 144 Shares in accordance with the terms of this
Agreement would qualify under paragraph (k) of SEC Rule 144 without
compliance with paragraphs (c), (e), (f) and (h) of SEC Rule 144.
5.13 Issuer Reporting. Except as set forth on Exhibit 5.13,
each of the Issuers has been subject to the reporting requirements of
Section 13 of the Securities Exchange Act of 1934, as amended, for a period
of at least ninety days prior to the date hereof and has filed all the
reports required to be filed thereunder during the twelve months prior to
the date hereof or such shorter period as it has been subject to such
requirements.
5.14 Stock Powers. The Powers are duly executed and the stock
powers constitute valid endorsements in blank of the Pledged Securities
under Section 8-308 of the Uniform Commercial Code.
5.15 Issuers' Securities. Each of the Issuers has outstanding
the equity securities set forth opposite their names below:
Issuer Title of Class No. of Shares
------ -------------- -------------
Berkshire Hathaway Inc. - Class A common stock 1,210,762
Penn Engineering and Manufacturing Corp. common stock 6,969,577
Penn Engineering and Manufacturing Corp. Class A common 1,707,082
Schweitzer-Mauduit International, Inc. common stock 16,052,309
Thiokol Corp. common stock 18,264,813
5.16 Financial Statements. The Borrower has furnished to the
Lender its (i) unaudited consolidated balance sheet as at December 31, 1995
and its unaudited consolidated statement of income, retained earnings and
cash flow for the calendar year then ended, and related footnotes, and (ii)
unaudited consolidating balance sheet and statement of income of the
Borrower and its subsidiaries as at September 30, 1996 for the six-month
period then ended. Such financial statements were prepared in accordance
with GAAP applied on a consistent basis throughout the periods specified
and present fairly the financial position of the Borrower and its
subsidiaries and the results of the operations of the Borrower and its
subsidiaries for such periods.
5.17 Guarantors' Net Worth. The aggregate net worth of the
Persons party to Guaranties in full force and effect an any date upon which
this representation is made is not less than $150,000,000.
5.18 Changes. Since September 30, 1996, there have been no
changes in the financial condition, business or results of operations of
the Borrower or any of its subsidiaries or of any of the Guarantors, other
than changes in the ordinary course of business, the effect of which have,
individually or in the aggregate, been materially adverse to the Borrower
and its subsidiaries taken as a whole, or, with respect to any such change
affecting a Guarantor, to any such Guarantor.
5.19 Use of Proceeds. The proceeds of Loans shall be used for
the purpose of general investments and working capital of the Borrower, but
not for the purchase or carrying of margin stock. The Borrower may from
time to time make loans, from the proceeds of Loans hereunder, to its
general partners and to other Persons the beneficial ownership of which
other Persons are held solely by the Borrower and/or all of the Guarantors
and provided that the use of proceeds of such loans conforms with the
representations and warranties of the Borrower herein regarding the use of
proceeds of loans made to it.
5.20 Subsidiaries. At the date hereof, all the subsidiaries of
the Borrower are listed on Exhibit 5.20 hereto which sets forth the total
amount of capital stock issued and outstanding by each Subsidiary and the
percentage of such capital stock owned beneficially and of record by the
Borrower or a Subsidiary of the Borrower, as the case may be.
5.21 Compliance with ERISA. The Borrower and each member of the
Controlled Group have fulfilled their obligations under the applicable
minimum funding standards of ERISA and the Code with respect to each Plan
and, to the beat of the knowledge of the Borrower's officers, are in
compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and have not incurred any liability to
the PBGC or a Plan under Title IV of ERISA.
5.22 Solvency. After giving effect to the execution and
delivery of this Agreement and the Ancillary Documents, and the application
of the proceeds of the Loans contemplated hereunder, the Borrower is and
will be able to pay its debts as they mature, and the Borrower will not be
insolvent or have unreasonably small capital to conduct its present and
prospective businesses.
5.23 Compliance with Laws. The Borrower and each of its
subsidiaries is in compliance in all material respects with all applicable
laws, rules, regulations and orders, including, without limitation, those
relating to environmental matters.
5.24 Taxes. The Borrower is and will continue to be taxable as
a partnership and not as an association taxable as a corporation. The
Borrower has filed all tax or information returns which are required to be
filed and has paid all taxes, assessments and governmental charges that are
due and payable except those that are being actively contested in good
faith by the Borrower.
ARTICLE VI
FURNISH INFORMATION
The Lender shall in no event have any obligation or commitment
to make any Loan hereunder and may in its sole and absolute discretion
demand repayment of the amounts outstanding at any time. If the Lender
shall make any Loan hereunder, until the Liabilities are paid in full the
Borrower will in any event, unless the Lender shall otherwise consent in
writing furnish to the Lender:
(i) as soon as available and in any event within 90
days after the end of each calendar year and within 45 days of the
end of each calendar quarter, financial statements of the sort
described in Section 5.16; provided, however, that if the Borrower
shall, at any time so long as any amount shall be outstanding under
the Demand Note or hereunder, have prepared audited balance sheets,
statements of income and cash flow, then the Borrower will promptly
furnish to the Lender copies of such audited financial statements,
including the opinion of the Borrower's independent certified public
accountants relating to such financial statements;
(ii) immediately upon the occurrence of an Event of
Default, a statement setting forth the facts and circumstances of
such Event of Default and specifying what actions the Borrower has
taken as proposes to take to remedy such Event of Default;
(iii) together with the reports and statements
described in clauses (i) and (ii) above, a certificate, dated as of
the date such report or statement is delivered and signed by the
Borrower, stating that no Event of Default or an event which, but for
the mare lapse of time or the giving of notice or both, would
constitute an Event of Default, existed on the date of such
certificate;
(iv) within tan days of changing the location of
its business, notify the Lender of the new location of its business;
and
(v) such other information respecting the condition
or operations, financial or otherwise, of the Borrower as the Lender
may from time to time reasonably request, including, without
limitation, any information relating to any materially adverse
changes relating to the Borrower's employment and the Borrower's
income, assets or liabilities, promptly upon the occurrence thereof.
ARTICLE VII
DEMAND NOTE; EVENTS OF DEFAULT; ENFORCEMENT
7.1 Demand Note; Events of Default. All Loans made by the
Lender hereunder constitute demand Loans, payable in full at any time on
the Lender's demand. Whether or not any event of default has occurred, any
representation or warranty shall have been breached or any covenants set
forth herein shall have been violated, the Lender may at any time in its
sole and absolute discretion demand payment of amounts due under the Demand
Note and hereunder and shall be under no obligation to forebear from making
such demand. In the event of any such demand, the Demand Note, all interest
thereon and all other amounts payable thereunder and under this Agreement
shall be and become forthwith due and payable, without presentment, further
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition, the occurrence of any of any
of the following events shall be deemed to constitute an "Event of Default"
for purposes of this Agreement and the Demand Note:
(a) The Borrower shall fail to pay any principal of the
Note when the Lender shall demand payment thereof;
(b) The Borrower shall fail to pay any interest on the
Note or any other amounts hereunder within five days of the date upon which
the same becomes due and payable; or
(c) Any representation, warranty or statement made by the
Borrower in this Agreement, or in any of the Ancillary Documents or by any
Guarantor in any Guaranty, shall prove to have been incorrect in any
material respect when made, whether on the date hereof, or upon the
delivery of any Notice of Borrowing or notice of conversion to the LIBOR
Rate; or
(d) The Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement or any
Guarantor shall fail to perform any term, covenant or agreement contained
in his or her Guaranty; or
(e) The Borrower or any of the Guarantors shall fail to
pay any principal of or premium or interest on any Debt of the Borrower or
such Guarantor, as the case may be, which is outstanding when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise); or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, it the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof; or
(f) The Borrower or any Guarantor shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the
Borrower or any Guarantor seeking to adjudicate it or it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of the Borrower or such
Guarantor, or either of their property or either of their debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of
a receiver, trustee, custodian or other similar official for either of them
or for any substantial part of either of their property and, in the case of
any such proceeding instituted against either of them, either such
proceeding shall remain undismissed or unstayed for a period of 60 days, or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of
a receiver, trustee, custodian or other similar official for, either of
them or for any substantial part of either of their property) shall occur;
or the Borrower or a Guarantor conceals, removes, or permits to be
concealed or removed, any part of either of their property, with the intent
to hinder, delay or defraud either of their creditors or any of them, or
makes or suffers a transfer of any of either of their property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law, or
makes any transfer of either of their property to or for the benefit of a
creditor at a time when other creditors similarly situated have not been
paid; or
(g) Any judgment or order for the payment of money in
excess of $100,000 shall be rendered against the Borrower or any Guarantor
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
ten days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(h) there shall occur a material adverse change in the
business, results of operations or condition (financial or otherwise) of
the Borrower; or
(i) the occurrence of either of the following events with
respect to Eric Ruttenberg: (A) his death; or (B) his withdrawal from or
removal as a partner of the Borrower.
If any event described in clause (f) above shall occur with respect to the
Borrower the Demand Note, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived
by the Borrower.
7.2 Remedies of the Lender.
7.2.1 Remedies Generally. Upon demand for payment under the
Demand Note, or upon acceleration of the Demand Note without demand, the
Lender shall have, in addition to any other rights given under this
Agreement, the Demand Note or by law, all of the rights and remedies with
respect to the Pledged Collateral of a secured party under the Uniform
Commercial Code as in effect in the State of New York. If any of the
Pledged Collateral shall not be registered in the name of the Lender or the
Lender's nominee, the Lender may, at its option transfer or register any or
all of the Pledged Collateral into its or its nominee's name with or
without indication that such Pledged Collateral is subject to the security
interest hereunder. In addition, the Lender Shall have the power to take
possession of any Pledged Collateral of which it does not then have
possession and such powers of sale and other powers as may be conferred by
applicable law. With respect to the Pledged Collateral or any part thereof
which shall then be in or shall thereafter come into the possession or
custody of the Lender or which the Lender shall otherwise have the ability
to transfer under applicable law, the Lender may, in its Sole discretion,
without notice except to the extent required in Section 7.2.2, after the
Liabilities shall become due and unpaid, sell or cause the same to be sold
at any broker's board or at public or private sale, in one or more sales or
lots, at such price as the Lender may deem best, for cash or on credit or
for future delivery, without assumption of any credit risk on the part of
the Lender and the purchaser of any or all of the Pledged Collateral so
sold shall thereafter own the same, absolutely free from any claim,
encumbrance or right of any kind whatsoever.
7.2.2 Sale of Pledged Collateral. Unless any of the Pledged
Collateral threatens to decline speedily in value or is or becomes of a
type sold on a recognized market, the Lender will give the Borrower
reasonable notice of the time and place of any public sale thereof, or of
the time after which any private sale or other intended disposition is to
be made. Any sale of the Pledged Collateral conducted in conformity with
reasonable commercial practices of banks, commercial finance companies,
insurance companies or other financial institutions disposing of property
similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Notwithstanding any provision to the contrary contained herein,
any requirement of reasonable notice shall be met if three Business Days'
notice of such sale or disposition is provided to the Borrower. Any other
requirement of notice, demand or advertisement for sale is, to the extent
permitted by law, waived.
7.2.3 Restrictions on Sale. In view of the fact that federal
and state securities laws may impose certain restrictions on the method by
which a sale of the Pledged Collateral may be effected after the
Liabilities shall become due and payable, the Borrower agrees that the
Lender may, from time to time, attempt to sell all or any part of the
Pledged Collateral by means of a private placement restricting the bidders
and prospective purchasers to those who are qualified and will represent
and agree that they are purchasing for investment only and not for
distribution. In so doing, the Lender may solicit offers to buy the Pledged
Collateral, or any part of it, from a limited number of investors deemed by
the Lender, in its judgment, to be financially responsible parties who
might be interested in purchasing the Pledged Collateral. It the Lender
solicits such offers, then the acceptance by the Lender of the highest
offer obtained therefrom shall be deemed to be a commercially reasonable
method of disposing of such Pledged Collateral.
7.2.4 Purchase by Lender. The Lender may, in its own name or in
the name of a designee or nominee, buy all or any part of the Pledged
collateral at any public sale and, if permitted by applicable law, buy all
or any part of the Pledged Collateral at any private Sale.
7.2.5 Proceedings by Lender. (i) The Lender shall have the
right and power to institute and maintain such suits and proceedings as it
may deem appropriate to protect and enforce the rights vested in it by this
Agreement and the Ancillary Documents and (ii) the Lender may, either after
entry of a judgment or decree or without entry of a judgment or decree,
proceed by suit or suits at law or in equity to enforce such rights and to
foreclose upon the Pledged Collateral or any portion thereof and to sell
all or, from time to time, any of the Pledged Collateral under the judgment
or decree of a court of competent jurisdiction.
7.3 Distributions by the Lender of Collateral Proceeds. All
amounts received by the Lender pursuant to the terms of this Agreement and
the Guaranties shall be distributed upon receipt first, to the Lender until
the Liabilities shall have been paid in full and, then, to the Borrower.
ARTICLE VIII
APPOINTMENT OF THE LENDER AS ATTORNEY-IN-FACT;
LIMITATION OF LENDER LIABILITY
8.1 Attorney-in-Fact. The Borrower hereby appoints the Lender
as the Borrower's attorney-in-fact, with full authority in the place and
stead of the Borrower and in the name of the Borrower or otherwise, from
time to time in the Lender's discretion to take any action and to execute
any instrument which the Lender may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation,
(i) the execution and filing with the SEC and any applicable national
securities exchange, in such Borrower's name and on its behalf, such
Notices of Proposed Sale of Securities on Form 144 covering the Pledged
Securities as Lender may deem appropriate if the Lender intends to sell any
of the Pledged 144 Shares, and (ii) to receive, endorse and collect all
instruments made payable to the Borrower representing any distribution,
interest payment or other dividend distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same, and
(iii) to arrange for the transfer of the Pledged Collateral pursuant to
Article III. This power of attorney created under this Section 8.1, being
coupled with an interest, shall be irrevocable for the term of this
Agreement and thereafter as long as any of the Liabilities shall be
outstanding, but shall not be deemed to authorize the Lender to take any
action as the Borrower's attorney-in-fact which the Borrower could not be
required to take hereunder.
8.2 Limitation of Liability of the Lender
8.2.1 Reliance. The Lender may conclusively rely and shall be
protected in acting or refraining from acting upon any document,
instrument, certificate, instruction or signature believed by it to be
genuine and may assume and shall be protected in assuming that any Person
purporting to give notice or instructions in accordance with this Agreement
or in connection with any transaction to which this Agreement relates has
been duly authorized to do so. The Lender shall not be obligated to make
any inquiry as to the authority, capacity, existence or identity of any
Person purporting to have executed any such document or instrument or have
made any such signature or purporting to give any such notice or
instructions.
8.2.2 Acts, Omissions, etc. The Lender shall not be liable for
any acts, omissions, errors of judgment or mistakes of fact or law
including, without limitation, acts, omissions, errors or mistakes with
respect to the Pledged Collateral, except for those arising out of or in
connection with the Lender's gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Lender shall be under
no obligation to take any steps necessary to preserve rights in the Pledged
collateral against any other parties but may do so at its option, and all
expenses incurred in connection therewith shall be for the sole account of
the Borrower.
8.2.3 Good Faith. The Lender shall not be liable for any action
taken by it in good faith and believed by it to be authorized or within the
rights or powers conferred upon it by this Agreement, and may consult with
counsel of its own choice and shall have full and complete authorization
and protection for any action taken or suffered by it hereunder in good
faith and in accordance with the opinion of such counsel.
ARTICLE IX
MISCELLANEOUS
9.1 Effectiveness. This Agreement shall remain in full force
and effect until all of the Liabilities shall have been paid and satisfied
in full and the Demand Note shall have been terminated and canceled. The
undertakings set forth in the Demand Note and the Agreement shall continue
to be effective or be reinstated, as the case may be, if at any time any
payment of the Liabilities is rescinded or must otherwise be returned as a
result of the insolvency or bankruptcy of the Borrower, all as though such
payment had not been made.
9.2 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrower and the Lender, and their
respective successors and assigns. The Lender may assign to one or more
banks or other entities all or a portion of its rights under this Agreement
under the Demand Note and the Ancillary Documents. The Lender will give the
Borrower no less than five Business Days' prior written notice of any such
assignment. In the event of an assignment of all or a portion of its rights
hereunder, the Lender may transfer and deliver all or a portion of the
property then held by it as security hereunder and the assignee shall
thereunder become vested with all the powers and rights herein given to the
Lender with respect thereto. After any such assignment or transfer, the
Lender shall be forever relieved and fully discharged from any liability or
responsibility in the matter, and the Lender shall retain all rights and
powers with respect to property not so transferred or delivered. The Lender
may sell participations to one or more banks or other entities in or to all
or a portion of its rights hereunder and under the Demand Note. The Lender
may in connection with any assignment or participation or proposed
assignment or participation disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower
furnished to the Lender by or on behalf of the Borrower, provided that
prior to any such disclosure, the assignee or participant or proposed
assignee or proposed participant shall agree to preserve the
confidentiality of confidential information related to the Borrower
received by it from the Lender.
9.3 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws (as opposed to conflict of
laws provisions) of the State of New York. Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be held to be prohibited or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
9.4 Jurisdiction; Waiver of Jury Trial. THE BORROWER AND THE
LENDER AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF OR CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM (IN CONNECTION WITH THIS AGREEMENT) SHALL BE RESOLVED ONLY BY STATE OR
FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK, PROVIDED, HOWEVER, THAT
THE BORROWER AGREES THAT THE LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST
THE BORROWER OR ITS PROPERTY IN A COURT IN ANY JURISDICTION IN ORDER TO
ENABLE THE LENDER TO SEIZE ON THE PLEDGED COLLATERAL OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE LENDER. THE BORROWER
SHALL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
THE LENDER TO REALIZE ON ANY OF THE PLEDGED COLLATERAL. THE BORROWER
WAIVES, IN ALL DISPUTES, ANY OBJECTION THAT THE BORROWER MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE. THE BORROWER AND THE LENDER
EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT.
9.5 Other Waivers. The Borrower hereby waives any requirement
of diligence, presentment, demand of payment, filing of claims with a court
in the event of receivership or bankruptcy of the Borrower, protest or
notice with respect to the Liabilities, the benefit of any statutes of
limitation, and all demands whatsoever, and covenants that this Agreement
will not be discharged.
9.6 Notices. Any notice or other communication herein required
or permitted to be given shall be in writing (including facsimile
communication) and may be personally served, telecopied or sent by courier
service or United States mail. All such notices and communications shall,
when served, telecopied, delivered or mailed, be effective when served,
confirmed by telecopied acknowledgment, delivered, or three Business Days
after being deposited in the United States mail (registered or certified
mail, with postage prepaid and properly addressed), respectively. For the
purposes hereof, the addresses of the parties hereto (until notice of a
change thereof is delivered as provided in this Section 9.6) shall be as
set forth below such party's name on the signature pages hereof or at such
other address as may be designated by such party in a written notice to the
other party.
9.7 Amendments. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by the Borrower herefrom, shall in
any event be effective unless the same shall be in writing and signed by
the Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
9.8 Costs, Expenses, Taxes and Indemnity.
9.8.1 Payment by Borrower. The Borrower agrees to pay on demand
all reasonable costs, fees and expenses in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the Demand Note, and the Ancillary Documents including, without
limitation, (i) all costs, fees and expenses incurred by the Lender or for
which the Lender has become obligated, in connection with the maintenance,
inspection, verification and/or valuation of the Pledged Collateral and the
perfection of the Lender's interest in such Pledged Collateral, including,
without limitation, any fees for filing under the Uniform Commercial Code
of any relevant jurisdiction and (ii) the reasonable fees and out-of-pocket
expenses of counsel for the Lender with respect thereto and with respect to
advising the Lender as to its rights and responsibilities under this
Agreement, the Demand Note and the Ancillary Documents. The Borrower agrees
to pay on demand all costs and expenses, if any (including, without
limitation, reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise)
of this Agreement, the Demand Note, the other Ancillary Documents and the
other documents to be delivered hereunder or thereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of Lender's rights hereunder. The Borrower agrees to pay,
indemnify and to hold the Lender harmless from any and all recording and
filing fees, and other liabilities with respect to stamp, excise or other
taxes, if any (other than taxes imposed on all or any portion of the
overall net income of the Lender by the State of New York, or the Federal
government or by any political subdivision or taxing authority of the State
of New York or the Federal government) which may be payable in connection
with the execution and delivery of, or consummation of the transactions
contemplated by this Agreement or any of the Ancillary Documents or any
amendment, modification, supplement thereto or consent or waiver given in
connection therewith.
9.8.2 Indemnity. The Borrower further agrees to defend,
protect, indemnify and hold harmless the Lender, each affiliate of the
Lender and each of the officers, directors, employees, agents and co-agents
of the Lender (collectively the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated as a party thereto), imposed on, incurred
by, or asserted against such Indemnitees in any manner relating to or
arising out of this Agreement, the Demand Note, any of the other Ancillary
Documents or the use or intended use of the proceeds of the Loan
(collectively, the "Indemnified Matters"); provided, that the Borrower
shall have no obligation to an Indemnitee hereunder with respect to
indemnified matters caused by or resulting from the gross negligence or the
willful misconduct of that Indemnitee.
9.9 Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default or (ii) the declaration by the Lender
to the effect that the Demand Note is due and payable, the Lender is hereby
authorized at any time and from time to time, to the fullest extent
permitted by law, to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement, the Demand Note,
and any of the other Ancillary Documents, whether or not the Lender shall
have made any demand under this Agreement or the Demand Note and although
such obligations may be unmatured. Lender agrees promptly to notify the
Borrower after any such set-off and application made by Lender; provided,
however, that the failure to give such notice shall not affect the validity
of such set-off and application. The rights of the Lender under this
Section 9.9 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Lender may have.
9.10 Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument.
9.11 Section Readings. The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
TINICUM INVESTORS
By: /s/ Eric M. Ruttenberg
------------------------------------
Eric M. Ruttenberg,
Managing General Partner
Notice Address
990 Stewart Avenue
Garden City, NY 11530
Facsimile: (516) 222-2902
Employer ID No.: 13-3800339
CITIBANK, N.A.
By: /s/ Nicholas Rippolone
------------------------------
Name: Nicholas Rippolone
Title: V.P.
Notice Address
Private Banking Group
Citibank, N.A.
153 East 53rd Street
New York, New York 10043
Attention: Nicholas Ripollone
Facsimile: (212) 308-5183
Schedule 1 to Demand Loan and Pledge Agreement
Dated as of March 5, 1997
Description of Pledged Shares
Schedule 1 to Demand Loan and Pledge Agreement - Tinicum
Investors/Citibank, N.A.
Description of Pledged Collateral
<TABLE>
<CAPTION>
Number Exchange
of % of Relationship
Issuer and Stock Par Pledged Outstanding How Shares to Issuer
Certificate No. Value Securities Class Were Acquired Listed
- -------------------- ----- ---------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Berkshire Hathaway, $5.00 30 .01 open market NYSE
Inc.-Class A purchases
Penn Engineering and $1.00 70,000 1 open market NYSE
Manufacturing purchases
Corp.-Common Stock
Penn Engineering and $1.00 25,700 1.5 open market NYSE
Manufacturing purchases
Corp.-Class A Common
Schweitzer-Mauduit $0.10 287,200 1.8 open market NYSE
International, Inc. purchases
Thiokol Corp. $1.00 20,000 0.11 open market NYSE
purchases
</TABLE>
Exhibit 2.2
to Demand Loan and Pledge Agreement
dated as of March 5, 1997
Citibank, N.A., Private Bank
153 East 53rd Street - 18th floor
New York, NY 10043
Attention: Nicholas Ripollone
RE: Notice of Borrowing under Demand Loan and Pledge
Agreement (the "Agreement") dated as of March 5,
1997 between Citibank, N.A. and Tinicum Investors
Ladies/Gentlemen:
Pursuant to Section 2.2.1 of the Agreement, the undersigned
hereby irrevocably requests a [Base Rate Loan/LIBOR Loan] in the amount of
$_________ to be made on __________, 19__. Please make proceeds of the
Loan, other than proceeds being applied to roll over a prior Loan,
available to us at the following Citibank, N.A. account: _________________.
[For LIBOR Loans only:] The Interest Period applicable
to said Loan will be ______________.
The proceeds of said Loan will be used for ___________________.
As of the date hereof and after giving effect to the Loan
requested hereby, the aggregate principal amount of Loans outstanding will
be $____________. After making the Loan hereby requested, the Principal
Balance will not exceed the $10,000,000.
All representations and warranties contained or referred to in
the Agreement and in the Ancillary Documents are true and accurate on and
as of the date hereof except as to any matters that have changed in
accordance with or as permitted by the Agreement and no Event of Default,
and no event which, but for the mere passage of time or the giving of
notice or both, would constitute an Event of Default, has occurred and is
continuing. All capitalized terms used in this letter have the meaning
given to such terms in the Agreement.
TINICUM INVESTORS
By:________________________________
Title:
Date: _____________ ___, 199_
Exhibit 3.1
to
Demand Loan and Pledge Agreement
dated as of March 5, 1997
Form of Stock Power and Power of Attorney
STOCK POWER
FOR VALUE RECEIVED, _______________________________________________________
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
hereby sell, assign and transfer unto ______________________________________
____________________________________________________________________________
____________________________________________________________________________
(_______) Shares of the ____________ Capital Stock of ______________________
_______________________________________________ standing in my (our) name(s)
on the books of said Corporation represented by Certificate(s) No(s) _______
herewith, and do hereby irrevocable constitute and appoint _________________
______________________________________________________ attorney to transfer
the said stock on the books of said Corporation with full power of
substitution in the premises.
Dated ___________________
_____________________________
In presence of
_____________________________
POWER OF ATTORNEY
The undersigned, TINICUM INVESTORS, does hereby constitute a nd
appoint Citibank, N.A. and any officer or agent of Citibank, N.A., with
full power of substitution, its true and lawful attorney and agent to
execute and file with the Securities and Exchange Commission and any
applicable national securities exchange, in its name and on its behalf,
such Notices of Proposed sale of Securities on Form 144 securities owned by
the undersigned and pledged by the undersigned to Citibank, N.A. for the
purpose of notifying the Securities and Exchange Commission of Citibank,
N.A.'s intention to sell securities for the undersigned's account in
reliance on Rule 144 promulgated under the Securities Act of 1933, as
amended, and the undersigned does hereby ratify and confirm as its own act
and deed all that any such attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this
power of attorney this ___ day of March 5 , 1997.
________________________________
Name:
Signed and sworn to
before me this ___ day
of March 5, 1997.
____________________________
Notary Public
Exhibit 5.8
to
Demand Loan and Pledge Agreement
dated as of March 5, 1997
Liens, Security Interest and Other Charges or
Encumbrances on Pledged Shares
---------------------------------------------
NONE
Exhibit 5.12
to
Demand Loan and Pledge Agreement
dated as of March 5, 1997
Pledged 144 Shares Not Held for Three Years
-------------------------------------------
NONE
Exhibit 5.13
to
Demand Loan and Pledge Agreement
dated as of March 5, 1997
Issuers Not Reporting Under Securities Exchange Act of 1934
-----------------------------------------------------------
NONE
Exhibit 5.20
to
Demand Loan and Pledge Agreement
dated as of March 5, 1997
List of Subsidiaries of the Borrower
------------------------------------
Palace Court Limited, a corporation organized under the laws of England.
FORM OF DEMAND PROMISSORY NOTE
U.S. $10,000,000 Dated: , 1997
FOR VALUE RECEIVED, the undersigned, TINICUM INVESTORS, a
general partnership organized under the laws of the state of Delaware (the
"Borrower"), HEREBY PROMISES TO PAY ON DEMAND to the order of CITIBANK,
N.A. (the "Lender") the aggregate unpaid principal amount of all advances
made hereunder pursuant to the Demand Loan and Pledge Agreement dated as of
March 5, 1997 (as the same may be amended, supplemented, or otherwise
modified from time to time, the "Loan Agreement") between the Borrower and
the Lender. Capitalized terms used in this Demand Note and not herein
defined have the meanings ascribed to them in the Loan Agreement.
The Borrower promises to pay interest on the principal amount
hereof from time to time outstanding from the date hereof until such
principal amount is paid in full, at such interest rates, and payable at
such times, as shall be calculated pursuant to the Loan Agreement.
Both principal and interest are payable in lawful money of the
Unite d States of America to the Lender's account at Private Bank, 153 East
53rd Street, 18th floor, New York, New York 10043, or such other address as
Lender shall designate in writing from time to time to Borrower, in same
day funds.
This Demand Promissory Note is the Demand Note referred to in,
and is entitled to the benefits of, including, without limitation, the
security provided for by, the Loan Agreement. The Loan Agreement, among
other things, contains provisions for payment of amounts due hereunder upon
demand by the Lender made in its sole and absolute discretion at any time,
for automatic acceleration of the maturity hereof upon the happening of
certain stated events, for repayment and prepayments on account of
principal hereof prior to the maturity hereof, and also for the payment of
certain other amounts in certain events, all upon the terms and conditions
therein specified.
Presentment, demand, protest and other notice of any kind are
her eby expressly waived.
TINICUM INVESTORS
By: ___________________________________
Name:
General Partner
SCHEDULE TO PROMISSORY DEMAND NOTE OF TINICUM
INVESTORS PAYABLE TO THE ORDER OF CITIBANK, N.A.
<TABLE>
<CAPTION>
Date Amount Base or Interest Interest Amount Notation
of Loan LIBOR Rate Period Paid Made By
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
<C> <C> <C> <C> <C> <C> <C>
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
- ------------ ------------ ------------ ------------ ------------ ---------- ----------
</TABLE>
DEMAND PROMISSORY NOTE
U.S. $10,000,000 Dated: March 5, 1997
FOR VALUE RECEIVED, the undersigned, TINICUM INVESTORS, a
general partnership organized under the laws of the state of Delaware (the
"Borrower"), HEREBY PROMISES TO PAY ON DEMAND to the order of CITIBANK,
N.A. (the "Lender") the aggregate unpaid principal amount of all advances
made hereunder pursuant to the Demand Loan and Pledge Agreement dated as of
March 5, 1997 (as the same may be amended, supplemented, or otherwise
modified from time to time, the "Loan Agreement") between the Borrower and
the Lender. Capitalized terms used in this Demand Note and not herein
defined have the meanings ascribed to them in the Loan Agreement.
The Borrower promises to pay interest on the principal amount
hereo f from time to time outstanding from the date hereof until such
principal amount is paid in full, at such interest rates, and payable at
such times, as shall be calculated pursuant to the Loan Agreement.
Both principal and interest are payable in lawful money of the
Unite d States of America to the Lender's account at Private Bank, 153 East
53rd Street, 18th floor, New York, New York 10043, or such other address as
Lender shall designate in writing from time to time to Borrower, in same
day funds.
This Demand Promissory Note is the Demand Note referred to in,
and i s entitled to the benefits of, including, without limitation, the
security provided for by, the Loan Agreement. The Loan Agreement, among
other things, contains provisions for payment of amounts due hereunder upon
demand by the Lender made in its sole and absolute discretion at any time,
for automatic acceleration of the maturity hereof upon the happening of
certain stated events, for repayment and prepayments on account of
principal hereof prior to the maturity hereof, and also for the payment of
certain other amounts in certain events, all upon the terms and conditions
therein specified.
Presentment, demand, protest and other notice of any kind are
her eby expressly waived.
TINICUM INVESTORS
By: /s/ Eric Ruttenberg
-------------------------------------
Name:
General Partner
