<PAGE>
FY94: THIRD QUARTER
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED MAY 1, 1994
COMMISSION FILE NUMBER 1-6101
ROHR, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1607455
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
850 LAGOON DRIVE, CHULA VISTA, CALIFORNIA 91910
(Address of principal executive offices)
(619) 691- 4111
(Registrant's Telephone No.)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
--- ---
AS OF MAY 31, 1994, THERE WERE 18,030,430 SHARES OF THE REGISTRANT'S COMMON
STOCK OUTSTANDING.
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Page 1 of 17
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PART 1. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
ROHR, INC. AND SUBSIDIARIES
---------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(in thousands except for share data)
------------------------------------
<TABLE>
<CAPTION>
MAY 1, JULY 31,
1994 1993
----------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
- - ------
Cash and short-term investments $ 25,985 $ 42,186
Accounts receivable 91,899 94,140
Inventories:
Work-in-process 463,305 560,139
Raw materials, purchased parts and supplies 28,078 32,575
Less customers' progress payments and advances (105,537) (152,976)
--------- ----------
Inventories - net 385,846 439,738
Prepaid expenses and other current assets 12,091 16,861
Deferred tax asset 13,723 13,654
--------- ----------
TOTAL CURRENT ASSETS 529,544 606,579
PROPERTY, PLANT AND EQUIPMENT 498,784 496,452
Less accumulated depreciation and amortization (273,122) (257,407)
--------- ----------
Property, plant and equipment - net 225,662 239,045
INVESTMENT IN LEASES 37,699 38,233
DEFERRED TAX ASSET 119,123 89,348
OTHER ASSETS 37,616 44,581
--------- ----------
$ 949,644 $1,017,786
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
- - ------------------------------------
Trade accounts and other payables $ 127,695 $ 166,916
Salaries, wages and benefits 35,694 38,623
Current portion of long-term debt 15,574 50,719
--------- ----------
TOTAL CURRENT LIABILITIES 178,963 256,258
LONG-TERM DEBT 466,562 480,889
PENSION AND POST-RETIREMENT OBLIGATIONS 131,509 63,040
OTHER OBLIGATIONS 27,058 35,356
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value per share, 10 million
shares authorized, none issued - -
Common stock, $1 par value per share, authorized
50,000,000 shares; issued and outstanding
18,009,680 and 17,995,866 shares respectively 18,010 17,996
Additional paid-in capital 102,546 102,312
Retained earnings 80,289 75,241
Minimum pension liability adjustment (55,293) (13,306)
--------- ----------
TOTAL SHAREHOLDERS' EQUITY 145,552 182,243
--------- ----------
$ 949,644 $1,017,786
========= ==========
</TABLE>
Page 2 of 17
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ROHR, INC. AND SUBSIDIARIES
---------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
-------------------------------------------------
(in thousands except for per share data)
----------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------- ---------------------
MAY 1, MAY 2, MAY 1, MAY 2,
1994 1993 1994 1993
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Sales $231,101 $296,781 $715,924 $ 922,785
Costs and Expenses 209,255 308,934 648,974 903,521
General & Administrative Expenses 7,286 11,214 20,732 33,662
Unusual Items 7,926 7,926
-------- -------- -------- ---------
Operating Income (Loss) 6,634 (23,367) 38,292 (14,398)
Interest Income 395 272 915 677
Interest Expense 11,436 12,890 35,637 36,065
-------- -------- -------- ---------
Income (Loss) before Taxes and Cumulative
Effect of Accounting Changes (4,407) (35,985) 3,570 (49,786)
Taxes (Benefit) on Income (1,720) (13,784) (1,478) (19,070)
-------- -------- -------- ---------
Income (Loss) before Cumulative Effect
of Accounting changes (2,687) (22,201) 5,048 (30,716)
Cumulative Effect through July 31, 1992
of accounting changes, net of taxes - - - (223,950)
-------- -------- -------- ---------
Net Income (Loss) $ (2,687) $(22,201) $ 5,048 $(254,666)
======== ======== ======== =========
Net Income (Loss) per Average
Share of Common Stock:
Before cumulative effect of
accounting changes $(0.15) $(1.24) $ 0.28 $ (1.72)
Effect through July 31, 1992
of accounting changes - - - (12.52)
-------- -------- -------- ---------
Net Income (Loss) $ (0.15) $ (1.24) $ 0.28 $ (14.24)
======== ======== ======== =========
Cash Dividends per Share
of Common Stock - - - -
Total Common Stock and
Common Stock Equivalents 18,063 17,898 18,041 17,889
</TABLE>
Page 3 of 17
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ROHR, INC. AND SUBSIDIARIES
---------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
-------------------------------------------------
(in thousands)
--------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-----------------------
MAY 1, MAY 2,
1994 1993
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 5,048 $(254,666)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Cumulative effect of accounting changes, net of taxes 223,950
Depreciation and amortization 17,041 18,974
Changes due to (increase) decrease in operating assets:
Accounts receivable 21,408 19,218
Net inventories 53,892 43,844
Prepaid expenses and other assets 4,060 8,202
Deferred taxes (1,618) (24,064)
Changes due to increase (decrease) in operating
liabilities:
Payables and Other Liabilities (43,391) 7,322
Other (463) 2,720
--------- ---------
Net cash provided by operating activities 55,977 45,500
--------- ---------
INVESTING ACTIVITIES:
Proceeds from sale-leaseback transactions - 52,247
Purchase of property, plant and equipment - net (3,660) (22,889)
Other 75 (1,274)
--------- ---------
Net cash provided by (used in) investing activities (3,585) 28,084
--------- ---------
FINANCING ACTIVITIES:
Issuance of 9.33% senior notes - 62,000
Annual principal payment on 9.35% senior notes (12,500) (12,500)
Repayment of medium-term notes (35,000) (10,000)
Net short-term borrowings (repayments) - (20,000)
Long-term borrowings under revolving credit
agreement 101,000 90,000
Repayment of borrowings under revolving
credit agreement (101,000) (90,000)
Repayment of other long-term borrowings (1,972) (27,370)
Net repayment of receivable and equivalents - (45,000)
Proceeds from cash values in
insurance policies - 9,984
Cash collateral for receivables sales program (19,167) -
Stock contributions to employee benefit plans - 741
Other 46 20
--------- ---------
Net cash used in financing activities (68,593) (42,125)
--------- ---------
INCREASE (DECREASE) IN CASH AND
SHORT-TERM INVESTMENTS (16,201) 31,459
CASH AND SHORT-TERM INVESTMENTS,
BEGINNING OF PERIOD 42,186 21,122
--------- ---------
CASH AND SHORT-TERM INVESTMENTS,
END OF PERIOD $ 25,985 $ 52,581
========= =========
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized $ 36,612 $ 33,990
Cash paid for income taxes, net of refunds 115 5,112
</TABLE>
Page 4 of 17
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ROHR, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
The consolidated balance sheet as of May 1, 1994, and statements of
operations for the three month and nine month periods ended May 1, 1994 and
May 2, 1993, and cash flows for the nine month periods ended May 1, 1994,
and May 2, 1993, reflect all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary
for a fair presentation of the results of operations for the interim
periods. Financial results for interim periods are not necessarily
indicative of results to be expected for the full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated financial
statements should be read in conjunction with the financial statements
included in the July 31, 1993 Form 10-K.
CONTINGENCIES
In June 1987, the U.S. District Court of Los Angeles, in U.S. et al, vs.
Stringfellow, granted partial summary judgment against the Company and 14
other defendants on the issue of liability under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"). This
suit alleges that the defendants are jointly and severally liable for all
damage in connection with the Stringfellow hazardous waste disposal site in
Riverside County, California. In June 1989, a federal jury and a special
master appointed by the federal court found the State of California also
liable for the cleanup costs. On November 30, 1993, the special master
released his "Findings of Fact, Conclusions of Law and Reporting
Recommendations of the Special Master Regarding the State Share Fact Finding
Hearing". In it, he allocated liability between the State of California and
other parties. As this hearing did not involve the valuation of future
tasks and responsibilities, the order did not specify dollar amounts of
liability. The order, phrased in percentages of liability, recommended
allocating liability on the CERCLA claims as follows: 65% to the State of
California and 10% to the Stringfellow entities, leaving 25% to the
generator/counterclaimants (including the Company) and other users of the
site (or a maximum of up to 28% depending on the allocation of any
Stringfellow entity orphan share). On the state law claims, the special
master recommended a 95% share for the State of California, and 5% for the
Stringfellow entities, leaving 0% for the generator/counterclaimants. This
special master's finding is subject to a final decision and appeal. The
Company and the other generators of wastes disposed at the Stringfellow
site,
Page 5 of 17
<PAGE>
which include numerous companies with assets and equity significantly
greater than the Company, are jointly and severally liable for the share of
cleanup costs for which the generators, as a group, may ultimately be found
to be responsible. Notwithstanding, this CERCLA liability is sometimes
allocated among hazardous waste generators who used a waste disposal site
based on the volume of hazardous waste they disposed at the site. The
Company is the second largest generator of wastes by volume disposed at the
site, although it and certain other generators have argued the final
allocation of cleanup costs among generators should not be determined solely
by volume. The largest volume generator of wastes disposed at the
Stringfellow site has indicated it is significantly dependent on insurance
to fund its share of any cleanup costs, and that it is in litigation with
certain of its insurers.
The Company has claims against its comprehensive general liability insurers
for reimbursement of its cleanup costs at the site. These claims are the
subject of separate litigation, although the insurers nevertheless are
paying substantially all of the Company's costs of defense in the CERCLA and
State actions against the generators of wastes disposed at the site.
Certain of these insurance policies have pollution exclusion clauses which
are being argued as a defense and the insurers are alleging various other
defenses to coverage. The Company has entered settlements with some of the
insurance carriers and is engaged in settlement discussions with certain
others.
The Company intends to continue to vigorously defend itself in the
Stringfellow matter and believes, based upon currently available
information, that the ultimate resolution will not have a material adverse
effect on the financial position, liquidity, or results of operations of the
Company.
The Company is also involved in several other proceedings and investigations
related to environmental protection matters. It is difficult to estimate
the ultimate level of environmental expenditures that will be required in
connection with these matters due to a number of uncertainties, including
the complexity of the related laws and their interpretation, alternative
cleanup technologies and methods, insurance and other recoveries, and in
some cases, the extent and uncertainties of the Company's involvement.
However, the Company has heard of preliminary estimates of cleanup costs for
the Rio Bravo, Chatham Brothers and Casmalia waste disposal sites as
approximately $7 million, $30 million and $70 million, respectively, and the
Company's share (based on estimated, respective volumes of discharges into
such sites by all generators, all of which cannot now be known with
certainty) could approximate $0.5 million for the Rio Bravo site, $0 for the
Chatham Brothers site (based on the Company's belief that it never used that
site), and $1.8 million for the Casmalia site. The Company does not yet
know
Page 6 of 17
<PAGE>
about the ability of all of the other waste generators using the Casmalia
and Rio Bravo sites to fund their allocable share, and the Company could be
found jointly or severally liable with all waste generators using such
sites. The Company has made claims against its insurance carriers for
certain of these items, and has received claims acknowledgment letters
reserving the rights of such carriers. The insurers have alleged or may
allege various defenses to coverage, although no litigation has been
commenced. Based upon presently available information, the Company believes
that capital expenditures and costs of remedial actions in relation to these
other matters will not have a material adverse effect on the financial
position or results of operations of the Company.
In 1990, the Division of Enforcement of the Securities and Exchange
Commission (the "SEC") began conducting an informal inquiry regarding
various Company production programs, program and contract estimates at
completion and related accounting practices. Following the filing of a
registration statement with the SEC, the Company received on August 17,
1993, and shortly thereafter responded to, a request for documents from the
SEC Division of Enforcement concerning its decision to change its accounting
practices relating to long-term programs and contracts, and its previous
practice of capitalizing pre-certification and certain general and
administrative costs. The Company has received no further comments from the
SEC Division of Enforcement since that date.
The Company is involved as plaintiff or defendant in various other legal and
regulatory actions and inquiries incident to its business, none of which are
believed by management to have a material adverse effect on the financial
position or results of operations of the Company.
EMPLOYEE BENEFIT PLANS AND UNUSUAL ITEMS
The Company reduced the actuarially assumed discount rate for pension plan
valuation to 7.5% for fiscal year 1994 from the 8.5% used for fiscal year
1993 in order to reflect prevailing interest rates. This increased the
Company's accrued pension benefit obligation. This change, along with
increased early retirements and market performance of trust assets,
increased the reported underfunded status of the plan by $66.6 million to a
total of $124.1 million as of May 1, 1994. This $66.6 million increase
resulted in the recognition of such amount as additional pension liability
along with a $42 million reduction to shareholders' equity, net of the
related tax benefits.
Operating income was reduced by unusual items aggregating $7.9 million,
representing the write-off of unamortized pension past service costs related
to the downsizing of employment
Page 7 of 17
<PAGE>
levels in line with current business conditions, net of a gain on the sale
of the Auburn, Washington facility, which was closed during the prior fiscal
year.
SUBSEQUENT EVENTS
On May 19, 1994, subsequent to the close of the third quarter, the Company
completed its public offering of $100 million of 11.625% Senior Notes due
May 15, 2003 and the concurrent public offering of $50 million of 7.75%
Convertible Subordinated Notes due May 15, 2004. On June 9, 1994, the
Company was notified that Salomon Brothers Inc, the underwriter for the
offerings, had elected to exercise its over-allotment option to purchase an
additional $7.5 million of Convertible Subordinated Notes.
Approximately $64 million of the net proceeds from these offerings was used
to repay all amounts outstanding under the Company's revolving credit
agreement. The remaining proceeds will be used for general corporate
purposes.
Both series of notes are general unsecured obligations of the Company paying
interest semi-annually commencing November, 1994 and do not have sinking
fund requirements. The Convertible Subordinated Notes are convertible at
the option of the holder at any time prior to maturity into shares of the
Company's common stock at a conversion price of $10.35 per share.
Effective upon the issue date of the new Notes, the Company amended the
revolving credit agreement extending the credit commitment through April,
1997. The revised commitment is initially for $110 million and steps down
by $10 million every six months beginning October 1995 until it reaches $80
million. This credit facility matures in April 1997. This amendment, as
well as amendments to other of the Company's principal financing agreements,
revised the existing financial covenant levels and removed the requirement
that the Company issue $100 million of subordinated debt on or prior to
August 1, 1994.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Presented below is management's analysis of operating results for the three
month and nine month periods ended May 1, 1994 and May 2, 1993. Also
presented are material developments in the Company's liquidity and capital
resources since July 31, 1993. These discussions should be read in
conjunction with the financial statements and management's discussion and
analysis thereof included in the Company's July 31, 1993 Form 10K.
Page 8 of 17
<PAGE>
First Nine Months Fiscal 1994 Compared to First Nine Months Fiscal 1993
Total sales for the first nine months of fiscal year 1994 were $715.9
million, down $206.9 million or 22.4% from the first nine months of fiscal
year 1993. Commercial sales during the first nine months of fiscal year
1994 were down compared to the same period of fiscal year 1993 due primarily
to reductions in deliveries. Government sales for the comparative period
declined due primarily to a reduction in the delivery rate on the Titan
program. Commercial sales aggregated 87% and government sales 13% of the
Company's total sales in the first nine months of fiscal year 1994, very
similar to the prior year.
Operating income for the first nine months of fiscal year 1994 was $38.3
million. Operating income was reduced by unusual items aggregating $7.9
million, representing the write-off of unamortized pension past service
costs related to the downsizing of employment levels in line with current
business conditions, net of a gain on the sale of the Auburn, Washington
facility, which was closed during the prior fiscal year. Operating income
before the unusual items was $46.2 million for the first nine months of
fiscal year 1994 compared to an operating loss of $14.4 million for the same
period of fiscal year 1993. A significant contributor to improved operating
income was reduced general and administrative expenses which declined $13.0
million from $33.7 million for the first nine months of fiscal 1993 to $20.7
million in the first nine months of fiscal 1994. The decline was primarily
the result of downsizing and other ongoing cost cutting efforts. Fiscal
1994 results are being adversely impacted by a reduction in sales volume on
several programs. Fiscal 1993 results were impacted by losses on tooling
and design efforts, and cost problems related to certain programs including
the V2500. In addition, fiscal 1993 results were negatively impacted by a
$25.0 million net provision for asset and liability valuations and
litigation uncertainties. During and shortly following the third quarter of
fiscal 1994, several of these litigation uncertainties were settled with the
U.S. Air Force and U.S. Government at amounts in line with provisions
previously established.
Net interest expense was $34.7 million for the first nine months of fiscal
year 1994 compared to $35.4 million for the same period last year. While
total debt has declined, interest rates paid by the Company have increased
primarily due to the replacement of certain variable rate financings with
long-term fixed rate financings.
Net income for the first nine months of fiscal year 1994 was a positive $5.0
million or 28 cents per share compared to a loss of $30.7 million or $1.72
per share (before the cumulative effect of the accounting change described
below) for the same period last year. The net impact of the unusual items
described above was to reduce net income for the nine months of fiscal 1994
by
Page 9 of 17
<PAGE>
$4.8 million or 27 cents per share. The increase in federal income tax
rates resulting from the Omnibus Budget Reconciliation Act, implemented in
August 1993, increased net income by $2.8 million and earnings per share or
16 cents. Excluding unusual items and the positive impact of the tax act,
earnings would have been 39 cents per share for the nine months of fiscal
1994.
The first nine months of fiscal year 1993 were also impacted by a loss of
$223.9 million, net of taxes, or $12.52 per share, due to the cumulative
effect for the changes in the application of accounting principles through
July 31, 1992, adopted on a retroactive basis in the third quarter of fiscal
year 1993.
Third Quarter of Fiscal 1994 Compared to Third Quarter of Fiscal 1993
Total sales during the third quarter of fiscal 1994 were $231.1 million
compared to $296.8 million in the third quarter of the fiscal year 1993.
Commercial sales during the third quarter of fiscal 1994 were down compared
to the same period of fiscal 1993 due primarily to reduction in deliveries.
Government sales for the comparable period declined due primarily to a
reduction in the delivery rate on the Titan program. Commercial sales
aggregated 84% and government sales 16% of the Company's total sales in the
third quarter of fiscal year 1994.
Operating income for the third quarter of fiscal 1994, excluding the impact
of unusual items described in the previous section, was $14.5 million,
representing an operating margin of 6.3 percent. Including unusual items of
$7.9 million, operating income was $6.6 million for the third quarter.
Operating income was impacted by the factors discussed in the previous
section.
Additional Items
In fiscal 1993, the IRS issued a Revenue Agent's Report challenging the
Company's adoption in 1984 of the Completed Contract Method of Accounting
("CCMA"), the Company's tax deduction for funding liabilities related to a
Voluntary Employee Benefit Association ("VEBA") and certain other matters.
During the third quarter of fiscal 1994, the IRS conceded that the Company
was entitled to use CCMA. The Company is negotiating a resolution of the
remaining adjustment issues with the IRS. The Company believes that the
resolution of these remaining issues will not have a material adverse effect
on the Company and its financial position.
Government (military and space) sales accounted for approximately 13% of the
Company's total sales for the nine months ended May 1, 1994 and for the
fiscal year ended July 31, 1993. The
Page 10 of 17
<PAGE>
Company expects that the percentage of Company revenues attributable to
government sales will decline in future years. The production rate for the
Titan rocket motor casing program, which accounted for 5.9% of revenues in
fiscal 1993, is expected to decline substantially in response to market
demand. In addition, another company's alternative technology casing
approach may allow it to become a leading competitor in the market for this
product in the future. The Company's military sales are primarily
associated with older programs which are being phased out of production.
Following the end of the third quarter, the Company reached an agreement
with International Aero Engines on the V2500 program for Airbus A319, A320,
A321 aircraft under which the Company will continue to manufacture key
program components and provide total system support. Retention of this
program under mutually agreeable contractual terms was a key objective of
the Company.
LIQUIDITY AND CAPITAL RESOURCES
For the first nine months of fiscal year 1994, net cash provided by
operating activities totaled $56.0 million compared to $45.5 million during
the first nine months of fiscal year 1993. Net cash provided by operations
for the three months ended May 1, 1994 totaled $11.0 million. During the
three months ended May 2, 1993, net cash provided by operating activities
totaled $81.1 million due to several large receipts for tooling, engineering
changes and similar non-recurring expenses, as well as the receipt of
certain amounts that had been deferred pending aircraft certification. Net
cash provided by operations is subject to significant variations from period
to period.
The Company's total debt at May 1, 1994 aggregated $482.1 million, a
decrease of $49.5 million from $531.6 million on July 31, 1993. This
reduction was primarily the result of a scheduled repayment of the medium
term note for $35 million in October, 1993 and the annual scheduled
principal payment of $12.5 million in January, 1994 on its 9.35% Senior
Notes due 2000. At May 1, 1994, the Company had $50 million of borrowings
under its committed revolving credit agreement, the same amount borrowed at
July 31, 1993. Total financings, which include balance sheet indebtedness
and off-balance sheet financings, aggregated $572.6 million at May 1, 1994,
down $71.3 million from July 31, 1993. In addition to the decline in debt
reported on the balance sheet, this decrease reflects a temporary reduction
to the receivables financing program as discussed below.
Page 11 of 17
<PAGE>
The Company is a party to a $60.0 million accounts receivable facility under
which it sells receivables from specified customers on an on-going basis.
Due to the slow down in the aerospace industry, the amount of outstanding
receivables from these customers has fallen below levels which existed at
the start of the facility. As a result, the Company has elected to deposit
cash collateral from time to time as required to support the facility and
has withdrawn such cash when it is no longer required to be deposited. At
May 1, 1994 the Company had $19.2 million of cash collateral on deposit.
The Company is also a party to certain equipment leases and has granted the
lessors a security interest in selected customer receivables to secure $10
million of obligations. If the parties who lease this equipment to the
Company do not assign approximately one-half of their beneficial interests
in the leased equipment to other parties by January 1995, the equipment
lessors may require the Company to prepay up to $10 million of its equipment
lease obligations.
In order to enhance liquidity and improve its financial flexibility, the
Company adopted a financing plan with the objective of increasing long-term
financing and extending the Company's revolving credit agreement. On May
19, 1994, subsequent to the close of the third quarter, the Company
completed its public offering of $100 million of 11.625% Senior Notes due
May 15, 2003 and the concurrent public offering of $50 million of 7.75%
Convertible Subordinated Notes due May 15, 2004. On June 9, 1994, the
Company was notified that Salomon Brothers Inc, the underwriter for the
offerings, had elected to exercise its over-allotment option to purchase an
additional $7.5 million of Convertible Subordinated Notes.
Approximately $64 million of the net proceeds from these offerings was used
to repay all amounts outstanding under the Company's revolving credit
agreement. The remaining net proceeds will be used for general corporate
purposes.
Both series of notes are general unsecured obligations of the Company paying
interest semi-annually commencing November, 1994 and do not have sinking
fund requirements. The Convertible Subordinated Notes are convertible at
the option of the holder at any time prior to maturity into shares of the
Company's common stock at a conversion price of $10.35 per share.
Effective upon the issue date of the new Notes, the Company amended the
revolving credit agreement extending the credit commitment through April,
1997. The revised commitment is initially for $110 million and steps down
by $10 million every six months beginning October 1995 until it reaches $80
million. This credit facility matures in April 1997. This amendment, as
well as amendments to other of the Company's principal financing agreements,
revised the existing financial covenant levels and removed the requirement
that the Company issue $100 million of subordinated debt on or prior to
August 1, 1994.
Page 12 of 17
<PAGE>
During the third quarter, the Company renewed a letter of credit securing
its obligations to the State of California in connection with its self-
insured workers' compensation program. A second letter of credit, which
supports $16.5 million of industrial development bonds, will expire in July,
1994. In connection with this pending expiration, the Company will
repurchase the bonds from the existing holders and is preparing to re-market
the bonds to new holders.
The Company has been negotiating the sale of several non-core assets which
are not material to its business. In March 1994, the Company completed the
sale of its Auburn, Washington plant which had been closed in fiscal year
1993. In addition, on June 13, 1994, subsequent to the end of the fiscal
quarter, the Company completed the sale of its corporate jet product line.
The Company is continuing to negotiate the sale of its business for the
overhaul and repair of nacelle and thrust reverser components. The corporate
jet product line and the overhaul and repair business generated
approximately $25 million and $10 million, respectively, of revenues in the
fiscal year ended July 31, 1993.
As previously announced, the Company reduced the actuarially assumed
discount rate used to calculate the accrued benefit obligation for its
pension plans from 8-1/2% used in the prior year to 7-1/2%. This reduction
was made to reflect prevailing interest rates. This change, along with
increased early retirements and market performance of trust assets,
increased the reported underfunded status of the plans by $66.6 million to a
total of $124.1 million as of May 1, 1994. This $66.6 million increase
resulted in the recognition of such amount as additional pension liability
along with a $42 million reduction to shareholders' equity, net of the
related tax benefits.
The Company's net inventory decreased to $385.8 million at May 1, 1994 from
$439.7 million at July 31, 1993. Production inventory declined as a result
of the claims settlement on the U.S. Air Force contracts, a slowdown in
delivery schedules and the efforts of management to control inventory levels
through shorter lead and cycle times and just-in-time contracts with
suppliers. Excess-over-average inventory declined reflecting the increased
maturity of newer programs. These reductions were partially offset by an
increase in pre-production inventory, primarily in the MD-90, A340, PW4000
and V2500 programs. Customer progress payments and advances declined
primarily as a result of the claims settlement on the U.S. Air Force
contracts.
Capital expenditures for property, plant and equipment totaled $3.7 million
for the first nine months of fiscal year 1994, down from $22.9 million in
the first nine months of fiscal year 1993. Capital expenditures in the
first nine months of fiscal year 1993 were higher due in large part to
expenditures for new office and manufacturing facilities. In addition, the
Company has substantially curtailed its previously planned capital
expenditures for the balance of fiscal year 1994 in line with other cost
cutting efforts and anticipates such expenditures will not exceed an average
of $20 million per year over the subsequent four years. Given its
substantial recent
Page 13 of 17
<PAGE>
investments, the Company believes that the amount it plans to spend on
capital expenditures over the next several years will be sufficient to meet
the Company's production requirements.
The Company's firm backlog, which includes the sales price of all
undelivered units covered by customers' orders for which the Company has
production authorization, was approximately $1.3 billion at May 1, 1994
compared to $1.4 billion at July 31, 1993. Approximately $0.2 billion of
the $1.3 billion backlog is expected to be delivered in the remainder of
fiscal year 1994. (Sales during any period include certain sales which were
not part of backlog at the end of the prior period.) Customer orders in
firm backlog are subject to rescheduling and/or termination for customer
convenience; however, in certain cases the Company is entitled to an
adjustment in contract amounts. The Company has an additional $2.6 billion
in anticipated backlog, which represents the sales price of units which the
Company expects that its customers will order under existing contracts and
the Company will deliver within seven years.
Page 14 of 17
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
Under the terms of the Company's three-year revolving credit agreement, as
amended after the end of the third quarter of fiscal 1994, the
Company may not pay dividends on its common stock.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Index to Exhibits:
4.3.2 Second Amendment Agreement, dated as of
September 24, 1993, to Note Agreement dated as
of January 15, 1990.
4.3.3 Third Amendment Agreement, dated as of May 10,
1994, to Note Agreement dated as of January 15,
1990.
4.4.1 Second Amendment Agreement, dated as of
September 24, 1993, to Note Agreement dated as
of December 21, 1992.
4.4.2 Third Amendment Agreement, dated as of May 10,
1994, to Note Agreement dated as of December 21,
1992.
4.5 Indenture, dated as of May 15, 1994, between
Rohr, Inc., and IBJ Schroder Bank and Trust
Company, trustee, relating to 11-5/8% senior
notes.
4.6 Indenture, dated as of May 15, 1994, between
Rohr, Inc., and The Bank of New York, trustee,
relating to 7-3/4% convertible subordinated
notes.
10.11.6 Sixth Amendment to Bank Credit Agreement, dated
as of September 24, 1993.
Page 15 of 17
<PAGE>
10.11.7 Seventh Amendment to Bank Credit Agreement,
dated as of May 10, 1994.
10.13.3 Amendment Agreement, dated as of September
24, 1993.
10.13.4 Amendment Agreement, dated as of May 10, 1994.
11.1 Calculation of Primary Net Income Per Share of
Common Stock
11.2 Calculation of Fully Diluted Net Income Per
Share of Common Stock
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during this period. However, on May
4, 1994 a report on Form 8-K, dated May 2, 1994, was filed by the Company
under Item 5, "Other Events" discussing (i) the settlement of all
contractors disputes between the Company and the U.S. Air Force and (ii) the
settlement of the civil and criminal claims concerning an investigation by
the Los Angeles office of the U.S. Attorney.
Page 16 of 17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROHR, INC.
June 13, 1994 By:/S/ A. L. MAJORS
----------------
A. L. Majors
Vice President and Controller
(Chief Accounting Officer)
Page 17 of 17
<PAGE>
Exhibit 4.3.2
SECOND AMENDMENT AGREEMENT
SECOND AMENDMENT AGREEMENT (this "Amendment"), dated as of September
24, 1993, among ROHR, INC. (together with its successors and assigns, the
"Company"), and each of the holders of Notes whose name appears on the signature
pages hereof (individually, a "Holder" and, collectively, the "Holders").
RECITALS:
WHEREAS, the Company issued its 9.35% Senior Notes due January 29,
2000, pursuant to those certain several identical Note Agreements, each dated as
of January 15, 1990, between the Company and the Purchasers identified on Annex
1 thereto; and
WHEREAS, such Note Agreements were amended by that certain Amendment
Agreement, dated as of June 30, 1993 (such Note Agreements, as amended by such
Amendment Agreement, collectively being the "Existing Note Agreement"); and
WHEREAS, the Company has requested the Holders to modify certain terms
of the Existing Note Agreement; and
WHEREAS, the Holders are agreeable to such modifications and such
amendments, on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS.
Capitalized terms used in this Amendment and not otherwise defined
herein shall have the respective meanings ascribed to them in the Existing Note
Agreement.
2. AMENDMENTS.
Paragraph 10B of the Existing Note Agreement shall be amended by
amending and restating Subparagraph (ii)(f) of the definition of "Consolidated
Net Income Available for Fixed Charges" to read as follows:
"(f) in the case of any such period that includes the fiscal month
ending May 2, 1993, the provisions and charges, not in excess of
$38,000,000 in the aggregate, established by the Company in the third
quarter of Fiscal Year 1993; and".
1
<PAGE>
3. CONDITIONS TO EFFECTIVENESS.
The amendment set forth in Paragraph 2 shall become effective only upon the
satisfaction in all respects of the conditions set forth below:
3A. The Required Holders and the Company shall have executed and delivered
to each other this Amendment and the Existing Note Agreement, as amended hereby,
shall be in full force and effect.
3B. The definition of "Consolidated Net Income Available for Fixed
Charges" in the Note Agreement, dated as of December 21, 1992, between the
Company and the note holders party thereto, as amended through June 30, 1993,
shall have been amended in substantially the same manner as set forth in
Paragraph 2 hereof.
3C. The definition of "Net Income Available for Fixed Charges" in the
Credit Agreement, dated as of April 26, 1989, between the Company and the other
parties thereto, as amended through July 9, 1993 (the "Credit Agreement"), shall
have been amended in substantially the same manner as set forth in Paragraph 2
hereof.
3D. The definition of "Net Income Available for Fixed Charges"
incorporated from the Credit Agreement into the Sublease Agreement, dated as of
September 14, 1992, between the Company and State Street Bank and Trust Company
of California, National Association, and W. Jeffrey Kramer, not in an individual
capacity but solely as owner trustees under a trust for the benefit of General
Electric Capital Corporation, as amended through July 9, 1993, shall have been
effectively amended in substantially the same manner as set forth in Paragraph 2
hereof.
4. COSTS AND EXPENSES.
The Company shall pay all out-of-pocket expenses of the Holders in
connection with the negotiation, preparation, execution and delivery of this
Amendment, including, without limitation, all the fees and expenses of special
counsel engaged by the Holders in connection therewith.
5. MISCELLANEOUS.
5A. All provisions of this Amendment by or for the benefit of the parties
hereto shall bind and inure to the benefit of their respective successors and
assigns hereunder.
5B. This Amendment may be executed in one or more counterparts, all of
which taken together shall constitute a single instrument.
2
<PAGE>
5C. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE
OF NEW YORK.
5D. Except as expressly provided herein, (i) no other terms and provisions
of the Existing Note Agreement shall be modified or changed by this Amendment
and (ii) the terms and provisions of the Existing Note Agreement shall continue
in full force and effect. The Company hereby acknowledges and reaffirms all of
its obligations and duties under the Existing Note Agreement, as amended by this
Amendment, and under the Notes, as amended to date, issued thereunder.
5E. Any provision of this Amendment which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
5F. This Amendment may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
fist above written.
ROHR, INC.
By: /s/ R.W. Madsen
---------------------------------
Name: R.W. Madsen
Title: Vice President,
General Counsel
and Secretary
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Dennis B. Murphy
---------------------------------
Name:
Title:
3
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY
INSURANCE COMPANY OF NORTH AMERICA
LIFE INSURANCE COMPANY OF NORTH AMERICA
CONGEN TWO & CO.
THESE ENTITIES ARE EITHER THE REGISTERED OWNERS OF ONE OR MORE OF THE SECURITIES
PERTAINING HERETO OR ARE BENEFICIAL OWNERS OF ONE OR MORE OF SUCH SECURITIES
OWNED BY AND REGISTERED IN THE NAME(S) OF NOMINEES FOR THESE ENTITIES.
BY CIGNA INVESTMENTS, INC.
By /s/ Stephen L. Roberts
--------------------------------
Name: Stephen L. Roberts
Title: Vice President
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
SUN LIFE ASSURANCE COMPANY OF CANADA
By /s/ L. Brock Thomson
----------------------------------
Name: L. Brock Thomson
Title: Assistant Vice President - For President
By /s/ Margaret S. Mead
----------------------------------
Name: Margaret S. Mead
Title: Assitant Vice President and Counsel - For
Secretary
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
By /s/ L. Brock Thomson
----------------------------------
Name: L. Brock Thomson
Title: Treasurer
4
<PAGE>
===============================================================================
ROHR, INC.
---------------------------
THIRD AMENDMENT AGREEMENT
-----------------------
DATED AS OF MAY 10, 1994
9.35% SENIOR NOTES DUE JANUARY 29, 2000
================================================================================
<PAGE>
THIRD AMENDMENT AGREEMENT
THIRD AMENDMENT AGREEMENT (this "Third Amendment"), dated as of May 10,
1994, among ROHR, INC. (together with its successors and assigns, the
"Company"), and each of the holders of Notes (as such term is defined below)
whose name appears on the signature pages hereof (individually, a "Holder" and,
collectively, the "Holders").
RECITALS:
WHEREAS, the Company entered into those certain separate Note Agreements,
each dated as of January 15, 1990, between the Company and the Purchasers
identified on Annex 1 thereto, as previously amended by that certain Amendment
Agreement (the "First Amendment"), dated June 30, 1993, and that certain Second
Amendment Agreement, dated September 24, 1993 (collectively, as in effect
immediately prior to the Third Amendment Date, the "Existing Note Agreement,"
and, as further amended and restated by this Third Amendment, the "Amended Note
Agreement"), pursuant to which the Company has issued its 9.35% Senior Notes due
January 29, 2000, as amended by the First Amendment (the "Existing Notes"); and
WHEREAS, each of the Holders is a holder of the Existing Notes;
WHEREAS, the Company has requested the Holders to consent to certain
transactions by the Company and to amend and restate in full the Existing Note
Agreement;
WHEREAS, the Holders are willing to give such consent, and to enter into
such amendment and restatement, on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS
Capitalized terms used in this Third Amendment and not otherwise defined
herein shall have the respective meanings ascribed to them in the Amended Note
Agreement attached hereto as Exhibit A.
2. AMENDMENTS TO EXISTING NOTE AGREEMENT
The Existing Note Agreement is hereby amended and restated in its entirety
to read as set forth in the form attached hereto as Exhibit A.
3. CONSENT TO CERTAIN TRANSACTIONS.
Each of the undersigned Holders hereby consents to the following
transactions by the Company:
(i) the sale of the shares of, or substantially all of the assets
of Rohr Aero Services, Inc. and Rohr Aero Services Europe;
(ii) the sale of assets relating to the business jet product
line;
<PAGE>
(iii) the sale of the Company's facilities located in
Hagerstown, Maryland and related assets; and
(iv) the sale of the Company's facilities located in Auburn,
Washington.
Each of the undersigned Holders hereby agrees that the aforementioned
transactions shall not be deemed a Default or Event of Default pursuant to
paragraph 7A(v) or paragraph 7A(vi) of the Amended Note Agreement resulting from
the failure of the Company to comply with the provisions of paragraph 6D or
paragraph 6Q of the Amended Note Agreement or paragraph 6M of the Amended Note
Agreement (as it incorporates by reference Section 5.02(d) of the Credit
Agreement) with respect to the above transactions.
Notwithstanding the foregoing, sales of any of the Property described in
clauses (i) through (iv), inclusive, of this paragraph 3 shall be deemed to be
sales of Property subject to paragraph 6Q(i) of the Amended Note Agreement for
the purpose of determining the compliance by the Company with paragraph 6Q in
connection with any other sale, lease, transfer or other disposition of Property
of the Company or any Consolidated Subsidiary.
In addition, each of the undersigned Holders, as a holder of Warrants and
Registrable Securities (as such term is defined in the Warrant Agreement) hereby
waives any default under, or violation of, the provisions of paragraph 8B(ii) of
the Warrant Agreement that may have resulted by virtue of any failure of the
notice of the registration of the 1994 Subordinated Notes (provided to such
Holders pursuant to paragraph 8B(i) of the Warrant Agreement) to contain the
Company's agreement to use its best efforts, if requested to do so, to arrange
for such underwriters to include in such underwriting any Registrable Securities
that the Company was requested to register pursuant to paragraph 8B(i) of the
Warrant Agreement, and hereby waives (without prejudice to the right of such
Holder to participate in any future registration of Securities of the Company)
any right to participate in the registration or sale of the 1994 Subordinated
Notes.
4. CONDITIONS TO EFFECTIVENESS.
The amendment and restatement of the Existing Note Agreement set forth in
paragraph 2 and the consent by the Holders set forth in paragraph 3 shall become
effective only upon the satisfaction in all respects of the conditions set forth
below. The first date upon which all such conditions shall have been satisfied
is herein referred to as the "Effective Date."
4A. Each of the Holders and the Company shall have executed and delivered
to each other this Third Amendment, and the Amended Note Agreement shall be in
full force and effect.
4B. Each of the Holders shall have received a legal opinion of:
(i) Gibson, Dunn & Crutcher, special counsel to the Company, dated the
Effective Date and substantially in the form set forth in Exhibit B1
attached hereto; and
(ii) Richard Madsen, Esq, general counsel to the Company, dated the
Effective Date and substantially in the form set forth in Exhibit B2
attached hereto; and
2
<PAGE>
(iii) Hebb & Gitlin, special counsel to the holders of the Existing
Notes, dated the Effective Date and substantially in the form set forth in
Exhibit B3 attached hereto.
4C. The representations and warranties set forth in paragraph 5 hereof
shall be true and correct as of the date hereof and as of the Effective Date; no
Default or Event of Default pursuant to the Existing Note Agreement shall have
occurred and be continuing on the Effective Date; and each of the Holders shall
have received a written certificate, in the form of Exhibit C hereto, signed by
a duly authorized officer of the Company to such effect. Each of the Holders
shall have received a certificate of the Secretary or an Assistant Secretary of
the Company, substantially in the form of Exhibit D hereto, with respect to the
matters therein set forth.
4D. On or before the Effective Date, the Company shall have paid to each
Holder in immediately available funds an amendment fee equal to the product of
(i) twenty-five one-hundredths of one percent (0.25%) times (ii) the outstanding
principal amount of Existing Notes held by such Holder on the Effective Date.
4E. On or before the Effective Date, the Company shall have paid to each
Holder in immediately available funds, in exchange for such holder's consent to
the Company's issuance of $100,000,000 of additional pari passu Debt, a consent
fee equal to the product of (i) thirty-eight one-hundredths of one percent
(0.38%) times (ii) the outstanding principal amount of Existing Notes held by
such Holder on the Effective Date.
4F. On or before the Effective Date, the Company shall have closed on the
issuance of the Company's 1994 Senior Debt on terms and conditions acceptable to
the Holders in all respects.
4G. On or before the Effective Date, the Company shall have closed on the
issuance of Company's 1994 Subordinated Debt on terms and conditions acceptable
to the Holders in all respects.
4H. The Company shall have paid all amounts which are payable pursuant to
paragraph 6 hereof and paragraph 11B of the Amended Note Agreement.
4I. The holders of the 9.33 Senior Notes due December 15, 2002, of the
Company (the "Other Notes") shall have entered into an amendment of those
certain several identical Note Agreements, each dated as of December 21, 1992,
between the Company and the Purchasers identified on Annex 1 thereto, as
previously amended (collectively, the "Other Note Agreement"), further amending
such Other Note Agreement and the notes issued thereunder in a manner consistent
with paragraph 2 of this Third Amendment and consenting to certain transactions
by the Company in a manner consistent with paragraph 3 of this Agreement. Each
Holder shall have received a copy of the amendment agreement for such Other Note
Agreement, and the terms thereof shall be satisfactory to the Holders in all
respects.
4J. The Credit Agreement and the Sublease Agreement between the Company
and the trustees named therein for the benefit of General Electric Capital
Corporation, shall have been amended in form and substance satisfactory to the
Holders, which amendments shall be consistent with the amendments provided for
herein and permit the transactions contemplated by paragraph 3 of this Third
Amendment. Each Holder shall have received copies of said
3
<PAGE>
amendment documents and all agreements, instruments or other documents
containing any substantive agreement of the Company or any Consolidated
Subsidiary, executed or delivered in connection therewith, other than that
certain letter agreement (the "Agency Letter") between the Company and the agent
under the Credit Agreement relating to the agency fee paid to such agent, which
letter relates solely to the fee payable to the agent under the Credit Agreement
for acting in such capacity.
4K. All corporate and other proceedings taken or to be taken in connection
with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to such Holder, and such Holder
shall have received all such counterpart originals or certified or other copies
of such documents as it may reasonably request.
5. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to each of the Holders as follows:
5A. The Company:
(i) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation,
(ii) has all requisite power and authority and all necessary licenses
and permits to own and operate its Properties and to carry on its business
as now conducted and presently proposed to be conducted, and
(iii) is duly qualified and is authorized to do business and is in
good standing as a foreign corporation in each jurisdiction where the
character of its Properties or the nature of its activities makes such
qualification necessary.
5B. The Company has the corporate power and authority:
(i) to authorize, execute, deliver and enter into this Third
Amendment; and
(ii) to perform its obligations under this Third Amendment and the
Amended Note Agreement.
5C. This Third Amendment has been duly authorized by the Company. This
Third Amendment and the Amended Note Agreement constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as such enforceability may be:
(i) limited by bankruptcy, insolvency or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
The holders of the Existing Notes are entitled to the benefits of the Amended
Note Agreement.
4
<PAGE>
5D. The authorization, execution and delivery by the Company of this Third
Amendment is not, and the performance by the Company of its obligations under
the Amended Note Agreement will not be, inconsistent with its certificate of
incorporation or by-laws, does not and will not contravene any law, governmental
rule or regulation, violate any judgment, order or award of any arbitrator
applicable to the Company, does not and will not contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument to which the Company is a party or by which any of its Property is
bound, and will not result in the imposition of a Lien upon any Property of the
Company.
5E. No consent or approval of, giving of notice to, registration with, or
taking of any other action in respect of or by, any federal, state or local
governmental authority or agency, or other Person (except for actions that will
have occurred by the Effective Date), is required with respect to:
(i) the authorization, execution and delivery by the Company of this
Third Amendment, or
(ii) the performance by the Company of its obligations under the
Amended Note Agreement.
5F. After giving effect to this Third Amendment, the Seventh Amendment to
the Credit Agreement and the issuance and sale of the 1994 Senior Notes and the
1994 Subordinated Notes, no Default or Event of Default will exist and no
default or event of default exists under:
(i) the Other Note Agreement, as amended as contemplated pursuant to
paragraph 4I hereof;
(ii) the Credit Agreement;
(iii) the SubLease Agreement between the Company and the trustees
named therein acting for the benefit of General Electric Capital Credit
Corporation;
(iv) the 1994 Senior Notes or the indenture governing such 1994 Senior
Notes; or
(v) the 1994 Subordinated Notes or the indenture governing such 1994
Subordinated Notes.
After giving effect to this Third Amendment, the Seventh Amendment to the Credit
Agreement and the issuance and sale of the 1994 Senior Notes and the 1994
Subordinated Notes, the Company will be able to satisfy all conditions necessary
pursuant to the terms of the Credit Agreement to draw an amount, when added to
the amount of drawings and letter of credits then outstanding under the Credit
Agreement, equal to the full maximum commitment of One Hundred Ten Million
Dollars ($110,000,000) available under the Credit Agreement.
5
<PAGE>
5G. Except as set forth on Annex 2 hereto, as of the Effective Date, each
of the warranties and representations contained in the Amended Note Agreement
are true, correct and complete in all material respects, and such warranties and
representations are hereby incorporated by reference with the same effect as
though set forth in their entirety herein.
5H. There is no agreement between the Company and any of the banks which
are parties to the Credit Agreement with respect to the matters described in
paragraph 4J of this Third Amendment other than as set forth in the documents
delivered to the Holders pursuant to paragraph 4J of this Third Amendment.
Other than as set forth on Annex 2 hereto, there is no agreement between the
Company or any Consolidated Subsidiary and any other holder of Debt of the
Company or any Consolidated Subsidiary which provides for any compensation, fees
or other financial consideration in exchange or partial exchange for any
amendment, waiver or consent referred to in paragraph 4J. Copies of all
agreements and documents relating to such agreements have been provided to you
pursuant to paragraph 4J of this Third Amendment.
5I. Except as disclosed to you on Annex 2 hereto, it is not reasonably
foreseeable that any action, suit, investigation or proceeding or group of
similar actions, suits, investigations or proceedings (including, as such a
group, without limitation, all actions, suits, investigations or proceedings
arising out of federal or state environmental protection laws), pending or, to
the knowledge of the Company, threatened against the Company or any of the
Consolidated Subsidiaries, or any properties or rights of the Company or any of
the Consolidated Subsidiaries, by or before any court, arbitrator or
administrative or governmental body would result in any material adverse change
in the business, condition (financial or otherwise) or operations of the Company
and the Consolidated Subsidiaries taken as a whole.
6. COSTS AND EXPENSES.
Whether or not the conditions to effectiveness set forth in paragraph 3 of
this Third Amendment are satisfied, the Company shall pay all out-of-pocket
expenses of the Holders in connection with the negotiation, preparation,
execution and delivery of this Third Amendment, including, without limitation,
all the fees and expenses of special counsel engaged by the Holders in
connection therewith. Without limiting the generality of the foregoing, the
Company will pay, on the date of the Third Amendment, the fees and disbursements
of Holder's special counsel presented on such date, and shall also pay, upon
receipt of any statement thereof, each additional statement for reasonable fees
and disbursements of Holder's special counsel rendered after the date of this
Third Amendment in connection with this Third Amendment.
7. MISCELLANEOUS.
7A. All the provisions of this Third Amendment by or for the benefit of
the parties hereto shall bind and inure to the benefit of their respective
successors and assigns hereunder.
7B. This Third Amendment may be executed in one or more counterparts, all
of which taken together shall constitute a single instrument.
6
<PAGE>
7C. THIS THIRD AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF
THE STATE OF NEW YORK.
7D. The Company hereby acknowledges and reaffirms all of its obligations
and duties under the Amended Note Agreement and under the Existing Notes.
7E. Any provision of this Third Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
7F. This Third Amendment constitutes the final written expression of all
of the terms hereof and is a complete and exclusive statement of those terms.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.
ROHR, INC.
By: /s/ R. M. MILLER
------------------------------
Name: R. M. Miller
Title: Vice President and
Treasurer
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ THOMAS KLAMKA
------------------------------
Name: Thomas Klamka
Title: Vice President
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ LEANNE M. SWENSON
------------------------------
Name: Leanne M. Swenson
Title: Counsel
By: /s/ JOSEPH P. McLAUGHLIN
------------------------------
Name: Joseph P. McLaughlin
Title: Counsel
SUN LIFE ASSURANCE COMPANY OF
CANADA
By: /s/ JOHN N. WHELIHAN
------------------------------
Name: John N. Whelihan
Title: Assistant Vice President
--For President
By: /s/ JEFFREY J. SKERRY
------------------------------
Name: Jeffrey J. Skerry
Title: Assistant Counsel
--For Secretary
SUN LIFE ASSURANCE COMPANY OF
CANADA (U.S.)
By: /s/ L. BROCK THOMSON
------------------------------
Name: L. Brock Thomson
Title: Treasurer
Signature Page 1 to the THIRD AMENDMENT AGREEMENT, among ROHR, INC. and the
holders of Notes named therein.
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE ACCOUNTS,
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY,
INSURANCE COMPANY OF NORTH AMERICA AND
LIFE INSURANCE COMPANY OF NORTH AMERICA
EACH OF THESE ENTITIES, SEVERALLY
AND NOT JOINTLY, IS EITHER THE
REGISTERED OWNER OF ONE OR MORE
SECURITIES PERTAINING HERETO OR IS
A BENEFICIAL OWNER OF ONE OR MORE
SECURITIES OWNED BY AND REGISTERED
IN THE NAME OF A NOMINEE FOR THAT
ENTITY.
BY: CIGNA INVESTMENTS, INC.
By: /s/ STEPHEN J. MYOTT
--------------------------------
Name: Stephen J. Myott
Title: Vice President
Signature Page 2 to the THIRD AMENDMENT AGREEMENT, among ROHR, INC. and the
holders of Notes named therein.
<PAGE>
EXHIBIT A
FORM OF AMENDED AND RESTATED NOTE AGREEMENT
ROHR, INC.
------------------------------
AMENDED AND RESTATED NOTE AGREEMENT
=======================
DATED AS OF MAY 10, 1994
$100,000,000 9.35% SENIOR NOTES DUE JANUARY 29, 2000
A-2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. AUTHORIZATION OF ISSUE OF NOTES........................... A-5
2. PURCHASE AND SALE OF NOTES................................ A-5
3. CONDITIONS OF CLOSING..................................... A-6
3A. Opinion of Purchaser's Special Counsel............... A-6
3B. Opinions of Company's Counsel........................ A-6
3C. Representations and Warranties; No Default........... A-6
3D. Sale of Notes to Other Purchasers.................... A-6
3E. Purchase Permitted By Applicable laws................ A-6
3F. Private Placement Number............................. A-6
3G. Closing Expenses..................................... A-6
3H. Proceedings.......................................... A-6
4. PREPAYMENTS............................................... A-7
4A. Required Prepayments................................. A-7
4B. Optional Prepayment With Yield-Maintenance Premium... A-7
4C. Notice of Optional Prepayment........................ A-7
4D. Partial Prepayments Pro Rata......................... A-7
4E. Right to Put......................................... A-7
4F. Retirement of Notes.................................. A-8
4G. Tender of Notes in Payment of Warrant Exercise Price. A-8
5. AFFIRMATIVE COVENANTS..................................... A-8
5A. Payment of Taxes and Claims.......................... A-8
5B. Maintenance of Properties and Corporate Existence.... A-9
5C. Payment of Notes and Maintenance of Office........... A-10
5D. Financial Reporting and Notices...................... A-10
5E. Inspection of Property............................... A-11
5F. Covenant to Secure Note Equally...................... A-12
5G. ERISA Compliance..................................... A-12
5H. Involuntary Prepayment............................... A-12
6. NEGATIVE COVENANTS........................................ A-14
6A. Limitations on Liens................................. A-14
6B. Limitations on Leases................................ A-16
6C. Limitations on Indebtedness.......................... A-16
6D. Limitations on Mergers and Sales of Assets........... A-18
6E. Adjusted Consolidated Tangible Net Worth Maintenance. A-19
6F. Limitations on Distributions......................... A-19
6G. Limitations on Capital Expenditures.................. A-20
6H. Private Offering..................................... A-20
6I. Transactions with Affiliates......................... A-20
6J. Line of Business..................................... A-21
6K. Fixed Charge Coverage................................ A-21
</TABLE>
A-3
<PAGE>
TABLE OF CONTENTS (Cont.)
<TABLE>
<CAPTION>
PAGE
<S> <C>
6L. Debt Ratio........................................... A-21
6N. Maintenance of Senior Status......................... A-23
6P. Sales of Assets...................................... A-24
6Q. Sale of Receivables.................................. A-25
6R. Limitation on Certain Obligations.................... A-25
7. EVENTS OF DEFAULT......................................... A-25
7A. Acceleration......................................... A-25
7B. Acceleration on Payment Default...................... A-28
7C. Other Remedies....................................... A-29
8. REPRESENTATIONS, COVENANTS AND WARRANTIES................. A-29
8A. Subsidiaries......................................... A-29
8B. Corporate Organization and Authority................. A-30
8C. Financial Statements................................. A-30
8D. Actions Pending...................................... A-31
8E. Outstanding Debt..................................... A-31
8F. Title to Properties.................................. A-31
8G. Patents, Trademarks, Licenses, etc................... A-31
8H. Taxes................................................ A-31
8I. Conflicting Agreements and Other Matters............. A-32
8J. Offering of Notes.................................... A-32
8K. Regulation G, etc.................................... A-33
8L. Governmental Consent................................. A-33
8M. Disclosure........................................... A-33
8N. Compliance with Law.................................. A-33
8O. Certain Laws......................................... A-34
9. REPRESENTATIONS OF THE PURCHASER.......................... A-34
10. DEFINITIONS............................................... A-34
10A. Yield-Maintenance Terms.............................. A-35
10B. Other Terms.......................................... A-36
11. MISCELLANEOUS............................................. A-64
11A. Note Payments........................................ A-64
11B. Expenses............................................. A-64
11C. Consent to Amendments................................ A-65
11D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes........................................... A-65
11E. Persons Deemed Owners; Participations................ A-66
11F. Accounting Terms..................................... A-66
11G. Directly or Indirectly............................... A-66
11H. Survival of Representations and Warranties;
Entire Agreement..................................... A-67
11I. Successors and Assigns............................... A-67
</TABLE>
A-4
<PAGE>
TABLE OF CONTENTS (Cont.)
<TABLE>
<CAPTION>
<S> <C>
11J. Disclosure to Other Persons........................... A-67
11K. Notices............................................... A-68
11L. Descriptive Headings.................................. A-68
11M. Satisfaction Requirement.............................. A-68
11N. Governing Law......................................... A-69
11O. Payments Due on Non-Business Days..................... A-69
11P. Counterparts.......................................... A-69
Annex 1 -- Purchaser's Schedule
Annex 2 -- Subsidiary Information
Annex 3 -- Restrictions on Debt
Exhibit A -- Form of Note
Exhibit B -- Form of Opinion of Purchaser's Special Counsel
Exhibit C1 -- Form of Opinion of Company's General Counsel
Exhibit C2 -- Form of Opinion of Company's Special Counsel
Exhibit D -- Form of Officer's Certificate
Exhibit E -- Form of Secretary's Certificate
Exhibit F -- Form of Notice of Sale
</TABLE>
A-5
<PAGE>
ROHR, INC.
FOOT OF H STREET
CHULA VISTA, CA 92012
As of May 10, 1994
[Name and Address of Purchaser]
Gentlemen:
The undersigned, Rohr, Inc., (together with its predecessor, Rohr
Industries, Inc. and its successors, the "Company"), a Delaware corporation,
hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. Rohr Industries, Inc., predecessor
to the Company, has authorized the issuance of its senior promissory notes (the
"Notes") in the aggregate principal amount of One Hundred Million Dollars
($100,000,000) dated the date of issue thereof, to mature on January 29, 2000,
bearing interest on the unpaid balance thereof from the date thereof until the
principal thereof shall have become due and payable at the rate of nine and
thirty-five one-hundredths percent (9.35%) per annum and on overdue payments at
the rate specified therein, which senior promissory notes have been amended
pursuant to the First Amendment and, as amended, are substantially in the form
of Exhibit A attached hereto. The term "Notes" as used herein shall include
each such senior promissory note delivered pursuant to any provision of this
Agreement and each such senior promissory note delivered in substitution or
exchange for any other Note pursuant to any such provision.
2. PURCHASE AND SALE OF NOTES. The Company sold to you and, subject to
the terms and conditions herein set forth, you purchased from the Company the
aggregate principal amount of Notes set forth opposite your name in the
Purchaser Schedule attached hereto at one hundred percent (100%) of such
aggregate principal amount. The Company delivered to you, at the offices of
Hebb & Gitlin, a Professional Corporation, at One State Street, Hartford,
Connecticut, one or more Notes registered in your name, evidencing the aggregate
principal amount of Notes purchased by you and in the denomination or
denominations specified with respect to you in the Purchaser Schedule, against
payment of the purchase price thereof by transfer of immediately available funds
as directed by the Company in writing on the date of closing, February 2, 1990
(the "Closing" or the "Closing Date"). Concurrently with the execution and
delivery of this Agreement, the Company is entered into other Note Agreements
(the "Other Note Agreements") substantially identical with this Agreement
(except as to the identity of the purchaser and the principal amount of Notes to
be purchased) with the other purchasers (the "Other Purchasers") named in the
Purchaser Schedule. The sale to you and the sales to the Other Purchasers were
separate and several sales.
A-6
<PAGE>
3. CONDITIONS OF CLOSING. Your obligation to purchase and pay for the
Notes to be purchased by you hereunder was subject to the satisfaction, on or
before the Closing Date, of the following conditions:
3A. OPINION OF PURCHASER'S SPECIAL COUNSEL. You shall have received from
Hebb & Gitlin, a Professional Corporation, who are acting as special counsel for
you in connection with this transaction, a favorable opinion satisfactory to you
and substantially in the form of Exhibit B hereto.
3B. OPINIONS OF COMPANY'S COUNSEL. You shall have received from Richard
Madsen, Esq., general counsel for the Company, and Gibson, Dunn & Crutcher,
special counsel for the Company, favorable opinions satisfactory to you and
substantially in the form of Exhibit C1 and Exhibit C2, respectively, hereto.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and
warranties contained in paragraph 8 hereof shall be true on and as of the
Closing Date, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on the Closing Date no Event of Default or
Default; and the Company shall have delivered to you an Officer's Certificate,
dated the Closing Date, in the form of Exhibit D hereto.
3D. SALE OF NOTES TO OTHER PURCHASERS. The Company shall have sold to the
Other Purchasers the Notes to be purchased by them at the Closing and shall have
received payment in full therefor.
3E. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment
for the Notes to be purchased by you on the Closing Date on the terms and
conditions herein provided (including the use of the proceeds of such Notes by
the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, section 5 of the Securities Act or Regulation G,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject you to any tax, penalty, liability or other onerous condition under or
pursuant to any applicable law or governmental regulation, and you shall have
received such certificates or other evidence as you may request to establish
compliance with this condition.
3F. PRIVATE PLACEMENT NUMBER. The Company shall have provided reasonable
evidence that it has complied with the requirements necessary to obtain a
private placement number for the Notes from the CUSIP Division of Standard &
Poor's Corporation.
3G. CLOSING EXPENSES. The Company shall have paid at the Closing the
statement for fees and disbursements of the special counsel of the Purchasers
presented at the Closing.
3H. PROCEEDINGS. All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated hereby and all documents
incident thereto shall be satisfactory in substance and form to you, and you
shall have received all such counterpart originals or certified or other copies
of such documents as you may reasonably request. The Company shall have
delivered to you a certificate of the secretary or assistant secretary of the
Company in the form of Exhibit E hereto.
A-7
<PAGE>
4. PREPAYMENTS.
4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid in full, the
Company shall apply to the prepayment of the Notes, without premium, the sum of
Twelve Million Five Hundred Thousand Dollars ($12,500,000) on January 29 in each
of the years beginning on January 29, 1993, and ending on January 29, 1999,
inclusive, and such principal amounts of the Notes, together with interest
thereon to the prepayment dates, shall become due on such prepayment dates. The
remaining Twelve Million Five Hundred Thousand Dollars ($12,500,000) in
principal amount of the Notes, together with interest accrued thereon, shall
become due on the maturity date of the Notes.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE PREMIUM. The Notes shall
be subject to prepayment, in whole at any time or from time to time in part (in
multiples of $5,000,000), at the option of the Company, at one hundred percent
(100%) of the principal amount so prepaid plus interest thereon to the
prepayment date and the Yield-Maintenance Premium, if any, with respect to the
principal amount so prepaid. Any prepayment made by the Company pursuant to
this paragraph 4B shall be applied first to the principal of the Notes due on
the maturity date thereof and second to the prepayments required by this
paragraph 4 in the inverse order of their scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of
each Note irrevocable written notice of any prepayment to be made pursuant to
paragraph 4 hereof not less than ten (10) Business Days prior to the prepayment
date, specifying such prepayment date and the principal amount of the Notes, and
of the Notes held by such holder, to be prepaid on such date and stating that
such prepayment is to be made pursuant to paragraph 4 hereof. Notice of
prepayment having been given as aforesaid, the principal amount of the Notes
specified in such notice, together with interest thereon to the prepayment date
and together with the premium, if any, herein provided, shall become due and
payable on such prepayment date.
4D. PARTIAL PREPAYMENTS PRO RATA. Upon any prepayment of the Notes, the
principal amount so prepaid shall be allocated to all Notes at the time
outstanding in proportion to the respective outstanding principal amount thereof
(including, for the purpose of this paragraph only, all Notes prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any
Subsidiary or Affiliate).
4E. RIGHT TO PUT.
(i) GRANTING OF PUT. The Company hereby gives and grants to each holder of
Notes the option, right and privilege (such option, right and privilege herein
collectively referred to as the "Right to Put") to require the Company, upon or
after the occurrence of any Designated Event, to purchase from such holder on
the terms and conditions hereinafter set forth, and the Company agrees so to
purchase from such holder, for an amount equal to the Agreed Put Consideration,
all, but not less than all, of the Notes held by such holder.
(ii) EXERCISE OF PUT. Within ten (10) Business Days after the occurrence
of any Designated Event, the Company shall give each holder of Notes written
notice thereof describing such Designated Event, and the facts and circumstances
surrounding the occurrence thereof, in reasonable detail. At any time prior to
ninety (90) days after any holder of Notes shall receive
A-8
<PAGE>
such notice, such holder may exercise its Right to Put by delivering to the
Company a notice of sale (a "Notice of Sale") substantially in the form of
Exhibit F hereto. If a holder of Notes shall deliver a Notice of Sale, the
Company shall purchase the Notes then held by such holder on the date specified
in such notice (which shall be not less than fifteen (15) days after delivery of
such Notice of Sale), and such holder shall sell such Notes to the Company
without recourse, representation or warranty (other than as to such holder's
full right, title and interest to such Notes free of any adverse claim therein),
at a price, payable in immediately available funds by wire transfer to the
account specified pursuant to paragraph 11 hereof or to such other account as
may be specified in such notice, equal to the Agreed Put Consideration. Each
holder of Notes shall have the rights specified in this paragraph 4 with
respect to each Designated Event which shall occur, regardless of any act or
omission to act with respect to any previous Designated Event.
4F. RETIREMENT OF NOTES. The Company shall not, and shall not permit any
of the Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in
part prior to their stated final maturity (other than by prepayment pursuant to
paragraph 4A or paragraph 4B or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly (other than pursuant to paragraph 4E, paragraph 4G or paragraph 5H
hereof), Notes held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes held by each other holder of Notes at the time
outstanding upon the same terms and conditions. Any Notes so prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any of
the Subsidiaries or Affiliates shall not be deemed to be outstanding for any
purpose under this Agreement except as provided in paragraph 4D hereof.
4G. TENDER OF NOTES IN PAYMENT OF WARRANT EXERCISE PRICE. The Warrant
Agreement will provide that the purchase price for the Warrants issuable
thereunder may be paid, in whole or in part, by a tender of Notes. The Company
shall be deemed to have reacquired a principal amount of Notes equal to the
aggregate principal amount of Notes tendered in payment of the Warrant exercise
price, and such Notes so deemed to have been reacquired shall not be considered
outstanding for any purposes of this Agreement. In the event that less than the
entire outstanding principal amount of a Note is tendered in payment of the
Warrant exercise price, the Company shall issue and deliver to the holder
thereof a new Note equal in principal amount to the outstanding principal amount
of the Note so tendered less the portion thereof applied to the Warrant exercise
price.
5. AFFIRMATIVE COVENANTS. The Company covenants that on and after the
Closing Date, and so long as any Notes are outstanding, it shall comply with the
following:
5A. PAYMENT OF TAXES AND CLAIMS. The Company will, and will cause each
Subsidiary to, pay before they become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed
upon it or its Property, and
A-9
<PAGE>
(ii) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons that, if unpaid, will more
likely than not result in the creation of a Lien upon its Property,
provided that items of the foregoing description need not be paid while being
contested in good faith and in an appropriate manner.
5B. MAINTENANCE OF PROPERTIES AND CORPORATE EXISTENCE. The Company will,
and will cause each Subsidiary to,
(i) PROPERTY -- maintain its Property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto;
(ii) INSURANCE --
(a) maintain, with financially sound and reputable insurers,
insurance (or maintain self-insurance, including without limitation,
insurance with subsidiaries, if that shall be reasonable in the
circumstances) with respect to its Property and business against such
casualties and contingencies, of such types (including, without
limitation, loss or damage, public liability, business interruption,
larceny, embezzlement or other criminal misappropriation) and in such
amounts as is reasonably appropriate for the risks associated with the
business of the Company and the Subsidiaries; and
(b) at your request, deliver to you for examination, as soon as
practicable, policies or certificates of insurance or self-insurance
or certificates of insurance brokers evidencing compliance with the
provisions of this clause (ii);
(iii) FINANCIAL RECORDS -- keep true books of records and accounts in
which full and correct entries shall be made of all its business
transactions so that the financial statements required by paragraph 5D
hereof may be prepared in accordance with generally accepted accounting
principles;
(iv) CORPORATE EXISTENCE AND RIGHTS -- maintain, preserve and renew
the Company's existence as a corporation organized under the laws of a
state of the United States of America; and
(v) COMPLIANCE WITH LAW -- not be in violation of any law, ordinance
or governmental rule or regulation to which it is subject (including,
without limitation, laws, ordinances, rules or regulations relating to
environmental matters) and not fail to obtain any license, permit,
franchise or other governmental authorization necessary to the ownership of
its Properties or to the conduct of its business, which violation or
failure to obtain will, more likely than not, materially adversely affect
the business or financial condition of the Company and the Subsidiaries,
taken as a whole, or the ability of the Company to perform its obligations
set forth in this Agreement and in the Notes.
A-10
<PAGE>
5C. PAYMENT OF NOTES AND MAINTENANCE OF OFFICE. The Company will
punctually pay, or cause to be paid, the principal and interest (and premium, if
any) to become due in respect of the Notes according to the terms thereof and
shall maintain an office at the address of the Company set forth in paragraph
11 hereof where notices, presentations and demands in respect of this Agreement
or the Notes may be made upon it. Such office shall be maintained at such
address until such time as the Company shall notify the holders of the Notes of
any change of location of such office.
5D. FINANCIAL REPORTING AND NOTICES.
(i) FINANCIAL REPORTING. The Company will deliver to each holder of Notes
in duplicate:
(a) as soon as practicable and in any event within sixty (60) days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income and cash
flows of the Company and the Subsidiaries for such period and for the
period from the beginning of the current fiscal year to the end of such
quarterly period, and a consolidated balance sheet of the Company and the
Subsidiaries as at the end of such quarterly period, setting forth in each
case in comparative form figures for the corresponding period in the
preceding fiscal year, accompanied by additional financial statements
containing the same information prepared in accordance with generally
accepted accounting principles as then in effect if the accounting
principles applied by the Company in the preparation of the financial
statements first described in this clause (a) differ in any material
respect from generally accepted accounting principles as then in effect, in
both cases in reasonable detail and certified by an authorized financial
officer of the Company, subject to changes resulting from year-end
adjustments; provided, however, that so long as the accounting principles
applied by the Company in the preparation of the financial statements first
described in this clause (a) do not differ in any material respect from
generally accepted accounting principles as then in effect, delivery
pursuant to clause (c) below of copies of the Quarterly Report on Form 10-Q
of the Company for such quarterly period filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
clause (a) (provided that such Form 10-Q is accompanied by any other
financial information incorporated by reference in such Form 10-Q, and
provided further, that the Company provide to each holder who so requests
in writing any document incorporated by reference in such Form 10-Q);
(b) as soon as practicable and in any event within ninety (90) days
after the end of each fiscal year, consolidating and consolidated
statements of income and cash flows of the Company and the Subsidiaries for
such year, and consolidating and consolidated balance sheets of the Company
and the Subsidiaries as at the end of such year, setting forth in each case
in comparative form corresponding figures from the preceding annual audit,
accompanied by additional financial statements containing the same
information prepared in accordance with generally accepted accounting
principles as then in effect if the accounting principles applied by the
Company in the preparation of the financial statement first described in
this clause (b) differ in any material respect from generally accepted
accounting principles as then in effect, in both cases all in reasonable
detail and satisfactory in scope to the Required Holders and, as to the
consolidated statements
A-11
<PAGE>
prepared under generally accepted accounting principles as then in effect,
certified to the Company by independent public accountants of recognized
standing selected by the Company whose certificate shall be in scope and
substance satisfactory to the Required Holders in their reasonable
judgment, and, as to the consolidating statements and financial statements
not certified by such independent public accountants, certified by an
authorized financial officer of the Company; provided, however, that so
long as the accounting principles applied by the Company in the preparation
of the financial statements first described in this clause (b) do not
differ in any material respect from generally accepted accounting
principles as then in effect, delivery pursuant to clause (c) below of
copies of the Annual Report on Form 10-K of the Company for such fiscal
year filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this clause (b) (provided that such Form 10-K
is accompanied by any other financial information incorporated by reference
in such Form 10-K, and provided further, that the Company provide to each
holder who so requests in writing any document incorporated by reference in
such Form 10-K);
(c) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports that it sends to its
public stockholders and copies of all registration statements (without
exhibits) and all reports that it files with the Securities and Exchange
Commission (or any governmental body or agency succeeding to the functions
of the Securities and Exchange Commission); and
(d) copies of all agreements governing and instruments evidencing
Debt (other than Debt of a type described in subsection (vi) of the
definition of Debt) of the Company or any Consolidated Subsidiary
containing any Financial Covenant, and all agreements amending, modifying
or supplementing any such agreement or instrument affecting, adding or
deleting any Financial Covenant, in each case, entered into on or after the
First Amendment Date;
(e) all certificates and notices delivered or required to be delivered
to the holders of any other Debt of the Company or any Consolidated
Subsidiary on or after the First Amendment Date, in each case, in
connection with the compliance by the Company or any Consolidated
Subsidiary with any Financial Covenant; and
(f) with reasonable promptness, such other financial data as such
holder of Notes may reasonably request.
(ii) DEFAULT NOTICES. The Company also covenants that immediately upon any
Senior Officer of the Company obtaining knowledge of an Event of Default or
Default, it will deliver to each holder of Notes an Officer's Certificate
specifying the nature and period of existence thereof and what action the
Company proposes to take with respect thereto.
5E. INSPECTION OF PROPERTY. The Company will permit any Person designated
in writing by any holder of Notes, at such holder's expense, to visit and
inspect any of the Properties of the Company and the Subsidiaries, to examine
the corporate books and financial records of the Company and the Subsidiaries
and make copies thereof or extracts therefrom, all at such reasonable times and
as often as such holder may reasonably request. In addition, so long as (i) a
Default or an Event of Default shall have occurred and be continuing, (ii) in
the
A-12
<PAGE>
reasonable judgment of any holder of Notes, a material adverse change shall have
occurred with respect to the business or financial condition of the Company and
the Subsidiaries taken as a whole, or (iii) any holder shall have a reasonable
basis for questioning the validity of any line item in any financial statement
of the Company or the validity of such financial statement as a whole, the
Company will permit any Person designated in writing by any holder to discuss
the affairs, finances and accounts of any of such corporations with the
principal officers of the Company and its independent public accountants, all at
such reasonable times and as often as such holder may reasonably request.
5F. COVENANT TO SECURE NOTE EQUALLY. The Company covenants that, if it or
any Subsidiary shall create or assume any Lien upon any of its Property, whether
now owned or hereafter acquired, other than Liens permitted by the provisions of
paragraph 6A hereof or any similar provision incorporated herein by reference
(unless prior written consent to the creation or assumption thereof shall have
been obtained pursuant to paragraph 11C hereof), it will make or cause to be
made effective provision whereby the Notes will be secured by such Lien equally
and ratably with any and all other Debt thereby secured so long as any such
other Debt shall be so secured.
5G. ERISA COMPLIANCE. Neither the Company nor any Subsidiary will cause
any Plan maintained or participated in by it to engage in any "prohibited
transaction," as such term is defined in Section 4975 of the IRC.
5H. INVOLUNTARY PREPAYMENT.
(i) Upon the occurrence of any Prepayment Event, the Company shall
make an offer to the holders of Notes to repurchase the Notes as set forth
in this paragraph 5H. Immediately upon the occurrence of the Prepayment
Event but in any event within five (5) Business Days thereafter, the
Company shall give each holder of the Notes substantially simultaneous
written notice thereof describing such Prepayment Event in reasonable
detail including, without limitation, a description of the issue of Debt
giving rise to such Prepayment Event, the facts and circumstances
surrounding the occurrence thereof, the manner of the prepayment,
redemption or defeasance of such other Debt in connection therewith and
the manner specified in this paragraph 5H of accepting or rejecting such
offer by the holder. Such notice shall also contain the Company's offer
(the "Prepayment Offer") to purchase from each such holder of Notes a
principal amount of the Notes held by such holder equal to its Noteholder
Share of the Ratable Prepayment Amount at a purchase price equal to the
Agreed Put Consideration.
(ii) A holder of Notes may accept the Prepayment Offer, in whole or in
part, through a written acceptance (the "Noteholder Acceptance") delivered
to the Company within forty-five (45) days of such holder's receipt of the
Prepayment Offer (the "Offer Period"). Promptly after (and, in any event,
within two (2) Business Days of) its receipt of any Noteholder Acceptance,
the Company shall give substantially simultaneous written notice thereof to
all other holders of Notes.
(iii) If such holder shall accept the offer, the Company shall
purchase that portion (the "Prepayment Portion"), expressed as a
percentage, of the principal amount of Notes held by such holder specified
in its Noteholder Acceptance, provided that the
A-13
<PAGE>
principal amount of Notes the Company is required to purchase shall not
exceed such holder's Noteholder Share of the Ratable Prepayment Amount.
Such purchase shall be made on the fifteenth (15th) day after the
expiration of the Offer Period or, if later, the first day on which any
holder of any other issue of Debt would receive a prepayment in respect of
such Prepayment Event but in no event later than sixty (60) days after the
expiration of the Offer Period. On the date of purchase, such holder shall
sell the Prepayment Portion of such Notes to the Company without recourse,
representation or warranty (other than as to such holder's full right,
title and interest to the Prepayment Portion of such Notes free of any
adverse claim created by such holder therein), at a price, payable in
immediately available funds by wire transfer to the account specified
pursuant to paragraph 11 hereof or to such other account as may be
specified in such notice, equal to the Agreed Put Consideration.
(iv) Upon any partial prepayment of a Note pursuant to this paragraph
5H, such Note may, at the option of the holder thereof, be:
(a) surrendered to the Company, in which case the Company shall
promptly execute and issue to the holder thereof a new Note in a
principal amount equal to the principal amount remaining unpaid on the
surrendered Note after giving effect to such prepayment; or
(b) made available to the Company for notation thereon of the
portion of the principal so prepaid.
In case the entire principal amount of any Note is prepaid, such Note shall
be surrendered to the Company for cancellation and shall not be reissued,
and no Note shall be issued in lieu of the prepaid principal amount of any
Note.
(v) If the occurrence of any Prepayment Event causes the Company or
any Subsidiary to defease, repay, repurchase or have a reduction in the
available commitment under any issue of Debt prior to the time that any
Notes would be repurchased hereunder, then simultaneously with such
defeasance, repayment, repurchase or reduction in respect of such other
Debt, the Company shall pay to each holder an amount equal to its
Noteholder Share of the Ratable Prepayment Amount at a purchase price equal
to the Agreed Put Consideration, which payment shall satisfy all
obligations of the Company to the holders in respect of clauses (i) through
(iii), inclusive, of this paragraph 5H. At the time of the making of such
payment, the Company shall notify the holder of such payment in writing,
which notice shall state that such payment is being made pursuant to this
paragraph 5H(v), shall contain a description of the issue of Debt giving
rise to such Prepayment Event, the facts and circumstances surrounding the
occurrence thereof and the manner of the prepayment, redemption or
defeasance of such other Debt in connection therewith (unless such
information shall have been contained in a previously delivered notice
pursuant to paragraph 5H(i) with respect to such Prepayment Event) and
describe the procedure detailed in this paragraph 5H(v) pursuant to which a
holder may elect to rescind such payment.
In the event that a holder of Notes receiving a payment pursuant to
this paragraph 5H(v) elects to rescind the prepayment arising from such
Prepayment Event
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<PAGE>
with respect to all Notes or any portion of the Notes held by such holder,
such holder shall deliver to the Company, within forty-five (45) days of
such holder's receipt of the notice specified in this paragraph 5H(v),
written notice of such recision, and shall contemporaneously pay to the
Company in immediately available funds an amount equal to the amount so
paid such holder pursuant to this paragraph 5H(v) or, in the case of a
recision with respect to only a portion of the prepayment made to such
holder, an amount equal to that portion of such prepayment which such
holder wishes to rescind.
(vi) Each holder of Notes shall have the rights specified in this
paragraph 5H with respect to each Prepayment Event which shall occur,
regardless of any act or omission to act with respect to any previous
Prepayment Event. In the event that the Prepayment Event is also a
Designated Event subject to paragraph 4 of this Agreement, the Company
shall comply with the provisions of clause (v) of this paragraph 5H with
respect to the matters contained therein; in all other respect such
Designated Event will be treated as a Designated Event and not as a
Prepayment Event, and the Company will be required to comply with paragraph
4E in connection therewith. In the event that the Prepayment Event would
also be an event which results in an Event of Default, this paragraph 5H
shall not be deemed to in any respects limit the rights and remedies of the
holders under paragraph 7.
(vii) Prepayments made pursuant to this paragraph 5H shall be applied
ratably to the obligations of the Company to make required prepayments in
respect of the Notes pursuant to paragraph 4A hereof and to pay the
remaining principal amount thereof at maturity.
6. NEGATIVE COVENANTS. The Company covenants that on and after the
Closing Date, and so long as any Notes are outstanding, it shall comply with the
following:
6A. LIMITATIONS ON LIENS.
(i) NEGATIVE PLEDGE. The Company will not, and will not permit any
Subsidiary to, create, assume, or suffer to exist any Lien upon any of the
Property of the Company or any Subsidiary, whether now owned or hereafter
acquired, except:
(a) Liens securing Debt and other obligations in an aggregate
principal amount at any time not exceeding ten percent (10%) of
Consolidated Tangible Net Worth at such time, provided, however, that
neither the Company nor any Subsidiary shall create, assume or
otherwise incur any Lien upon any of its respective Properties unless
the Company is in compliance with paragraph 6R of this Agreement;
(b) Liens arising out of transactions contemplated by the terms
of the Trade Receivables Agreement;
(c) Purchase Money Mortgages if, after giving effect thereto and
to any concurrent transactions:
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<PAGE>
(I) each such Purchase Money Mortgage secures an amount not
exceeding one hundred percent (100%) of the cost of the
particular Property to which it relates (or, in the case of a
Lien existing on any Property of any corporation at the time it
becomes a Subsidiary, the Fair Market Value of such Property at
such time);
(II) such Purchase Money Mortgage encumbers only Property
(A) purchased after the Closing Date and (B) acquired with the
proceeds of the Debt secured thereby; and
(III) such Property was acquired in the ordinary course of
business of the corporation acquiring such Property,
provided, however, that neither the Company nor any Subsidiary shall
create, assume or otherwise incur any Purchase Money Mortgage unless
the Company is in compliance with paragraph 6R of this Agreement;
(d) Liens incurred in connection with Lease Transactions to the
extent that such Liens encumber Property covered by such Lease
Transactions; provided, however, that neither the Company nor any
Subsidiary shall create, assume or otherwise incur any such Liens
unless the Company is in compliance with paragraph 6R of this
Agreement, and provided further that, immediately after giving effect
to the investment of the Company or the Subsidiary in such Lease
Transaction, the aggregate amount of the investments then outstanding
of the Company and the Subsidiaries in all Lease Transactions does not
exceed Fifty Million Dollars ($50,000,000), it being agreed that for
the purpose of such calculation the amount of each investment shall be
determined on a Net After-Tax Cash Basis;
(e) Liens upon San Marcos Bonds, and the proceeds thereof, which
have been repurchased upon tender by the holders thereof in accordance
with the terms of the indenture governing such San Marcos Bonds,
until, but only until, the trustee with respect to such San Marcos
Bonds has received the purchase price therefor upon the remarketing
thereof and the issuer of the letter of credit that was drawn in
connection with such tender has been reimbursed for such amounts
drawn; provided, however, that the Company shall actively seek to
remarket such bonds pursuant to the provisions of the IDB Financing of
the Company's San Marcos, Texas facility or, to the extent necessary
in connection with any termination of any outstanding letter of credit
relating to such facility, to modify the structure of such IDB
Financing to the extent necessary to permit a long-term reissuance of
the repurchased San Marcos Bonds; and
(f) unless, at the time of incurrence thereof, a Default or an
Event of Default shall occur or be continuing, Liens incurred in
connection with the deposit of cash collateral to secure reimbursement
obligations of the Company relating to the San Marcos Bonds, but only
in connection with the extension of an outstanding letter of credit
relating to such facility and only in an amount of cash collateral not
exceeding the maximum amount which may be drawn under such
A-16
<PAGE>
letter of credit; provided, however, that the Company shall actively
seek to obtain a replacement letter of credit that does not require
cash collateralization (and thus relieves the Company of any
requirement to deposit cash collateral or to secure such reimbursement
obligations);
it being understood that each such Lien may be allocated by the Company to
any one of the preceding categories in which it may, by the terms of such
category, be included.
(ii) FINANCING STATEMENTS. The Company will not, and will not permit
any Subsidiary to, sign or file a financing statement under the Uniform
Commercial Code of any jurisdiction that names the Company or such
Subsidiary as debtor, or sign any security agreement authorizing any
secured party thereunder to file any such financing statement, except, in
any such case, a financing statement filed or to be filed to perfect or
protect a Lien that the Company or such Subsidiary is entitled to create,
assume or incur, or permit to exist, under the foregoing provisions of this
paragraph 6 or to evidence for informational purposes a lessor's interest
in Property leased to the Company or any such Subsidiary.
6B. LIMITATIONS ON LEASES.
(i) LIMITATIONS ON LEASES. The Company will not, and will not permit
any Subsidiary to, at any time be or become liable at any time as lessee
under any lease (other than a lease giving rise to a Capitalized Lease
Obligation) having an original (or then unexpired) term of one year or more
if:
(a) the aggregate Net Rentals payable in any period of twelve
(12) consecutive calendar months following such time under such lease
and all other such leases under which the Company or a Subsidiary is
lessee, minus
(b) all amounts of a similar nature due from sub-lessees under
such leases that are reasonably expected to be collected during the
same period,
would exceed ten percent (10%) of Consolidated Tangible Net Worth at such
time.
(ii) SUBSIDIARY. Any corporation that becomes a Subsidiary after the
Closing Date shall be deemed to have become liable as lessee, at the time
it becomes a Subsidiary, under all leases (under which it is liable as
lessee) of such corporation existing immediately after it becomes a
Subsidiary.
6C. LIMITATIONS ON INDEBTEDNESS. The Company will not, and will not
permit any Subsidiary to, create, issue, assume or guarantee any Debt (other
than Intercompany Debt) except that:
(i) on or prior to April 26, 1997:
(a) the Company may incur Debt under the Credit Agreement or an
Acceptable Replacement Credit Facility;
A-17
<PAGE>
(b) the Company may incur the 1994 Senior Debt and the 1994
Subordinated Debt;
(c) the Company and the Subsidiaries may incur unsecured Debt, in
an aggregate principal amount not to exceed $10,000,000 at any time
outstanding; provided, however, that no more than $5,000,000 of such
amount may be Debt of Subsidiaries;
(d) the Subsidiaries may incur Debt under revolving credit
facilities so long as the aggregate amount of all such Debt
outstanding at any time shall not exceed $5,000,000;
(e) the Company and the Subsidiaries may incur Debt described in
clause (vi) of the definition of "Debt" contained in paragraph 10B;
(f) Debt incurred in connection with the resale or remarketing of
San Marcos Bonds, but only to the extent that:
(I) San Marcos Bonds in an aggregate principal amount of
Sixteen Million Five Hundred Thousand Dollars ($16,500,000) were
issued and outstanding and held and owned by Persons other than
the Company, any Subsidiary or any Affiliate on May 10, 1994; and
(II) the San Marcos Bonds to be resold or remarketed were
repurchased by the Company upon tender by the holders thereof
after May 10, 1994 in accordance with the terms of the indenture
governing the San Marcos Bonds;
and
(g) replacement unsecured San Marcos Bonds, in an aggregate
principal amount not exceeding Sixteen Million Five Hundred Thousand
Dollars ($16,500,000), if, and only if, Sixteen Million Five Hundred
Thousand Dollars ($16,500,000) in aggregate amount of San Marcos Bonds
were redeemed in full as a result of the failure of the bank which has
issued any letter of credit relating to the San Marcos Bonds to extend
or renew such outstanding letter of credit (for the avoidance of
doubt, the aggregate principal amount of San Marcos Bonds and
replacement San Marcos Bonds, whether outstanding on the date hereof
or thereafter issued pursuant to clause (f) or clause (g) of this
paragraph 6C(i), shall not exceed Sixteen Million Five Hundred
Thousand Dollars ($16,500,000) at any time);
in each case, so long as after the incurrence thereof, and after giving
effect thereto, no Default or Event of Default (including any Default or
Event of Default arising out of any breach of paragraph 6L hereof) shall
have occurred or be continuing; and
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<PAGE>
(ii) on or after April 27, 1997, and at any time during any period set
forth in the tables below, the Company or any Subsidiary may incur Debt if,
immediately after giving effect to such incurrence of Debt:
(a) Consolidated Senior Debt would not exceed the percentage
applicable to such period of the sum of Consolidated Total Debt plus
Consolidated Tangible Net Worth, all as set forth in the table
immediately below:
If such time occurs during the period: Percentage:
------------------------------------- ----------
From April 27, 1997 through
and including July 31, 1998 38.00%
At all times on or after
August 1, 1998 35.00%;
and
(b) Combined Subsidiary Debt would not exceed five percent (5%)
of Consolidated Tangible Net Worth;
and so long as after the incurrence thereof, and after giving effect
thereto, no Default or Event of Default (including any Default or Event of
Default arising out of any breach of paragraph 6L or paragraph 6R hereof)
shall have occurred or be continuing.
6D. LIMITATIONS ON MERGERS AND SALES OF ASSETS. The Company will not, and
will not permit any Subsidiary to (whether in a single transaction or a series
of transactions), consolidate with, merge into or transfer substantially all of
its Property (whether now owned or hereafter acquired) to any other Person, or
permit any other Person to consolidate with, merge into, or transfer
substantially all of its Property to, the Company, except that any Subsidiary
may merge or consolidate with or into, or transfer substantially all of its
Property to, or acquire substantially all of the Property of, any other Person
and the Company may merge or consolidate with or into, or acquire substantially
all of the Property of, any other Person, if:
(i) in the case of any merger or consolidation involving the Company,
the corporation that results from such merger or consolidation is organized
under the laws of the United States of America or any jurisdiction thereof
and such corporation expressly assumes in writing the due and punctual
payment of the principal of, and Yield-Maintenance Premium, if any, and
interest on, all of the Notes, according to their tenor, and the due and
punctual performance and observance of all the covenants in the Notes and
this Agreement to be performed or observed by the Company, all in an
agreement or instrument satisfactory in form and substance to the Required
Holders;
(ii) immediately after the consummation of the transaction, and after
giving effect thereto, the Company, the corporation that results from any
such merger or consolidation with the Company or the Person that acquires
such Property from the Company, and in each case, its Subsidiaries shall be
engaged principally in the businesses of either or both of manufacturing
and distributing aerospace products or technically related products and of
providing services related to such products;
A-19
<PAGE>
(iii) immediately after the consummation of the transaction, and after
giving effect thereto, no Event of Default or Default would exist; and
(iv) immediately after the consummation of the transaction, and after
giving effect thereto, the Company could incur at least One Dollar ($1.00)
of additional Debt pursuant to paragraph 6 hereof.
6E. ADJUSTED CONSOLIDATED TANGIBLE NET WORTH MAINTENANCE. The Company
will maintain at all times Adjusted Consolidated Tangible Net Worth of not less
than the sum of:
(i) $125,000,000; plus
(ii) the sum of the Fiscal Quarter Net Worth Increase Amounts for
each fiscal quarter of the Company ended after July 31, 1994; plus
(iii) the aggregate amount of all capital contributions (which
amount shall include, without limitation, all amounts attributable to
the conversion of debt of the Company to equity of the Company, valued
at the amount added to stockholders' equity in accordance with GAAP)
received by the Company or any Consolidated Subsidiary (in each case,
other than contributions originally made by the Company or any
Consolidated Subsidiary) in cash, in Property other than cash or by
conversion of Debt of the Company at any time after the Third
Amendment Date.
6F. LIMITATIONS ON DISTRIBUTIONS.
(i) LIMIT ON DISTRIBUTIONS. The Company will not, and will not permit
any Subsidiary to, at any time declare or make or incur any liability to
declare or make any Distribution; provided, however, that:
(a) the Company may, repurchase, purchase, redeem or otherwise
acquire shares of its common stock or warrants, rights or options to
acquire such stock issued pursuant to Restricted Stock Plans, Stock
Option Plans, Stock Incentive Plans, the Rights Agreement, the ESOP,
or Non-Employee Directors Stock-Option Plans;
(b) the Company may declare or make any Distribution if,
immediately after giving effect to such Distribution,
(I) the Debt Ratio would not exceed 2.50:1.00;
(II) the Company could incur $1.00 of additional Debt
pursuant to paragraph 6 hereof;
(III) if the time of declaration or making, as the case may
be, of such Distribution is on or prior to April 26, 1997,
Consolidated Senior Debt at such time would not exceed thirty-
eight percent (38%) of the sum of
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<PAGE>
Consolidated Total Debt plus Consolidated Tangible Net Worth at
such time; and
(IV) after giving effect to such transactions, no Event of
Default or Default would then exist; and
(c) the Company may declare or make any Permitted Preferred
Dividend if, prior to and immediately after giving effect to such
Permitted Preferred Dividend, no Default or Event of Default shall
exist.
(ii) TIME OF PAYMENT. The Company will not authorize a Distribution
on its capital stock which is not payable within sixty (60) days of
authorization.
6G. LIMITATIONS ON CAPITAL EXPENDITURES. The Company will not, and will
not permit any Subsidiary to, make, on or before April 26, 1997, any
expenditures for fixed or capital assets which would cause the aggregate of all
such expenditures made by the Company and the Subsidiaries in any period of four
full consecutive fiscal quarters to exceed the sum of the amounts set forth
below opposite such four fiscal quarters:
<TABLE>
<CAPTION>
Fiscal Quarters Amount
--------------- -----------
<S> <C>
Each Fiscal Quarter 1994 $4,500,000
Each Fiscal Quarter 1995 $6,000,000
Each Fiscal Quarter 1996 $7,500,000
Each Fiscal Quarter 1997 $7,500,000.
</TABLE>
6H. PRIVATE OFFERING. The Company will not, and will not permit anyone
acting on its behalf to, offer the Notes or any part thereof or any similar
Securities for issue or sale to, or solicit any offer to acquire any of the same
from, anyone so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act.
6I. TRANSACTIONS WITH AFFILIATES.
(i) EXCHANGE LISTING. During any period that the Company does not have
common stock listed on the New York Stock Exchange or the American Stock
Exchange, the Company will not, and will not permit any Subsidiary to, sell or
transfer any Property to, or purchase or acquire any Property of, or otherwise
engage in any other transaction with, any Affiliate, except at prices and on
terms and conditions not less favorable to the Company or such Subsidiary than
could be obtained on an arms' length basis from unrelated third parties.
(ii) CONTROL PERSONS. During any period that the Company has common stock
listed on the New York Stock Exchange or the American Stock Exchange, the
Company will not, and will not permit any Subsidiary to, sell or transfer any
Property to, or purchase or acquire any Property of, or otherwise engage in any
other transaction with, any Control Person, except at prices and on terms and
conditions not less favorable to the Company or such Subsidiary than could be
obtained on an arms' length basis from unrelated third parties.
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<PAGE>
6J. LINE OF BUSINESS. The Company shall not, nor shall it permit any
Subsidiary to, make any change in the nature of its business if such change
would constitute a material change in the nature of the business of the Company
and the Subsidiaries taken as a whole as conducted on the Closing Date, or
commence or permit any Subsidiary to commence any major project for the
development of a new line of products or services other than aerospace products
or technically related products or services related to such products; provided
that the Company or any Subsidiary may commence any project for the development
of such new line of products or services if, and only if, the aggregate costs
and expenses related to all such projects (including, without limitation,
budgeted costs (determined from time to time) for such new project minus any
reasonably budgeted reimbursements for such costs due from parties other than
the Company or the Subsidiaries) shall not exceed ten percent (10%) of
Consolidated Tangible Net Worth at the time each such project is commenced.
6K. FIXED CHARGE COVERAGE. The Company will maintain for each day a ratio
of Consolidated Net Income Available for Fixed Charges for the period of 365
consecutive days (or 366 consecutive days for any such period that includes
February 29) ending on such day to Consolidated Fixed Charges for such period,
of not less than the ratio set forth in the chart below opposite the period set
forth below in which such day occurs:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Fiscal Year 1994 1.40 to 1.00
Fiscal Year 1995 1.55 to 1.00
Fiscal Year 1996 1.90 to 1.00
Fiscal Year 1997 and thereafter 2.00 to 1.00;
</TABLE>
6L. DEBT RATIO. The Company shall not permit the Debt Ratio for any day to
be greater than the ratio set forth opposite the period set forth in the chart
below in which such day occurs:
<TABLE>
<CAPTION>
Fiscal Year Ratio
----------- -----
<S> <C>
1994 5.60 to 1.00
1995 5.00 to 1.00
1996 4.10 to 1.00
1997 3.20 to 1.00
1998 2.80 to 1.00
1999 and thereafter 2.50 to 1.00.
</TABLE>
6M. INCORPORATION OF NEGATIVE COVENANTS.
(i) During all such times as both the Credit Agreement shall remain in
force, and either any Debt shall be outstanding thereunder or the lenders
party thereto shall have any obligation to lend or make advances
thereunder:
(a) the provisions of paragraph 6A (except for clauses (i)(e) and
(i)(f) thereof, to the extent provided in paragraph 6M(i)(c) below)
and paragraph 6B of this Agreement shall be of no force and effect;
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<PAGE>
(b) the provisions of Sections 5.02(b), 5.02(c), 5.02(d),
5.02(e), 5.02(g), 5.02(h) and 5.02(i) of the Credit Agreement, as in
effect on the Third Amendment Date (after giving effect to the Seventh
Amendment to the Credit Agreement), but without amendment, supplement
or modification (except as set forth in paragraph 6M(ii) hereof), and
together with all relevant definitions pertaining thereto, shall be
incorporated herein by reference, mutatis mutandis;
(c) the Company shall not, nor shall it permit any Subsidiary to,
create, assume or suffer to exist any Lien securing any Debt existing
on the date hereof or incurred thereafter in connection with any IDB
Financing, except for such Liens as are expressly permitted by the
provisions of clause (e) or clause (f) of paragraph 6A(i) hereof;
provided, however, that at all times during which either the Credit
Agreement shall be of no force or effect, or there shall be no Debt
outstanding thereunder and no obligation on the part of the lenders thereto
to lend or make any advance thereunder, the provisions of paragraph 6A and
paragraph 6B of this Agreement shall be in full force and effect.
(ii) If at any time:
(a) after the Third Amendment Date, the Credit Agreement is
amended, supplemented or modified to provide Financial Covenants in
addition to, or which are more restrictive of the Company or the
Consolidated Subsidiaries than, the provisions of the Credit
Agreement, as in effect on the Third Amendment Date (after giving
effect to the Seventh Amendment to the Credit Agreement dated as of
such date);
(b) after the First Amendment Date, the Company enters into any
other agreement governing, or executes any other instrument
evidencing, any Debt (or any commitment to lend), other than Debt or
commitments solely among the Company and/or one or more Consolidated
Subsidiaries; or
(c) after the First Amendment Date, the Company enters into any
amendment, supplement or modification of any agreement governing, or
any instrument evidencing, any Debt (or any commitment to lend), other
than Debt or commitments solely among the Company and/or one or more
Consolidated Subsidiaries;
then, and in each such case, each Financial Covenant set forth in such
amendment, supplement, modification or other agreement or instrument shall
be incorporated by reference herein for the remaining term of such
agreement or instrument, but only to the extent that such covenant is more
restrictive of the Company or the Consolidated Subsidiaries than the
corresponding provision of this Agreement.
(iii) In the event that any Financial Covenant contained in any other
agreement governing, or instrument evidencing, any Debt (or commitment to
lend), which Financial Covenant has been or is incorporated into this
Agreement pursuant to the provisions of paragraph 6M(ii) hereof, is
amended, supplemented or modified to make such Financial
A-23
<PAGE>
Covenant less restrictive of the Company or the Consolidated Subsidiaries
than the incorporated Financial Covenant, the more restrictive incorporated
Financial Covenant shall continue to be incorporated herein for the
remaining term of such agreement or instrument notwithstanding such
amendment, supplement or modification. Notwithstanding the foregoing
sentence, if the provisions of such incorporated Financial Covenant were
expressed when incorporated to be more restrictive on a temporary basis, or
more restrictive only for a prescribed period, such more restrictive
provision shall be incorporated herein only on such temporary basis or only
for such prescribed period, as the case may be.
(iv) No Financial Covenant incorporated herein by virtue of paragraph
6M(ii) or paragraph 6M(iii) hereof shall supersede, replace, amend,
supplement or modify any other provision of this Agreement, including any
covenant contained herein which addresses a subject matter similar to that
of such incorporated Financial Covenant.
6N. MAINTENANCE OF SENIOR STATUS. The Company will not take any action at
any time to amend, modify or supplement any subordination provision (or any
definition of any defined term as used in any such provision) in the Existing
Subordinated Notes, the 1994 Subordinated Notes or any indenture governing the
provisions of any thereof, or otherwise take any action which would result in
any of the Existing Subordinated Notes or 1994 Subordinated Notes not being
junior or subordinated in right of payment to the Notes to the same extent such
Existing Subordinated Notes or 1994 Subordinated Notes, as the case may be, are
subordinated to the Notes on the Third Amendment Date (after giving effect to
the issuance of the 1994 Subordinated Notes). The Company shall not take any
action which would result in the Notes not constituting, or not being fully
entitled to the benefits of, "Senior Indebtedness" and "Designated Senior
Indebtedness" as defined in the indenture governing the 1994 Subordinated Notes.
6O. CERTAIN AMENDMENTS. The Company shall not, nor shall it permit any
Consolidated Subsidiary to, consent to any amendment, modification, supplement
or waiver of:
(i) any of the provisions of any of Sections 3.02, 3.03, 3.04 or 3.05
of the Credit Agreement, as in effect on the Third Amendment Date (after
giving effect to the Seventh Amendment to the Credit Agreement), or any
other provision referred to therein or any defined term as used therein,
other than a waiver by the banks party thereto of any condition set forth
therein; or
(ii) any other provision of the Credit Agreement or, prior to April
25, 1997, any Acceptable Replacement Credit Facility, to the extent that
such amendment, modification, supplement or waiver would have the effect
of:
(a) reducing the amount or availability of credit thereunder,
changing the timing of or reducing the commitments of the lenders
thereunder to lend or make credits available pursuant thereto;
(b) making more restrictive upon the Company any condition
precedent to the funding of the credits available thereunder;
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<PAGE>
(c) requiring the Company or any Subsidiary to grant any lender
thereunder any Lien securing the obligations thereunder; or
(d) requiring the Company or any Subsidiary to maintain any
deposit accounts in any minimum amount, compensating balances, cash
management or clearing house relationship or similar arrangements,
with the lenders thereunder;
in each case, without the prior written consent of the Required Holders.
6P. SALES OF ASSETS. The Company will not, and will not permit any
Consolidated Subsidiary to, at any time after the First Amendment Date, sell,
lease, transfer or otherwise dispose of any Property (except for sales of
inventory and of obsolete or surplus Property in the ordinary course of
business, sales of accounts receivable, the issuance of director's qualifying
shares and sales, leases, transfers or other dispositions of Property to the
Company or a Consolidated Subsidiary (collectively, "Excepted Property"));
provided, however, that the foregoing restrictions shall not apply to the sale,
lease, transfer or other disposition of any such Property to any Person if all
of the following conditions are met:
(i) the book value of all such Property then being sold, leased,
transferred or otherwise disposed of, together with the book value of all
other Property (other than Excepted Property) sold, leased, transferred or
otherwise disposed of by the Company and the Consolidated Subsidiaries
since the First Amendment Date shall not, in the aggregate, exceed ten
percent (10%) of Consolidated Tangible Assets, determined as of the end of
the then most recently ended fiscal quarter of the Company;
(ii) in the case of the sale, lease, transfer or other disposition of
a Consolidated Subsidiary (whether by disposition of any capital stock of
such Consolidated Subsidiary, the Property thereof or otherwise) or a line
or segment of business of the Company or a Consolidated Subsidiary, in
either case, substantially as an entirety (except with respect to the sale,
lease, transfer or other disposition of capital stock of a Consolidated
Subsidiary), the sum of:
(A) that portion, expressed as a percentage, of Gross Operating
Income attributable to or contributed by all Property of a type
described in this paragraph 6P(ii) and then being sold, leased,
transferred or otherwise disposed of, for the period of eight (8) full
consecutive fiscal quarters most recently ended on or prior to the
date of such sale, lease, transfer or other disposition; plus
(B) with respect to each other sale, lease, transfer or other
disposition of Property of a type described in this paragraph 6P(ii)
occurring during the period beginning on the later of the First
Amendment Date and the beginning of the eight full (8) fiscal quarters
of the Company most recently ended prior to the consummation of the
transaction referred to in clause (A) above, and ending on the date of
the transaction referred to in clause (A) above, that portion,
expressed as a percentage, of Gross Operating Income attributable to
or contributed by such Property described in this clause (B) for the
period of eight (8) full consecutive fiscal quarters most recently
ended on or prior to the date of such sale, lease, transfer or other
disposition thereof;
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<PAGE>
shall not exceed ten percent (10%);
(iii) in the good faith opinion of the board of directors of the
Company (or a committee of such board to whom such matter has been properly
delegated), the sale, lease, transfer or other disposition is for Fair
Market Value and is in the best interests of the Company; and
(iv) immediately after the consummation of such sale, lease, transfer
or other disposition, and after giving effect thereto, no Default or Event
of Default would exist.
Sales and other dispositions of accounts receivable shall be subject to
paragraph 6Q of this Agreement. Sales of all or any portion of the capital
stock of a Consolidated Subsidiary shall, for purposes of determining the book
value thereof in clause (i) above, be deemed to be the sale of all or such
portion of the book value of the assets of the Consolidated Subsidiary which
shall have issued such capital stock. Sales of all or a portion of the capital
stock of any Consolidated Subsidiary shall, for purposes of determining its
contribution to Gross Operating Income in clause (ii) above, be deemed to have
contributed all or such portion of that proportion of Gross Operating Income
attributable to the Consolidated Subsidiary which shall have issued such capital
stock. As used in this paragraph 6P, the term `lease' shall mean an original
lease, as lessor, by the Company or any Consolidated Subsidiary, and the
continuance, extension or renewal of any existing lease shall not be treated as
a lease pursuant to, or restricted by, this paragraph 6P.
6Q. SALE OF RECEIVABLES. The Company covenants that it will not, and will
not permit any Consolidated Subsidiary to, sell with recourse or otherwise sell
for less than the face value thereof, any of its notes or accounts receivable,
except pursuant to the Trade Receivables Agreement; provided, however, that the
Company and any Consolidated Subsidiary may sell for book value the accounts
receivable owing from any Person (i) that has commenced a voluntary case under
the Bankruptcy Law of the United States or any proceedings under the Bankruptcy
Law of any other jurisdiction, or (ii) against whom any such case or proceedings
have been commenced and have remained undismissed for a period of at least sixty
(60) days.
6R. LIMITATION ON CERTAIN OBLIGATIONS. The Company will not at any time
permit the sum of (w) obligations secured by Liens allocated by the Company to
the category described in paragraph 6A(i)(a) hereof, (x) obligations secured by
Liens allocated by the Company to the category described in paragraph 6A(i)(c)
hereof, (y) obligations secured by Liens allocated by the Company to the
category described in paragraph 6A(i)(d) hereof which obligations were incurred
on or subsequent to the Closing Date, and (z) Combined Subsidiary Debt, in each
case at such time, to exceed fifteen percent (15%) of Consolidated Tangible Net
Worth at such time.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
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(i) the Company defaults in the payment of any principal of or
premium on any Note when the same shall become due, either by the terms
thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note
for more than ten (10) days after the date due; or
(iii) the Company or any Subsidiary defaults in any payment of
principal of or interest on any obligation for money borrowed (or any
Capitalized Lease Obligation, any obligation under a conditional sale or
other title retention agreement, any obligation issued or assumed as full
or partial payment for Property whether or not secured by a Purchase Money
Mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided with
respect thereto, or the Company or any Subsidiary fails to perform or
observe any other agreement, term or condition contained in any agreement
under which any such obligation is created (or if any other event
thereunder or under any such agreement shall occur and be continuing) and
the effect of such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such holder
or holders) to cause, such obligation to become due prior to any originally
stated maturity, or to be repurchased by the Company or any Subsidiary,
provided that the aggregate amount of all obligations as to which such a
payment default shall occur and be continuing or such a failure or other
event causing or permitting acceleration shall occur and be continuing
exceeds Fifteen Million Dollars ($15,000,000), and provided, further, that
obligations for the deferred purchase price of goods or services
(including, without limitation, Capitalized Lease Obligations and Purchase
Money Mortgages) shall be excluded from the operation of this clause (iii)
so long as such obligations are being contested in good faith by
appropriate proceedings and adequate reserves have been established
therefor; or
(iv) any representation or warranty made by the Company herein, in
the First Amendment, the Second Amendment, the Third Amendment or any other
amendment, modification or supplement hereto, or in the Warrant Agreement,
or by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement (including, without
limitation, the certificates furnished by the Company at the closing) shall
be false in any material respect on the date as of which made; or
(v) the Company or any Subsidiary shall fail to perform or observe
any covenant contained in paragraph 6 hereof, paragraph 4E hereof,
paragraph 5D(ii) or paragraph 5H hereof; or
(vi) the Company fails to perform or observe any other agreement,
term or condition contained herein, in the First Amendment, the Second
Amendment, the Third Amendment or in the Warrant Agreement or the Warrants,
and such failure shall not be remedied within thirty (30) days after the
occurrence of such failure first becomes known to any Senior Officer of the
Company; or
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(vii) the Company or any Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as such debts
become due as such phrase is defined in Section 303(h)(1) of the Bankruptcy
Code of 1978; or
(viii) any decree or order for relief in respect of the Company or
any Subsidiary is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law, whether now or hereafter in effect (the "Bankruptcy Law"),
of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or the taking of
possession by, a trustee, receiver, custodian, liquidator or similar
official, of the Company or any Subsidiary, or of any substantial part of
the assets of the Company or any Subsidiary, or commences a voluntary case
under the Bankruptcy Law of the United States or any proceedings (other
than proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any Subsidiary under the Bankruptcy
Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and the
Company or such Subsidiary by any act indicates its approval thereof,
consent thereto or acquiescence therein, or an order, judgment or decree is
entered appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such proceedings, and
such order, judgment or decree remains unstayed and in effect for more than
sixty (60) days; or
(xi) any order, judgment or decree is entered in any proceeding
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than
sixty (60) days; or
(xii) any order, judgment or decree is entered in any proceedings
against the Company or any Subsidiary decreeing a split-up of the Company
or such Subsidiary that requires the divestiture of Properties representing
at least ten percent (10%), or the divestiture of the stock of a Subsidiary
whose assets represent at least ten percent (10%), of the consolidated
assets of the Company and the Subsidiaries (determined in accordance with
generally accepted accounting principles) or that requires the divestiture
of assets, or stock of a Subsidiary, that shall have contributed at least
ten percent (10%) to Consolidated Net Income for any of the three (3)
fiscal years most recently ended as of the date such order, judgment or
decree shall be entered, and such order, judgment or decree remains
unstayed and in effect for more than sixty (60) days; or
(xiii) a final judgment in an amount in excess of Fifteen Million
Dollars ($15,000,000) is rendered against the Company or any Subsidiary
and, within sixty (60) days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within sixty (60)
days after the expiration of any such stay, such judgment is not
discharged; or
(xiv) any lender under the Credit Agreement or any Acceptable
Replacement Credit Facility fails or refuses, or announces its intention to
fail or refuse, to make any
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required advance under such Credit Agreement or any Acceptable Replacement
Credit Facility, or refuses to lend due to or as a result of any material
adverse change in the business, Properties, profits or condition (financial
or otherwise) of the Company; or
(xv) there shall occur any "Change of Control" as defined in the
indenture relating to the 1994 Subordinated Debt;
then
(a) if such event is an Event of Default specified in clause (viii),
clause (ix) or clause (x) of this paragraph 7.A with respect to the
Company, all of the Notes at the time outstanding shall automatically
become immediately due and payable at par together with interest accrued
thereon, without presentment, demand, protest or notice of any kind, all of
which are hereby waived by the Company, and
(b) if such event is any other Event of Default, the Required Holders
may at their option, by notice in writing to the Company, declare all of
the Notes to be, and all of the Notes shall thereupon be and become,
immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Premium, if any, with respect to each
Note, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Company, provided that the Yield-
Maintenance Premium, if any, with respect to each Note shall be due and
payable upon such declaration only if
(I) such event is an Event of Default specified in any of clause
(i) to clause (vi), inclusive, of this paragraph 7.A,
(II) the Required Holders shall have given to the Company, at
least ten (10) Business Days before such declaration, written notice
stating its or their intention so to declare the Notes to be
immediately due and payable and identifying one or more such Events of
Default whose occurrence on or before the date of such notice permits
such declaration and
(III) one or more of the Events of Default so identified shall
be continuing at the time of such declaration.
7B. ACCELERATION ON PAYMENT DEFAULT.
(i) ACCELERATION ON PAYMENT DEFAULT. During the existence of an Event of
Default described in paragraph 7.A(i) hereof or paragraph 7.A(ii) hereof, and
irrespective of whether the Required Holders shall have declared all the Notes
to be due and payable pursuant to paragraph 7.A, any holder of Notes may, at his
or its option, by notice in writing to the Company, declare the Notes then held
by such holder to be, and such Notes shall thereupon become, immediately due and
payable together with all interest accrued thereon, without any presentment,
demand, protest or other notice of any kind (other than as provided above), all
of which are hereby expressly waived, and the Company shall immediately pay to
such holder the entire principal of and interest accrued on such Notes and the
Yield-Maintenance Premium due at such time with respect to such Notes in
accordance with the provisions of paragraph 7.A(b) hereof (provided
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that the requirement of paragraph 7.A(b)(II) that the Required Holders give
notice may be satisfied by such holder giving such notice so long as the other
requirements of paragraph 7.A(b) hereof with respect to such notices have been
satisfied).
(ii) ANNULMENT OF ACCELERATION OF NOTES. If a declaration is made
pursuant to clause (i) of this paragraph 7.B by any holder or holders of Notes,
then and in every such case, the Required Holders may, by written instrument
filed with the Company and such holder or holders, rescind and annul such
declaration, and the consequences thereof, provided that at the time such
declaration is annulled and rescinded:
(a) no judgment or decree shall have been entered for the payment of
any moneys due on or pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal of,
or interest or Yield-Maintenance Premium on, the Notes that shall have
become due and payable by reason of such declaration under clause (i) of
this paragraph 7.B) shall have been duly paid; and
(c) each and every other Default and Event of Default shall have been
waived pursuant to paragraph 11.C hereof or otherwise made good or cured.
No such rescission and annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right consequent thereon.
7C. OTHER REMEDIES. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its rights
under this Agreement and such Note by exercising such remedies as are available
to such holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of any covenant
or other agreement contained in this Agreement or in aid of the exercise of any
power granted in this Agreement. No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or now or hereafter existing at law or in equity or by
statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants:
8A. SUBSIDIARIES. Annex 2 to this Agreement states,
(i) the name of each of the Subsidiaries, its jurisdiction of
incorporation and the percentage of its Voting Stock owned by the Company
and each other Subsidiary, and
(ii) the name of each of the Company's joint ventures and the nature
thereof.
Each of the Company and the Subsidiaries has good and marketable title to
all of the shares it purports to own of the stock of each Subsidiary, free and
clear in each case of any Lien. All such shares have been duly issued and are
fully paid and nonassessable.
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8B. CORPORATE ORGANIZATION AND AUTHORITY. The Company
(i) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation,
(ii) has all requisite legal and corporate power and authority to own
and operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted,
(iii) has all necessary licenses, certificates and permits to own and
operate its Properties and to carry on its business as now conducted and as
presently proposed to be conducted, except where the failure to have any
such licenses, certificates and permits, together with all other such
failures, would not be likely to have a material and adverse effect on the
business or financial condition of the Company and the Subsidiaries, taken
as a whole, or the ability of the Company to perform its obligations set
forth in this Agreement and in the Notes, and
(iv) has duly qualified or has been duly licensed, and is authorized
to do business and is in good standing as a foreign corporation, except
where the failure to be so qualified, licensed and authorized in any
jurisdiction, together with all such other failures, would not be likely to
have a material and adverse effect on the business or financial condition
of the Company and the Subsidiaries, taken as a whole, or the ability of
the Company to perform its obligations set forth in this Agreement and in
the Notes.
The revenues and net income of the Company for the year ended July 31,
1989, and the total assets of the Company as of July 31, 1989, exceed eighty-
five percent (85%) of the consolidated revenues, consolidated net income, and
consolidated assets of the Company and the Subsidiaries for such period and at
such time.
8C. FINANCIAL STATEMENTS. The Company has furnished you with the
following financial statements, identified by a principal financial officer of
the Company:
(i) a consolidated balance sheet of the Company and the Subsidiaries
as at July 31 in each of the years 1987 to 1993 inclusive, and consolidated
statements of earnings and changes in financial condition or cash flows, as
the case may be, of the Company and the Subsidiaries for the year ended
July 31 in each of the years 1987 to 1993, inclusive, all certified by
Deloitte & Touche; and
(ii) a consolidated balance sheet of the Company and the Subsidiaries
as at January 30, 1994 and January 31, 1993, and consolidated statements of
earnings and cash flows for the three (3) month periods ended on January
30, 1994 and on January 31, 1993 prepared by the Company.
Such financial statements (including all related schedules and notes, subject,
as to interim statements, to changes resulting from audits and year-end
adjustments) have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods involved (except as
otherwise noted therein) and fairly present all liabilities, direct and
contingent, of the Company and the Subsidiaries required to be shown in
accordance with such
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principles. The balance sheets fairly present the condition of the Company and
the Subsidiaries as at the dates thereof, and the statements of earnings and
changes in financial condition or cash flows, as the case may be, fairly present
the results of the operations of the Company and the Subsidiaries for the
periods indicated. There has been no material adverse change in the business or
financial condition of the Company and the Subsidiaries, taken as a whole, since
July 31, 1993, except for charges in the third Fiscal Quarter of Fiscal Year
1994 to shareholders' equity in connection with the increases in the underfunded
status of the Company's pension plans, and to income in connection with the
expensing of unamortized pension benefit past service costs, each as described
in the Company's Quarterly Report on Form 10-Q for Fiscal Quarter ended January
30, 1994.
8D. ACTIONS PENDING. There is no action, suit, investigation or
proceeding or group of similar actions, suits, investigations or proceedings
(including, as such a group, without limitation, all actions, suits,
investigations or proceedings arising out of federal or state environmental
protection laws), pending, or, to the knowledge of the Company, threatened
against the Company or any of the Subsidiaries, or any Properties or rights of
the Company or any of the Subsidiaries, by or before any court, arbitrator or
administrative or governmental body that would be more likely than not to have a
material and adverse effect on the business or financial condition of the
Company and the Subsidiaries, taken as a whole, or the ability of the Company to
perform its obligations set forth in this Agreement and in the Notes.
8E. OUTSTANDING DEBT. Neither the Company nor any of the Subsidiaries has
outstanding any Debt except as permitted by paragraph 6.C hereof. There exists
no default under the provisions of any instrument evidencing such Debt or of any
agreement relating thereto.
8F. TITLE TO PROPERTIES. Each of the Company and the Subsidiaries has
good and indefeasible title to its respective real Properties (other than
Properties that it leases) and good title to all of its other respective
Properties, including the Properties reflected in the balance sheet as at
January 30, 1994 referred to in paragraph 8.C hereof (other than Properties
disposed of in the ordinary course of business), subject to no Lien of any kind
except Liens permitted by paragraph 6.A hereof. All leases necessary in any
material respect for the conduct of the respective businesses of the Company and
the Subsidiaries are valid and subsisting and are in full force and effect.
8G. PATENTS, TRADEMARKS, LICENSES, ETC. Each of the Company and the
Subsidiaries owns or possesses all of the patents, trademarks, service marks,
trade names, copyrights, licenses, and rights with respect thereto, necessary
for the present conduct of its business, without any known conflict with the
rights of others.
8H. TAXES. Each of the Company and the Subsidiaries has filed all
Federal, State and other income tax returns that, to the best knowledge of the
officers of the Company, are required to be filed, and each has paid all taxes
as shown on such returns and on all assessments received by it to the extent
that such taxes have become due, except such taxes as are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established in accordance with generally accepted accounting principles.
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8I. CONFLICTING AGREEMENTS AND OTHER MATTERS.
(i) RESTRICTIONS. Neither the Company nor any of the Subsidiaries is
subject to any charter or by-law restriction that would, in the aggregate with
all other such charter or by-law restrictions, be more likely than not to have a
material and adverse effect on the business or financial condition of the
Company and the Subsidiaries, taken as a whole, or the ability of the Company to
perform its obligations set forth in this Agreement and in the Notes.
(ii) CONFLICTS. Neither the execution nor delivery of this Agreement or
the Notes, nor the offering, issuance and sale of the Notes, nor the fulfillment
of nor the compliance with the terms and provisions hereof and of the Notes will
conflict with, or result in a breach of the terms, conditions or provisions of,
or constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the Properties of the Company or any of the
Subsidiaries pursuant to, the charter or by-laws of the Company or any of the
Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Company or any of the Subsidiaries is subject.
(iii) RESTRICTIONS ON DEBT. Neither the Company nor any of the
Subsidiaries is a party to, or otherwise subject to any provision contained in,
any instrument evidencing indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including its
charter) that limits the amount of, or otherwise imposes restrictions on the
incurring of, Debt of the Company of the type to be evidenced by the Notes
except as set forth in the agreements listed in Annex 3 attached hereto.
(iv) SALE IS LEGAL AND AUTHORIZED. Each of the sale of the Notes by the
Company and compliance by the Company and each Subsidiary with all of the
provisions of this Agreement and of the Notes:
(a) is within the corporate powers of the Company and each
Subsidiary; and
(b) is legal and does not conflict with, result in any breach of any
of the provisions of, constitute a default under, or result in the creation
of any Lien upon any Property of the Company or any Subsidiary under the
provisions of, any agreement, charter instrument, bylaw or other instrument
to which it is a party or by which it or any of its Property may be bound.
(v) NOTES ARE ENFORCEABLE. The obligations of the Company under this
Agreement and the Notes are valid, binding and enforceable in accordance with
the terms of this Agreement and the Notes, except the enforceability hereof or
thereof, as the case may be, may be:
(a) limited by bankruptcy, insolvency or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
8J. OFFERING OF NOTES. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security of
the Company for sale to, or
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solicited any offers to buy the Notes or any similar security of the Company
from, or otherwise approached or negotiated with respect thereto with, any
Person other than institutional investors, and neither the Company nor any agent
acting on its behalf has taken or will take any action that would subject the
issuance or sale of the Notes to the provisions of section 5 of the Securities
Act or to the provisions of any securities or Blue Sky law of any applicable
jurisdiction.
8K. REGULATION G, ETC. Neither the Company nor any Subsidiary owns or has
any present intention of acquiring any "margin stock" as defined in Regulation G
(12 CFR Part 207) of the Board of Governors of the Federal Reserve System
("margin stock"). The proceeds of sale of the Notes will be used for general
corporate purposes. None of such proceeds will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any margin stock or for the purpose of maintaining, reducing or
retiring any indebtedness that was originally incurred to purchase or carry any
stock that is currently a margin stock or for any other purpose that might
constitute this transaction a "purpose credit" within the meaning of such
Regulation G. Neither the Company nor any agent acting on its behalf has taken
or will take any action which might cause this agreement or the Notes to violate
Regulation G, Regulation T or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Exchange Act, as amended, in each
case as in effect now or as the same may hereafter be in effect.
8L. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or Properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Date with either
or both of the Securities and Exchange Commission and state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.
8M. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to you by or on behalf of the Company in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading. There is no fact peculiar to the Company or any of
the Subsidiaries that in the future (so far as the Company can now foresee)
would, in the aggregate with all other such facts, be more likely than not to
have a material and adverse effect on the business or financial condition of the
Company and the Subsidiaries, taken as a whole, or the ability of the Company to
perform its obligations set forth in this Agreement and in the Notes and that
has not been set forth in this Agreement or in the other documents, certificates
and statements furnished to you by or on behalf of the Company prior to the date
hereof in connection with the transactions contemplated hereby.
8N. COMPLIANCE WITH LAW. Neither the Company nor any Subsidiary:
(i) is in violation of any law, ordinance, governmental rule or
regulation to which it is subject; or
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(ii) has failed to obtain any license, certificate, permit, franchise
or other governmental authorization necessary to the ownership of its
Property or to the conduct of its business;
which violation or failure to obtain is more likely than not to have, in the
aggregate with all other such violations or failures, a material and adverse
effect on the business or financial condition of the Company and the
Subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations set forth in this Agreement and in the Notes.
8O. CERTAIN LAWS.
(i) INVESTMENT COMPANY ACTS. The Company is not, and is not directly or
indirectly controlled by, or acting on behalf of any Person which is, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(ii) ABSENCE OF FOREIGN OR ENEMY STATUS. The Company is not
(a) an "enemy" or an "ally of the enemy" within the meaning of
Section 2 of the Trading with the Enemy Act, as amended, or any executive
orders or regulations issued or promulgated pursuant thereto,
(b) a "national" of any "designated enemy country" as such terms are
defined in Executive Order No. 9095, as amended, of the President of the
United States of America, or
(c) a "national" of any "designated foreign country" within the
meaning of the Foreign Assets Control Regulations of the United States of
America (Code of Federal Regulations, Title 31, Chapter V, Part 500 to
543).
(iii) HOLDING COMPANY STATUS. The Company is not a "holding company" or
an "affiliate" of a "holding company," or a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utilities
Holding Company Act of 1935, as amended.
9. REPRESENTATIONS OF THE PURCHASER. You represent, and in making this
sale to you it is specifically understood and agreed, that you are not acquiring
the Notes to be purchased by you hereunder with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act, provided that the lawful disposition of your Property shall at all times be
and remain within your control. You also represent that no part of the funds
being used by you to pay the purchase price of the Notes being purchased by you
hereunder constitutes assets allocated to any separate account maintained by you
in which any employee benefit plan, other than employee benefit plans identified
on a list which has been furnished by you to the Company, participates to the
extent of five percent (5%) or more. For the purpose of this paragraph 9, the
terms "separate account" and "employee benefit plan" shall have the respective
meanings specified in Section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement the following terms
shall have the meanings specified with respect thereto below:
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10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid or purchased pursuant to paragraph 4.B,
paragraph 4.E or paragraph 5H hereof (any partial prepayment being applied
in satisfaction of required payments of principal in inverse order of their
scheduled due dates) or is declared to be immediately due and payable
pursuant to paragraph 7.A hereof, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on a semiannual basis) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of
any Note, the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York City time)
on the Business Day next preceding the Settlement Date with respect to
such Called Principal, on the display designated as "Page 678" on the
Telerate Service (or such other display as may replace Page 678 on the
Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time shall
not be ascertainable,
(ii) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of
the Business Day next preceding the Settlement Date with respect to
such Called Principal, in Federal Reserve Statistical Release # H15
(519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date.
Such implied yield shall be determined, if necessary, by (a) converting
U.S. Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between reported
yields. Reinvestment Yield calculated as aforesaid shall be increased by
twenty-five one-hundredths percent (0.25%) per annum in the case of any
Settlement Date occurring after January 29, 1996.
"REMAINING AVERAGE LIFE" means, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing
(i) such Called Principal into
(ii) the sum of the products obtained by multiplying
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(a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by
(b) the number of years (calculated to the nearest one-
twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of
such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to
such Called Principal if no payment of such Called Principal were made
prior to its scheduled due date.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid or purchased
pursuant to paragraph 4.B, paragraph 4.E or paragraph 5H hereof or is
declared to be immediately due and payable pursuant to paragraph 7.A
hereof, as the context requires.
"YIELD-MAINTENANCE PREMIUM" means, with respect to any Note, a premium
equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of
(i) such Called Principal, plus
(ii) interest accrued thereon as of (including interest due on)
the Settlement Date with respect to such Called Principal.
The Yield-Maintenance Premium shall in no event be less than zero.
10B. OTHER TERMS.
"1994 SENIOR DEBT" shall mean the Company's Senior Notes Due 2003, in
the aggregate principal amount of One Hundred Million Dollars
($100,000,000) on substantially the terms and conditions set forth under
the heading "DESCRIPTION OF SENIOR NOTES" in Amendment No. 1 to the
Registration Statement on Form S-3 of the Company, as filed with the
Securities and Exchange Commission on April 19, 1994, relating thereto.
"1994 SUBORDINATED DEBT" shall mean the Company's Convertible
Subordinated Notes Due 2004, in the aggregate principal amount of up to
Fifty-Seven Million Five Hundred Thousand Dollars ($57,500,000) and which
are subordinated to payment of principal, interest and Yield-Maintenance
Premium in respect of the Notes, and all other obligations under this
Agreement, on substantially the terms and conditions set forth under the
heading "DESCRIPTION OF SUBORDINATED NOTES" in Amendment No. 2 to the
Registration Statement on Form S-3 of the Company, as filed with the
Securities and Exchange Commission on April 19, 1994 relating thereto.
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"ACCEPTABLE AVAILABILITY" shall mean, at any time on or after the date
shown in the first column of the chart below, and on or prior to the date
shown in the second column of the chart below, the availability under the
Credit Agreement at such time reflected in the third column of the chart
below:
<TABLE>
<CAPTION>
======================================================================
ON AND AFTER: TO AND INCLUDING: ACCEPTABLE AVAILABILITY:
======================================================================
<S> <C> <C>
Third Amendment Date October 24, 1995 $110,000,000
- - ----------------------------------------------------------------------
October 25, 1995 April 24, 1996 $100,000,000
- - ----------------------------------------------------------------------
April 25, 1996 October 24, 1996 $ 90,000,000
- - ----------------------------------------------------------------------
October 25, 1996 April 24, 1997 $ 80,000,000
- - ----------------------------------------------------------------------
April 25, 1997 and thereafter $ 0
======================================================================
</TABLE>
"ACCEPTABLE REPLACEMENT CREDIT FACILITY" shall mean, with respect to
any replacement, refunding or refinancing of the Credit Agreement, a
revolving credit facility:
(i) making available to the Company at least the Acceptable
Availability:
(ii) which, if such facility provides for extension of credit in
forms (including, without limitation, letters of credit or banker's
acceptances) other than cash, provides that, at the option of the
Company, at least the Acceptable Availability shall be available to
the Company in cash; provided, however, that, should the Company
actually draw credit in forms other than cash (including, without
limitation, the issuance of one or more letters of credit), the amount
of cash available under such facility may be reduced by the aggregate
amount of such credits for so long as such credits are outstanding, so
that the aggregate amount available need not exceed the Acceptable
Availability at such time;
(iii) which shall not require the maintenance of any
compensating balance or other similar arrangement in any amount
greater than the difference between the aggregate amount of cash
available under such facility minus the Acceptable Availability;
(iv) which shall not contain, at the time of the effectiveness of
such facility:
(a) any financial covenants, events of default or other
conditions with which the Company would not be able to comply at
such time, based on the most recent business plan presented to
the Board of Directors (including updates thereto through the
date of effectiveness of such facility) of the Company at such
time or, prior to January 25, 1997, that were more onerous than
those contained in the Credit Agreement at the time of the
effectiveness of such facility; and
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<PAGE>
(b) any borrowing base provision or similar lending
constraints; or
(c) any conditions precedent to making advances thereunder
that would, based on the most recent business plan presented to
the Board of Directors (and updates thereto) of the Company at
such time, be reasonably likely to prevent the Company from fully
utilizing the Acceptable Availability to it under such credit
facility at any time during the term of such credit facility or,
prior to January 25, 1997, that were more onerous than those
contained in the Credit Agreement at the time of the
effectiveness of such facility ;
(v) which shall not have a maturity date earlier than that of the
Credit Agreement immediately prior to giving effect to such
replacement, refunding or refinancing; and
(vi) which shall be unsecured and shall not rank senior in right
of payment in any respect to the Notes.
"ADJUSTED CONSOLIDATED DEBT" shall mean and include all Debt of the
Company and the Consolidated Subsidiaries.
"ADJUSTED CONSOLIDATED NET INCOME" shall mean for any period
(i) the gross revenues of the Company and the Consolidated
Subsidiaries for such period, determined on a consolidated basis; less
(ii) all operating and non-operating expenses of the Company and
the Consolidated Subsidiaries for such period, including all charges
of a proper character (including, without limitation, current and
deferred taxes on income, provision for taxes on unremitted foreign
earnings which are included in gross revenues, and current additions
to reserves), determined on a consolidated basis;
but not including in such gross revenues
(i) any gains (net of expenses and taxes applicable thereto) in
excess of losses arising from the sale, conversion or other
disposition of capital assets, other than gains arising out of any
transaction or series of related transactions in which such gains do
not exceed One Hundred Thousand Dollars ($100,000);
(ii) any gain arising from any write-up of assets subsequent to
July 31, 1992;
(iii) earnings of any Consolidated Subsidiary accrued prior to
the date it became a Consolidated Subsidiary;
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<PAGE>
(iv) earnings of any Person, substantially all the assets of
which have been acquired in any manner, realized by such Person prior
to the date of such acquisition;
(v) net earnings or net losses of any Person in which the Company
or any Consolidated Subsidiary shall have an ownership interest
unless, in the case of net earnings, such net earnings shall have
actually been received by the Company or such Consolidated Subsidiary
in the form of cash distributions;
(vi) any portion of the net earnings of any Consolidated
Subsidiary which for any reason is unavailable for payment of
dividends to the Company or any other Consolidated Subsidiary;
(vii) the earnings of any Person to which assets of the Company
shall have been sold, transferred or disposed of, or into which the
Company shall have merged, prior to the date of such transaction;
(viii) any gain arising from the acquisition of any Securities
of the Company or any Consolidated Subsidiary;
(ix) any portion of the net earnings of the Company that cannot
be freely converted into United States dollars; and
(x) any deferred credit representing the excess of equity in any
Consolidated Subsidiary at the date of acquisition over the cost of
investment in such Consolidated Subsidiary.
"ADJUSTED CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time the
excess of total assets of the Company and the Consolidated Subsidiaries at
such time, determined on a consolidated basis, over total liabilities of
the Company and the Consolidated Subsidiaries at such time, determined on a
consolidated basis, in each case determined in accordance with generally
accepted accounting principles, excluding, however, from the determination
of total assets
(i) all assets that would be classified as intangible assets
under such generally accepted accounting principles, including,
without limitation, goodwill (whether representing the excess of cost
over book value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises, unamortized debt discount and
expense, organization costs, research and development costs and other
deferred charges (other than prepaid insurance and taxes and pre-
production and production costs including, but not limited to,
engineering and tooling costs, that are amortized over anticipated
deliveries),
(ii) treasury stock and minority interests in any Person,
(iii) cash, Securities or other Property set apart and held in a
sinking or other analogous fund established for the purpose of
redemption or other retirement of capital stock,
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<PAGE>
(iv) to the extent not already deducted from total assets,
reserves for depreciation, depletion, obsolescence or amortization of
Properties and all other reserves or appropriations of retained
earnings that, in accordance with such generally accepted accounting
principles, should be established in connection with the business
conducted by the relevant corporation, and
(v) any revaluation or other write-up in book value of assets
subsequent to July 31, 1992.
Notwithstanding the foregoing, (A) net deferred income tax assets recorded
in accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes ("SFAS 109") shall be treated as a tangible
asset (and not deducted pursuant to clause (i) or (iv) of this definition)
and shall be calculated without regard to any valuation allowance with
respect to such net deferred tax asset recorded by the Company in
accordance with SFAS 109, and (B) any asset established pursuant to
Statement of Financial Accounting Standards No. 87, Employers Accounting
for Pensions ("SFAS 87") which corresponds to an additional minimum pension
liability recorded pursuant to SFAS No. 87 and any prepaid pension asset
which arises from amounts funded by the Company in accordance with Internal
Revenue Service regulations (but not in excess of the minimum amounts
required to be contributed thereunder) in excess of amounts expensed in
accordance with SFAS 87, shall be treated as a tangible asset (and not
deducted pursuant to clause (i) or (iv) of this definition).
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the
Company, except a Subsidiary. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by
contract or otherwise.
"AGREED PUT CONSIDERATION" shall mean as of the date of prepayment by
the Company upon the exercise by any holder of Notes of its Right to Put or
option to be repaid pursuant to paragraph 5H, the sum of
(i) the principal amount of the Notes held by such holder subject
to the prepayment on such date, plus
(ii) all accrued and unpaid interest to such date on such Notes,
plus
(iii) the Yield-Maintenance Premium as of such date with respect
to such Notes.
"AGREEMENT" and references thereto shall mean this Agreement as it may
from time to time be amended or supplemented.
"BANK LENDERS" shall mean the Lenders as defined in the Credit
Agreement.
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<PAGE>
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City are required or authorized
to be closed.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under generally accepted accounting principles, would be required to be
capitalized on the books of the Company or any Subsidiary, taken at the
amount thereof accounted for as indebtedness (net of interest expense) in
accordance with such principles.
"CLOSING" shall have the meaning assigned to such term in paragraph 2
of this Agreement.
"CLOSING DATE" shall have the meaning assigned to such term in
paragraph 2 of this Agreement.
"COMBINED SUBSIDIARY DEBT" shall mean at any time all unsecured Debt
of the Subsidiaries at such time (after eliminating intercompany
transactions among the Subsidiaries).
"COMPANY" shall have the meaning specified in the introductory
paragraph of this Agreement.
"CONFIDENTIAL INFORMATION" shall mean any information furnished to any
holder of Notes by the Company or any agent of the Company in connection
with this Agreement (including, without limitation, any information
furnished to you pursuant to paragraph 5D hereof) or obtained by any holder
of Notes in connection with an inspection made pursuant to paragraph 5G
hereof, that is about the Company (or in respect of which the Company has a
confidentiality obligation) and that is marked by the Company as being
confidential, other than any such information,
(i) that was publicly known, or otherwise known to you, at the
time the information was furnished to you,
(ii) that subsequently becomes publicly known through no act or
omission by you, or
(iii) that otherwise becomes known to you, other than through
disclosure by the Company or any Subsidiary.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum,
without duplication, of
(i) interest expense related to Debt of the Company and the
Consolidated Subsidiaries,
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<PAGE>
(ii) amortization expense related to Debt of the Company and the
Consolidated Subsidiaries issued at a discount,
(iii) dividends in respect of preferred stock of Consolidated
Subsidiaries,
(iv) dividends in respect of Permitted Preferred Stock to the
extent paid to Persons other than the Company or any wholly-owned
Consolidated Subsidiary, plus
(v) rentals payable in respect of Capitalized Lease Obligations
of the Company and the Consolidated Subsidiaries,
in each case calculated for such period on a consolidated basis in
accordance with generally accepted accounting principles.
"CONSOLIDATED NET INCOME" shall mean for any period
(i) the gross revenues of the Company and the Subsidiaries for
such period, determined on a consolidated basis; less
(ii) all operating and non-operating expenses of the Company and
the Subsidiaries for such period, including all charges of a proper
character (including, without limitation, current and deferred taxes
on income, provision for taxes on unremitted foreign earnings which
are included in gross revenues, and current additions to reserves),
determined on a consolidated basis;
but not including in such gross revenues
(i) any gains (net of expenses and taxes applicable thereto) in
excess of losses arising from the sale, conversion or other
disposition of capital assets, other than gains arising out of any
transaction or series of related transactions in which such gains do
not exceed One Hundred Thousand Dollars ($100,000);
(ii) any gain arising from any write-up of assets subsequent to
July 31, 1992;
(iii) earnings of any Subsidiary accrued prior to the date it
became a Subsidiary;
(iv) earnings of any Person, substantially all the assets of
which have been acquired in any manner, realized by such Person prior
to the date of such acquisition;
(v) net earnings or net losses of any Person in which the Company
or any Subsidiary shall have an ownership interest unless, in the case
of net earnings, such net earnings shall have actually been received
by the Company or such Subsidiary in the form of cash distributions;
A-43
<PAGE>
(vi) any portion of the net earnings of any Subsidiary which for
any reason is unavailable for payment of dividends to the Company or
any other Subsidiary;
(vii) the earnings of any Person to which assets of the Company
shall have been sold, transferred or disposed of, or into which the
Company shall have merged, prior to the date of such transaction;
(viii) any gain arising from the acquisition of any Securities
of the Company or any Subsidiary;
(ix) any portion of the net earnings of the Company that cannot
be freely converted into United States dollars; and
(x) any deferred credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost of investment in
such Subsidiary.
"CONSOLIDATED NET INCOME AVAILABLE FOR FIXED CHARGES" shall mean, for
any period, the sum of
(i) Adjusted Consolidated Net Income for such period, plus
(ii) the aggregate amount of
(a) Consolidated Fixed Charges,
(b) provisions for taxes on earnings,
(c) depreciation expense,
(d) the Special Charge;
(e) in the case of any such period that includes the fiscal
month ending May 2, 1993, the cumulative effect through May 2,
1993 of the accounting changes adopted by the Company, effective
as of August 1, 1992, as described in the Company's Form 10-Q
filed with the Securities and Exchange Commission for the third
quarter of its 1993 Fiscal Year;
(f) in the case of any such period that includes the fiscal
month ending May 2, 1993, the provisions and charges, not in
excess of $38,000,000 in the aggregate, established by the
Company in the third quarter of its 1993 Fiscal Year; and
(g) the Tax Adjustment Amount;
A-44
<PAGE>
in each case to the extent, and only to the extent, reflected in the
computation of Adjusted Consolidated Net Income for such period. As
used in this definition,
`Special Charge' shall mean that certain special provision of
Fifty Million Dollars ($50,000,000) taken by the Company during the
third quarter of its 1992 Fiscal Year;" and
`Tax Adjustment Amount' shall mean, for any period, the lesser of
(i) accrued interest expense on taxes on earnings for such
period minus any interest income on tax refunds for such period
and
(ii) Three Hundred Thirty-Three Thousand Dollars ($333,333)
multiplied by the number of fiscal months in such period;
provided, however, that, notwithstanding the foregoing, to the extent
that such period includes one or more fiscal months of the Company
during the third quarter of the Company's 1992 Fiscal Year, "Tax
Adjustment Amount" shall be deemed to mean an amount equal to Six
Million One Hundred Thousand Dollars ($6,100,000) for each such fiscal
month.
"CONSOLIDATED SENIOR DEBT" shall mean at any time Senior Debt at such
time, determined on a consolidated basis, minus Non-Recourse Debt of the
Company and the Subsidiaries at such time, determined on a consolidated
basis.
"CONSOLIDATED SUBSIDIARY" shall mean any corporation more than fifty
percent (50%) of the total combined voting power of all classes of Voting
Stock of which shall, at the time as of which any determination is being
made, be owned, directly or indirectly, by the Company.
"CONSOLIDATED TANGIBLE ASSETS" shall mean, at any time, the sum of:
(i) Adjusted Consolidated Tangible Net Worth at such time; plus
(ii) the total amount of all liabilities of the Company and the
Consolidated Subsidiaries on a consolidated basis at such time.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time the excess of
total assets of the Company and the Subsidiaries at such time, determined
on a consolidated basis, over total liabilities of the Company and the
Subsidiaries at such time, determined on a consolidated basis, in each case
determined in accordance with generally accepted accounting principles,
excluding, however, from the determination of total assets:
(i) all assets that would be classified as intangible assets
under such generally accepted accounting principles, including,
without limitation, goodwill (whether representing the excess of cost
over book value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises, unamortized debt discount and
expense, organization costs, research and development costs
A-45
<PAGE>
and other deferred charges (other than prepaid insurance and taxes and
pre-production and production costs including, but not limited to,
engineering and tooling costs, that are amortized over anticipated
deliveries);
(ii) treasury stock and minority interests in Subsidiaries;
(iii) cash, Securities or other Property set apart and held in a
sinking or other analogous fund established for the purpose of
redemption or other retirement of capital stock;
(iv) to the extent not already deducted from total assets,
reserves for depreciation, depletion, obsolescence or amortization of
Properties and all other reserves or appropriations of retained
earnings that, in accordance with such generally accepted accounting
principles, should be established in connection with the business
conducted by the relevant corporation; and
(v) any revaluation or other write-up in book value of assets
subsequent to July 31, 1992.
Notwithstanding the foregoing, (A) net deferred income tax assets recorded
in accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes ("SFAS 109") shall be treated as a tangible
asset (and not deducted pursuant to clause (i) or (iv) of this definition)
and shall be calculated without regard to any valuation allowance with
respect to such net deferred tax asset recorded by the Company in
accordance with SFAS 109, and (B) any asset established pursuant to
Statement of Financial Accounting Standards No. 87, Employers Accounting
for Pensions ("SFAS 87") which corresponds to an additional minimum pension
liability recorded pursuant to SFAS No. 87 and any prepaid pension asset
which arises from amounts funded by the Company in accordance with Internal
Revenue Service regulations (but not in excess of the minimum amounts
required to be contributed thereunder) in excess of amounts expensed in
accordance with SFAS 87, shall be treated as a tangible asset (and not
deducted pursuant to clause (i) or (iv) of this definition).
"CONSOLIDATED TOTAL DEBT" shall mean, at any time, Debt of the Company
and the Subsidiaries at such time minus Non-Recourse Debt of the Company
and the Subsidiaries at such time, determined on a consolidated basis.
"CONTROL PERSON" shall mean a Person who possesses, directly or
indirectly, the power to direct or cause the direction of the management
and policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of April
26, 1989, among the Company and the lenders party thereto and the agent
thereunder, as such Credit Agreement may be amended or supplemented from
time to time.
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<PAGE>
"DEBT" shall mean, without duplication,
(i) indebtedness for borrowed money,
(ii) obligations evidenced by bonds, debentures, notes or other
similar instruments (as such term is defined in Article 9 of the
Uniform Commercial Code as from time to time in effect in the State of
New York),
(iii) obligations to pay the deferred purchase price of Property
or services (excluding advances, deposits or partial or progress
payments, unpaid wages and related employee obligations and excluding
trade payables),
(iv) obligations as lessee under Capitalized Lease Obligations,
(v) obligations under Guaranties of indebtedness or obligations
of others of the kinds referred to in clauses (i) through (iv) above,
(vi) obligations under Title IV of ERISA for each Plan and
Multiemployer Plan, in respect of unfunded accrued liabilities for
such plans, if any, as of the first day of the plan year as shown in
the annual actuarial report most recently delivered to the obligor in
respect of such obligations by the actuary for each such Plan and
Multiemployer Plan, and
(vii) in the case of any Consolidated Subsidiary, all preferred
stock of such Consolidated Subsidiary held by Persons other than the
Company or a wholly-owned Consolidated Subsidiary, such preferred
stock to be valued at the aggregate liquidation preference thereof.
"DEBT RATIO" shall mean, at any time, the ratio of Adjusted
Consolidated Debt to Adjusted Consolidated Tangible Net Worth.
"DEFAULT" shall mean any event or condition that, with notice or the
passage of time, or both, would become an Event of Default.
"DE MINIMUS PAYMENTS" shall mean, with respect to any Debt of the
Company or any Subsidiary (other than Debt governed or evidenced by the
Notes, the 9.33% Senior Notes due December 15, 2002, the Credit Agreement,
any Acceptable Replacement Credit Facility, the 1994 Senior Notes, the 1994
Subordinated Notes or the Existing Subordinated Notes of either Series),
payments, prepayments, defeasances and redemptions (in each case, other
than Originally Scheduled Payments) in respect of any such Debt aggregating
not more than Five Hundred Thousand Dollars ($500,000) in any Fiscal Year.
"DESIGNATED EVENT" shall mean the occurrence of any one or more of the
following after the Closing Date:
(i) the direct or indirect acquisition by any person (as such
term is used in Section 13(d) and Section 14(d)(2) of the Exchange
Act), or related
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<PAGE>
persons constituting a group (as such term is used in Rule 13d-5 under
the Exchange Act), of (i) beneficial ownership of issued and
outstanding shares of Voting Stock of the Company the result of which
acquisition is that such person or such group possesses in excess of
fifty percent (50%) of the combined voting power of all then issued
and outstanding Voting Stock of the Company or (ii) within any period
of three-hundred sixty-five (365) consecutive days, all or
substantially all of the assets of the Company; or
(ii) following the election or removal of directors, a majority
of the Company's board of directors consists of individuals who were
not members of the Company's board of directors two years before such
election or removal, unless the election of each director who was not
a director at the beginning of such two-year period has been approved
in advance by directors representing at least a majority of the
directors then in office who were directors at the beginning of the
two-year period; or
(iii) the consolidation with, or merger into, any Person by the
Company in a transaction in which more than thirty percent (30%) by
number of votes of the Voting Stock of the Company is exchanged (the
calculation of which shall be made by dividing the number of votes
attributable to the Voting Stock so exchanged by the aggregate number
of votes attributable to the Voting Stock immediately prior to such
transaction); or
(iv) (a) any transaction or series of transactions (whether
related or unrelated) in which the Company repurchases or
otherwise retires in the aggregate, within any period of three
hundred sixty-five (365) consecutive days, thirty percent (30%)
or more (by number) of the Company's outstanding common stock
(the calculation of which shall be made by dividing the number of
shares outstanding immediately after giving effect to each such
repurchase or retirement, other than any such shares owned by a
Subsidiary, by the highest number of shares outstanding at any
time during the period of three hundred sixty-five (365)
consecutive days ending on (and including) the date of such
repurchase or retirement (adjusting in each case for stock
splits, stock dividends and other similar transactions, excluding
in each case shares held in treasury, and assuming in each case
that all securities then convertible into, or representing then
effective rights to purchase, common stock have been exercised at
such time), or
(b) any Distribution made by the Company the Fair Market
Value of which, together with the aggregate Fair Market Value of
all other Distributions made by the Company during the period of
three hundred sixty-five (365) days ending on (and including) the
date of such Distribution (each Distribution being valued on the
date it is made), equals or exceeds thirty percent (30%) of the
Fair Market Value the Company's outstanding common stock
(determined at the commencement of such period);
in each case if as a result of such event or events Consolidated Total Debt
shall, at any time during the period beginning on the date of such
transaction (or the date of the
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completion of such series of transactions, as the case may be) and ending
three hundred sixty-five (365) days thereafter, equal or exceed seventy-
five percent (75%) of the sum of Consolidated Total Debt plus Consolidated
Tangible Net Worth at such time.
"DISTRIBUTION" shall mean:
(i) dividends or other distributions on or in respect of the
capital stock of the Company or any Subsidiary (except distributions
solely in such stock or in Rights, as such term is defined in the
Rights Agreement and except to the extent made to the Company or any
Wholly-Owned Subsidiary);
(ii) the repurchase, purchase, redemption or acquisition of
capital stock of the Company or any Subsidiary, or of warrants, rights
or other options to purchase such stock (except when solely in
exchange for such stock and except to the extent made from the Company
or a Wholly-Owned Subsidiary) unless made, contemporaneously, from the
net proceeds of a sale of such stock; and
(iii) all payments in respect of Subordinated Debt (other than
mandatory scheduled payments and prepayments), including optional or
voluntary prepayments and including all payments made to acquire
Subordinated Debt (except to the extent such payment is made to the
Company or a Wholly-Owned Subsidiary).
"EQUITY ISSUANCE ACQUISITIONS" shall mean the acquisition by the
Company of Debt (including, without limitation, Notes, the 1994
Subordinated Notes, the Company's 9.35% Senior Notes due January 29, 2000
or the Company's 7% Convertible Subordinated Debentures due 2012), or any
portion thereof, for consideration consisting solely of common stock of the
Company and in connection with tenders of such Debt by the holders thereof
in payment of the exercise or purchase price of any rights, warrants or
options to acquire such common stock, or upon conversion of such Debt into
such common stock.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall mean any corporation or trade or business that
(i) is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the IRC) as the Company, or
(ii) is under common control (within the meaning of Section
414(c) of the IRC) with the Company.
"ESOP" shall mean the Salaried Employees Stock Ownership Plan,
effective August 1, 1983, as amended from time to time.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A hereof.
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"EXCEPTED PROPERTY" shall have the meaning set forth in paragraph 6P
of this Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXISTING SUBORDINATED NOTES" shall mean and include:
(i) the Company's 9.25% Subordinated Debentures due 2017; and
(ii) the Company's 7% Convertible Subordinated Debentures due
2012;
and the Existing Subordinated Notes of each such series (but not the
Existing Subordinated Notes of the other series) shall be referred to
collectively as a "SERIES" of Existing Subordinated Notes.
"FAIR MARKET VALUE" shall mean at any time with respect to any
Property, the sale value of such Property that would be realized in an
arm's-length sale at such time between an informed and willing buyer, and
an informed and willing seller, under no compulsion to buy or sell,
respectively.
"FINANCIAL COVENANT" shall mean any covenant, agreement or provision
(including, without limitation, the definitions applicable thereto) of or
applicable to the Company or any Consolidated Subsidiary contained in any
agreement governing, or instrument evidencing, any Debt (or commitment to
lend), other than Debt or a commitment to lend among the Company and one or
more Consolidated Subsidiaries, of the Company or any Consolidated
Subsidiary in an aggregate principal amount greater than $5,000,000, which
covenant, agreement or provision:
(i) requires the Company or any Consolidated Subsidiary to
maintain specified financial amounts or ratios or to meet other
financial tests;
(ii) restricts the ability of the Company or any Consolidated
Subsidiary to:
(a) make Distributions, investments, capital expenditures or
operating expenditures of any kind;
(b) incur, create or maintain any Debt (or other
obligations) or Liens;
(c) merge, consolidate or acquire or be acquired by any
Person;
(d) sell, lease, transfer or dispose of any Property (other
than restrictions imposed solely upon collateral, and not upon
Property of the Company or any Consolidated Subsidiary generally,
by holders of Liens thereon which are permitted by this
Agreement; or
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<PAGE>
(e) issue or sell any capital stock of any kind;
(iii) is similar to any provision in paragraph 6 of this
Agreement; or
(iv) provides that a default or event of default shall occur, or
that the Company or any Consolidated Subsidiary shall be required to
prepay, redeem or otherwise acquire for value any Debt or security as
a result of its failure to comply with any provision similar to any of
those set forth in any of the foregoing clauses (i), (ii) or (iii).
"FIRST AMENDMENT" shall mean the Amendment Agreement, entered into as
of June 30, 1993, between the Company and the holders of Notes named
therein.
"FIRST AMENDMENT DATE" shall mean the "Effective Date," as such term
is defined in the First Amendment.
"FISCAL YEAR" shall mean any fiscal year of the Company ending on July
31 .
"FISCAL QUARTER NET WORTH INCREASE AMOUNTS" shall mean for any fiscal
quarter of the Company, the greater of (i) Zero Dollars ($0) and (ii) fifty
percent (50%) of Adjusted Consolidated Net Income for such fiscal quarter.
"FUJI" shall mean The FUJI Bank, Limited.
"GROSS OPERATING INCOME" shall mean for any period, sales minus costs
and expenses (other than depreciation and amortization), in each case, as
reflected as a line item on the consolidated statements of earnings and
cash flows of the Company and the Consolidated Subsidiaries for such
period.
"GUARANTIES" shall mean, with respect to any Person (the "Guarantor"),
any obligation (except the endorsement in the ordinary course of business
of negotiable instruments for deposit or collection) of the Guarantor
guaranteeing or in effect guaranteeing any indebtedness, dividend or other
obligation of any other Person (the "Primary Obligor") in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Guarantor:
(i) to purchase such indebtedness or obligation or any Property
constituting security therefor;
(ii) to loan, advance or supply funds, make any capital
contribution or purchase Property from any Person
(a) for the purpose of payment of such indebtedness or
obligation, or
(b) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary
Obligor or otherwise to
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<PAGE>
advance or make available funds for the purchase or payment of
such indebtedness or obligation; or
(iii) to lease Property or to purchase Securities or other
Property or services primarily for the purpose of assuring the owner
of such indebtedness or obligation of the ability of the Primary
Obligor to make payment of the indebtedness or obligation or, in the
case of any such lease, under terms providing that the obligation to
make payments thereunder is absolute and unconditional under
conditions not customarily found in commercial leases then in general
use;
(iv) to contract or agree to purchase any Property or services if
such contract or agreement requires that payment for such Property or
services (a) shall be made regardless of whether delivery of such
Property or services is ever made or tendered or (b) shall be
subordinated to any indebtedness (of the purchaser or user of such
Property or the Person entitled to the benefit of such services) owed
or to be owed to any Person; or
(v) otherwise to assure the owner of the indebtedness or
obligation of the Primary Obligor against loss in respect thereof.
"IDB FINANCING" shall mean any industrial development bond or similar
financing in which a state or other governmental authority incurs Debt to
construct, improve or acquire (or, in the case of the San Marcos Bonds, to
refinance the construction, improvement or acquisition of) fixed assets for
use primarily by the Company or a Subsidiary under a lease or similar
arrangement of at least five years' duration and in connection with which
the Company or such Subsidiary is obligated (directly or indirectly), under
such lease or other arrangement, to make payments to such state or other
governmental authority which are used to service such Debt.
"INSTITUTIONAL INVESTOR" shall mean
(i) any original purchaser of any of the Notes,
(ii) the subsidiaries and affiliates of any such purchaser and
nominees controlled by any such purchaser, and
(iii) any insurance company, pension fund, mutual fund,
investment company, bank, savings bank, savings and loan association,
investment banking company, trust company, finance or credit company,
any portfolio or any investment fund managed by any of the foregoing,
and any other institutional investor, and any nominee of the foregoing
controlled by any such Person, provided that in each case such Person
has assets of at least Five Hundred Million Dollars ($500,000,000).
"INTERCOMPANY DEBT" shall mean Debt owed by the Company or any
Subsidiary to the Company or any Subsidiary.
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<PAGE>
"IRC" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"LEASE TRANSACTION" shall mean a transaction (including, without
limitation, a transaction with respect to qualified leased Property meeting
the requirements of Section 168(f)(8) of the IRC) pursuant to which the
Company or any Subsidiary makes an investment (as a lessor as contemplated
by said Section 168(f)(8) or on an equity basis with the meaning of Section
4(1) of Revenue Procedure 75-21, 1975-1 C.B. 715, as amended or
supplemented), in all or part of the purchase price of Property, which
Property, concurrently with the purchase thereof, is leased under a
Capitalized Lease Obligation by the Company or such Subsidiary (acting
directly or through either or both of a trust or partnership and with or
without other investors) to a lessee, provided that such investment is made
in part for the purpose of saving or deferring Federal income tax liability
and that the Company or such Subsidiary incurs no obligation, and creates
no Lien in connection with such transaction except that:
(i) the Company or such Subsidiary, directly or indirectly
(a) may borrow part of the funds necessary to pay the
purchase price of such Property (and any related leases, contract
rights, general intangibles or accounts), and
(b) may secure such borrowings by Liens provided that such
Liens do not extend to or cover any Property other than Property
referred to in subclause (a) above and do not secure any
obligations other than those incurred in connection with such
purchase and lease transaction, and
(ii) the Company or such Subsidiary may incur other obligations
in connection with such transaction (and the Company may guarantee any
such obligation of a Subsidiary) provided that such obligations and
guarantee
(a) constitute Non-Recourse Debt,
(b) are incidental and necessary to effect such transaction,
and
(c) are of the type frequently incurred by lessors or equity
investors in connection with the business of leasing Property.
"LETTER OF CREDIT PREPAYMENT EVENT" shall mean either:
(i) the redemption, reacquisition or repurchase of any San Marcos
Bonds (other than in connection with a Permitted IDB Acquisition); or
(ii) any deposit after November 30, 1994, of cash collateral to
secure reimbursement obligations of the Company relating to the San
Marcos Bonds or any letter of credit relating thereto;
A-53
<PAGE>
in either case, solely as result of and in response to the failure of the
bank which has issued any letter of credit relating to the San Marcos Bonds
to extend or renew such outstanding letter of credit; provided, however,
that prior to effecting such redemption, reacquisition, repurchase or cash
collateralization the Company shall have used its best efforts to retain
such letter of credit. The Company covenants, in connection with any
Letter of Credit Prepayment Event described in clause (i) above, to
actively seek to remarket the redeemed, reacquired or repurchased San
Marcos Bonds or, to the extent necessary, to modify the structure of such
IDB Financing to the extent necessary to permit a long-term reissuance of
the repurchased San Marcos Bonds, and, in connection with any Letter of
Credit Prepayment Event described in clause (ii) above, to continue to seek
to obtain an unsecured letter of credit not requiring such cash
collateralization.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including
any agreement to give any of the foregoing (but excluding negative pledge
clauses in agreements related to the borrowing of money), any conditional
sale or other title retention agreement, any lease in the nature thereof,
and the filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction (but excluding informational
filings made in respect of leases)) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"MAXIMUM PENSION CONTRIBUTION" shall mean, for any fiscal year of the
Company, a contribution to any or all Plans or Multiemployer Plans not
exceeding the greater of:
(i) the sum of:
(a) the amount set forth in the chart below under the
heading "Base Contribution" for such fiscal year; plus
(b) the lesser of:
(I) the amount set forth in the chart below under the
heading "Maximum Additional Contribution" for such fiscal
year; and
(II) the amount, if positive, by which cash provided by
operating activities of the Company and the Subsidiaries
(calculated in a manner consistent with the preparation of
the projections contained in the Company's February 28,
1994, financial plan, as provided to the Purchasers) for
such fiscal year exceeds the amount set forth in the chart
below under the heading "Projected Cash Flow" for such
fiscal year, so long as, but only so long as, for a period
of not less than thirty (30) days prior to and thirty (30)
days following each date on which any contribution made by
the Company and the Subsidiary would cause the aggregate
amount of contributions during such fiscal year to exceed
the "Base Contribution" set forth in the chart below for
such
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<PAGE>
fiscal year, the amount of Debt outstanding under the Credit
Agreement (or any replacement, renewal or refinancing
thereof) is Zero Dollars ($0);
and
(ii) the minimum contribution permitted during such fiscal year
pursuant to ERISA, the IRC and the rules and regulations under ERISA
and the IRC.
A contribution to a Plan or Multiemployer Plan permitted by clause (b) of
this definition may be made within a period of ninety (90) days immediately
following the end of such fiscal year.
<TABLE>
<CAPTION>
===================================================================
MAXIMUM PROJECTED
ADDITIONAL CASH
FISCAL YEAR BASE CONTRIBUTION CONTRIBUTION PROVIDED BY
OPERATIONS
===================================================================
<S> <C> <C> <C>
1994 $17,000,000 $ 0 $36,700,000
- - -------------------------------------------------------------------
1995 $36,000,000 $ 3,200,000 $15,600,000
- - -------------------------------------------------------------------
1996 $37,000,000 $ 6,900,000 $46,100,000
- - -------------------------------------------------------------------
1997 $30,000,000 $10,500,000 $64,900,000
- - -------------------------------------------------------------------
1998 $23,000,000 $18,200,000 $53,400,000
===================================================================
</TABLE>
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA) in respect
of which the Company or any ERISA Affiliate is an "employer" (as such term
is defined in Section 3 of ERISA).
"MULTIPLE EMPLOYER PLAN" shall mean any employee benefit plan within
the meaning of Section 3(3) of ERISA other than a Multiemployer Plan,
subject to Title IV of ERISA, to which the Company or any ERISA Affiliate
and an employer (as such term is defined in Section 3 of ERISA) other than
an ERISA Affiliate or the Company contribute.
"NET AFTER-TAX CASH BASIS" shall mean at any time in respect of any
investment made in connection with a Lease Transaction, the initial amount
of such investment made by the Company or any Subsidiary in such Lease
Transaction, less
(i) the net aggregate amount (on a cash basis) received by or
distributed to the Company or such Subsidiary, on or prior to such
time, after payment and deduction of all expenses (including but not
limited to insurance and trustee's fees and after payment of interest
and principal on any loan incurred in such Lease Transaction) to the
extent all such expenses are related to and incurred in connection
with such Lease Transaction, and,
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<PAGE>
(ii) the net aggregate amount (on a cash basis), on account of
reductions in the Company's quarterly estimated tax payments to the
United States and to the State of California, on or prior to such
time, as such shall be adjusted at year-end to reflect the actual tax
benefits obtained on account of reduced taxes payable by virtue of
such Lease Transaction. In computing quarterly estimated tax
payments, the Company shall take into consideration, on a consolidated
basis, the full taxable year's anticipated benefits of the Lease
Transaction, including allowable depreciation and interest, expenses,
deductions, investment and other tax credits, and net rental income.
"NET RENTALS" shall mean, with respect to any period, all fixed
payments that the lessee is required to make during such period by the
terms of any lease having an original term of one year or more, but shall
not include amounts required to be paid in respect of maintenance, repairs,
income taxes, property taxes, insurance, assessments or other similar
charges or additional rentals (in excess of fixed minimums) based upon a
percentage of gross receipts.
"NON-EMPLOYEE DIRECTORS STOCK-OPTION PLANS" shall mean the Company's
1988 Non-Employee Directors Stock-Option Plan and any other comparable
future plan.
"NON-RECOURSE DEBT" shall mean, as to any Person, in connection with a
Lease Transaction, all indebtedness and other obligations of such Person
(i) incurred in connection with such Lease Transaction and (ii) of the type
described in clause (i) of the definition of Lease Transaction; provided,
that the obligations of such Person to repay borrowed money shall be
expressly limited as to recourse solely to (A) the property subject to such
Lease Transaction (including the proceeds of such property) and (B) the
amounts payable by or on behalf of the lessee under or in connection with
such Lease Transaction.
"NOTEHOLDER ACCEPTANCE" shall have the meaning set forth in paragraph
5H(ii) of this Agreement.
"NOTEHOLDER SHARE" shall mean, in respect of any holder of Notes and
any Ratable Prepayment Amount, such holder's ratable share of such Ratable
Prepayment Amount, such ratable share being determined by reference to the
outstanding principal amount of Notes held by such holder as a percentage
of the outstanding principal amount of all Notes.
"NOTICE OF SALE" shall have the meaning specified in clause (ii) of
paragraph 4.E hereof.
"OFFER PERIOD" shall have the meaning set forth in paragraph 5I(ii) of
this Agreement.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents, its Chief
Financial Officer, its Controller, its Secretary or its Treasurer.
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<PAGE>
"ORIGINALLY SCHEDULED PAYMENTS" shall mean and include:
(i) payment of any Debt at scheduled maturity;
(ii) with respect to any Debt, originally scheduled prepayments,
originally scheduled redemptions, originally scheduled sinking fund
payments or originally scheduled reductions in maximum commitments
thereof; and
(iii) payments in respect of any revolving credit agreement,
including, without limitation, the Credit Agreement, which do not
result in a permanent reduction of the original commitment thereunder.
As used in the preceding sentence, "original" or "originally scheduled"
means the maturity, payments, prepayments, or reductions in commitment
established as of the Third Amendment Date, or, if later, at the time of
execution of the relevant credit facility but does not include any
payments, prepayments or reductions in commitment which result from the
occurrence of any contingency, even if the provision requiring such
payment, prepayment or reduction as a result of such contingency was
originally contained in the agreements governing such Debt, and even if the
occurrence of such contingency was foreseeable, at the time of the
execution of the documentation of such issue of Debt.
"OTHER NOTE AGREEMENT" shall have the meaning assigned to such term in
paragraph 2 of this Agreement.
"OTHER PURCHASERS" shall have the meaning assigned to such term in
paragraph 2 of this Agreement.
"PERMITTED EXISTING SUBORDINATED DEBT ACQUISITIONS" shall mean, with
respect to either Series of Existing Subordinated Notes, the purchase or
acquisition by the Company or any Subsidiary of Existing Subordinated Notes
of such Series in anticipation of satisfying an Originally Scheduled
Payment thereof; provided, however, that all of the following conditions
are met:
(i) no Existing Subordinated Notes may be acquired more than
three hundred sixty-four (364) days prior to the date of any such
Originally Scheduled Payment thereof;
(ii) the Company or any Subsidiary, more than one hundred eighty
(180) days, but not more than three hundred sixty-four (364) days,
prior to the date of the next succeeding Originally Scheduled Payment
thereof, may acquire no more than fifty percent (50%) of the aggregate
principal amount of Existing Subordinated Notes of such Series
required to be prepaid or redeemed on the date of the next succeeding
Originally Scheduled Payment;
(iii) the Company or any Subsidiary, not more than one hundred
eighty (180) days prior to the date of the next succeeding Originally
Scheduled Payment thereof, may acquire an aggregate principal amount
of Existing Subordinated Notes of such Series not exceeding (together
with any Existing Subordinated
A-57
<PAGE>
Notes of such Series acquired more than one hundred eighty (180) days,
but not more than three hundred sixty-four (364) days, prior to the
date of the next succeeding Originally Scheduled Payment thereof) one
hundred percent (100%) of the aggregate principal amount of Existing
Subordinated Notes of such Series required to be prepaid or redeemed
on the date of the next succeeding Originally Scheduled Payment;
(iv) at the time of such acquisition:
(a) no Default or Event of Default shall be continuing;
(b) the Company shall not reasonably foresee the occurrence
of any Default or Event of Default at any time prior to the date
of the next succeeding Originally Scheduled Payment thereof;
(c) the Debt Ratio would not exceed 2.50:1.00; and
(d) the Company could incur $1.00 of additional Debt;
(v) the purchase price paid by the Company and the Subsidiaries
in respect of such acquisition of Existing Subordinated Notes shall be
less than one hundred percent (100%) of the principal amount of
Existing Subordinated Notes so acquired; and
(vi) the Company, on the date of each Originally Scheduled
Payment in respect of the Existing Subordinated Notes, shall actually
apply, in accordance with the provisions of such Existing Subordinated
Notes, all Existing Subordinated Notes of such Series acquired by the
Company and the Subsidiaries to the prepayment or redemption of such
Existing Subordinated Notes required to be prepaid or redeemed on such
date.
"PERMITTED IDB ACQUISITIONS" shall mean:
(i) prepayments or repurchases of San Marcos Bonds upon tender by
the holders thereof after May 10, 1994 in accordance with the terms of
the indenture governing the San Marcos Bonds; provided, however, that
San Marcos Bonds in an aggregate principal amount of Sixteen Million
Five Hundred Thousand Dollars ($16,500,000) shall have been issued,
outstanding and held and owned by Persons other than the Company, any
Subsidiary or any Affiliate on May 10, 1994 (whether or not
subsequently repurchased by the Company); and provided, further, that
the Company shall be actively seeking to either remarket the San
Marcos Bonds that were so prepaid or repurchased pursuant to the
provisions of the IDB Financing of the Company's San Marcos, Texas
facility or, to the extent necessary in connection with any
termination of any outstanding letter of credit relating to such
facility, to modify the structure of such IDB Financing to the extent
necessary to permit a long-term reissuance of the repurchased San
Marcos Bonds; and
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<PAGE>
(ii) the redemption in full on or before June 1, 1994 of all the
San Marcos Bonds, but solely as result of and in response to the
failure of FUJI to extend or renew its outstanding letter of credit
relating to the IDB Financing of the Company's San Marcos, Texas
facility; provided, however, that:
(a) prior to effecting such redemption, the Company shall
have used its best efforts to retain such letter of credit by
offering to deposit cash collateral to secure its obligations to
FUJI under the Reimbursement Agreement, dated as of May 1, 1990,
with the Company relating to such IDB Financing;
(b) following the making of such redemption, the Company
shall use its best efforts to obtain a replacement unsecured
letter of credit to issue replacement unsecured San Marcos Bonds,
and shall thereafter use its best efforts to market or sell such
San Marcos Bonds.
"PERMITTED INVESTMENTS" means any of the following, to the extent
owned by the Company free and clear of all Liens (except such Liens as are
permitted by the terms of this Agreement):
(i) marketable direct obligations issued or unconditionally
guaranteed by the United States government or issued by an agency or
instrumentality thereof and backed by the full faith and credit of the
United States, in each case maturing within one year after the date of
acquisition thereof;
(ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any
public instrumentality thereof maturing within 180 days after the date
of acquisition thereof and, at the time of acquisition, having a
rating of A or higher from either S&P or Moody's (or, if at any time
neither S&P nor Moody's shall be rating such obligations, then one of
the three highest ratings from another nationally recognized rating
service reasonably acceptable to the Required Holders) and not listed
in the Credit Watch published by S&P;
(iii) commercial paper (other than commercial paper issued by
the Company or any Affiliate or Consolidated Subsidiary) maturing no
more than 180 days after the date of creation thereof and, at the time
of acquisition, having a rating of at least A-1 or P-1 from either S&P
or Moody's (or, if at any time neither S&P nor Moody's shall be rating
such obligations, then the highest rating from other nationally
recognized rating services reasonably acceptable to the Required
Holders);
(iv) domestic and Eurodollar certificates of deposit or time
deposits, bankers' acceptances or bank notes maturing within one year
after the date of acquisition thereof issued by any commercial bank
organized under the laws of the United States or any state thereof or
the District of Columbia having a rating of A or higher from S&P or
Moody's;
A-59
<PAGE>
(v) money market funds having an average portfolio maturity, at
the time of acquisition thereof, of not more than 180 days, which
money market funds either:
(a) have a rating from a nationally recognized rating
service reasonably acceptable to the Required Holders which is
equivalent to a rating of either AAAm-G or AAAm from S&P or a
rating of Prime-1 from Moody's; or
(b) are required to invest at least 95% of their assets in
instruments described in other clauses of this definition;
(vi) repurchase obligations with a term of not more than 30 days
for instruments described in clauses (i) and (ii) of this definition;
(vii) investments made in connection with the Citibank, N.A.,
overnight Nassau Sweep Account; and
(viii) repurchase obligations having Kidder, Peabody & Co.,
Inc., or any other investment bank organized under the laws of any
state of the United States and approved by the Required Holders as the
counterparty, with a term of not more than 45 days for whole loans
secured by commercial or residential real estate mortgages.
"PERMITTED PREFERRED DIVIDEND" shall mean dividends in respect of any
Permitted Preferred Stock in an aggregate amount not to exceed in any
period of 365 days (or 366 days in any year in which there is a February
29th) the product of
(i) the lesser of:
(a) an amount equal to 100 basis points in excess of the
yield on the U.S. Treasury security with a constant maturity of
30 years on the date of issuance of the Permitted Preferred
Stock; and
(b) 10% per annum,
times
(ii) the aggregate cash consideration paid to the Company in
consideration of the issuance of the Permitted Preferred Stock.
"PERMITTED PREFERRED STOCK" shall mean any issue of preferred stock of
the Company which is not required to be redeemed, repurchased or otherwise
acquired or retired, in whole or in part, for value by the Company, upon
the occurrence of any contingency or otherwise, prior to July 1, 2003.
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<PAGE>
"PERSON" shall mean an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or
any department or agency thereof.
"PLAN" shall mean at any time any "employee pension benefit plan" (as
such term is defined in Section 3 of ERISA) maintained by the Company or
any ERISA Affiliate for employees of the Company or such ERISA Affiliate,
excluding any Multiemployer Plan, but including, without limitation, any
Multiple Employer Plan.
"PREPAYMENT EVENT" shall mean any Letter of Credit Prepayment Event,
any mandatory or optional defeasance, prepayment or repurchase, in whole or
in part, of any issue of Debt (other than Debt owing solely to the Company
or any Wholly-Owned Subsidiary), or reduction in commitment in any credit
facility, of the Company or any Subsidiary, or any event which occurs that
gives rise to an obligation of the Company or any Subsidiary to make any
such defeasance, prepayment, repurchase or reduction, in each case, other
than:
(i) Originally Scheduled Payments;
(ii) Permitted Existing Subordinated Debt Acquisitions;
(iii) Permitted IDB Acquisitions;
(iv) Equity Issuance Acquisitions; and
(v) De Minimus Payments.
In connection with any Debt described in clause (vi) of the definition of
"Debt," payments in respect of contributions of amounts not exceeding,
during any fiscal year of the Company, the Maximum Pension Contribution for
such fiscal year to any Plan or Multiemployer Plan shall not give rise to a
Prepayment Event, but a Prepayment Event will result from the payment or
contribution to any such Plan or Multiemployer Plan of any amount in excess
of the Maximum Pension Contribution during any fiscal year.
"PREPAYMENT OFFER" shall have the meaning set forth in paragraph 5H(i)
of this Agreement.
"PREPAYMENT PORTION" shall have the meaning set forth in paragraph
5I(iii) of this Agreement.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"PURCHASE MONEY MORTGAGES" shall mean a Lien held by any Person
(whether or not the seller of such assets) on tangible assets (other than
assets acquired to replace, repair, upgrade or alter assets owned by the
Company or any Subsidiary on the Closing Date) acquired, improved or
constructed by the Company or any Subsidiary after the Closing Date, which
Lien secures all or a portion of the related purchase price or
A-61
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improvement or construction costs of such assets (or Debt incurred to pay
such purchase price or costs), or any Lien existing on any tangible assets
of any corporation at the time it becomes a Subsidiary, and extensions (as
to time), renewals and replacements of any such Lien or the Debt secured
thereby, provided that, in each such case such Lien does not extend to any
other asset of the Company or any Subsidiary; provided, further, that any
Lien on acquired Property, or on Property of a corporation at the time it
becomes a Subsidiary, was not created in contemplation of such acquisition
or such corporation becoming a Subsidiary, as the case may be.
"PURCHASERS" shall mean you and the Other Purchasers.
"RATABLE PREPAYMENT AMOUNT" shall mean, in respect of the Notes:
(i) in connection with any Letter of Credit Prepayment Event, an
amount equal to the product of:
(a) the aggregate principal amount of San Marcos Bonds
redeemed, reacquired or repurchased, or with respect to which
cash collateral has been deposited to secure reimbursement
obligations of the Company relating to the San Marcos Bonds or
any letter of credit relating thereto, as the case may be, by the
Company; times
(b) the quotient of:
(I) the aggregate amount of Notes then outstanding;
divided by
(II) the aggregate amount of the Notes and the 9.33%
Senior Notes due December 15, 2002 of the Company then
outstanding;
and
(ii) with respect to each other Prepayment Event, a principal
amount of the Notes equal to the product of:
(a) the highest percentage of any issue of Debt being
prepaid, or as to which any offer to prepay shall apply, as a
result of the occurrence of such Prepayment Event, multiplied by
(b) the outstanding principal amount of the Notes.
"REQUIRED HOLDERS" shall mean at any time the holder or holders of at
least sixty-six and two-thirds percent (66 2/3%) of the aggregate principal
amount of the Notes outstanding at such time, provided that Notes owned by
the Company, any Subsidiary or any Affiliate at such time shall be deemed
not to be outstanding for purposes of determining such percentage.
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"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of
the Company or any other officer of the Company involved principally in its
financial administration or its controllership function.
"RESTRICTED STOCK PLANS" shall mean the 1969, 1970, 1972, 1974 and
1984 Restricted Stock Plans of the Company and any other comparable future
plan.
"RIGHT TO PUT" shall have the meaning specified in clause (i) of
paragraph 4.E hereof.
"RIGHTS AGREEMENT" shall mean the Rights Agreement dated as of August
15, 1986, between the Company and The First National Bank of Chicago, as in
effect on December 21, 1992.
"S&P" means Standard & Poor's Corporation.
"SAN MARCOS BONDS" shall mean bonds originally issued in connection
with the IDB Financing of Company's San Marcos, Texas facility, or
replacement bonds issued on substantially the same terms as the originally
issued bonds.
"SECOND AMENDMENT" shall mean the Second Amendment Agreement entered
into as of September 24, 1993, between the Company and the holder of Notes
named therein.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITY" shall have the meaning specified in Section 2(1) of the
Securities Act.
"SENIOR DEBT" shall mean all Debt of Subsidiaries, all Debt of the
Company secured by any Lien and all other Debt ranking senior to or pari
passu with the Notes with respect to distributions of the Company's
Property in any bankruptcy proceeding.
"SENIOR OFFICER" shall mean with respect to any corporation each of
the Chairman, President, any Vice-President, the Chief Financial Officer,
the Secretary, and the Treasurer of such corporation.
"STOCK INCENTIVE PLANS" shall mean the 1989 Stock Incentive Plan of
the Company and any other future comparable plan.
"STOCK OPTION PLANS" shall mean the 1972, 1973, 1974, 1982 and 1984
Stock Option Plans of the Company and any other future comparable plan.
"SUBSIDIARY" shall mean any corporation organized under the laws of
any state of the United States of America, Canada, or any province of
Canada, that has the majority of its Property located in and makes the
major portion of its sales to Persons located in the United States of
America or Canada, and more than fifty percent (50%) of the total
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combined voting power of all classes of Voting Stock of which shall, at the
time as of which any determination is being made, be owned, directly or
indirectly, by the Company.
"THIRD AMENDMENT" shall mean the Third Amendment Agreement entered
into as of May 10, 1994, between the Company and the holder of Notes named
therein.
"THIRD AMENDMENT DATE" shall mean the "Effective Date," as such term
is defined in the Third Amendment.
"TRADE RECEIVABLES AGREEMENT" shall mean
(i) the Amended and Restated Trade Receivables Purchase and Sale
Agreement dated as of January 26, 1990 and as amended thereafter among
the Company, Corporate Asset Funding Company, Inc., Citibank, N.A. and
Citicorp North America, Inc., individually and as agent,
(ii) the Amended and Restated Trade Receivables Purchase and Sale
Agreement dated as of January 26, 1990 and as amended thereafter among
the Company, Citibank, N.A. and Citicorp North America, Inc.,
individually and as agent, and
(iii) other agreements for the sale of receivables, or other
amounts payable to the Company on account of any pre-production costs,
by the Company or any Subsidiary, with recourse to the Company or such
Subsidiary no greater than as set forth in the agreement referred to
in clause (i) of this definition,
provided that in no event shall
(a) the Company or any Subsidiary sell Property (or subject
Property to any Liens) under any such agreements other than Property
of the type that may be sold under any such agreements in accordance
with the terms of any such agreements as in effect on the Closing
Date, and in no event shall such sales be made unless they are sales
of interests in accounts and general intangibles as such terms are
defined by the Uniform Commercial Code as in effect in New York,
(b) at any time the aggregate amount of claims (whether or not
asserted at such time) against any one or more of the Company or the
Subsidiaries, or assets of any of them, arising out of such agreements
(but only that portion of such claims that represents principal)
exceed the greater of,
(I) thirty-five percent (35%) of Adjusted Consolidated
Tangible Net Worth, or
(II) Sixty Million Dollars ($60,000,000), and
(c) for any period of ten consecutive Business Days, the
aggregate amount of claims (whether or not asserted at such time)
against any one or more of the Company or the Subsidiaries, or assets
of any of them, arising out of such
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<PAGE>
agreements (but only that portion of such claims that represents
principal) exceed ninety-one percent (91%) of the aggregate face
amount of the receivables and general intangibles with respect to
which the Company may or has sold interests under any such agreements
and which receivables and general intangibles are outstanding at such
time.
"TRANSFEREE" shall mean any direct or indirect transferee of all or
any part of any Note purchased by any Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency).
"WARRANT AGREEMENT" shall mean that certain Warrant Agreement entered
into among the Company and holders of the Notes and certain other Debt of
the Company on or after the Amendment Date in compliance with the
provisions of paragraph 7A of the Amendment.
"WARRANTS" shall mean warrants to purchase shares of the common stock
of the Company issued pursuant to the Warrant Agreement.
"WHOLLY-OWNED SUBSIDIARY" shall mean any Subsidiary one hundred
percent (100%) of the capital stock of which (other than directors'
qualifying shares) is held of record and beneficially owned by the Company
or any other Wholly-Owned Subsidiary.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as you shall hold any
Note, it will make payments of principal thereof, premium, if any, Agreed Put
Consideration, and interest thereon, by wire transfer of immediately available
funds for credit to your account or accounts as specified in the Purchaser
Schedule attached hereto, or such other account or accounts in the United States
as you may designate in writing, notwithstanding any contrary provision herein
or in any Note with respect to the place of payment. You agree that, before
disposing of any Note, you will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made thereon and of the
date to which interest thereon has been paid. The Company agrees to afford the
benefits of this paragraph 11.A to any Transferee that shall have made the same
agreement as you have made in this paragraph 11.A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save you and any
Transferee harmless against liability for the payment of all out-of-pocket
expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and
expenses of any special counsel engaged by you or any Transferee in
connection with this Agreement, the transactions contemplated hereby and
any subsequent proposed
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modification of, or proposed consent under, this Agreement, whether or not
such proposed modification shall be effected or proposed consent granted,
and
(ii) the costs and expenses, including attorneys' fees, incurred by
you or any Transferee in enforcing any rights under this Agreement or the
Notes or in responding to any subpoena or other legal process issued in
connection with this Agreement or the transactions contemplated hereby or
by reason of you or any Transferee having acquired any Note, including
without limitation costs and expenses incurred in any bankruptcy case,
provided that the Company shall be required to pay for such attorney's fees only
to the extent that such attorneys are retained by the Required Holders to
represent, as a group, the Required Holders and all other holders of Notes which
shall consent to such representation. The obligations of the Company under this
paragraph 11.B shall survive the transfer of any Note or portion thereof or
interest therein by you or any Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement and the Note may be amended,
and the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, if the Company shall obtain the
written consent to such amendment, action or omission to act, of the Required
Holder(s) except that, without the written consent of the holder or holders of
all Notes at the time outstanding, no amendment to this Agreement shall change
the maturity of any Note, or change the principal of, or the rate or time of
payment of interest or any premium payable with respect to any Note, or affect
the time, amount or allocation of any required prepayments, or reduce the
proportion of the principal amount of the Notes required with respect to any
consent. With respect to waivers or consents to amendments to or concerning the
provisions of paragraph 5H hereof, the provisions of such paragraph and (except
as set forth in this sentence) the definitions used therein (as used therein)
may not be waived, amended or supplemented without the consent of each holder of
Notes, but waivers concerning the occurrence of any Prepayment Event, and
waivers and consents to amendments or supplements to the definition of
Prepayment Event, may be given by the Required Holders.
Each holder of any Note at the time or thereafter outstanding shall be
bound by any consent authorized by this paragraph 11.C, whether or not such Note
shall have been marked to indicate such consent, but any Notes issued thereafter
may bear a notation referring to any such consent. No course of dealing between
the Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The
Notes are issuable as registered notes without coupons in denominations of at
least One Million Dollars ($1,000,000), except as may be necessary to reflect
any principal amount not evenly divisible by, One Million Dollars ($1,000,000).
The Company shall keep at its principal office a register in which the Company
shall provide for the registration of Notes and of transfers of Notes. Upon
surrender for registration of transfer of any Note at the principal office of
the Company, the Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount, registered in
the name of the Transferee or Transferees so long as any such Transferee or
Transferees are Institutional Investors. At the option of the holder of any
Note, such Note may be exchanged for other Notes of like tenor and of any
authorized
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denominations, of a like aggregate principal amount, upon surrender of the Note
to be exchanged at the principal office of the Company. Whenever any Notes are
so surrendered for exchange, the Company shall, at its expense, execute and
deliver the Notes that the holder making the exchange is entitled to receive.
Every Note surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed by
the holder of such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon transfer thereof shall
carry the rights to unpaid interest and interest to accrue that were carried by
the Note so exchanged or transferred, so that neither gain nor loss of interest
shall result from any such transfer or exchange. Upon receipt of written notice
from the holder of any Note of the loss, theft, destruction or mutilation of
such Note and, in the case of any such loss, theft or destruction, upon receipt
of such holder's unsecured indemnity agreement, or in the case of any such
mutilation, upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and premium, if any, and interest on such Note
and for all other purposes whatsoever, whether or not such Note shall be
overdue, and the Company shall not be affected by notice to the contrary.
Subject to the preceding sentence, the holder of any Note may from time to time
grant participations in all or any part of such Note to any Institutional
Investor on such terms and conditions as may be determined by such holder in its
sole and absolute discretion, it being understood that such holder's obligations
under this Agreement shall remain unchanged and that such holder shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and in addition, that you agree that you shall only grant such
participations in compliance with any applicable provisions of the Securities
Act.
11F. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the financial
statements contained in the Company's Quarterly Report on Form 10-Q for fiscal
quarter ended May 2, 1993. If any change in accounting principles from those
used in the preparation of such financial statements hereafter occasioned by the
promulgation of rules and regulations by or required by the Financial Accounting
Standards Board, the Cost Accounting Standards Board or the Securities and
Exchange Commission (or successors thereto or agencies with similar functions)
result in a material change in the accounting principles used to prepare the
financial statements contained in the Company's Annual Reports on Form 10-K or
Quarterly Reports on Form 10-Q, the Company and the holders of Notes agree, upon
notification of such change by the Company to the holders of Notes or by a
holder of Notes to the Company, to enter into negotiations in order to amend
paragraph 6 and the Financial Covenants incorporated by reference herein, as
applicable, so as to equitably reflect such change with the desired result that
the criteria for evaluating the Company's financial condition shall be the same
after such change as if such change had not been made.
11G. DIRECTLY OR INDIRECTLY. Where any provision in this Agreement refers
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person, including actions taken by or on behalf of any
partnership in which such Person is a general partner.
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<PAGE>
11H. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by you of any Note or
portion thereof or interest therein and the payment of any Note, and may be
relied upon by any Transferee, regardless of any investigation made at any time
by or on behalf of you or any Transferee. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and understanding
between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
11I. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of either of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11J. DISCLOSURE TO OTHER PERSONS. You agree to use your best efforts to
hold in confidence and not to disclose any Confidential Information, provided,
that you will be free, after notice to the Company, to correct any false or
misleading information that may become public concerning your relationship to
the Company and the Subsidiaries or to the transactions contemplated by this
Agreement. Notwithstanding the foregoing, the Company acknowledges that the
holder of any Note may deliver copies of any financial statements and other
documents delivered to such holder, and disclose any other information disclosed
to such holder (including, without limitation, Confidential Information), by or
on behalf of the Company or any Subsidiary in connection with or pursuant to
this Agreement, to
(i) such holder's directors, officers, employees, agents and
professional consultants,
(ii) any other holder of any Note,
(iii) any Institutional Investor to which such holder sells or offers
to sell such Note or any part thereof, provided that such Institutional
Investor signs a written agreement to comply with the confidentiality
provisions of this Agreement, regardless of whether or not such offeree
purchases any Notes, and provided further that no such agreement shall be
required so long as such Institutional Investor is furnished only with
information that is not Confidential Information,
(iv) any Institutional Investor to which such holder sells or offers
to sell a participation in all or any part of such Note, provided that such
Institutional Investor signs a written agreement to comply with the
confidentiality provisions of this Agreement, regardless of whether or not
such offeree purchases any Notes, and provided further that no such
agreement shall be required so long as such Institutional Investor is
furnished only with information that is not Confidential Information,
(v) any federal or state regulatory authority having jurisdiction
over such holder,
(vi) the National Association of Insurance Commissioners or any
similar organization or
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<PAGE>
(vii) any other Person to which such delivery or disclosure may be
necessary,
(a) in compliance with any law, rule, regulation or order
applicable to such holder,
(b) in response to any subpoena or other legal process, or
(c) in connection with any litigation to which such holder is a
party.
11K. NOTICES. All written communications provided for hereunder shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid), and
(i) if to you, addressed to you at the address specified for such
communications in the Purchaser Schedule attached hereto, or at such other
address as you shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to such other
holder at such address as such other holder shall have specified to the
Company in writing or, if any such other holder shall not have so specified
an address to the Company, then addressed to such other holder in care of
the last holder of such Note which shall have so specified an address to
the Company, and
(iii) if to the Company, addressed to it at
Rohr, Inc.
Foot of H Street
Chula Vista, CA 92012
Attention: Treasurer
copy to: General Counsel
or at such other address as the Company shall have specified to the holder
of each Note in writing; provided, however, that any such communication to
the Company may also, at the option of the holder of any Note, be delivered
by any other means either to the Company at its address specified above or
to any officer of the Company.
Any written communication sent in accordance with the first sentence of this
paragraph 11K, other than in accordance with the proviso thereto, shall be
deemed to have been received when sent; any written communication delivered in
accordance with such proviso shall be deemed to have been received when
delivered.
11L. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement,
11M. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to you or to the Required Holders, the determination
of such satisfaction shall be made by you or the Required Holders, as the case
may be, in the sole and exclusive judgment (exercised in good faith) of the
Person or Persons making such determination.
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<PAGE>
11N. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
INTERNAL LAW OF THE STATE OF NEW YORK.
11O. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day. If the date for any payment is extended to the
next succeeding Business Day by reason of the preceding sentence, the period of
such extension shall be included in the computation of the interest payable on
such Business Day.
11P. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, and it shall not
be necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
Company, whereupon this letter shall become a binding agreement between you and
the Company.
Very truly yours,
ROHR, INC.
By:
-----------------------------------
Name:
Title:
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<PAGE>
The foregoing Agreement is
hereby accepted as of the
date first above written.
[NAME OF PURCHASER]
By:
-----------------------------
Name:
Title:
A-71
<PAGE>
Exhibit 4.4.1
SECOND AMENDMENT AGREEMENT
SECOND AMENDMENT AGREEMENT (this "Amendment"), dated as of September
24, 1993, among ROHR, INC. (together with its successors and assigns, the
"Company"), and each of the holders of Notes whose name appears on the signature
pages hereof (individually, a "Holder" and, collectively, the "Holders").
RECITALS:
WHEREAS, the Company issued its 9.33% Senior Notes due December 15,
2002, pursuant to that certain Note Agreement, dated as of December 21, 1992,
between the Company and the Purchasers identified on Annex 1 thereto; and
WHEREAS, such Note Agreement was amended by that certain Amendment
Agreement, dated as of June 30, 1993 (such Note Agreement, as amended by such
Amendment Agreement, being the "Existing Note Agreement"); and
WHEREAS, the Company has requested the Holders to modify certain terms
of the Existing Note Agreement; and
WHEREAS, the Holders are agreeable to such modifications and such
amendments, on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS.
Capitalized terms used in this Amendment and not otherwise defined
herein shall have the respective meanings ascribed to them in the Existing Note
Agreement.
2. AMENDMENTS.
Paragraph 10B of the Existing Note Agreement shall be amended by
amending and restating Subparagraph (ii)(f) of the definition of "Consolidated
Net Income Available for Fixed Charges" to read as follows:
"(f) in the case of any such period that includes the fiscal month
ending May 2, 1993, the provisions and charges, not in excess of
$38,000,000 in the aggregate, established by the Company in the third
quarter of Fiscal Year 1993; and".
1
<PAGE>
3. CONDITIONS TO EFFECTIVENESS.
The amendment set forth in Paragraph 2 shall become effective only upon the
satisfaction in all respects of the conditions set forth below:
3A. The Required Holders and the Company shall have executed and delivered
to each other this Amendment and the Existing Note Agreement, as amended hereby,
shall be in full force and effect.
3B. The definition of "Consolidated Net Income Available for Fixed
Charges" in each of the Note Agreements, dated as of January 15, 1990, between
the Company and the note holder party thereto, as amended through June 30, 1993,
shall have been amended in substantially the same manner as set forth in
Paragraph 2 hereof.
3C. The definition of "Net Income Available for Fixed Charges" in the
Credit Agreement, dated as of April 26, 1989, between the Company and the other
parties thereto, as amended through July 9, 1993 (the "Credit Agreement"), shall
have been amended in substantially the same manner as set forth in Paragraph 2
hereof.
3D. The definition of "Net Income Available for Fixed Charges"
incorporated from the Credit Agreement into the Sublease Agreement, dated as of
September 14, 1992, between the Company and State Street Bank and Trust Company
of California, National Association, and W. Jeffrey Kramer, not in an individual
capacity but solely as owner trustees under a trust for the benefit of General
Electric Capital Corporation, as amended through July 9, 1993, shall have been
effectively amended in substantially the same manner as set forth in Paragraph 2
hereof.
4. COSTS AND EXPENSES.
The Company shall pay all out-of-pocket expenses of the Holders in
connection with the negotiation, preparation, execution and delivery of this
Amendment, including, without limitation, all the fees and expenses of special
counsel engaged by the Holders in connection therewith.
5. MISCELLANEOUS.
5A. All provisions of this Amendment by or for the benefit of the parties
hereto shall bind and inure to the benefit of their respective successors and
assigns hereunder.
5B. This Amendment may be executed in one or more counterparts, all of
which taken together shall constitute a single instrument.
2
<PAGE>
5C. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE
OF NEW YORK.
5D. Except as expressly provided herein, (i) no other terms and provisions
of the Existing Note Agreement shall be modified or changed by this Amendment
and (ii) the terms and provisions of the Existing Note Agreement shall continue
in full force and effect. The Company hereby acknowledges and reaffirms all of
its obligations and duties under the Existing Note Agreement, as amended by this
Amendment, and under the Notes, as amended to date, issued thereunder.
5E. Any provision of this Amendment which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
5F. This Amendment may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
fist above written.
ROHR, INC.
By: /s/ R.W. Madsen
---------------------------
Name: R. W. Madsen
Title: Vice President,
General Counsel
and Secretary
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Dennis B. Murphy
---------------------------
Name:
Title:
3
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ Richard C. Morrison
---------------------------
Name:
Title:
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By:
----------------------------
Name:
Title:
By
----------------------------
Name:
Title:
4
<PAGE>
- - -------------------------------------------------------------------------------
ROHR, INC.
-------------------------
THIRD AMENDMENT AGREEMENT
-------------------------
DATED AS OF MAY 10, 1994
9.33% SENIOR NOTES DUE DECEMBER 15, 2002
- - --------------------------------------------------------------------------------
<PAGE>
THIRD AMENDMENT AGREEMENT
THIRD AMENDMENT AGREEMENT (this "Third Amendment"), dated as of May 10,
1994, among ROHR, INC. (together with its successors and assigns, the
"Company"), and each of the holders of Notes (as such term is defined below)
whose name appears on the signature pages hereof (individually, a "Holder" and,
collectively, the "Holders").
RECITALS:
WHEREAS, the Company entered into that certain Note Agreement, dated as of
December 21, 1992, between the Company and the Purchasers identified on Annex 1
thereto, as previously amended by that certain Amendment Agreement (the "First
Amendment"), dated June 30, 1993, and that certain Second Amendment Agreement,
dated September 24, 1993 (collectively, as in effect immediately prior to the
Third Amendment Date, the "Existing Note Agreement," and, as further amended and
restated by this Third Amendment, the "Amended Note Agreement"), pursuant to
which the Company has issued its 9.33% Senior Notes due December 15, 2002, as
amended by the First Amendment (the "Existing Notes"); and
WHEREAS, each of the Holders is a holder of the Existing Notes;
WHEREAS, the Company has requested the Holders to consent to certain
transactions by the Company and to amend and restate in full the Existing Note
Agreement;
WHEREAS, the Holders are willing to give such consent, and to enter into
such amendment and restatement, on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS
Capitalized terms used in this Third Amendment and not otherwise defined
herein shall have the respective meanings ascribed to them in the Amended Note
Agreement attached hereto as Exhibit A.
2. AMENDMENTS TO EXISTING NOTE AGREEMENT
The Existing Note Agreement is hereby amended and restated in its entirety
to read as set forth in the form attached hereto as Exhibit A.
3. CONSENT TO CERTAIN TRANSACTIONS.
Each of the undersigned Holders hereby consents to the following
transactions by the Company:
(i) the sale of the shares of or substantially all of the assets
of Rohr Aero Services, Inc. and Rohr Aero Services Europe;
(ii) the sale of assets relating to the business jet product
line;
<PAGE>
(iii) the sale of the Company's facilities located in Hagerstown,
Maryland and related assets; and
(iv) the sale of the Company's facilities located in Auburn,
Washington.
Each of the undersigned Holders hereby agrees that the aforementioned
transactions shall not be deemed a Default or Event of Default pursuant to
paragraph 7A(v) or paragraph 7A(vi) of the Amended Note Agreement resulting from
the failure of the Company to comply with the provisions of paragraph 6D or
paragraph 6Q of the Amended Note Agreement or paragraph 6M of the Amended Note
Agreement (as it incorporates by reference Section 5.02(d) of the Credit
Agreement) with respect to the above transactions.
Notwithstanding the foregoing, sales of any of the Property described in
clauses (i) through (iv), inclusive, of this paragraph 3 shall be deemed to be
sales of Property subject to paragraph 6Q(i) of the Amended Note Agreement for
the purpose of determining the compliance by the Company with paragraph 6Q in
connection with any other sale, lease, transfer or other disposition of Property
of the Company or any Consolidated Subsidiary.
In addition, each of the undersigned Holders, as a holder of Warrants and
Registrable Securities (as such term is defined in the Warrant Agreement) hereby
waives any default under, or violation of, the provisions of paragraph 8B(ii) of
the Warrant Agreement that may have resulted by virtue of any failure of the
notice of the registration of the 1994 Subordinated Notes (provided to such
Holders pursuant to paragraph 8B(i) of the Warrant Agreement) to contain the
Company's agreement to use its best efforts, if requested to do so, to arrange
for such underwriters to include in such underwriting any Registrable Securities
that the Company was requested to register pursuant to paragraph 8B(i) of the
Warrant Agreement, and hereby waives (without prejudice to the right of such
Holder to participate in any future registration of Securities of the Company)
any right to participate in the registration or sale of the 1994 Subordinated
Notes.
4. CONDITIONS TO EFFECTIVENESS.
The amendment and restatement of the Existing Note Agreement set forth in
paragraph 2 and the consent by the Holders set forth in paragraph 3 shall become
effective only upon the satisfaction in all respects of the conditions set forth
below. The first date upon which all such conditions shall have been satisfied
is herein referred to as the "Effective Date."
4A. Each of the Holders and the Company shall have executed and delivered
to each other this Third Amendment, and the Amended Note Agreement shall be in
full force and effect.
4B. Each of the Holders shall have received a legal opinion of:
(i) Gibson, Dunn & Crutcher, special counsel to the Company, dated the
Effective Date and substantially in the form set forth in Exhibit B1
attached hereto; and
(ii) Richard Madsen, Esq, general counsel to the Company, dated the
Effective Date and substantially in the form set forth in Exhibit B2
attached hereto; and
2
<PAGE>
(iii) Hebb & Gitlin, special counsel to the holders of the Existing
Notes, dated the Effective Date and substantially in the form set forth in
Exhibit B3 attached hereto.
4C. The representations and warranties set forth in paragraph 5 hereof
shall be true and correct as of the date hereof and as of the Effective Date; no
Default or Event of Default pursuant to the Existing Note Agreement shall have
occurred and be continuing on the Effective Date; and each of the Holders shall
have received a written certificate, in the form of Exhibit C hereto, signed by
a duly authorized officer of the Company to such effect. Each of the Holders
shall have received a certificate of the Secretary or an Assistant Secretary of
the Company, substantially in the form of Exhibit D hereto, with respect to the
matters therein set forth.
4D. On or before the Effective Date, the Company shall have paid to each
Holder in immediately available funds an amendment fee equal to the product of
(i) twenty-five one-hundredths of one percent (0.25%) times (ii) the outstanding
principal amount of Existing Notes held by such Holder on the Effective Date.
4E. On or before the Effective Date, the Company shall have paid to each
Holder in immediately available funds, in exchange for such holder's consent to
the Company's issuance of $100,000,000 of additional pari passu Debt, a consent
fee equal to the product of (i) thirty-eight one-hundredths of one percent
(0.38%) times (ii) the outstanding principal amount of Existing Notes held by
such Holder on the Effective Date.
4F. On or before the Effective Date, the Company shall have closed on the
issuance of the Company's 1994 Senior Debt on terms and conditions acceptable to
the Holders in all respects.
4G. On or before the Effective Date, the Company shall have closed on the
issuance of Company's 1994 Subordinated Debt on terms and conditions acceptable
to the Holders in all respects.
4H. The Company shall have paid all amounts which are payable pursuant to
paragraph 6 hereof and paragraph 11B of the Amended Note Agreement.
4I. The holders of the 9.35% Senior Notes due January 29, 2000 of the
Company (the "Other Notes") shall have entered into an amendment of those
certain several identical Note Agreements, each dated as of January 15, 1990,
between the Company and the Purchasers identified on Annex 1 thereto, as
previously amended (collectively, the "Other Note Agreement"), further amending
such Other Note Agreement and the notes issued thereunder in a manner consistent
with paragraph 2 of this Third Amendment and consenting to certain transactions
by the Company in a manner consistent with paragraph 3 of this Agreement. Each
Holder shall have received a copy of the amendment agreement for such Other Note
Agreement, and the terms thereof shall be satisfactory to the Holders in all
respects.
4J. The Credit Agreement and the Sublease Agreement between the Company
and the trustees named therein for the benefit of General Electric Capital
Corporation, shall have been amended in form and substance satisfactory to the
Holders, which amendments shall be consistent with the amendments provided for
herein and permit the transactions contemplated by paragraph 3 of this Third
Amendment. Each Holder shall have received copies of said
3
<PAGE>
amendment documents and all agreements, instruments or other documents
containing any substantive agreement of the Company or any Consolidated
Subsidiary, executed or delivered in connection therewith, other than that
certain letter agreement (the "Agency Letter") between the Company and the agent
under the Credit Agreement relating to the agency fee paid to such agent, which
letter relates solely to the fee payable to the agent under the Credit Agreement
for acting in such capacity.
4K. All corporate and other proceedings taken or to be taken in connection
with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to such Holder, and such Holder
shall have received all such counterpart originals or certified or other copies
of such documents as it may reasonably request.
5. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to each of the Holders as follows:
5A. The Company:
(i) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation,
(ii) has all requisite power and authority and all necessary licenses
and permits to own and operate its Properties and to carry on its business
as now conducted and presently proposed to be conducted, and
(iii) is duly qualified and is authorized to do business and is in
good standing as a foreign corporation in each jurisdiction where the
character of its Properties or the nature of its activities makes such
qualification necessary.
5B. The Company has the corporate power and authority:
(i) to authorize, execute, deliver and enter into this Third
Amendment; and
(ii) to perform its obligations under this Third Amendment and the
Amended Note Agreement.
5C. This Third Amendment has been duly authorized by the Company. This
Third Amendment and the Amended Note Agreement constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as such enforceability may be:
(i) limited by bankruptcy, insolvency or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
The holders of the Existing Notes are entitled to the benefits of the Amended
Note Agreement.
4
<PAGE>
5D. The authorization, execution and delivery by the Company of this Third
Amendment is not, and the performance by the Company of its obligations under
the Amended Note Agreement will not be, inconsistent with its certificate of
incorporation or by-laws, does not and will not contravene any law, governmental
rule or regulation, violate any judgment, order or award of any arbitrator
applicable to the Company, does not and will not contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument to which the Company is a party or by which any of its Property is
bound, and will not result in the imposition of a Lien upon any Property of the
Company.
5E. No consent or approval of, giving of notice to, registration with, or
taking of any other action in respect of or by, any federal, state or local
governmental authority or agency, or other Person (except for actions that will
have occurred by the Effective Date), is required with respect to:
(i) the authorization, execution and delivery by the Company of this
Third Amendment, or
(ii) the performance by the Company of its obligations under the
Amended Note Agreement.
5F. After giving effect to this Third Amendment, the Seventh Amendment to
the Credit Agreement and the issuance and sale of the 1994 Senior Notes and the
1994 Subordinated Notes, no Default or Event of Default will exist and no
default or event of default exists under:
(i) the Other Note Agreement, as amended as contemplated pursuant to
paragraph 4I hereof;
(ii) the Credit Agreement;
(iii) the SubLease Agreement between the Company and the trustees
named therein acting for the benefit of General Electric Capital Credit
Corporation;
(iv) the 1994 Senior Notes or the indenture governing such 1994 Senior
Notes; or
(v) the 1994 Subordinated Notes or the indenture governing such 1994
Subordinated Notes.
After giving effect to this Third Amendment, the Seventh Amendment to the Credit
Agreement and the issuance and sale of the 1994 Senior Notes and the 1994
Subordinated Notes, the Company will be able to satisfy all conditions necessary
pursuant to the terms of the Credit Agreement to draw an amount, when added to
the amount of drawings and letter of credits then outstanding under the Credit
Agreement, equal to the full maximum commitment of One Hundred Ten Million
Dollars ($110,000,000) available under the Credit Agreement.
5G. Except as set forth on Annex 2 hereto, as of the Effective Date, each
of the warranties and representations contained in the Amended Note Agreement
are true, correct and
5
<PAGE>
complete in all material respects, and such warranties and representations are
hereby incorporated by reference with the same effect as though set forth in
their entirety herein.
5H. There is no agreement between the Company and any of the banks which
are parties to the Credit Agreement with respect to the matters described in
paragraph 4J of this Third Amendment other than as set forth in the documents
delivered to the Holders pursuant to paragraph 4J of this Third Amendment.
Other than as set forth on Annex 2 hereto, there is no agreement between the
Company or any Consolidated Subsidiary and any other holder of Debt of the
Company or any Consolidated Subsidiary which provides for any compensation, fees
or other financial consideration in exchange or partial exchange for any
amendment, waiver or consent referred to in paragraph 4J. Copies of all
agreements and documents relating to such agreements have been provided to you
pursuant to paragraph 4J of this Third Amendment.
5I. Except as disclosed to you on Annex 2 hereto, it is not reasonably
foreseeable that any action, suit, investigation or proceeding or group of
similar actions, suits, investigations or proceedings (including, as such a
group, without limitation, all actions, suits, investigations or proceedings
arising out of federal or state environmental protection laws), pending or, to
the knowledge of the Company, threatened against the Company or any of the
Consolidated Subsidiaries, or any properties or rights of the Company or any of
the Consolidated Subsidiaries, by or before any court, arbitrator or
administrative or governmental body would result in any material adverse change
in the business, condition (financial or otherwise) or operations of the Company
and the Consolidated Subsidiaries taken as a whole.
6. COSTS AND EXPENSES.
Whether or not the conditions to effectiveness set forth in paragraph 3 of
this Third Amendment are satisfied, the Company shall pay all out-of-pocket
expenses of the Holders in connection with the negotiation, preparation,
execution and delivery of this Third Amendment, including, without limitation,
all the fees and expenses of special counsel engaged by the Holders in
connection therewith. Without limiting the generality of the foregoing, the
Company will pay, on the date of the Third Amendment, the fees and disbursements
of Holder's special counsel presented on such date, and shall also pay, upon
receipt of any statement thereof, each additional statement for reasonable fees
and disbursements of Holder's special counsel rendered after the date of this
Third Amendment in connection with this Third Amendment.
7. MISCELLANEOUS.
7A. All the provisions of this Third Amendment by or for the benefit of
the parties hereto shall bind and inure to the benefit of their respective
successors and assigns hereunder.
7B. This Third Amendment may be executed in one or more counterparts, all
of which taken together shall constitute a single instrument.
7C. THIS THIRD AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF
THE STATE OF NEW YORK.
6
<PAGE>
7D. The Company hereby acknowledges and reaffirms all of its obligations
and duties under the Amended Note Agreement and under the Existing Notes.
7E. Any provision of this Third Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
7F. This Third Amendment constitutes the final written expression of all
of the terms hereof and is a complete and exclusive statement of those terms.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.
ROHR, INC.
By: /s/ R.M. MILLER
----------------------------------------
Name: R. M. Miller
Title: Vice President and Treasurer
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ THOMAS KLAMKA
----------------------------------------
Name: Thomas Klamka
Title: Vice President
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ LEANNE M. SWENSON
----------------------------------------
Name: Leanne M. Swenson
Title: Counsel
By: /s/ JOSEPH P. McLAUGHLIN
----------------------------------------
Name: Joseph P. McLaughlin
Title: Counsel
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ RICHARD C. MORRISON
----------------------------------------
Name: Richard C. Morrison
Title: Vice President
Signature Page 1 to the THIRD AMENDMENT AGREEMENT among ROHR, INC. and the
holders of Notes named therein.
8
<PAGE>
EXHIBIT A
FORM OF AMENDED AND RESTATED NOTE AGREEMENT
ROHR, INC.
--------------------------
AMENDED AND RESTATED NOTE AGREEMENT
--------------------------
DATED AS OF MAY 10, 1994
$62,000,000 9.33% SENIOR NOTES DUE DECEMBER 15, 2002
A-2
<PAGE>
TABLE OF CONTENTS
(NOT PART OF AGREEMENT)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. AUTHORIZATION OF ISSUE OF NOTE....................................... A-5
2. PURCHASE AND SALE OF NOTES........................................... A-5
3. CONDITIONS OF CLOSING................................................ A-6
3A. Opinion of Purchasers' Special Counsel...................... A-6
3B. Opinion of Company's Counsel................................ A-6
3C. Representations and Warranties; No Default.................. A-6
3D. Purchase Permitted By Applicable Laws....................... A-6
3E. Proceedings................................................. A-6
3F. Sale of Notes to Other Purchasers........................... A-6
3G. Closing Expenses............................................ A-7
4. PREPAYMENTS.......................................................... A-7
4A. Required Prepayments........................................ A-7
4B. Optional Prepayment With Yield-Maintenance Amount........... A-7
4C. Notice of Optional Prepayment............................... A-7
4D. Partial Payments Pro Rata................................... A-7
4E. Right to Put................................................ A-8
4F. Retirement of Notes......................................... A-8
4G. Tender of Notes in Payment of Warrant Exercise Price........ A-8
5. AFFIRMATIVE COVENANTS................................................ A-9
5A. Payment of Taxes and Claims................................. A-9
5B. Maintenance of Properties and Corporate Existence;
Other Matters............................................. A-9
5C. Payment of Notes and Maintenance of Office.................. A-10
5D. Financial Statements........................................ A-10
5E. Default Notices............................................. A-13
5F. Information Required by Rule 144A........................... A-13
5G. Inspection of Property...................................... A-13
5H. Covenant to Secure Note Equally............................. A-13
5I. Involuntary Prepayment...................................... A-14
6. NEGATIVE COVENANTS................................................... A-16
6A. Limitations on Liens........................................ A-16
6B. Limitations on Leases....................................... A-18
6C. Limitations on Indebtedness................................. A-18
6D. Limitations on Mergers and Sales of Assets.................. A-20
6E. Adjusted Consolidated Tangible Net Worth Maintenance........ A-20
6F. Limitations on Distributions................................ A-21
6G. Fixed Charge Coverage....................................... A-22
6H. Limitations on Capital Expenditures......................... A-22
6I. Private Offering............................................ A-22
6J. Transactions with Affiliates................................ A-22
</TABLE>
A-3
<PAGE>
TABLE OF CONTENTS (CONTINUED)
(NOT PART OF AGREEMENT)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
6K. Line of Business...................................... A-22
6L. Limitation on Certain Obligations..................... A-23
6M. Incorporation of Negative Covenants................... A-23
6N. Maintenance of Senior Status.......................... A-24
6O. Certain Amendments.................................... A-25
6P. Sales of Assets....................................... A-25
6Q. Sale of Receivables................................... A-27
6R. Debt Ratio............................................ A-27
7. EVENTS OF DEFAULT.............................................. A-27
7A. Acceleration.......................................... A-27
7B. Rescission of Acceleration............................ A-30
7C. Notice of Acceleration or Rescission.................. A-30
7D. Other Remedies........................................ A-30
8. REPRESENTATIONS AND WARRANTIES................................. A-31
8A. Subsidiaries.......................................... A-31
8B. Corporate Organization and Authority.................. A-31
8C. Financial Statements.................................. A-32
8D. Actions Pending....................................... A-32
8E. Outstanding Debt...................................... A-32
8F. Title to Properties................................... A-32
8G. Patents, Trademarks, Licenses, etc.................... A-33
8H. Taxes................................................. A-33
8I. Conflicting Agreements and Other Matters.............. A-33
8J. Offering of Notes..................................... A-34
8K. Use of Proceeds....................................... A-34
8L. ERISA................................................. A-34
8M. Governmental Consent.................................. A-35
8N. Environmental Compliance.............................. A-35
8O. Disclosure............................................ A-35
8P. Compliance with Law................................... A-36
8Q. Certain Laws.......................................... A-36
9. REPRESENTATIONS OF EACH PURCHASER.............................. A-36
9A. Nature of Purchase.................................... A-36
9B. Source of Funds....................................... A-37
10. DEFINITIONS.................................................... A-37
10A. Yield-Maintenance Terms............................... A-37
10B. Other Terms........................................... A-38
11. MISCELLANEOUS.................................................. A-66
11A. Note Payments......................................... A-66
11B. Expenses.............................................. A-67
</TABLE>
A-4
<PAGE>
TABLE OC CONTENTS (CONTINUED)
(NOT PART OF AGREEMENT)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
11C. Consent to Amendments................................... A-67
11D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes............................................ A-68
11E. Persons Deemed Owners; Participations................... A-68
11F. Accounting.............................................. A-68
11G. Directly or Indirectly.................................. A-69
11H. Survival of Representations and Warranties;
Entire Agreement...................................... A-69
11I. Successors and Assigns.................................. A-69
11J. Disclosure to Other Persons............................. A-69
11K. Notices................................................. A-70
11L. Payments Due on Non-Business Days....................... A-71
11M. Satisfaction Requirement................................ A-71
11N. Governing Law........................................... A-71
11O. Severability............................................ A-71
11P. Descriptive Headings.................................... A-71
11Q. Counterparts............................................ A-71
11R. Severalty of Obligations................................ A-71
Annex 1 -- Purchaser Schedule
Annex 2 -- Payment Instructions at Closing
Annex 3 -- Information as to Company
Exhibit A -- Form of 9.33% Senior Note Due December 15, 2002
Exhibit B1 -- Form of Purchasers' Special Counsel's Opinion
Exhibit B2 -- Form of Company's General Counsel Opinion
Exhibit C -- Form of Officers' Certificate
Exhibit D -- Form of Secretary's Certificate
Exhibit E -- Form of Notice of Sale
</TABLE>
A-5
<PAGE>
ROHR, INC.
FOOT OF H STREET
CHULA VISTA, CALIFORNIA 92012
-------------------
AMENDED AND RESTATED NOTE AGREEMENT
-------------------
$62,000,000 9.33% SENIOR NOTES DUE DECEMBER 15, 2002
Dated as of May 10, 1994
[Insert Name and Address
of Each Purchaser]
Ladies and Gentlemen:
The undersigned, Rohr, Inc. (herein called, together with its successors,
the "Company"), hereby agrees with the purchasers named in the Purchaser
Schedule attached hereto as Annex 1 (herein called the "Purchasers") as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company has authorized the
issuance of its senior promissory notes in the aggregate principal amount of
$62,000,000, dated the date of issue thereof, to mature December 15, 2002,
bearing interest on the unpaid balance thereof from the date thereof until the
principal thereof shall have become due and payable at the rate of nine and
thirty-three one-hundredths percent (9.33%) per annum and on overdue payments at
the rate specified therein, which senior promissory notes have been amended
pursuant to the First Amendment and, as amended, are substantially in the form
of Exhibit A attached hereto. The term "Notes" as used herein shall include
each such senior promissory note delivered pursuant to any provision of this
Agreement and each such senior promissory note delivered in substitution or
exchange for any other Note pursuant to any such provision.
2. PURCHASE AND SALE OF NOTES. The Company sold to each Purchaser and,
subject to the terms and conditions herein set forth, each Purchaser purchased
from the Company the aggregate principal amount of Notes set forth opposite such
Purchaser's name in the Purchaser Schedule attached hereto as Annex 1 at one
hundred percent (100%) of such aggregate principal amount. On the date of
closing, December 22, 1992 (herein called the "Closing Date"), the Company
delivered to each Purchaser, at the offices of Hebb & Gitlin, a Professional
Corporation, at One State Street, Hartford, Connecticut, one or more Notes
registered in such Purchaser's name, evidencing the aggregate principal amount
of Notes to be
A-6
<PAGE>
purchased by such Purchaser and in the denomination or denominations specified
with respect to such Purchaser in the Purchaser Schedule attached as Annex 1
hereto against payment of the purchase price thereof by transfer of immediately
available funds as directed by the Company on Annex 2 attached hereto.
3. CONDITIONS OF CLOSING. Each Purchaser's obligation to purchase and
pay for the Notes to be purchased by such Purchaser hereunder was subject to the
satisfaction, on or before the Closing Date, of the following conditions:
3A. OPINION OF PURCHASERS' SPECIAL COUNSEL. Such Purchaser shall have
received from Hebb & Gitlin, who is acting as special counsel for the Purchasers
in connection with this transaction, a favorable opinion satisfactory to such
Purchaser as to such matters incident to the matters herein contemplated as it
may reasonably request, substantially in the form of Exhibit B1 attached hereto.
3B. OPINION OF COMPANY'S COUNSEL. Such Purchaser shall have received from
Richard Madsen, Esq., general counsel for the Company, a favorable opinion
satisfactory to such Purchaser and substantially in the form of Exhibit B2
attached hereto.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and
warranties contained in paragraph 8 hereof shall be true on and as of the
Closing Date, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on the Closing Date no Event of Default or
Default; and the Company shall have delivered to such Purchaser a certifi-cate
dated the Closing Date, substantially in the form of Exhibit C attached hereto,
and signed by the officers indicated in such form, to such effect. The Company
shall have delivered a certificate dated the Closing Date and signed by the
Secretary or an Assistant Secretary of the Company, substantially in the form of
Exhibit D attached hereto, with respect to the matters therein set forth.
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment
for the Notes to be purchased by such Purchaser on the Closing Date on the terms
and conditions herein provided (including the use of the proceeds of such Notes
by the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, section 5 of the Securities Act or Regulation G,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject such Purchaser to any tax, penalty, liability or other onerous condition
under or pursuant to any applicable law or governmental regulation, and such
Purchaser shall have received such certificates or other evidence as it may
request to establish compliance with this condition.
3E. PROCEEDINGS. All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated hereby and all documents
incident thereto shall be satisfactory in substance and form to such Purchaser,
and such Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
3F. SALE OF NOTES TO OTHER PURCHASERS. The Company shall have sold to the
other Purchasers the Notes to be purchased by them at the closing and shall have
received payment in full therefor.
A-7
<PAGE>
3G. CLOSING EXPENSES. The Company shall have paid at the closing the
statement for fees and disbursements of the special counsel for the Purchasers
presented at the closing.
4. PREPAYMENTS. The Notes shall be subject to prepayment with respect to
the required prepayments specified in paragraph 4A hereof, prepayment with
respect to the optional prepayments permitted by paragraph 4B hereof, repurchase
by the Company at the option of each holder as specified in paragraph 4E,
paragraph 4G hereof and paragraph 5I hereof.
4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid in full, the
Company shall apply to the prepayment of the Notes, without premium, the sum of
Eight Million Eight Hundred Fifty Thousand Dollars ($8,850,000) on December 15
in each of the years 1996 to 2001, inclusive, and such principal amounts of the
Notes, together with interest thereon to the prepayment dates, shall become due
on such prepayment dates. The remaining Eight Million Nine Hundred Thousand
Dollars ($8,900,000) in principal amount of the Notes, together with interest
accrued thereon, shall become due on the maturity date of the Notes.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes shall be
subject to prepayment, in whole at any time or from time to time in part (in
multiples of $5,000,000), at the option of the Company, at one hundred percent
(100%) of the principal amount so prepaid plus interest thereon to the
prepayment date and the Yield-Maintenance Amount, if any, with respect to each
Note. Any partial prepayment of the Notes pursuant to this paragraph 4B shall
be applied in satisfaction of required payments of principal in inverse order of
their scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of
each Note irrevocable written notice of any prepayment pursuant to paragraph 4B
hereof not less than 30, nor more than 60, days prior to the prepayment date,
specifying such prepayment date and the principal amount of the Notes, and of
the Notes held by such holder, to be prepaid on such date and stating that such
prepayment is to be made pursuant to paragraph 4B of this Agreement. Notice of
prepayment having been given as aforesaid, the principal amount of the Notes
specified in such notice, together with interest thereon to the prepayment date
and together with the Yield-Maintenance Amount, if any, with respect thereto,
shall become due and payable on such prepayment date. The Company shall, on or
before the day on which it gives written notice of any prepayment pursuant to
paragraph 4B hereof, give telephonic notice of the principal amount of the Notes
to be prepaid and the prepayment date to each Significant Holder which shall
have designated a recipient of such notices in the Purchaser Schedule attached
hereto or by notice in writing to the Company. In addition, the Company shall,
on the day before such prepayment date, deliver, by facsimile, a written notice
to such recipient of the amount of the Yield-Maintenance Amount, if any,
together with supporting calculations in reasonable detail.
4D. PARTIAL PAYMENTS PRO RATA. Upon any partial prepayment of the Notes
pursuant to paragraph 4A or paragraph 4B of this Agreement, the principal amount
so prepaid shall be allocated to all Notes at the time outstanding (including,
for the purpose of this paragraph 4D only, all Notes prepaid or otherwise
retired or purchased or otherwise acquired by the Company or any of the
Subsidiaries or Affiliates other than by prepayment pursuant to paragraph 4A,
paragraph 4B or paragraph 5I) in proportion to the respective outstanding
principal amounts thereof.
A-8
<PAGE>
4E. RIGHT TO PUT.
(I) GRANTING OF PUT. The Company hereby gives and grants to each
holder of Notes the option, right and privilege (such option, right and
privilege herein collectively referred to as the "Right to Put") to require
the Company, upon or after the occurrence of any Designated Event, to
purchase from such holder on the terms and conditions hereinafter set
forth, and the Company agrees so to purchase from such holder, for an
amount equal to the Agreed Put Consideration, all, but not less than all,
of the Notes held by such holder.
(II) EXERCISE OF PUT. Within ten (10) Business Days after the
occurrence of any Designated Event, the Company shall give each holder of
Notes substantially simultaneous written notice thereof describing such
Designated Event, and the facts and circumstances surrounding the
occurrence thereof, in reasonable detail. At any time prior to ninety (90)
days after any holder of Notes shall receive such notice, such holder may
exercise its Right to Put by delivering to the Company a notice of sale (a
"Notice of Sale") substantially in the form of Exhibit E hereto. If a
holder of Notes shall deliver a Notice of Sale, the Company shall purchase
the Notes then held by such holder on the date specified in such notice
(which shall be not less than fifteen (15) days after delivery of such
Notice of Sale), and such holder shall sell such Notes to the Company
without recourse, representation or warranty (other than as to such
holder's full right, title and interest to such Notes free of any adverse
claim therein), at a price, payable in immediately available funds by wire
transfer to the account specified pursuant to paragraph 11A hereof or to
such other account as may be specified in such notice, equal to the Agreed
Put Consideration. Promptly after (and, in any event, within two (2)
Business Days of) its receipt of any Notice of Sale, the Company shall give
substantially simultaneous written notice thereof to all other holders of
Notes. Each holder of Notes shall have the rights specified in this
paragraph 4E with respect to each Designated Event which shall occur,
regardless of any act or omission to act with respect to any previous
Designated Event.
4F. RETIREMENT OF NOTES. The Company shall not, and shall not permit any
of the Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in
part prior to their stated final maturity (other than by prepayment pursuant to
paragraph 4A or paragraph 4B or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly (other than pursuant to paragraph 4E hereof, paragraph 4G or
paragraph 5I hereof), Notes held by any holder unless the Company or such
Subsidiary or Affiliate shall have offered to prepay or otherwise retire or
purchase or otherwise acquire, as the case may be, the same proportion of the
aggregate principal amount of Notes held by each other holder of Notes at the
time outstanding upon the same terms and conditions. Any Notes so prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any of
the Subsidiaries or Affiliates shall not be deemed to be outstanding for any
purpose under this Agreement except as provided in paragraph 4D hereof.
4G. TENDER OF NOTES IN PAYMENT OF WARRANT EXERCISE PRICE. The Warrant
Agreement will provide that the purchase price for the Warrants issuable
thereunder may be paid, in whole or in part, by a tender of Notes. The Company
shall be deemed to have reacquired a principal amount of Notes equal to the
aggregate principal amount of Notes tendered in payment of the
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Warrant exercise price, and such Notes so deemed to have been reacquired shall
not be considered outstanding for any purposes of this Agreement. In the event
that less than the entire outstanding principal amount of a Note is tendered in
payment of the Warrant exercise price, the Company shall issue and deliver to
the holder thereof a new Note equal in principal amount to the outstanding
principal amount of the Note so tendered less the portion thereof applied to the
Warrant exercise price.
5. AFFIRMATIVE COVENANTS.
5A. PAYMENT OF TAXES AND CLAIMS. The Company will, and will cause each
Subsidiary to, pay before they become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed
upon it or its Property, and
(ii) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons that, if unpaid, will more
likely than not result in the creation of a Lien upon its Property,
provided that items of the foregoing description need not be paid while being
contested in good faith and in an appropriate manner.
5B. MAINTENANCE OF PROPERTIES AND CORPORATE EXISTENCE; OTHER MATTERS. The
Company will, and will cause each Subsidiary to,
(I) PROPERTY -- maintain its Property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto;
(II) INSURANCE --
(a) maintain, with financially sound and reputable insurers,
insurance (or maintain self-insurance, including without limitation,
insurance with subsidiaries, if that shall be reasonable in the
circumstances) with respect to its Property and business against such
casualties and contingencies, of such types (including, without
limitation, loss or damage, public liability, business interruption,
larceny, embezzlement or other criminal misappropriation) and in such
amounts as is reasonably appropriate for the risks associated with the
business of the Company and the Subsidiaries; and
(b) at the request of any Significant Holder, deliver to such
Significant Holder for examination, as soon as practicable, policies
or certificates of insurance or self-insurance or certificates of
insurance brokers evidencing compliance with the provisions of this
clause (ii);
(III) FINANCIAL RECORDS -- keep true books of records and accounts in
which full and correct entries shall be made of all its business
transactions so that the financial statements required by paragraph 5D
hereof may be prepared in accordance with generally accepted accounting
principles as in effect at the time of such preparation;
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(IV) CORPORATE EXISTENCE AND RIGHTS -- maintain, preserve and renew
the Company's existence as a corporation organized under the laws of a
state of the United States of America;
(V) COMPLIANCE WITH LAW -- not be in violation of any law, ordinance
or governmental rule or regulation to which it is subject (including,
without limitation, laws, ordinances, rules or regulations relating to
environmental matters) and not fail to obtain any license, permit,
franchise or other governmental authorization necessary to the ownership of
its Properties or to the conduct of its business, which violation or
failure to obtain will, more likely than not, materially adversely affect
the business or financial condition of the Company and the Subsidiaries,
taken as a whole, or the ability of the Company to perform its obligations
set forth in this Agreement and in the Notes;
(VI) OFFERING OF NOTES -- take no action (and will allow no agent
acting on its behalf to take any action) that would subject the issuance or
sale of the Notes to the provisions of section 5 of the Securities Act or
to the registration or qualification provisions of any securities or Blue
Sky law of any applicable jurisdiction; and
(VII) USE OF PROCEEDS -- use the proceeds of sale of the Notes to
repay Debt of the Company, to reduce the amount of receivables sold
pursuant to the Trade Receivables Agreement and for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any "margin stock" as defined in Regulation G (12 CFR Part 207) of
the Board of Governors of the Federal Reserve System (herein called "margin
stock") or for the purpose of maintaining, reducing or retiring any Debt
which was originally incurred to purchase or carry any stock that is
currently a margin stock or for any other purpose which might constitute
this transaction a "purpose credit" within the meaning of such Regulation
G. Neither the Company nor any agent acting on its behalf has taken or
will take any action which might cause this Agreement or the Notes to
violate Regulation G, Regulation T, Regulation U, Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act, in each case as was in effect on the Closing
Date, as is now in effect or as the same may hereafter be in effect.
5C. PAYMENT OF NOTES AND MAINTENANCE OF OFFICE. The Company will
punctually pay, or cause to be paid, the principal and interest (and Yield-
Maintenance Amount, if any) to become due in respect of the Notes according to
the terms thereof and shall maintain an office at the address of the Company set
forth in paragraph 11K hereof where notices, presentations and demands in
respect of this Agreement or the Notes may be made upon it. Such office shall
be maintained at such address until such time as the Company shall notify in
writing the holders of the Notes of any change of location of such office.
5D. FINANCIAL STATEMENTS. The Company covenants that it will deliver to
each Significant Holder in quadruplicate:
(i) as soon as practicable and in any event within sixty (60) days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income and cash
flows of the Company and the Subsidiaries
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for such period and for the period from the beginning of the current fiscal
year to the end of such quarterly period, and a consolidated balance sheet
of the Company and the Subsidiaries as at the end of such quarterly period,
setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, accompanied by
additional financial statements containing the same information prepared in
accordance with generally accepted accounting principles as then in effect
if the accounting principles applied by the Company in the preparation of
the financial statements first described in this clause (i) differ in any
material respect from generally accepted accounting principles as then in
effect, in both cases in reasonable detail and satisfactory in form to the
Required Holders and certified by an authorized financial officer of the
Company, subject to changes resulting from year-end adjustments, provided,
however, that so long as the accounting principles applied by the Company
in the preparation of the financial statements first described in this
clause (i) do not differ in any material respect from generally accepted
accounting principles as then in effect, delivery pursuant to clause (iii)
below of copies of the Quarterly Report on Form 10-Q of the Company for
such quarterly period filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements of this clause (i) (provided
that such Form 10-Q is accompanied by any other financial information
incorporated by reference in such Form 10-Q, and provided further, that the
Company provide to each holder of Notes who so requests in writing any
document incorporated by reference in such Form 10-Q);
(ii) as soon as practicable and in any event within 90 days after the
end of each fiscal year, consolidating and consolidated statements of
income and cash flows and a consolidated statement of stockholders' equity
of the Company and the Subsidiar-ies for such year, and a consolidating and
consolidated balance sheet of the Company and the Subsidiaries as at the
end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit,
accompanied by additional financial statements containing the same
information prepared in accordance with generally accepted accounting
principles as then in effect if the accounting principles applied by the
Company in the preparation of the financial statement first described in
this clause (ii) differ in any material respect from generally accepted
accounting principles as then in effect, in both cases all in reasonable
detail and satisfactory in form to the Required Holders and, as to the
consolidated statements prepared in accordance with generally accepted
accounting principles as then in effect, reported on by independent public
accountants of recognized national standing selected by the Company whose
report shall be without limitation as to the scope of the audit and
satisfactory in form and substance to the Required Holders and, as to the
consolidating statements and financial statements not certified by such
independent public accountants, certified by an authorized financial
officer of the Company, provided, however, that so long as the accounting
principles applied by the Company in the preparation of the financial
statements first described in this clause (ii) do not differ in any
material respect from generally accepted accounting principles as then in
effect, delivery pursuant to clause (iii) below of copies of the Annual
Report on Form 10-K of the Company for such fiscal year filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (ii) (provided that such Form 10-K is
accompanied by any other financial information incorporated by reference in
such Form 10-K, and provided further, that the Company provide to each
holder of Notes who so requests in writing any document incorporated by
reference in such Form 10-K);
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(iii) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as it shall send to its
public stockholders and copies of all registration statements (without
exhibits) and all reports which it files with the Securities and Exchange
Commission (or any governmental body or agency succeeding to the functions
of the Securities and Exchange Commission);
(iv) a copy of each other report submitted to the Company or any
Subsidiary by independent accountants in connection with any annual,
interim or special audit made by them of the books of the Company or any
Subsidiary (to be provided to each Significant Holder at such time, if any,
as the contents of or analysis contained within any such report is (or
becomes likely to be) incorporated into a Form 10-Q or a Form 10-K filing
to be made by the Company with the Securities and Exchange Commission);
(v) copies of all agreements governing and instruments evidencing Debt
(other than Debt of a type described in subsection (vi) of the definition
of Debt) of the Company or any Consolidated Subsidiary containing any
Financial Covenant, and all agreements amending, modifying or supplementing
any such agreement or instrument affecting, adding or deleting any
Financial Covenant, in each case, entered into on or after the First
Amendment Date;
(vi) all certificates and notices delivered or required to be
delivered to the holders of any other Debt of the Company or any
Consolidated Subsidiary on or after the First Amendment Date, in each case,
in connection with the compliance by the Company or any Consolidated
Subsidiary with any Financial Covenant; and
(vii) with reasonable promptness, such other financial data as such
Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i)
and (ii) above, the Company will deliver to each Significant Holder an Officer's
Certificate (a) demonstrating (with computations in reasonable detail, where
appropriate) compliance by the Company and the Subsidiaries with the provisions
of paragraph 6A through paragraph 6M hereof and paragraph 5I, (b) demonstrating
a reconciliation in reasonable detail of the differences between financial
statements prepared in accordance with generally accepted accounting principles
as then in effect and any other similar financial statements provided
contemporaneously therewith prepared other than in accordance with generally
accepted accounting principles, (c) stating that there exists no Event of
Default or Default, or, if any Event of Default or Default exists, specifying
the nature and period of existence thereof and what action the Company proposes
to take with respect thereto, and (d) stating whether or not there has been any
material change in the self-insurance requirements of the Company.
Together with each delivery of financial statements required by clause (ii)
above, the Company will deliver to each Significant Holder a certificate of such
accountants stating that, in making the audit necessary for their report on such
financial statements, they have obtained no knowledge of any Event of Default or
Default, or, if they have obtained knowledge of any Event of Default or Default,
specifying the nature and period of existence thereof. Such accountants,
however, shall not be liable to anyone by reason of their failure to obtain
knowledge of any Event
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of Default or Default which would not be disclosed in the course of an audit
conducted in accordance with generally accepted auditing standards.
5E. DEFAULT NOTICES. The Company covenants that immediately after any
Responsible Officer obtains knowledge of an Event of Default or Default, it will
deliver to each Significant Holder an Officer's Certificate specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto.
5F. INFORMATION REQUIRED BY RULE 144A. The Company covenants that it
will, upon the request of any Significant Holder, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such Significant Holder may reasonably determine to be
necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act in connection with the resale of Notes,
except at such times as the Company is subject to the reporting requirements of
sections 13 or 15(d) of the Exchange Act. For the purpose of this paragraph 5F,
the term "qualified institutional buyer" shall have the meaning specified in
Rule 144A under the Securities Act.
5G. INSPECTION OF PROPERTY. The Company will permit any Person designated
in writing by any Significant Holder, at such Significant Holder's expense (or
if an Event of Default or a Default shall exist, at the expense of the Company),
to visit and inspect any of the Properties of the Company and the Subsidiaries,
to examine the corporate books and financial records of the Company and the
Subsidiaries and make copies thereof or extracts therefrom, all at such
reasonable times and as often as such Significant Holder may reasonably request.
In addition, so long as (i) a Default or an Event of Default shall have occurred
and be continuing, (ii) in the reasonable judgment of any Significant Holder, a
material adverse change shall have occurred with respect to the business or
financial condition of the Company and the Subsidiaries taken as a whole, or
(iii) any Significant Holder shall have a reasonable basis for questioning the
validity of any line item in any financial statement of the Company or the
validity of such financial statement as a whole, the Company will permit any
Person designated in writing by any Significant Holder to discuss the affairs,
finances and accounts of any of such corporations with the principal officers of
the Company and its independent public accountants, all at such reasonable times
and as often as such Significant Holder may reasonably request.
5H. COVENANT TO SECURE NOTE EQUALLY. The Company covenants that, if it or
any Subsidiary shall create or assume any Lien upon any of its Property, whether
now owned or hereafter acquired, other than Liens permitted by the provisions of
paragraph 6A hereof or any similar provision incorporated herein by reference
(unless prior written consent to the creation or assumption thereof shall have
been obtained pursuant to paragraph 11C hereof), it will make or cause to be
made effective provision whereby the Notes will be secured by such Lien equally
and ratably with any and all other Debt thereby secured so long as any such
other Debt shall be so secured.
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5I. INVOLUNTARY PREPAYMENT.
(i) Upon the occurrence of any Prepayment Event, the Company shall
make an offer to the holders of Notes to repurchase the Notes as set forth
in this paragraph 5I. Immediately upon the occurrence of the Prepayment
Event but in any event within five (5) Business Days thereafter, the
Company shall give each holder of the Notes substantially simultaneous
written notice thereof describing such Prepayment Event in reasonable
detail including, without limitation, a description of the issue of Debt
giving rise to such Prepayment Event, the facts and circumstances
surrounding the occurrence thereof, the manner of the prepayment,
redemption or defeasance of such other Debt in connection therewith and the
manner specified in this paragraph 5I of accepting or rejecting such offer
by the holder. Such notice shall also contain the Company's offer (the
"Prepayment Offer") to purchase from each such holder of Notes a principal
amount of the Notes held by such holder equal to its Noteholder Share of
the Ratable Prepayment Amount at a purchase price equal to the Agreed Put
Consideration.
(ii) A holder of Notes may accept the Prepayment Offer, in whole or in
part, through a written acceptance (the "Noteholder Acceptance") delivered
to the Company within forty-five (45) days of such holder's receipt of the
Prepayment Offer (the "Offer Period"). Promptly after (and, in any event,
within two (2) Business Days of) its receipt of any Noteholder Acceptance,
the Company shall give substantially simultaneous written notice thereof to
all other holders of Notes.
(iii) If such holder shall accept the offer, the Company shall
purchase that portion (the "Prepayment Portion"), expressed as a
percentage, of the principal amount of Notes held by such holder specified
in its Noteholder Acceptance, provided that the principal amount of Notes
the Company is required to purchase shall not exceed such holder's
Noteholder Share of the Ratable Prepayment Amount. Such purchase shall be
made on the fifteenth (15th) day after the expiration of the Offer Period
or, if later, the first day on which any holder of any other issue of Debt
would receive a prepayment in respect of such Prepayment Event but in no
event later than sixty (60) days after the expiration of the Offer Period.
On the date of purchase, such holder shall sell the Prepayment Portion of
such Notes to the Company without recourse, representation or warranty
(other than as to such holder's full right, title and interest to the
Prepayment Portion of such Notes free of any adverse claim created by such
holder therein), at a price, payable in immediately available funds by wire
transfer to the account specified pursuant to paragraph 11.A hereof or to
such other account as may be specified in such notice, equal to the Agreed
Put Consideration.
(iv) Upon any partial prepayment of a Note pursuant to this paragraph
5I, such Note may, at the option of the holder thereof, be:
(a) surrendered to the Company, in which case the Company shall
promptly execute and issue to the holder thereof a new Note in a
principal amount equal to the principal amount remaining unpaid on the
surrendered Note after giving effect to such prepayment; or
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(b) made available to the Company for notation thereon of the
portion of the principal so prepaid.
In case the entire principal amount of any Note is prepaid, such Note shall
be surrendered to the Company for cancellation and shall not be reissued,
and no Note shall be issued in lieu of the prepaid principal amount of any
Note.
(v) If the occurrence of any Prepayment Event causes the Company or
any Subsidiary to defease, prepay, repurchase or have a reduction in the
available commitment under any issue of Debt prior to the time that any
Notes would be repurchased hereunder, then simultaneously with such
defeasance, prepayment, repurchase or reduction in respect of such other
Debt, the Company shall pay to each holder an amount equal to its
Noteholder Share of the Ratable Prepayment Amount at a purchase price equal
to the Agreed Put Consideration, which payment shall satisfy all
obligations of the Company to the holders in respect of clauses (i) through
(iii), inclusive, of this paragraph 5I. At the time of the making of such
payment, the Company shall notify the holder of such payment in writing,
which notice shall state that such payment is being made pursuant to this
paragraph 5I(v), shall contain a description of the issue of Debt giving
rise to such Prepayment Event, the facts and circumstances surrounding the
occurrence thereof and the manner of the prepayment, redemption or
defeasance of such other Debt in connection therewith (unless such
information shall have been contained in a previously delivered notice
pursuant to paragraph 5I(i) with respect to such Prepayment Event) and
describe the procedure detailed in this paragraph 5I(v) pursuant to which a
holder may elect to rescind such payment.
In the event that a holder of Notes receiving a payment pursuant to
this paragraph 5I(v) elects to rescind the prepayment arising from such
Prepayment Event with respect to all Notes or any portion of the Notes held
by such holder, such holder shall deliver to the Company, within forty-five
(45) days of such holder's receipt of the notice specified in this
paragraph 5I(v), written notice of such recision, and shall
contemporaneously pay to the Company in immediately available funds an
amount equal to the amount so paid such holder pursuant to this paragraph
5I(v) or, in the case of a recision with respect to only a portion of the
prepayment made to such holder, an amount equal to that portion of such
prepayment which such holder wishes to rescind.
(vi) Each holder of Notes shall have the rights specified in this
paragraph 5I with respect to each Prepayment Event which shall occur,
regardless of any act or omission to act with respect to any previous
Prepayment Event. In the event that the Prepayment Event is also a
Designated Event subject to paragraph 4 of this Agreement, the Company
shall comply with the provisions of clause (v) of this paragraph 5I with
respect to the matters contained therein; in all other respect such
Designated Event will be treated as a Designated Event and not as a
Prepayment Event, and the Company will be required to comply with paragraph
4E in connection therewith. In the event that the Prepayment Event would
also be an event which results in an Event of Default, this paragraph 5I
shall not be deemed to in any respects limit the rights and remedies of the
holders under paragraph 7.
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(vii) Prepayments made pursuant to this paragraph 5I shall be applied
ratably to the obligations of the Company to make required prepayments in
respect of the Notes pursuant to paragraph 4A hereof and to pay the
remaining principal amount thereof at maturity.
6. NEGATIVE COVENANTS.
6A. LIMITATIONS ON LIENS.
(I) NEGATIVE PLEDGE. The Company will not, and will not permit any
Subsidiary to, create, assume, or suffer to exist any Lien upon any of the
Property of the Company or any Subsidiary, whether now owned or hereafter
acquired, except:
(a) Liens securing Debt and other obligations in an aggregate
principal amount at any time not exceeding ten percent (10%) of
Consolidated Tangible Net Worth at such time, provided, however, that
neither the Company nor any Subsidiary shall create, assume or
otherwise incur any Lien upon any of its respective Properties unless
the Company is in compliance with paragraph 6L of this Agreement;
(b) Liens arising out of transactions contemplated by the terms
of the Trade Receivables Agreement;
(c) Purchase Money Mortgages if, after giving effect thereto and
to any concurrent transactions:
(I) each such Purchase Money Mortgage secures an amount not
exceeding one hundred percent (100%) of the cost of the
particular Property to which it relates (or, in the case of a
Lien existing on any Property of any corporation at the time it
becomes a Subsidiary, the Fair Market Value of such Property at
such time);
(II) such Purchase Money Mortgage encumbers only Property
(A) purchased after the Closing Date and (B) acquired with the
proceeds of the Debt secured thereby; and
(III) such Property was acquired in the ordinary course of
business of the corporation acquiring such Property,
provided, however, that neither the Company nor any Subsidiary shall
create, assume or otherwise incur any Purchase Money Mortgage unless
the Company is in compliance with paragraph 6L of this Agreement;
(d) Liens incurred in connection with Lease Transactions to the
extent that such Liens encumber Property covered by such Lease
Transactions; provided, however, that neither the Company nor any
Subsidiary shall create, assume or otherwise incur any such Liens
unless the Company is in compliance with paragraph 6L of this
Agreement, and provided further that, immediately after
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giving effect to the investment of the Company or the Subsidiary in
such Lease Transaction, the aggregate amount of the investments then
outstanding of the Company and the Subsidiaries in all Lease
Transactions does not exceed Fifty Million Dollars ($50,000,000), it
being agreed that for the purpose of such calculation the amount of
each investment shall be determined on a Net After-Tax Cash Basis;
(e) Liens upon San Marcos Bonds, and the proceeds thereof, which
have been repurchased upon tender by the holders thereof in accordance
with the terms of the indenture governing such San Marcos Bonds,
until, but only until, the trustee with respect to such San Marcos
Bonds has received the purchase price therefor upon the remarketing
thereof and the issuer of the letter of credit that was drawn in
connection with such tender has been reimbursed for such amounts
drawn; provided, however, that the Company shall actively seek to
remarket such bonds pursuant to the provisions of the IDB Financing of
the Company's San Marcos, Texas facility or, to the extent necessary
in connection with any termination of any outstanding letter of credit
relating to such facility, to modify the structure of such IDB
Financing to the extent necessary to permit a long-term reissuance of
the repurchased San Marcos Bonds; and
(f) unless, at the time of incurrence thereof, a Default or an
Event of Default shall occur or be continuing, Liens incurred in
connection with the deposit of cash collateral to secure reimbursement
obligations of the Company relating to the San Marcos Bonds, but only
in connection with the extension of an outstanding letter of credit
relating to such facility and only in an amount of cash collateral not
exceeding the maximum amount which may be drawn under such letter of
credit; provided, however, that the Company shall actively seek to
obtain a replacement letter of credit that does not require cash
collateralization (and thus relieves the Company of any requirement to
deposit cash collateral or to secure such reimbursement obligations);
it being understood that each such Lien may be allocated by the Company to
any one of the preceding categories in which it may, by the terms of such
category, be included.
(II) FINANCING STATEMENTS. The Company will not, and will not permit
any Subsidiary to, sign or file a financing statement under the Uniform
Commercial Code of any jurisdiction that names the Company or such
Subsidiary as debtor, or sign any security agreement authorizing any
secured party thereunder to file any such financing statement, except, in
any such case, a financing statement filed or to be filed to perfect or
protect a Lien that the Company or such Subsidiary is entitled to create,
assume or incur, or permit to exist, under the foregoing provisions of this
paragraph 6.A or to evidence for informational purposes a lessor's interest
in Property leased to the Company or any such Subsidiary.
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6B. LIMITATIONS ON LEASES.
(I) LIMITATIONS ON LEASES. The Company will not, and will not permit
any Subsidiary to, at any time be or become liable at any time as lessee
under any lease (other than a lease giving rise to a Capitalized Lease
Obligation) having an original (or then unexpired) term of one year or more
if:
(a) the aggregate Net Rentals payable in any period of twelve
(12) consecutive calendar months following such time under such lease
and all other such leases under which the Company or a Subsidiary is
lessee, minus
(b) all amounts of a similar nature due from sub-lessees under
such leases that are reasonably expected to be collected during the
same period,
would exceed ten percent (10%) of Consolidated Tangible Net Worth at such
time.
(II) SUBSIDIARY. Any corporation that becomes a Subsidiary after the
Closing Date shall be deemed to have become liable as lessee, at the time
it becomes a Subsidiary, under all leases (under which it is liable as
lessee) of such corporation existing immediately after it becomes a
Subsidiary.
6C. LIMITATIONS ON INDEBTEDNESS. The Company will not, and will not
permit any Subsidiary to, create, issue, assume or guarantee any Debt (other
than Intercompany Debt) except that:
(i) on or prior to April 26, 1997:
(a) the Company may incur Debt under the Credit Agreement or an
Acceptable Replacement Credit Facility;
(b) the Company may incur the 1994 Senior Debt and the 1994
Subordinated Debt;
(c) the Company and the Subsidiaries may incur unsecured Debt, in
an aggregate principal amount not to exceed $10,000,000 at any time
outstanding; provided, however, that no more than $5,000,000 of such
amount may be Debt of Subsidiaries;
(d) the Subsidiaries may incur Debt under revolving credit
facilities so long as the aggregate amount of all such Debt
outstanding at any time shall not exceed $5,000,000;
(e) the Company and the Subsidiaries may incur Debt described in
clause (vi) of the definition of "Debt" contained in paragraph 10B;
(f) Debt incurred in connection with the resale or remarketing of
San Marcos Bonds, but only to the extent that:
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(I) San Marcos Bonds in an aggregate principal amount of
Sixteen Million Five Hundred Thousand Dollars ($16,500,000) were
issued and outstanding and held and owned by Persons other than
the Company, any Subsidiary or any Affiliate on May 10, 1994; and
(II) the San Marcos Bonds to be resold or remarketed were
repurchased by the Company upon tender by the holders thereof
after May 10, 1994 in accordance with the terms of the indenture
governing the San Marcos Bonds;
and
(g) replacement unsecured San Marcos Bonds, in an aggregate
principal amount not exceeding Sixteen Million Five Hundred Thousand
Dollars ($16,500,000), if, and only if, Sixteen Million Five Hundred
Thousand Dollars ($16,500,000) in aggregate amount of San Marcos Bonds
were redeemed in full as a result of the failure of the bank which has
issued any letter of credit relating to the San Marcos Bonds to extend
or renew such outstanding letter of credit (for the avoidance of
doubt, the aggregate principal amount of San Marcos Bonds and
replacement San Marcos Bonds, whether outstanding on the date hereof
or thereafter issued pursuant to clause (f) or clause (g) of this
paragraph 6C(i), shall not exceed Sixteen Million Five Hundred
Thousand Dollars ($16,500,000) at any time);
in each case, so long as after the incurrence thereof, and after giving
effect thereto, no Default or Event of Default (including any Default or
Event of Default arising out of any breach of paragraph 6R hereof) shall
have occurred or be continuing; and
(ii) on or after April 27, 1997, and at any time during any period set
forth in the tables below, the Company or any Subsidiary may incur Debt if,
immediately after giving effect to such incurrence of Debt:
(a) Consolidated Senior Debt would not exceed the percentage
applicable to such period of the sum of Consolidated Total Debt plus
Consolidated Tangible Net Worth, all as set forth in the table
immediately below:
<TABLE>
<CAPTION>
If such time occurs during the period: Percentage:
------------------------------------- ----------
<S> <C>
From April 27, 1997 through
and including July 31, 1998 38.00%
At all times on or after
August 1, 1998 35.00%;
</TABLE>
and
(b) Combined Subsidiary Debt would not exceed five percent (5%)
of Consolidated Tangible Net Worth;
A-20
<PAGE>
and so long as after the incurrence thereof, and after giving effect
thereto, no Default or Event of Default (including any Default or Event of
Default arising out of any breach of paragraph 6L or paragraph 6R hereof)
shall have occurred or be continuing.
6D. LIMITATIONS ON MERGERS AND SALES OF ASSETS. The Company will not, and
will not permit any Subsidiary to (whether in a single transaction or a series
of transactions), consolidate with, merge into or transfer substantially all of
its Property (whether now owned or hereafter acquired) to any other Person, or
permit any other Person to consolidate with, merge into, or transfer
substantially all of its Property to, the Company, except that any Subsidiary
may merge or consolidate with or into, or transfer substantially all of its
Property to, or acquire substantially all of the Property of, any other Person
and the Company may merge or consolidate with or into, or acquire substantially
all of the Property of, any other Person, if:
(i) in the case of any merger or consolidation involving the Company,
the corporation that results from such merger or consolidation is organized
under the laws of the United States of America or any jurisdiction thereof
and such corporation expressly assumes in writing the due and punctual
payment of the principal of, and Yield-Maintenance Amount, if any, and
interest on, all of the Notes, according to their tenor, and the due and
punctual performance and observance of all the covenants in the Notes and
this Agreement to be performed or observed by the Company, all in an
agreement or instrument satisfactory in form and substance to the Required
Holders;
(ii) immediately after the consummation of the transaction, and after
giving effect thereto, the Company, the corporation that results from any
such merger or consolidation with the Company or the Person that acquires
such Property from the Company, and in each case, its Subsidiaries shall be
engaged principally in the businesses of either or both of manufacturing
and distributing aerospace products or technically related products and of
providing services related to such products;
(iii) immediately after the consummation of the transaction, and
after giving effect thereto, no Event of Default or Default would exist;
and
(iv) immediately after the consummation of the transaction, and after
giving effect thereto, the Company could incur at least One Dollar ($1.00)
of additional Debt pursuant to paragraph 6.C hereof.
6E. ADJUSTED CONSOLIDATED TANGIBLE NET WORTH MAINTENANCE. The Company
will maintain at all times Adjusted Consolidated Tangible Net Worth of not less
than the sum of:
(i) $125,000,000; plus
(ii) the sum of the Fiscal Quarter Net Worth Increase Amounts for
each fiscal quarter of the Company ended after July 31, 1994; plus
(iii) the aggregate amount of all capital contributions (which
amount shall include, without limitation, all amounts attributable to
the conversion of debt of the Company to equity of the Company, valued
at the amount added to
A-21
<PAGE>
stockholders' equity in accordance with GAAP) received by the Company
or any Consolidated Subsidiary (in each case, other than contributions
originally made by the Company or any Consolidated Subsidiary) in
cash, in Property other than cash or by conversion of Debt of the
Company at any time after the Third Amendment Date.
6F. LIMITATIONS ON DISTRIBUTIONS.
(I) LIMIT ON DISTRIBUTIONS. The Company will not, and will not permit
any Subsidiary to, at any time declare or make or incur any liability to
declare or make any Distribution; provided, however, that:
(a) the Company may, repurchase, purchase, redeem or otherwise
acquire shares of its common stock or warrants, rights or options to
acquire such stock issued pursuant to Restricted Stock Plans, Stock
Option Plans, Stock Incentive Plans, the Rights Agreement, the ESOP,
or Non-Employee Directors Stock-Option Plans;
(b) the Company may declare or make any Distribution if,
immediately after giving effect to such Distribution,
(I) the Debt Ratio would not exceed 2.50:1.00;
(II) the Company could incur $1.00 of additional Debt
pursuant to paragraph 6.C hereof;
(III) if the time of declaration or making, as the case may
be, of such Distribution is on or prior to April 26, 1997,
Consolidated Senior Debt at such time would not exceed thirty-
eight percent (38%) of the sum of Consolidated Total Debt plus
Consolidated Tangible Net Worth at such time; and
(IV) after giving effect to such transactions, no Event of
Default or Default would then exist; and
(c) the Company may declare or make any Permitted Preferred
Dividend if, prior to and immediately after giving effect to such
Permitted Preferred Dividend, no Default or Event of Default shall
exist.
(II) TIME OF PAYMENT. The Company will not authorize a Distribution
on its capital stock which is not payable within sixty (60) days of
authorization.
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<PAGE>
6G. FIXED CHARGE COVERAGE. The Company will maintain for each day a ratio
of Consolidated Net Income Available for Fixed Charges for the period of 365
consecutive days (or 366 consecutive days for any such period that includes
February 29) ending on such day to Consolidated Fixed Charges for such period,
of not less than the ratio set forth in the chart below opposite the period set
forth below in which such day occurs:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Fiscal Year 1994 1.40 to 1.00
Fiscal Year 1995 1.55 to 1.00
Fiscal Year 1996 1.90 to 1.00
Fiscal Year 1997 and thereafter 2.00 to 1.00;
</TABLE>
6H. LIMITATIONS ON CAPITAL EXPENDITURES. The Company will not, and will not
permit any Subsidiary to, make, on or before April 26, 1997, any expenditures
for fixed or capital assets which would cause the aggregate of all such
expenditures made by the Company and the Subsidiaries in any period of four full
consecutive fiscal quarters to exceed the sum of the amounts set forth below
opposite such four fiscal quarters:
<TABLE>
<CAPTION>
Fiscal Quarters Amount
--------------- ------
<S> <C>
Each Fiscal Quarter 1994 $4,500,000
Each Fiscal Quarter 1995 $6,000,000
Each Fiscal Quarter 1996 $7,500,000
Each Fiscal Quarter 1997 $7,500,000.
</TABLE>
6I. PRIVATE OFFERING. The Company will not, and will not permit anyone
acting on its behalf to, offer the Notes or any part thereof or any similar
Securities for issue or sale to, or solicit any offer to acquire any of the same
from, anyone so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act.
6J. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not
permit any Subsidiary to, sell or transfer any Property to, or purchase or
acquire any Property of, or otherwise engage in any other transaction with, any
Affiliate, except at prices and on terms and conditions not less favorable to
the Company or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties, provided, however, that this paragraph 6J shall
not prohibit any transaction between (i) the Company or any Subsidiary and (ii)
any Affiliate that is an EEC Affiliate, if such transaction will not have a
material, adverse effect on the business, condition (financial or otherwise) or
operations of the Company, any Subsidiary or any EEC Affiliate.
6K. LINE OF BUSINESS. The Company shall not, nor shall it permit any
Subsidiary to, make any change in the nature of its business if such change
would constitute a material change in the nature of the business of the Company
and the Subsidiaries taken as a whole as conducted on the Closing Date, or
commence or permit any Subsidiary to commence any major project for the
development of a new line of products or services other than aerospace products
or technically related products or services related to such products; provided
that the Company or any Subsidiary may commence any project for the development
of such new line of products
A-23
<PAGE>
or services if, and only if, the aggregate costs and expenses related to all
such projects (including, without limitation, budgeted costs (determined from
time to time) for such new project minus any reasonably budgeted reimbursements
for such costs due from parties other than the Company or the Subsidiaries)
shall not exceed ten percent (10%) of Consolidated Tangible Net Worth at the
time each such project is commenced.
6L. LIMITATION ON CERTAIN OBLIGATIONS. The Company will not at any time
permit the sum of (w) obligations secured by Liens allocated by the Company to
the category described in paragraph 6A(i)(a) hereof, (x) obligations secured by
Liens allocated by the Company to the category described in paragraph 6A(i)(c)
hereof, (y) obligations secured by Liens allocated by the Company to the
category described in paragraph 6A(i)(d) hereof which obligations were incurred
on or subsequent to the Closing Date, and (z) Combined Subsidiary Debt, in each
case at such time, to exceed fifteen percent (15%) of Consolidated Tangible Net
Worth at such time.
6M. INCORPORATION OF NEGATIVE COVENANTS.
(i) During all such times as both the Credit Agreement shall remain in
force, and either any Debt shall be outstanding thereunder or the lenders
party thereto shall have any obligation to lend or make advances
thereunder:
(a) the provisions of paragraph 6A (except for clauses (i)(e) and
(i)(f) thereof, to the extent provided in paragraph 6M(i)(c) below)
and paragraph 6B of this Agreement shall be of no force and effect;
(b) the provisions of Sections 5.02(b), 5.02(c), 5.02(d),
5.02(e), 5.02(g), 5.02(h) and 5.02(i) of the Credit Agreement, as in
effect on the Third Amendment Date (after giving effect to the Seventh
Amendment to the Credit Agreement), but without amendment, supplement
or modification (except as set forth in paragraph 6M(ii) hereof), and
together with all relevant definitions pertaining thereto, shall be
incorporated herein by reference, mutatis mutandis;
(c) the Company shall not, nor shall it permit any Subsidiary to,
create, assume or suffer to exist any Lien securing any Debt existing
on the date hereof or incurred thereafter in connection with any IDB
Financing, except for such Liens as are expressly permitted by the
provisions of clause (e) or clause (f) of paragraph 6A(i) hereof;
provided, however, that at all times during which either the Credit
Agreement shall be of no force or effect, or there shall be no Debt
outstanding thereunder and no obligation on the part of the lenders thereto
to lend or make any advance thereunder, the provisions of paragraph 6A and
paragraph 6B of this Agreement shall be in full force and effect.
(ii) If at any time:
(a) after the Third Amendment Date, the Credit Agreement is
amended, supplemented or modified to provide Financial Covenants in
addition to, or which are more restrictive of the Company or the
Consolidated Subsidiaries than, the provisions of the Credit
Agreement, as in effect on the Third Amendment Date
A-24
<PAGE>
(after giving effect to the Seventh Amendment to the Credit Agreement
dated as of such date);
(b) after the First Amendment Date, the Company enters into any
other agreement governing, or executes any other instrument
evidencing, any Debt (or any commitment to lend), other than Debt or
commitments solely among the Company and/or one or more Consolidated
Subsidiaries; or
(c) after the First Amendment Date, the Company enters into any
amendment, supplement or modification of any agreement governing, or
any instrument evidencing, any Debt (or any commitment to lend), other
than Debt or commitments solely among the Company and/or one or more
Consolidated Subsidiaries;
then, and in each such case, each Financial Covenant set forth in such
amendment, supplement, modification or other agreement or instrument shall
be incorporated by reference herein for the remaining term of such
agreement or instrument, but only to the extent that such covenant is more
restrictive of the Company or the Consolidated Subsidiaries than the
corresponding provision of this Agreement.
(iii) In the event that any Financial Covenant contained in any other
agreement governing, or instrument evidencing, any Debt (or commitment to
lend), which Financial Covenant has been or is incorporated into this
Agreement pursuant to the provisions of paragraph 6M(ii) hereof, is
amended, supplemented or modified to make such Financial Covenant less
restrictive of the Company or the Consolidated Subsidiaries than the
incorporated Financial Covenant, the more restrictive incorporated
Financial Covenant shall continue to be incorporated herein for the
remaining term of such agreement or instrument notwithstanding such
amendment, supplement or modification. Notwithstanding the foregoing
sentence, if the provisions of such incorporated Financial Covenant were
expressed when incorporated to be more restrictive on a temporary basis, or
more restrictive only for a prescribed period, such more restrictive
provision shall be incorporated herein only on such temporary basis or only
for such prescribed period, as the case may be.
(iv) No Financial Covenant incorporated herein by virtue of paragraph
6M(ii) or paragraph 6M(iii) hereof shall supersede, replace, amend,
supplement or modify any other provision of this Agreement, including any
covenant contained herein which addresses a subject matter similar to that
of such incorporated Financial Covenant.
6N. MAINTENANCE OF SENIOR STATUS. The Company will not take any action at
any time to amend, modify or supplement any subordination provision (or any
definition of any defined term as used in any such provision) in the Existing
Subordinated Notes, the 1994 Subordinated Notes or any indenture governing the
provisions of any thereof, or otherwise take any action which would result in
any of the Existing Subordinated Notes or 1994 Subordinated Notes not being
junior or subordinated in right of payment to the Notes to the same extent such
Existing Subordinated Notes or 1994 Subordinated Notes, as the case may be, are
subordinated to the Notes on the Third Amendment Date (after giving effect to
the issuance of the 1994 Subordinated Notes). The Company shall not take any
action which would result in the Notes not constituting,
A-25
<PAGE>
or not being fully entitled to the benefits of, "Senior Indebtedness" and
"Designated Senior Indebtedness" as defined in the indenture governing the 1994
Subordinated Notes.
6O. CERTAIN AMENDMENTS. The Company shall not, nor shall it permit any
Consolidated Subsidiary to, consent to any amendment, modification, supplement
or waiver of:
(i) any of the provisions of any of Sections 3.02, 3.03, 3.04 or 3.05
of the Credit Agreement, as in effect on the Third Amendment Date (after
giving effect to the Seventh Amendment to the Credit Agreement), or any
other provision referred to therein or any defined term as used therein,
other than a waiver by the banks party thereto of any condition set forth
therein; or
(ii) any other provision of the Credit Agreement or, prior to April
25, 1997, any Acceptable Replacement Credit Facility, to the extent that
such amendment, modification, supplement or waiver would have the effect
of:
(a) reducing the amount or availability of credit thereunder,
changing the timing of or reducing the commitments of the lenders
thereunder to lend or make credits available pursuant thereto;
(b) making more restrictive upon the Company any condition
precedent to the funding of the credits available thereunder;
(c) requiring the Company or any Subsidiary to grant any lender
thereunder any Lien securing the obligations thereunder; or
(d) requiring the Company or any Subsidiary to maintain any
deposit accounts in any minimum amount, compensating balances, cash
management or clearing house relationship or similar arrangements,
with the lenders thereunder;
in each case, without the prior written consent of the Required Holders.
6P. SALES OF ASSETS. The Company will not, and will not permit any
Consolidated Subsidiary to, at any time after the First Amendment Date, sell,
lease, transfer or otherwise dispose of any Property (except for sales of
inventory and of obsolete or surplus Property in the ordinary course of
business, sales of accounts receivable, the issuance of director's qualifying
shares and sales, leases, transfers or other dispositions of Property to the
Company or a Consolidated Subsidiary (collectively, "Excepted Property"));
provided, however, that the foregoing restrictions shall not apply to the sale,
lease, transfer or other disposition of any such Property to any Person if all
of the following conditions are met:
(i) the book value of all such Property then being sold, leased,
transferred or otherwise disposed of, together with the book value of all
other Property (other than Excepted Property) sold, leased, transferred or
otherwise disposed of by the Company and the Consolidated Subsidiaries
since the First Amendment Date shall not, in the aggregate, exceed ten
percent (10%) of Consolidated Tangible Assets, determined as of the end of
the then most recently ended fiscal quarter of the Company;
A-26
<PAGE>
(ii) in the case of the sale, lease, transfer or other disposition of
a Consolidated Subsidiary (whether by disposition of any capital stock of
such Consolidated Subsidiary, the Property thereof or otherwise) or a line
or segment of business of the Company or a Consolidated Subsidiary, in
either case, substantially as an entirety (except with respect to the sale,
lease, transfer or other disposition of capital stock of a Consolidated
Subsidiary), the sum of:
(A) that portion, expressed as a percentage, of Gross Operating
Income attributable to or contributed by all Property of a type
described in this paragraph 6P(ii) and then being sold, leased,
transferred or otherwise disposed of, for the period of eight (8) full
consecutive fiscal quarters most recently ended on or prior to the
date of such sale, lease, transfer or other disposition; plus
(B) with respect to each other sale, lease, transfer or other
disposition of Property of a type described in this paragraph 6P(ii)
occurring during the period beginning on the later of the First
Amendment Date and the beginning of the eight full (8) fiscal quarters
of the Company most recently ended prior to the consummation of the
transaction referred to in clause (A) above, and ending on the date of
the transaction referred to in clause (A) above, that portion,
expressed as a percentage, of Gross Operating Income attributable to
or contributed by such Property described in this clause (B) for the
period of eight (8) full consecutive fiscal quarters most recently
ended on or prior to the date of such sale, lease, transfer or other
disposition thereof;
shall not exceed ten percent (10%);
(iii) in the good faith opinion of the board of directors of the
Company (or a committee of such board to whom such matter has been properly
delegated), the sale, lease, transfer or other disposition is for Fair
Market Value and is in the best interests of the Company; and
(iv) immediately after the consummation of such sale, lease, transfer
or other disposition, and after giving effect thereto, no Default or Event
of Default would exist.
Sales and other dispositions of accounts receivable shall be subject to
paragraph 6Q of this Agreement. Sales of all or any portion of the capital
stock of a Consolidated Subsidiary shall, for purposes of determining the book
value thereof in clause (i) above, be deemed to be the sale of all or such
portion of the book value of the assets of the Consolidated Subsidiary which
shall have issued such capital stock. Sales of all or a portion of the capital
stock of any Consolidated Subsidiary shall, for purposes of determining its
contribution to Gross Operating Income in clause (ii) above, be deemed to have
contributed all or such portion of that proportion of Gross Operating Income
attributable to the Consolidated Subsidiary which shall have issued such capital
stock. As used in this paragraph 6P, the term `lease' shall mean an original
lease, as lessor, by the Company or any Consolidated Subsidiary, and the
continuance, extension or renewal of any existing lease shall not be treated as
a lease pursuant to, or restricted by, this paragraph 6P.
A-27
<PAGE>
6Q. SALE OF RECEIVABLES. The Company covenants that it will not, and will
not permit any Consolidated Subsidiary to, sell with recourse or otherwise sell
for less than the face value thereof, any of its notes or accounts receivable,
except pursuant to the Trade Receivables Agreement; provided, however, that the
Company and any Consolidated Subsidiary may sell for book value the accounts
receivable owing from any Person (i) that has commenced a voluntary case under
the Bankruptcy Law of the United States or any proceedings under the Bankruptcy
Law of any other jurisdiction, or (ii) against whom any such case or proceedings
have been commenced and have remained undismissed for a period of at least sixty
(60) days.
6R. DEBT RATIO. The Company shall not permit the Debt Ratio for any day
to be greater than the ratio set forth opposite the period set forth in the
chart below in which such day occurs:
<TABLE>
<CAPTION>
Fiscal Year Ratio
----------- -----
<S> <C>
1994 5.60 to 1.00
1995 5.00 to 1.00
1996 4.10 to 1.00
1997 3.20 to 1.00
1998 2.80 to 1.00
1999 and thereafter 2.50 to 1.00.
</TABLE>
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of or Yield-
Maintenance Amount payable with respect to any Note when the same shall
become due, either by the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note
for more than five (5) days after the date due; or
(iii) the Company or any Subsidiary defaults in any payment of
principal of or interest on any obligation for money borrowed (or any
Capitalized Lease Obligation, any obligation under a conditional sale or
other title retention agreement, any obligation issued or assumed as full
or partial payment for Property whether or not secured by a Purchase Money
Mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided with
respect thereto, or the Company or any Subsidiary fails to perform or
observe any other agreement, term or condition contained in any agreement
under which any such obligation is created (or if any other event
thereunder or under any such agreement shall occur and be continuing) and
the effect of such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such holder
or holders) to cause, such obligation to become due prior to any originally
stated maturity, or to be repurchased by the Company or any Subsidiary,
provided that the aggregate
A-28
<PAGE>
amount of all obligations as to which such a payment default shall occur
and be continuing or such a failure or other event causing or permitting
acceleration shall occur and be continuing exceeds Fifteen Million Dollars
($15,000,000), and provided, further, that obligations for the deferred
purchase price of goods or services (including, without limitation,
Capitalized Lease Obligations and Purchase Money Mortgages) shall be
excluded from the operation of this clause (iii) so long as such
obligations are being contested in good faith by appropriate proceedings
and adequate reserves have been established therefor; or
(iv) any representation or warranty made by the Company herein, in the
First Amendment, the Second Amendment, the Third Amendment or any other
amendment, modification or supplement hereto, or in the Warrant Agreement,
or by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement (including, without
limitation, the certificates furnished by the Company at the closing) shall
be false in any material respect on the date as of which made; or
(v) the Company or any Subsidiary shall fail to perform or observe any
covenant contained in paragraph 6 hereof, in paragraph 4E hereof, paragraph
5E hereof or paragraph 5I hereof; or
(vi) the Company fails to perform or observe any other agreement, term
or condition contained herein, in the First Amendment, the Second
Amendment, the Third Amendment or in the Warrant Agreement or the Warrants,
and such failure shall not be remedied within thirty (30) days after the
occurrence of such failure first becomes known to any Senior Officer of the
Company; or
(vii) the Company or any Subsidiary makes an assignment for the
benefit of creditors; or
(viii) any decree or order for relief in respect of the Company or
any Subsidiary is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law, whether now or hereafter in effect (herein called the
"Bankruptcy Law"), of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or the taking of
possession by, a trustee, receiver, custodian, liquidator or similar
official of the Company or any Subsidiary, or of any substantial part of
the assets of the Company or any Subsidiary, or commences a voluntary case
under the Bankruptcy Law of the United States or any proceedings (other
than proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any Subsidiary under the Bankruptcy
Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings
are commenced, against the Company or any Subsidiary and the Company or
such Subsidiary by any act indicates its approval thereof, consent thereto
or acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or similar
official, or approving the petition in any such proceedings,
A-29
<PAGE>
and such order, judgment or decree remains unstayed and in effect for more
than sixty (60) days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than
sixty (60) days; or
(xii) any order, judgment or decree is entered in any proceedings
against the Company or any Subsidiary decreeing a split-up of the Company
or such Subsidiary that requires the divestiture of Properties representing
at least ten percent (10%), or the divestiture of the stock of a Subsidiary
whose assets represent at least ten percent (10%), of the consolidated
assets of the Company and the Subsidiaries (determined in accordance with
generally accepted accounting principles) or that requires the divestiture
of assets, or stock of a Subsidiary, that shall have contributed at least
ten percent (10%) to Consolidated Net Income for any of the three (3)
fiscal years most recently ended as of the date such order, judgment or
decree shall be entered, and such order, judgment or decree remains
unstayed and in effect for more than sixty (60) days; or
(xiii) a final judgment in an amount in excess of Fifteen Million
Dollars ($15,000,000) is rendered against the Company or any Subsidiary
and, within sixty (60) days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within sixty (60)
days after the expiration of any such stay, such judgment is not
discharged; or
(xiv) the Company or any Subsidiary is generally not paying its debts
as such debts become due; or
(xv) the Company or any ERISA Affiliate, in its capacity as an
employer under a Multiemployer Plan, makes a complete or partial withdrawal
from such Multiemployer Plan resulting in the incurrence by such
withdrawing employer of a withdrawal liability in an amount exceeding Ten
Million Dollars ($10,000,000); or
(xvi) any lender under the Credit Agreement or any Acceptable
Replacement Credit Facility fails or refuses, or announces its intention to
fail or refuse, to make any required advance under such Credit Agreement or
any Acceptable Replacement Credit Facility, or refuses to lend due to or as
a result of any material adverse change in the business, Properties,
profits or condition (financial or otherwise) of the Company; or
(xvii) there shall occur any "Change of Control" as defined in the
indenture relating to the 1994 Subordinated Debt;
then
(a) if such event is an Event of Default specified in clause (i) or
(ii) of this paragraph 7A, the holder of any Note (other than the Company
or any of the Subsidiaries or Affiliates) may at its option, by notice in
writing to the Company, declare such Note to be, and such Note shall
thereupon be and become, immediately due and payable at par
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<PAGE>
together with interest accrued thereon, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Company,
(b) if such event is an Event of Default specified in clause (vii),
(viii), (ix) or (x) of this paragraph 7A with respect to the Company, all
of the Notes at the time outstanding shall automatically become immediately
due and payable at par together with interest accrued thereon, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company, and
(c) if such event is not an Event of Default specified in clause
(vii), (viii), (ix) or (x) of this paragraph 7A with respect to the
Company, the Required Holders may at its or their option, by notice in
writing to the Company, declare all of the Notes to be, and all of the
Notes shall thereupon be and become, immediately due and payable together
with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Company, provided that the Yield-Maintenance Amount, if any, with respect
to each Note shall be due and payable upon such declaration only if (x)
such event is an Event of Default specified in any of clauses (i) to (vi),
inclusive, of this paragraph 7A, (y) the Required Holders shall have given
to the Company, at least ten (10) Business Days before such declaration,
written notice stating its or their intention so to declare the Notes to be
immediately due and payable and identifying one or more such Events of
Default whose occurrence on or before the date of such notice permits such
declaration and (z) one or more of the Events of Default so identified
shall be continuing at the time of such declaration.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the Notes
shall have been declared immediately due and payable pursuant to paragraph 7A
hereof, the Required Holders may, by notice in writing to the Company, rescind
and annul such declaration and its consequences if (i) the Company shall have
paid all overdue interest on the Notes, the principal of and Yield-Maintenance
Amount, if any, payable with respect to any Notes which have become due
otherwise than by reason of such declaration, and interest on such overdue
interest and overdue principal and Yield-Maintenance Amount at the rate
specified in the Notes, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 11C hereof, and (iv) no judgment or decree shall have been entered
for the payment of any amounts due pursuant to the Notes or this Agreement. No
such rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A hereof or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B hereof, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its rights
under this Agreement and such Note by exercising such remedies as are available
to such holder in respect thereof under
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<PAGE>
applicable law, either by suit in equity or by action at law, or both, whether
for specific performance of any covenant or other agreement contained in this
Agreement or in aid of the exercise of any power granted in this Agreement. No
remedy conferred in this Agreement upon the holder of any Note is intended to be
exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
as follows:
8A. SUBSIDIARIES. Annex 2 to this Agreement accurately states,
(i) the name of each of the Subsidiaries, its jurisdiction of
incorporation and the percentage of its Voting Stock owned by the Company
and each other Subsidiary, and
(ii) the name of each of the Company's joint ventures and the nature
thereof.
Each of the Company and the Subsidiaries has good and marketable title to
all of the shares it purports to own of the stock of each Subsidiary, free and
clear in each case of any Lien. All such shares have been duly issued and are
fully paid and nonassessable.
8B. CORPORATE ORGANIZATION AND AUTHORITY. The Company
(i) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation,
(ii) has all requisite legal and corporate power and authority to own
and operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted,
(iii) has all necessary licenses, certificates and permits to own and
operate its Properties and to carry on its business as now conducted and as
presently proposed to be conducted, except where the failure to have any
such licenses, certificates and permits, together with all other such
failures, would not be likely to have a material and adverse effect on the
business or financial condition of the Company and the Subsidiaries, taken
as a whole, or the ability of the Company to perform its obligations set
forth in this Agreement and in the Notes, and
(iv) has duly qualified or has been duly licensed, and is authorized
to do business and is in good standing as a foreign corporation, except
where the failure to be so qualified, licensed and authorized in any
jurisdiction, together with all such other failures, would not be likely to
have a material and adverse effect on the business or financial condition
of the Company and the Subsidiaries, taken as a whole, or the ability of
the Company to perform its obligations set forth in this Agreement and in
the Notes.
The revenues and net income of the Company for the fiscal year ended July 31,
1992, and the total assets of the Company as of July 31, 1992, in each case
exceed ninety percent (90%) of
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<PAGE>
the consolidated revenues, consolidated net income, and consolidated assets of
the Company and the Subsidiaries for such period and at such time.
8C. FINANCIAL STATEMENTS. The Company has furnished each Purchaser with
the following financial statements, identified by a principal financial officer
of the Company:
(i) a consolidated balance sheet of the Company and its subsidiaries
as at July 31 in each of the years 1990 to 1993, inclusive, and
consolidated statements of income, stockholders' equity and cash flows of
the Company and its subsidiaries for each such year, all reported on by
Deloitte & Touche; and
(ii) a consolidated balance sheet of the Company and its subsidiaries
as at January 30, 1994 and January 31, 1993 and consolidated statements of
income and cash flows for the three month period ended on each such date,
prepared by the Company.
Such financial statements (including any related schedules and/or notes) are
true and correct in all material respects (subject, as to interim statements, to
changes resulting from audits and year-end adjustments), have been prepared in
accordance with generally accepted accounting principles as in effect at such
time and consistently followed throughout the periods involved (except as
otherwise noted therein) and show all liabilities, direct and contingent, of the
Company and its subsidiaries required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Company and
its subsidiaries as at the dates thereof, and the statements of income,
stockholders' equity and cash flows fairly present the results of the operations
of the Company and its subsidiaries and their cash flows for the periods
indicated. There has been no material adverse change in the business, condition
(financial or otherwise) or operations of the Company and the Subsidiaries taken
as a whole since July 31, 1993, except for charges in the third Fiscal Quarter
of Fiscal Year 1994 to shareholders' equity in connection with the increases in
the underfunded status of the Company's pension plans, and to income in
connection with the expensing of unamortized pension benefit past service costs,
each as described in the Company's Quarterly Report on Form 10-Q for Fiscal
Quarter ended January 30, 1994.
8D. ACTIONS PENDING. Except as set forth on Annex 3 hereto, it is not
reasonably foreseeable that any action, suit, investigation or proceeding or
group of similar actions, suits, investigations or proceedings (including, as
such a group, without limitation, all actions, suits, investigations or
proceedings arising out of federal or state environmental protection laws),
pending or, to the knowledge of the Company, threatened against the Company or
any of the Subsidiaries, or any properties or rights of the Company or any of
the Subsidiaries, by or before any court, arbitrator or administrative or
governmental body would result in any material adverse change in the business,
condition (financial or otherwise) or operations of the Company and the
Subsidiaries taken as a whole.
8E. OUTSTANDING DEBT. Neither the Company nor any of the Subsidiaries has
outstanding any Debt except as permitted by paragraph 6C hereof. There exists
no default under the provisions of any instrument evidencing such Debt or of any
agreement relating thereto.
8F. TITLE TO PROPERTIES. Each of the Company and the Subsidiaries has
good and indefeasible title to its respective real Properties (other than
Properties that it leases) and good
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<PAGE>
title to all of its other respective Properties, including the Properties
reflected in the balance sheet as at January 30, 1994 referred to in paragraph
8C(ii) hereof (other than Properties disposed of in the ordinary course of
business), subject to no Lien of any kind except Liens permitted by paragraph 6A
hereof. All leases necessary in any material respect for the conduct of the
respective businesses of the Company and the Subsidiaries are valid and
subsisting and are in full force and effect.
8G. PATENTS, TRADEMARKS, LICENSES, ETC. Each of the Company and the
Subsidiaries owns or possesses all of the patents, trademarks, service marks,
trade names, copyrights, licenses, and rights with respect thereto, necessary
for the present conduct of its business, without any known conflict with the
rights of others.
8H. TAXES. Each of the Company and the Subsidiaries has filed all
federal, state and other income tax returns that are required to be filed, and
each has paid all taxes as shown on such returns and on all assessments received
by it to the extent that such taxes have become due, except such taxes as are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with generally accepted accounting
principles.
8I. CONFLICTING AGREEMENTS AND OTHER MATTERS.
(I) RESTRICTIONS. Neither the Company nor any of the Subsidiaries is
a party to any contract or agreement or subject to any charter or bylaw
restriction that would, in the aggregate with all other such contracts,
agreements, or charter or bylaw restrictions, be more likely than not to
have a material and adverse effect on the business or financial condition
of the Company and the Subsidiaries, taken as a whole, or the ability of
the Company to perform its obligations set forth in this Agreement and in
the Notes.
(II) CONFLICTS. Neither the execution nor delivery of this Agreement
or the Notes, nor the offering, issuance and sale of the Notes, nor the
fulfillment of nor the compliance with the terms and provisions hereof and
of the Notes will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
Properties of the Company or any of the Subsidiaries pursuant to, the
charter or bylaws of the Company or any of the Subsidiaries, any award of
any arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which the Company or any of the Subsidiaries is subject.
(III) RESTRICTIONS ON DEBT. Neither the Company nor any of the
Subsidiaries is a party to, or otherwise subject to any provision contained
in, any instrument evidencing indebtedness of the Company or such
Subsidiary, any agreement relating thereto or any other contract or
agreement (including its charter) that limits the amount of, or otherwise
imposes restrictions on the incurring of, Debt of the Company of the type
to be evidenced by the Notes except as set forth in the agreements listed
in Annex 3 attached hereto.
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<PAGE>
(IV) SALE IS LEGAL AND AUTHORIZED. Each of the sale of the Notes by
the Company and compliance by the Company and each Subsidiary with all of
the provisions of this Agreement and of the Notes:
(a) is within the corporate powers of the Company and each
Subsidiary; and
(b) is legal and does not conflict with, result in any breach of
any of the provisions of, constitute a default under, or result in the
creation of any Lien upon any Property of the Company or any
Subsidiary under the provisions of, any agreement, charter instrument,
bylaw or other instrument to which it is a party or by which it or any
of its Property may be bound.
(V) NOTES ARE ENFORCEABLE. The obligations of the Company under this
Agreement and the Notes are valid, binding and enforceable in accordance
with the terms of this Agreement and the Notes, except the enforceability
hereof or thereof, as the case may be, may be:
(a) limited by bankruptcy, insolvency or other similar laws
affecting the enforceability of creditors' rights generally; and
(b) subject to the availability of equitable remedies.
8J. OFFERING OF NOTES. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security of
the Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than institutional investors, and neither the
Company nor any agent acting on its behalf has taken any action that would
subject the issuance or sale of the Notes to the provisions of section 5 of the
Securities Act or to the provisions of any securities or Blue Sky law of any
applicable jurisdiction.
8K. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns or has
any present intention of acquiring any margin stock. The proceeds of sale of
the Notes will be used to repay Debt of the Company, to reduce the amount of
receivables sold pursuant to the Trade Receivables Agreement and for general
corporate purposes. None of such proceeds will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any margin stock or for the purpose of maintaining, reducing or
retiring any Debt which was originally incurred to purchase or carry any stock
that is currently a margin stock or for any other purpose which might constitute
this transaction a "purpose credit" within the meaning of such Regulation G.
Neither the Company nor any agent acting on its behalf has taken or will take
any action which might cause this Agreement or the Notes to violate Regulation
G, Regulation T, Regulation U or any other regulation of the Board of Governors
of the Federal Reserve System or to violate the Exchange Act, in each case as
was in effect on the Closing Date, as in effect now or as the same may hereafter
be in effect.
8L. ERISA. No accumulated funding deficiency (as defined in section 302
of ERISA and section 412 of the IRC), whether or not waived, exists with respect
to any Plan (other than a Multiemployer Plan). No liability to the Pension
Benefit Guaranty Corporation has been or is
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<PAGE>
expected by the Company or any ERISA Affiliate to be incurred with respect to
any Plan (other than a Multiemployer Plan) by the Company, any Subsidiary or any
ERISA Affiliate which is or would be materially adverse to the business,
condition (financial or otherwise) or operations of the Company and the
Subsidiaries taken as a whole. Neither the Company, any Subsidiary nor any
ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or would be materially adverse to the business, condition (financial or
otherwise) or operations of the Company and the Subsidiaries taken as a whole.
The execution and delivery of this Agreement and the issuance and sale of the
Notes will be exempt from, or will not involve any transaction which is subject
to, the prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under section
502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the IRC.
The representation by the Company in the next preceding sentence is made in
reliance upon and subject to the accuracy of each Purchaser's representation in
paragraph 9B hereof.
8M. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or Properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Date with either
or both of the Securities and Exchange Commission and state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.
8N. ENVIRONMENTAL COMPLIANCE. The Company and the Subsidiaries and all of
their respective properties and facilities have complied at all times and in all
respects with all federal, state, local and regional statutes, laws, ordinances
and judicial or administrative orders, judgments, rulings and regulations
relating to protection of the environment except, in any such case, where
failure to comply would not result in a material adverse effect on the business,
condition (financial or otherwise) or operations of the Company and the
Subsidiaries taken as a whole.
8O. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to the
Company or any of the Subsidiaries that in the future (so far as the Company can
now foresee) would, in the aggregate with all other such facts, be more likely
than not to have a material and adverse effect on the business or financial
condition of the Company and the Subsidiaries, taken as a whole, or the ability
of the Company to perform its obligations set forth in this Agreement and in the
Notes and that has not been set forth in this Agreement or in the other
documents, certificates and statements furnished to each Purchaser by or on
behalf of the Company prior to the date hereof in connection with the
transactions contemplated hereby.
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<PAGE>
8P. COMPLIANCE WITH LAW. Neither the Company nor any Subsidiary:
(i) is in violation of any law, ordinance, governmental rule or
regulation to which it is subject; or
(ii) has failed to obtain any license, certificate, permit, franchise
or other governmental authorization necessary to the ownership of its
Property or to the conduct of its business;
which violation or failure to obtain is more likely than not to have, in the
aggregate with all other such violations or failures, a material and adverse
effect on the business or financial condition of the Company and the
Subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations set forth in this Agreement and in the Notes.
8Q. CERTAIN LAWS.
(I) INVESTMENT COMPANY ACTS. The Company is not, and is not directly
or indirectly controlled by, or acting on behalf of any Person which is, an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(II) ABSENCE OF FOREIGN OR ENEMY STATUS. The Company is not
(a) an "enemy" or an "ally of the enemy" within the meaning of
Section 2 of the Trading with the Enemy Act, as amended, or any
executive orders or regulations issued or promulgated pursuant
thereto,
(b) a "national" of any "designated enemy country" as such terms
are defined in Executive Order No. 9095, as amended, of the President
of the United States of America, or
(c) a "national" of any "designated foreign country" within the
meaning of the Foreign Assets Control Regulations of the United States
of America (Code of Federal Regulations, Title 31, Chapter V, Part 500
to 543).
(III) HOLDING COMPANY STATUS. The Company is not a "holding company"
or an "affiliate" of a "holding company," or a "subsidiary company" of a
"holding company," or a "public utility" within the meaning of the Public
Utilities Holding Company Act of 1935, as amended.
9. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser represents as
follows:
9A. NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes to be
purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that the
disposition of such Purchaser's Property shall at all times be and remain within
its control.
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<PAGE>
9B. SOURCE OF FUNDS. No part of the funds being used by such Purchaser to
pay the purchase price of the Notes being purchased by such Purchaser hereunder
constitutes assets allocated to any separate account maintained by such
Purchaser in which any employee benefit plan, other than employee benefit plans
identified on a list which has been furnished by such Purchaser to the Company,
participates to the extent of ten percent (10%) or more. For the purpose of
this paragraph 9B, the terms "separate account" and "employee benefit plan"
shall have the respective meanings specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms defined in
the introductory sentence and in paragraphs 1 and 2 shall have the respective
meanings specified therein, and the following terms shall have the meanings
specified with respect thereto below:
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal of
such Note that is to be prepaid or purchased pursuant to paragraph 4B, paragraph
4.E or paragraph 5I hereof (any partial prepayment being applied in satisfaction
of required payments of principal in inverse order of their scheduled due dates)
or is declared to be immediately due and payable pursuant to paragraph 7A
hereof, as the context requires.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal of
any Note, the yield to maturity implied by
(i) the yields reported, as of 10:00 a.m. (New York City time) on
the Business Day next preceding the Settlement Date with respect to
such Called Principal, on the display designated as "Page 678" on the
Telerate Service (or such other display as may replace Page 678 on the
Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time shall
not be ascertainable,
(ii) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of
the Business Day next preceding the Settlement Date with respect to
such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date.
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<PAGE>
Such implied yield shall be determined, if necessary, by (a) converting
U.S. Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between yields
reported for various maturities. Reinvestment Yield calculated as
aforesaid shall be increased by twenty-five one-hundredths percent (0.25%)
per annum in the case of any Settlement Date occurring after December 15,
1998.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing
(i) such Called Principal into
(ii) the sum of the products obtained by multiplying
(a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by
(b) the number of years (calculated to the nearest one-
twelfth year) which will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of
such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to
such Called Principal if no payment of such Called Principal were made
prior to its scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid or
purchased pursuant to paragraph 4B, paragraph 4E or paragraph 5I hereof or
is declared to be immediately due and payable pursuant to paragraph 7A
hereof, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of
(i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on)
the Settlement Date with respect to such Called Principal.
The Yield-Maintenance Amount shall in no event be less than zero.
10B. OTHER TERMS.
"1994 SENIOR DEBT" shall mean the Company's Senior Notes Due 2003, in
the aggregate principal amount of One Hundred Million Dollars
($100,000,000) on substantially the terms and conditions set forth under
the heading "DESCRIPTION OF
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<PAGE>
SENIOR NOTES" in Amendment No. 1 to the Registration Statement on Form S-3
of the Company, as filed with the Securities and Exchange Commission on
April 19, 1994, relating thereto.
"1994 SUBORDINATED DEBT" shall mean the Company's Convertible
Subordinated Notes Due 2004, in the aggregate principal amount of up to
Fifty-Seven Million Five Hundred Thousand Dollars ($57,500,000) and which
are subordinated to payment of principal, interest and Yield-Maintenance
Amount in respect of the Notes, and all other obligations under this
Agreement, on substantially the terms and conditions set forth under the
heading "DESCRIPTION OF SUBORDINATED NOTES" in Amendment No. 2 to the
Registration Statement on Form S-3 of the Company, as filed with the
Securities and Exchange Commission on April 19, 1994 relating thereto.
"ACCEPTABLE AVAILABILITY" shall mean, at any time on or after the date
shown in the first column of the chart below, and on or prior to the date
shown in the second column of the chart below, the availability under the
Credit Agreement at such time reflected in the third column of the chart
below:
<TABLE>
<CAPTION>
ON AND AFTER: TO AND INCLUDING: ACCEPTABLE AVAILABILITY:
=========================================================================
<S> <C> <C>
Third Amendment Date October 24, 1995 $110,000,000
-------------------------------------------------------------------------
October 25, 1995 April 24, 1996 $100,000,000
-------------------------------------------------------------------------
April 25, 1996 October 24, 1996 $ 90,000,000
-------------------------------------------------------------------------
October 25, 1996 April 24, 1997 $ 80,000,000
-------------------------------------------------------------------------
April 25, 1997 and thereafter $ 0
=========================================================================
</TABLE>
"ACCEPTABLE REPLACEMENT CREDIT FACILITY" shall mean, with respect to
any replacement, refunding or refinancing of the Credit Agreement, a
revolving credit facility:
(i) making available to the Company at least the Acceptable
Availability:
(ii) which, if such facility provides for extension of credit in
forms (including, without limitation, letters of credit or banker's
acceptances) other than cash, provides that, at the option of the
Company, at least the Acceptable Availability shall be available to
the Company in cash; provided, however, that, should the Company
actually draw credit in forms other than cash (including, without
limitation, the issuance of one or more letters of credit), the amount
of cash available under such facility may be reduced by the aggregate
amount of such credits for so long as such credits are outstanding, so
that the aggregate amount available need not exceed the Acceptable
Availability at such time;
(iii) which shall not require the maintenance of any
compensating balance or other similar arrangement in any amount
greater than the difference
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between the aggregate amount of cash available under such facility
minus the Acceptable Availability;
(iv) which shall not contain, at the time of the effectiveness of
such facility:
(a) any financial covenants, events of default or other
conditions with which the Company would not be able to comply at
such time, based on the most recent business plan presented to
the Board of Directors (including updates thereto through the
date of effectiveness of such facility) of the Company at such
time or, prior to January 25, 1997, that were more onerous than
those contained in the Credit Agreement at the time of the
effectiveness of such facility; and
(b) any borrowing base provision or similar lending
constraints; or
(c) any conditions precedent to making advances thereunder
that would, based on the most recent business plan presented to
the Board of Directors (and updates thereto) of the Company at
such time, be reasonably likely to prevent the Company from fully
utilizing the Acceptable Availability to it under such credit
facility at any time during the term of such credit facility or,
prior to January 25, 1997, that were more onerous than those
contained in the Credit Agreement at the time of the
effectiveness of such facility;
(v) which shall not have a maturity date earlier than that of the
Credit Agreement immediately prior to giving effect to such
replacement, refunding or refinancing; and
(vi) which shall be unsecured and shall not rank senior in right
of payment in any respect to the Notes.
"ADJUSTED CONSOLIDATED DEBT" shall mean and include all Debt of the
Company and the Consolidated Subsidiaries.
"ADJUSTED CONSOLIDATED NET INCOME" shall mean for any period
(i) the gross revenues of the Company and the Consolidated
Subsidiaries for such period, determined on a consolidated basis; less
(ii) all operating and non-operating expenses of the Company and
the Consolidated Subsidiaries for such period, including all charges
of a proper character (including, without limitation, current and
deferred taxes on income, provision for taxes on unremitted foreign
earnings which are included in gross revenues, and current additions
to reserves), determined on a consolidated basis;
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but not including in such gross revenues
(i) any gains (net of expenses and taxes applicable thereto) in
excess of losses arising from the sale, conversion or other
disposition of capital assets, other than gains arising out of any
transaction or series of related transactions in which such gains do
not exceed One Hundred Thousand Dollars ($100,000);
(ii) any gain arising from any write-up of assets subsequent to
July 31, 1992;
(iii) earnings of any Consolidated Subsidiary accrued prior to
the date it became a Consolidated Subsidiary;
(iv) earnings of any Person, substantially all the assets of
which have been acquired in any manner, realized by such Person prior
to the date of such acquisition;
(v) net earnings or net losses of any Person in which the Company
or any Consolidated Subsidiary shall have an ownership interest
unless, in the case of net earnings, such net earnings shall have
actually been received by the Company or such Consolidated Subsidiary
in the form of cash distributions;
(vi) any portion of the net earnings of any Consolidated
Subsidiary which for any reason is unavailable for payment of
dividends to the Company or any other Consolidated Subsidiary;
(vii) the earnings of any Person to which assets of the Company
shall have been sold, transferred or disposed of, or into which the
Company shall have merged, prior to the date of such transaction;
(viii) any gain arising from the acquisition of any Securities
of the Company or any Consolidated Subsidiary;
(ix) any portion of the net earnings of the Company that cannot
be freely converted into United States dollars; and
(x) any deferred credit representing the excess of equity in any
Consolidated Subsidiary at the date of acquisition over the cost of
investment in such Consolidated Subsidiary.
"ADJUSTED CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time the
excess of total assets of the Company and the Consolidated Subsidiaries at
such time, determined on a consolidated basis, over total liabilities of
the Company and the Consolidated Subsidiaries at such time, determined on a
consolidated basis, in each case determined in accordance with generally
accepted accounting principles, excluding, however, from the determination
of total assets
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(i) all assets that would be classified as intangible assets
under such generally accepted accounting principles, including,
without limitation, goodwill (whether representing the excess of cost
over book value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises, unamortized debt discount and
expense, organization costs, research and development costs and other
deferred charges (other than prepaid insurance and taxes and pre-
production and production costs including, but not limited to,
engineering and tooling costs, that are amortized over anticipated
deliveries),
(ii) treasury stock and minority interests in any Person,
(iii) cash, Securities or other Property set apart and held in a
sinking or other analogous fund established for the purpose of
redemption or other retirement of capital stock,
(iv) to the extent not already deducted from total assets,
reserves for depreciation, depletion, obsolescence or amortization of
Properties and all other reserves or appropriations of retained
earnings that, in accordance with such generally accepted accounting
principles, should be established in connection with the business
conducted by the relevant corporation, and
(v) any revaluation or other write-up in book value of assets
subsequent to July 31, 1992.
Notwithstanding the foregoing, (A) net deferred income tax assets recorded
in accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes ("SFAS 109") shall be treated as a tangible
asset (and not deducted pursuant to clause (i) or (iv) of this definition)
and shall be calculated without regard to any valuation allowance with
respect to such net deferred tax asset recorded by the Company in
accordance with SFAS 109, and (B) any asset established pursuant to
Statement of Financial Accounting Standards No. 87, Employers Accounting
for Pensions ("SFAS 87") which corresponds to an additional minimum pension
liability recorded pursuant to SFAS No. 87 and any prepaid pension asset
which arises from amounts funded by the Company in accordance with Internal
Revenue Service regulations (but not in excess of the minimum amounts
required to be contributed thereunder) in excess of amounts expensed in
accordance with SFAS 87, shall be treated as a tangible asset (and not
deducted pursuant to clause (i) or (iv) of this definition).
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the
Company, except a Subsidiary. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by
contract or otherwise.
"AGREED PUT CONSIDERATION" shall mean as of the date of prepayment by
the Company upon the exercise by any holder of Notes of its Right to Put or
option to be repaid pursuant to paragraph 5I, the sum of
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(i) the principal amount of the Notes held by such holder
subject to the prepayment on such date, plus
(ii) all accrued and unpaid interest to such date on such Notes,
plus
(iii) the Yield-Maintenance Amount as of such date with respect
to such Notes.
"AGREEMENT" and references thereto shall mean this Agreement as it may
from time to time be amended or supplemented.
"BANK LENDERS" shall mean the Lenders as defined in the Credit
Agreement.
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City are required or authorized
to be closed.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under generally accepted accounting principles, would be required to be
capitalized on the books of the Company or any Subsidiary, taken at the
amount thereof accounted for as indebtedness (net of interest expense) in
accordance with such principles.
"CLOSING DATE" shall have the meaning assigned to such term in
paragraph 2 of this Agreement.
"COMBINED SUBSIDIARY DEBT" shall mean at any time all unsecured Debt
of the Subsidiaries at such time (after eliminating intercompany
transactions among the Subsidiaries).
"COMPANY" shall have the meaning specified in the introductory
paragraph of this Agreement.
"CONFIDENTIAL INFORMATION" shall mean any information furnished to any
holder of Notes by the Company or any agent of the Company in connection
with this Agreement (including, without limitation, any information
furnished to you pursuant to paragraph 5D hereof) or obtained by any holder
of Notes in connection with an inspection made pursuant to paragraph 5G
hereof, that is about the Company (or in respect of which the Company has a
confidentiality obligation) and that is marked by the Company as being
confidential, other than any such information,
(i) that was publicly known, or otherwise known to you, at the
time the information was furnished to you,
(ii) that subsequently becomes publicly known through no act or
omission by you, or
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(iii) that otherwise becomes known to you, other than through
disclosure by the Company or any Subsidiary.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum,
without duplication, of
(i) interest expense related to Debt of the Company and the
Consolidated Subsidiaries,
(ii) amortization expense related to Debt of the Company and the
Consolidated Subsidiaries issued at a discount,
(iii) dividends in respect of preferred stock of Consolidated
Subsidiaries,
(iv) dividends in respect of Permitted Preferred Stock to the
extent paid to Persons other than the Company or any wholly-owned
Consolidated Subsidiary, plus
(v) rentals payable in respect of Capitalized Lease Obligations
of the Company and the Consolidated Subsidiaries,
in each case calculated for such period on a consolidated basis in
accordance with generally accepted accounting principles.
"CONSOLIDATED NET INCOME" shall mean for any period
(i) the gross revenues of the Company and the Subsidiaries for
such period, determined on a consolidated basis; less
(ii) all operating and non-operating expenses of the Company and
the Subsidiaries for such period, including all charges of a proper
character (including, without limitation, current and deferred taxes
on income, provision for taxes on unremitted foreign earnings which
are included in gross revenues, and current additions to reserves),
determined on a consolidated basis;
but not including in such gross revenues
(i) any gains (net of expenses and taxes applicable thereto) in
excess of losses arising from the sale, conversion or other
disposition of capital assets, other than gains arising out of any
transaction or series of related transactions in which such gains do
not exceed One Hundred Thousand Dollars ($100,000);
(ii) any gain arising from any write-up of assets subsequent to
July 31, 1992;
(iii) earnings of any Subsidiary accrued prior to the date it
became a Subsidiary;
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(iv) earnings of any Person, substantially all the assets of
which have been acquired in any manner, realized by such Person prior
to the date of such acquisition;
(v) net earnings or net losses of any Person in which the Company
or any Subsidiary shall have an ownership interest unless, in the case
of net earnings, such net earnings shall have actually been received
by the Company or such Subsidiary in the form of cash distributions;
(vi) any portion of the net earnings of any Subsidiary which for
any reason is unavailable for payment of dividends to the Company or
any other Subsidiary;
(vii) the earnings of any Person to which assets of the Company
shall have been sold, transferred or disposed of, or into which the
Company shall have merged, prior to the date of such transaction;
(viii) any gain arising from the acquisition of any Securities
of the Company or any Subsidiary;
(ix) any portion of the net earnings of the Company that cannot
be freely converted into United States dollars; and
(x) any deferred credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost of investment in
such Subsidiary.
"CONSOLIDATED NET INCOME AVAILABLE FOR FIXED CHARGES" shall mean, for
any period, the sum of
(i) Adjusted Consolidated Net Income for such period, plus
(ii) the aggregate amount of
(a) Consolidated Fixed Charges,
(b) provisions for taxes on earnings,
(c) depreciation expense,
(d) the Special Charge;
(e) in the case of any such period that includes the fiscal
month ending May 2, 1993, the cumulative effect through May 2,
1993 of the accounting changes adopted by the Company, effective
as of August 1, 1992, as described in the Company's Form 10-Q
filed with the Securities and Exchange Commission for the third
quarter of its 1993 Fiscal Year;
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(f) in the case of any such period that includes the fiscal
month ending May 2, 1993, the provisions and charges, not in
excess of $38,000,000 in the aggregate, established by the
Company in the third quarter of its 1993 Fiscal Year; and
(g) the Tax Adjustment Amount;
in each case to the extent, and only to the extent, reflected in the
computation of Adjusted Consolidated Net Income for such period. As
used in this definition,
`Special Charge' shall mean that certain special provision of
Fifty Million Dollars ($50,000,000) taken by the Company during the
third quarter of its 1992 Fiscal Year;" and
`Tax Adjustment Amount' shall mean, for any period, the lesser of
(i) accrued interest expense on taxes on earnings for such
period minus any interest income on tax refunds for such period
and
(ii) Three Hundred Thirty-Three Thousand Dollars ($333,333)
multiplied by the number of fiscal months in such period;
provided, however, that, notwithstanding the foregoing, to the extent
that such period includes one or more fiscal months of the Company
during the third quarter of the Company's 1992 Fiscal Year, "Tax
Adjustment Amount" shall be deemed to mean an amount equal to Six
Million One Hundred Thousand Dollars ($6,100,000) for each such fiscal
month.
"CONSOLIDATED SENIOR DEBT" shall mean at any time Senior Debt at such
time, determined on a consolidated basis, minus Non-Recourse Debt of the
Company and the Subsidiaries at such time, determined on a consolidated
basis.
"CONSOLIDATED SUBSIDIARY" shall mean any corporation more than fifty
percent (50%) of the total combined voting power of all classes of Voting
Stock of which shall, at the time as of which any determination is being
made, be owned, directly or indirectly, by the Company.
"CONSOLIDATED TANGIBLE ASSETS" shall mean, at any time, the sum of:
(i) Adjusted Consolidated Tangible Net Worth at such time; plus
(ii) the total amount of all liabilities of the Company and the
Consolidated Subsidiaries on a consolidated basis at such time.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time the excess of
total assets of the Company and the Subsidiaries at such time, determined
on a consolidated basis, over total liabilities of the Company and the
Subsidiaries at such time, determined
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on a consolidated basis, in each case determined in accordance with
generally accepted accounting principles, excluding, however, from the
determination of total assets:
(i) all assets that would be classified as intangible assets
under such generally accepted accounting principles, including,
without limitation, goodwill (whether representing the excess of cost
over book value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises, unamortized debt discount and
expense, organization costs, research and development costs and other
deferred charges (other than prepaid insurance and taxes and pre-
production and production costs including, but not limited to,
engineering and tooling costs, that are amortized over anticipated
deliveries);
(ii) treasury stock and minority interests in Subsidiaries;
(iii) cash, Securities or other Property set apart and held in a
sinking or other analogous fund established for the purpose of
redemption or other retirement of capital stock;
(iv) to the extent not already deducted from total assets,
reserves for depreciation, depletion, obsolescence or amortization of
Properties and all other reserves or appropriations of retained
earnings that, in accordance with such generally accepted accounting
principles, should be established in connection with the business
conducted by the relevant corporation; and
(v) any revaluation or other write-up in book value of assets
subsequent to July 31, 1992.
Notwithstanding the foregoing, (A) net deferred income tax assets recorded
in accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes ("SFAS 109") shall be treated as a tangible
asset (and not deducted pursuant to clause (i) or (iv) of this definition)
and shall be calculated without regard to any valuation allowance with
respect to such net deferred tax asset recorded by the Company in
accordance with SFAS 109, and (B) any asset established pursuant to
Statement of Financial Accounting Standards No. 87, Employers Accounting
for Pensions ("SFAS 87") which corresponds to an additional minimum pension
liability recorded pursuant to SFAS No. 87 and any prepaid pension asset
which arises from amounts funded by the Company in accordance with Internal
Revenue Service regulations (but not in excess of the minimum amounts
required to be contributed thereunder) in excess of amounts expensed in
accordance with SFAS 87, shall be treated as a tangible asset (and not
deducted pursuant to clause (i) or (iv) of this definition).
"CONSOLIDATED TOTAL DEBT" shall mean, at any time, Debt of the Company
and the Subsidiaries at such time minus Non-Recourse Debt of the Company
and the Subsidiaries at such time, determined on a consolidated basis.
"CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of April
26, 1989, among the Company and the lenders party thereto and the agent
thereunder, as such Credit Agreement may be amended or supplemented from
time to time.
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"DEBT" shall mean, without duplication,
(i) indebtedness for borrowed money,
(ii) obligations evidenced by bonds, debentures, notes or other
similar instruments (as such term is defined in Article 9 of the
Uniform Commercial Code as from time to time in effect in the State of
New York),
(iii) obligations to pay the deferred purchase price of Property
or services (excluding advances, deposits or partial or progress
payments, unpaid wages and related employee obligations and excluding
trade payables),
(iv) obligations as lessee under Capitalized Lease Obligations,
(v) obligations under Guaranties of indebtedness or obligations
of others of the kinds referred to in clauses (i) through (iv) above,
(vi) obligations under Title IV of ERISA for each Plan and
Multiemployer Plan, in respect of unfunded accrued liabilities for
such plans, if any, as of the first day of the plan year as shown in
the annual actuarial report most recently delivered to the obligor in
respect of such obligations by the actuary for each such Plan and
Multiemployer Plan, and
(vii) in the case of any Consolidated Subsidiary, all preferred
stock of such Consolidated Subsidiary held by Persons other than the
Company or a wholly-owned Consolidated Subsidiary, such preferred
stock to be valued at the aggregate liquidation preference thereof.
"DEBT RATIO" shall mean, at any time, the ratio of Adjusted
Consolidated Debt to Adjusted Consolidated Tangible Net Worth.
"DEFAULT" shall mean any event or condition that, with notice or the
passage of time, or both, would become an Event of Default.
"DE MINIMUS PAYMENTS" shall mean, with respect to any Debt of the
Company or any Subsidiary (other than Debt governed or evidenced by the
Notes, the 9.35% Senior Notes due January 29, 2000, the Credit Agreement,
any Acceptable Replacement Credit Facility, the 1994 Senior Notes, the 1994
Subordinated Notes or the Existing Subordinated Notes of either Series),
payments, prepayments, defeasances and redemptions (in each case, other
than Originally Scheduled Payments) in respect of any such Debt aggregating
not more than Five Hundred Thousand Dollars ($500,000) in any Fiscal Year.
"DESIGNATED EVENT" shall mean the occurrence of any one or more of the
following after the Closing Date:
(i) the direct or indirect acquisition by any person (as such
term is used in Section 13(d) and Section 14(d)(2) of the Exchange
Act), or related
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persons constituting a group (as such term is used in Rule 13d-5 under
the Exchange Act), of (i) beneficial ownership of issued and
outstanding shares of Voting Stock of the Company the result of which
acquisition is that such person or such group possesses in excess of
fifty percent (50%) of the combined voting power of all then issued
and outstanding Voting Stock of the Company or (ii) within any period
of three-hundred sixty-five (365) consecutive days, all or
substantially all of the assets of the Company; or
(ii) following the election or removal of directors, a majority
of the Company's board of directors consists of individuals who were
not members of the Company's board of directors two years before such
election or removal, unless the election of each director who was not
a director at the beginning of such two-year period has been approved
in advance by directors representing at least a majority of the
directors then in office who were directors at the beginning of the
two-year period; or
(iii) the consolidation with, or merger into, any Person by the
Company in a transaction in which more than thirty percent (30%) by
number of votes of the Voting Stock of the Company is exchanged (the
calculation of which shall be made by dividing the number of votes
attributable to the Voting Stock so exchanged by the aggregate number
of votes attributable to the Voting Stock immediately prior to such
transaction); or
(iv) (a) any transaction or series of transactions (whether
related or unrelated) in which the Company repurchases or
otherwise retires in the aggregate, within any period of three
hundred sixty-five (365) consecutive days, thirty percent (30%)
or more (by number) of the Company's outstanding common stock
(the calculation of which shall be made by dividing the number of
shares outstanding immediately after giving effect to each such
repurchase or retirement, other than any such shares owned by a
Subsidiary, by the highest number of shares outstanding at any
time during the period of three hundred sixty-five (365)
consecutive days ending on (and including) the date of such
repurchase or retirement (adjusting in each case for stock
splits, stock dividends and other similar transactions, excluding
in each case shares held in treasury, and assuming in each case
that all securities then convertible into, or representing then
effective rights to purchase, common stock have been exercised at
such time), or
(b) any Distribution made by the Company the Fair Market
Value of which, together with the aggregate Fair Market Value of
all other Distributions made by the Company during the period of
three hundred sixty-five (365) days ending on (and including) the
date of such Distribution (each Distribution being valued on the
date it is made), equals or exceeds thirty percent (30%) of the
Fair Market Value the Company's outstanding common stock
(determined at the commencement of such period);
in each case if as a result of such event or events Consolidated Total Debt
shall, at any time during the period beginning on the date of such
transaction (or the date of the
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completion of such series of transactions, as the case may be) and ending
three hundred sixty-five (365) days thereafter, equal or exceed seventy-
five percent (75%) of the sum of Consolidated Total Debt plus Consolidated
Tangible Net Worth at such time.
"DISTRIBUTION" shall mean:
(i) dividends or other distributions on or in respect of the
capital stock of the Company or any Subsidiary (except distributions
solely in such stock or in Rights, as such term is defined in the
Rights Agreement and except to the extent made to the Company or any
Wholly-Owned Subsidiary);
(ii) the repurchase, purchase, redemption or acquisition of
capital stock of the Company or any Subsidiary, or of warrants, rights
or other options to purchase such stock (except when solely in
exchange for such stock and except to the extent made from the Company
or a Wholly-Owned Subsidiary) unless made, contemporaneously, from the
net proceeds of a sale of such stock; and
(iii) all payments in respect of Subordinated Debt (other than
mandatory scheduled payments and prepayments), including optional or
voluntary prepayments and including all payments made to acquire
Subordinated Debt (except to the extent such payment is made to the
Company or a Wholly-Owned Subsidiary).
"EEC AFFILIATE" shall mean any corporation organized under the laws of
any country which is a member nation of the European Economic Community (as
used herein, the "EEC") as such organization is constituted on the Closing
Date, that has the majority of its Property located in and makes the major
portion of its sales to Persons located in the United States of America,
Canada, or the EEC, and more than fifty percent (50%) of the total combined
voting power of all classes of Voting Stock of which shall, at the time as
of which any determination is being made, be owned, directly or indirectly,
by the Company.
"EQUITY ISSUANCE ACQUISITIONS" shall mean the acquisition by the
Company of Debt (including, without limitation, Notes, the 1994
Subordinated Notes, the Company's 9.35% Senior Notes due January 29, 2000
or the Company's 7% Convertible Subordinated Debentures due 2012), or any
portion thereof, for consideration consisting solely of common stock of the
Company and in connection with tenders of such Debt by the holders thereof
in payment of the exercise or purchase price of any rights, warrants or
options to acquire such common stock, or upon conversion of such Debt into
such common stock.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall mean any corporation or trade or business that
(i) is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the IRC) as the Company, or
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(ii) is under common control (within the meaning of Section 414(c)
of the IRC) with the Company.
"ESOP" shall mean the Salaried Employees Stock Ownership Plan,
effective August 1, 1983, as amended from time to time.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A hereof.
"EXCEPTED PROPERTY" shall have the meaning set forth in paragraph 6P
of this Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXISTING SUBORDINATED NOTES" shall mean and include:
(i) the Company's 9.25% Subordinated Debentures due 2017; and
(ii) the Company's 7% Convertible Subordinated Debentures due
2012;
and the Existing Subordinated Notes of each such series (but not the
Existing Subordinated Notes of the other series) shall be referred to
collectively as a "SERIES" of Existing Subordinated Notes.
"FAIR MARKET VALUE" shall mean at any time with respect to any
Property, the sale value of such Property that would be realized in an
arm's-length sale at such time between an informed and willing buyer, and
an informed and willing seller, under no compulsion to buy or sell,
respectively.
"FINANCIAL COVENANT" shall mean any covenant, agreement or provision
(including, without limitation, the definitions applicable thereto) of or
applicable to the Company or any Consolidated Subsidiary contained in any
agreement governing, or instrument evidencing, any Debt (or commitment to
lend), other than Debt or a commitment to lend among the Company and one or
more Consolidated Subsidiaries, of the Company or any Consolidated
Subsidiary in an aggregate principal amount greater than $5,000,000, which
covenant, agreement or provision:
(i) requires the Company or any Consolidated Subsidiary to
maintain specified financial amounts or ratios or to meet other
financial tests;
(ii) restricts the ability of the Company or any Consolidated
Subsidiary to:
(a) make Distributions, investments, capital expenditures or
operating expenditures of any kind;
(b) incur, create or maintain any Debt (or other
obligations) or Liens;
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(c) merge, consolidate or acquire or be acquired by any
Person;
(d) sell, lease, transfer or dispose of any Property (other
than restrictions imposed solely upon collateral, and not upon
Property of the Company or any Consolidated Subsidiary generally,
by holders of Liens thereon which are permitted by this
Agreement; or
(e) issue or sell any capital stock of any kind;
(iii) is similar to any provision in paragraph 6 of this
Agreement; or
(iv) provides that a default or event of default shall occur, or
that the Company or any Consolidated Subsidiary shall be required to
prepay, redeem or otherwise acquire for value any Debt or security as
a result of its failure to comply with any provision similar to any of
those set forth in any of the foregoing clauses (i), (ii) or (iii).
"FIRST AMENDMENT" shall mean the Amendment Agreement, entered into as
of June 30, 1993, between the Company and the holders of Notes named
therein.
"FIRST AMENDMENT DATE" shall mean the "Effective Date," as such term
is defined in the First Amendment.
"FISCAL YEAR" shall mean any fiscal year of the Company ending on July
31 .
"FISCAL QUARTER NET WORTH INCREASE AMOUNTS" shall mean for any fiscal
quarter of the Company, the greater of (i) Zero Dollars ($0) and (ii) fifty
percent (50%) of Adjusted Consolidated Net Income for such fiscal quarter.
"FUJI" shall mean The FUJI Bank, Limited.
"GROSS OPERATING INCOME" shall mean for any period, sales minus costs
and expenses (other than depreciation and amortization), in each case, as
reflected as a line item on the consolidated statements of earnings and
cash flows of the Company and the Consolidated Subsidiaries for such
period.
"GUARANTIES" shall mean, with respect to any Person (the "Guarantor"),
any obligation (except the endorsement in the ordinary course of business
of negotiable instruments for deposit or collection) of the Guarantor
guaranteeing or in effect guaranteeing any indebtedness, dividend or other
obligation of any other Person (the "Primary Obligor") in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Guarantor:
(i) to purchase such indebtedness or obligation or any Property
constituting security therefor;
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(ii) to loan, advance or supply funds, make any capital
contribution or purchase Property from any Person
(a) for the purpose of payment of such indebtedness or
obligation, or
(b) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary
Obligor or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation; or
(iii) to lease Property or to purchase Securities or other
Property or services primarily for the purpose of assuring the owner
of such indebtedness or obligation of the ability of the Primary
Obligor to make payment of the indebtedness or obligation or, in the
case of any such lease, under terms providing that the obligation to
make payments thereunder is absolute and unconditional under
conditions not customarily found in commercial leases then in general
use;
(iv) to contract or agree to purchase any Property or services if
such contract or agreement requires that payment for such Property or
services (a) shall be made regardless of whether delivery of such
Property or services is ever made or tendered or (b) shall be
subordinated to any indebtedness (of the purchaser or user of such
Property or the Person entitled to the benefit of such services) owed
or to be owed to any Person; or
(v) otherwise to assure the owner of the indebtedness or
obligation of the Primary Obligor against loss in respect thereof.
"IDB FINANCING" shall mean any industrial development bond or similar
financing in which a state or other governmental authority incurs Debt to
construct, improve or acquire (or, in the case of the San Marcos Bonds, to
refinance the construction, improvement or acquisition of) fixed assets for
use primarily by the Company or a Subsidiary under a lease or similar
arrangement of at least five years' duration and in connection with which
the Company or such Subsidiary is obligated (directly or indirectly), under
such lease or other arrangement, to make payments to such state or other
governmental authority which are used to service such Debt.
"INSTITUTIONAL INVESTOR" shall mean
(i) any original purchaser of any of the Notes,
(ii) the subsidiaries and affiliates of any such purchaser and
nominees controlled by any such purchaser, and
(iii) any insurance company, pension fund, mutual fund,
investment company, bank, savings bank, savings and loan association,
investment banking company, trust company, finance or credit company,
any portfolio or any
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investment fund managed by any of the foregoing, and any other
institutional investor, and any nominee of the foregoing controlled by
any such Person, provided that in each case such Person has assets of
at least Five Hundred Million Dollars ($500,000,000).
"INTERCOMPANY DEBT" shall mean Debt owed by the Company or any
Subsidiary to the Company or any Subsidiary.
"IRC" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"LEASE TRANSACTION" shall mean a transaction (including, without
limitation, a transaction with respect to qualified leased Property meeting
the requirements of Section 168(f)(8) of the IRC) pursuant to which the
Company or any Subsidiary makes an investment (as a lessor as contemplated
by said Section 168(f)(8) or on an equity basis with the meaning of Section
4(1) of Revenue Procedure 75-21, 1975-1 C.B. 715, as amended or
supplemented), in all or part of the purchase price of Property, which
Property, concurrently with the purchase thereof, is leased under a
Capitalized Lease Obligation by the Company or such Subsidiary (acting
directly or through either or both of a trust or partnership and with or
without other investors) to a lessee, provided that such investment is made
in part for the purpose of saving or deferring Federal income tax liability
and that the Company or such Subsidiary incurs no obligation, and creates
no Lien in connection with such transaction except that:
(i) the Company or such Subsidiary, directly or indirectly
(a) may borrow part of the funds necessary to pay the
purchase price of such Property (and any related leases, contract
rights, general intangibles or accounts), and
(b) may secure such borrowings by Liens provided that such
Liens do not extend to or cover any Property other than Property
referred to in subclause (a) above and do not secure any
obligations other than those incurred in connection with such
purchase and lease transaction, and
(ii) the Company or such Subsidiary may incur other obligations
in connection with such transaction (and the Company may guarantee any
such obligation of a Subsidiary) provided that such obligations and
guarantee
(a) constitute Non-Recourse Debt,
(b) are incidental and necessary to effect such transaction,
and
(c) are of the type frequently incurred by lessors or equity
investors in connection with the business of leasing Property.
A-55
<PAGE>
"LETTER OF CREDIT PREPAYMENT EVENT" shall mean either:
(i) the redemption, reacquisition or repurchase of any San Marcos
Bonds (other than in connection with a Permitted IDB Acquisition); or
(ii) any deposit, after November 30, 1994, of cash collateral to
secure reimbursement obligations of the Company relating to the San
Marcos Bonds or any letter of credit relating thereto;
in either case, solely as result of and in response to the failure of the
bank which has issued any letter of credit relating to the San Marcos Bonds
to extend or renew such outstanding letter of credit; provided, however,
that prior to effecting such redemption, reacquisition, repurchase or cash
collateralization the Company shall have used its best efforts to retain
such letter of credit. The Company covenants, in connection with any
Letter of Credit Prepayment Event described in clause (i) above, to
actively seek to remarket the redeemed, reacquired or repurchased San
Marcos Bonds or, to the extent necessary, to modify the structure of such
IDB Financing to the extent necessary to permit a long-term reissuance of
the repurchased San Marcos Bonds, and, in connection with any Letter of
Credit Prepayment Event described in clause (ii) above, to continue to seek
to obtain an unsecured letter of credit not requiring such cash
collateralization.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including
any agreement to give any of the foregoing (but excluding negative pledge
clauses in agreements related to the borrowing of money), any conditional
sale or other title retention agreement, any lease in the nature thereof,
and the filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction (but excluding informational
filings made in respect of leases)) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"MAXIMUM PENSION CONTRIBUTION" shall mean, for any fiscal year of the
Company, a contribution to any or all Plans or Multiemployer Plans not
exceeding the greater of:
(i) the sum of:
(a) the amount set forth in the chart below under the
heading "Base Contribution" for such fiscal year; plus
(b) the lesser of:
(I) the amount set forth in the chart below under the
heading "Maximum Additional Contribution" for such fiscal
year; and
(II) the amount, if positive, by which cash provided by
operating activities of the Company and the Subsidiaries
(calculated in a manner consistent with the preparation of
the
A-56
<PAGE>
projections contained in the Company's February 28, 1994,
financial plan, as provided to the Purchasers) for such
fiscal year exceeds the amount set forth in the chart below
under the heading "Projected Cash Flow" for such fiscal
year, so long as, but only so long as, for a period of not
less than thirty (30) days prior to and thirty (30) days
following each date on which any contribution made by the
Company and the Subsidiary would cause the aggregate amount
of contributions during such fiscal year to exceed the "Base
Contribution" set forth in the chart below for such fiscal
year, the amount of Debt outstanding under the Credit
Agreement (or any replacement, renewal or refinancing
thereof) is Zero Dollars ($0);
and
(ii) the minimum contribution permitted during such fiscal year
pursuant to ERISA, the IRC and the rules and regulations under ERISA
and the IRC.
A contribution to a Plan or Multiemployer Plan permitted by clause (b) of
this definition may be made within a period of ninety (90) days immediately
following the end of such fiscal year.
<TABLE>
<CAPTION>
===================================================================
PROJECTED
MAXIMUM CASH
ADDITIONAL PROVIDED BY
FISCAL YEAR BASE CONTRIBUTION CONTRIBUTION OPERATIONS
===================================================================
<S> <C> <C> <C>
1994 $17,000,000 $ 0 $36,700,000
- - -------------------------------------------------------------------
1995 $36,000,000 $ 3,200,000 $15,600,000
- - -------------------------------------------------------------------
1996 $37,000,000 $ 6,900,000 $46,100,000
- - -------------------------------------------------------------------
1997 $30,000,000 $10,500,000 $64,900,000
- - -------------------------------------------------------------------
1998 $23,000,000 $18,200,000 $53,400,000
===================================================================
</TABLE>
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA) in respect
of which the Company or any ERISA Affiliate is an "employer" (as such term
is defined in Section 3 of ERISA).
"MULTIPLE EMPLOYER PLAN" shall mean any employee benefit plan within
the meaning of Section 3(3) of ERISA other than a Multiemployer Plan,
subject to Title IV of ERISA, to which the Company or any ERISA Affiliate
and an employer (as such term is defined in Section 3 of ERISA) other than
an ERISA Affiliate or the Company contribute.
A-57
<PAGE>
"NET AFTER-TAX CASH BASIS" shall mean at any time in respect of any
investment made in connection with a Lease Transaction, the initial amount
of such investment made by the Company or any Subsidiary in such Lease
Transaction, less
(i) the net aggregate amount (on a cash basis) received by or
distributed to the Company or such Subsidiary, on or prior to such
time, after payment and deduction of all expenses (including but not
limited to insurance and trustee's fees and after payment of interest
and principal on any loan incurred in such Lease Transaction) to the
extent all such expenses are related to and incurred in connection
with such Lease Transaction, and,
(ii) the net aggregate amount (on a cash basis), on account of
reductions in the Company's quarterly estimated tax payments to the
United States and to the State of California, on or prior to such
time, as such shall be adjusted at year-end to reflect the actual tax
benefits obtained on account of reduced taxes payable by virtue of
such Lease Transaction. In computing quarterly estimated tax
payments, the Company shall take into consideration, on a consolidated
basis, the full taxable year's anticipated benefits of the Lease
Transaction, including allowable depreciation and interest, expenses,
deductions, investment and other tax credits, and net rental income.
"NET RENTALS" shall mean, with respect to any period, all fixed
payments that the lessee is required to make during such period by the
terms of any lease having an original term of one year or more, but shall
not include amounts required to be paid in respect of maintenance, repairs,
income taxes, property taxes, insurance, assessments or other similar
charges or additional rentals (in excess of fixed minimums) based upon a
percentage of gross receipts.
"NON-EMPLOYEE DIRECTORS STOCK-OPTION PLANS" shall mean the Company's
1988 Non-Employee Directors Stock-Option Plan and any other comparable
future plan.
"NON-RECOURSE DEBT" shall mean, as to any Person, in connection with a
Lease Transaction, all indebtedness and other obligations of such Person
(i) incurred in connection with such Lease Transaction and (ii) of the type
described in clause (i) of the definition of Lease Transaction; provided,
that the obligations of such Person to repay borrowed money shall be
expressly limited as to recourse solely to (A) the property subject to such
Lease Transaction (including the proceeds of such property) and (B) the
amounts payable by or on behalf of the lessee under or in connection with
such Lease Transaction.
"NOTEHOLDER ACCEPTANCE" shall have the meaning set forth in paragraph
5I(ii) of this Agreement.
"NOTEHOLDER SHARE" shall mean, in respect of any holder of Notes and
any Ratable Prepayment Amount, such holder's ratable share of such Ratable
Prepayment Amount, such ratable share being determined by reference to the
outstanding principal amount of Notes held by such holder as a percentage
of the outstanding principal amount of all Notes.
A-58
<PAGE>
"NOTICE OF SALE" shall have the meaning specified in clause (ii) of
paragraph 4.E hereof.
"OFFER PERIOD" shall have the meaning set forth in paragraph 5I(ii) of
this Agreement.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents, its Chief
Financial Officer, its Controller, its Secretary or its Treasurer.
"ORIGINALLY SCHEDULED PAYMENTS" shall mean and include:
(i) payment of any Debt at scheduled maturity;
(ii) with respect to any Debt, originally scheduled prepayments,
originally scheduled redemptions, originally scheduled sinking fund
payments or originally scheduled reductions in maximum commitments
thereof; and
(iii) payments in respect of any revolving credit agreement,
including, without limitation, the Credit Agreement, which do not
result in a permanent reduction of the original commitment thereunder.
As used in the preceding sentence, "original" or "originally scheduled"
means the maturity, payments, prepayments, or reductions in commitment
established as of the Third Amendment Date, or, if later, at the time of
execution of the relevant credit facility but does not include any
payments, prepayments or reductions in commitment which result from the
occurrence of any contingency, even if the provision requiring such
payment, prepayment or reduction as a result of such contingency was
originally contained in the agreements governing such Debt, and even if the
occurrence of such contingency was foreseeable, at the time of the
execution of the documentation of such issue of Debt.
"PERMITTED EXISTING SUBORDINATED DEBT ACQUISITIONS" shall mean, with
respect to either Series of Existing Subordinated Notes, the purchase or
acquisition by the Company or any Subsidiary of Existing Subordinated Notes
of such Series in anticipation of satisfying an Originally Scheduled
Payment thereof; provided, however, that all of the following conditions
are met:
(i) no Existing Subordinated Notes may be acquired more than
three hundred sixty-four (364) days prior to the date of any such
Originally Scheduled Payment thereof;
(ii) the Company or any Subsidiary, more than one hundred eighty
(180) days, but not more than three hundred sixty-four (364) days,
prior to the date of the next succeeding Originally Scheduled Payment
thereof, may acquire no more than fifty percent (50%) of the aggregate
principal amount of Existing Subordinated Notes of such Series
required to be prepaid or redeemed on the date of the next succeeding
Originally Scheduled Payment;
A-59
<PAGE>
(iii) the Company or any Subsidiary, not more than one hundred
eighty (180) days prior to the date of the next succeeding Originally
Scheduled Payment thereof, may acquire an aggregate principal amount
of Existing Subordinated Notes of such Series not exceeding (together
with any Existing Subordinated Notes of such Series acquired more than
one hundred eighty (180) days, but not more than three hundred sixty-
four (364) days, prior to the date of the next succeeding Originally
Scheduled Payment thereof) one hundred percent (100%) of the aggregate
principal amount of Existing Subordinated Notes of such Series
required to be prepaid or redeemed on the date of the next succeeding
Originally Scheduled Payment;
(iv) at the time of such acquisition:
(a) no Default or Event of Default shall be continuing;
(b) the Company shall not reasonably foresee the occurrence
of any Default or Event of Default at any time prior to the date
of the next succeeding Originally Scheduled Payment thereof;
(c) the Debt Ratio would not exceed 2.50:1.00; and
(d) the Company could incur $1.00 of additional Debt;
(v) the purchase price paid by the Company and the Subsidiaries
in respect of such acquisition of Existing Subordinated Notes shall be
less than one hundred percent (100%) of the principal amount of
Existing Subordinated Notes so acquired; and
(vi) the Company, on the date of each Originally Scheduled
Payment in respect of the Existing Subordinated Notes, shall actually
apply, in accordance with the provisions of such Existing Subordinated
Notes, all Existing Subordinated Notes of such Series acquired by the
Company and the Subsidiaries to the prepayment or redemption of such
Existing Subordinated Notes required to be prepaid or redeemed on such
date.
"PERMITTED IDB ACQUISITIONS" shall mean:
(i) prepayments or repurchases of San Marcos Bonds upon tender by
the holders thereof after May 10, 1994 in accordance with the terms of
the indenture governing the San Marcos Bonds; provided, however, that
San Marcos Bonds in an aggregate principal amount of Sixteen Million
Five Hundred Thousand Dollars ($16,500,000) shall have been issued,
outstanding and held and owned by Persons other than the Company, any
Subsidiary or any Affiliate on May 10, 1994 (whether or not
subsequently repurchased by the Company); and provided, further, that
the Company shall be actively seeking to either remarket the San
Marcos Bonds that were so prepaid or repurchased pursuant to the
provisions of the IDB Financing of the Company's San Marcos, Texas
facility or, to the extent necessary in connection with any
termination of any outstanding
A-60
<PAGE>
letter of credit relating to such facility, to modify the structure of
such IDB Financing to the extent necessary to permit a long-term
reissuance of the repurchased San Marcos Bonds; and
(ii) the redemption in full on or before June 1, 1994 of all the
San Marcos Bonds, but solely as result of and in response to the
failure of FUJI to extend or renew its outstanding letter of credit
relating to the IDB Financing of the Company's San Marcos, Texas
facility; provided, however, that:
(a) prior to effecting such redemption, the Company shall
have used its best efforts to retain such letter of credit by
offering to deposit cash collateral to secure its obligations to
FUJI under the Reimbursement Agreement, dated as of May 1, 1990,
with the Company relating to such IDB Financing;
(b) following the making of such redemption, the Company
shall use its best efforts to obtain a replacement unsecured
letter of credit to issue replacement unsecured San Marcos Bonds,
and shall thereafter use its best efforts to market or sell such
San Marcos Bonds.
"PERMITTED INVESTMENTS" means any of the following, to the extent
owned by the Company free and clear of all Liens (except such Liens as are
permitted by the terms of this Agreement):
(i) marketable direct obligations issued or unconditionally
guaranteed by the United States government or issued by an agency or
instrumentality thereof and backed by the full faith and credit of the
United States, in each case maturing within one year after the date of
acquisition thereof;
(ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any
public instrumentality thereof maturing within 180 days after the date
of acquisition thereof and, at the time of acquisition, having a
rating of A or higher from either S&P or Moody's (or, if at any time
neither S&P nor Moody's shall be rating such obligations, then one of
the three highest ratings from another nationally recognized rating
service reasonably acceptable to the Required Holders) and not listed
in the Credit Watch published by S&P;
(iii) commercial paper (other than commercial paper issued by
the Company or any Affiliate or Consolidated Subsidiary) maturing no
more than 180 days after the date of creation thereof and, at the time
of acquisition, having a rating of at least A-1 or P-1 from either S&P
or Moody's (or, if at any time neither S&P nor Moody's shall be rating
such obligations, then the highest rating from other nationally
recognized rating services reasonably acceptable to the Required
Holders);
(iv) domestic and Eurodollar certificates of deposit or time
deposits, bankers' acceptances or bank notes maturing within one year
after the date of
A-61
<PAGE>
acquisition thereof issued by any commercial bank organized under the
laws of the United States or any state thereof or the District of
Columbia having a rating of A or higher from S&P or Moody's;
(v) money market funds having an average portfolio maturity, at
the time of acquisition thereof, of not more than 180 days, which
money market funds either:
(a) have a rating from a nationally recognized rating
service reasonably acceptable to the Required Holders which is
equivalent to a rating of either AAAm-G or AAAm from S&P or a
rating of Prime-1 from Moody's; or
(b) are required to invest at least 95% of their assets in
instruments described in other clauses of this definition;
(vi) repurchase obligations with a term of not more than 30 days
for instruments described in clauses (i) and (ii) of this definition;
(vii) investments made in connection with the Citibank, N.A.,
overnight Nassau Sweep Account; and
(viii) repurchase obligations having Kidder, Peabody & Co.,
Inc., or any other investment bank organized under the laws of any
state of the United States and approved by the Required Holders as the
counterparty, with a term of not more than 45 days for whole loans
secured by commercial or residential real estate mortgages.
"PERMITTED PREFERRED DIVIDEND" shall mean dividends in respect of any
Permitted Preferred Stock in an aggregate amount not to exceed in any
period of 365 days (or 366 days in any year in which there is a February
29th) the product of
(i) the lesser of:
(a) an amount equal to 100 basis points in excess of the
yield on the U.S. Treasury security with a constant maturity of
30 years on the date of issuance of the Permitted Preferred
Stock; and
(b) 10% per annum,
times
(ii) the aggregate cash consideration paid to the Company in
consideration of the issuance of the Permitted Preferred Stock.
"PERMITTED PREFERRED STOCK" shall mean any issue of preferred stock of
the Company which is not required to be redeemed, repurchased or otherwise
acquired or
A-62
<PAGE>
retired, in whole or in part, for value by the Company, upon the occurrence
of any contingency or otherwise, prior to July 1, 2003.
"PERSON" shall mean an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or
any department or agency thereof.
"PLAN" shall mean at any time any "employee pension benefit plan" (as
such term is defined in Section 3 of ERISA) maintained by the Company or
any ERISA Affiliate for employees of the Company or such ERISA Affiliate,
excluding any Multiemployer Plan, but including, without limitation, any
Multiple Employer Plan.
"PREPAYMENT EVENT" shall mean any Letter of Credit Prepayment Event,
any mandatory or optional defeasance, prepayment or repurchase, in whole or
in part, of any issue of Debt (other than Debt owing solely to the Company
or any Wholly-Owned Subsidiary), or reduction in commitment in any credit
facility, of the Company or any Subsidiary, or any event which occurs that
gives rise to an obligation of the Company or any Subsidiary to make any
such defeasance, prepayment, repurchase or reduction, in each case, other
than:
(i) Originally Scheduled Payments;
(ii) Permitted Existing Subordinated Debt Acquisitions;
(iii) Permitted IDB Acquisitions;
(iv) Equity Issuance Acquisitions; and
(v) De Minimus Payments.
In connection with any Debt described in clause (vi) of the definition of
"Debt," payments in respect of contributions of amounts not exceeding,
during any fiscal year of the Company, the Maximum Pension Contribution for
such fiscal year to any Plan or Multiemployer Plan shall not give rise to a
Prepayment Event, but a Prepayment Event will result from the payment or
contribution to any such Plan or Multiemployer Plan of any amount in excess
of the Maximum Pension Contribution during any fiscal year.
"PREPAYMENT OFFER" shall have the meaning set forth in paragraph 5I(i)
of this Agreement.
"PREPAYMENT PORTION" shall have the meaning set forth in paragraph
5I(iii) of this Agreement.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"PURCHASE MONEY MORTGAGES" shall mean a Lien held by any Person
(whether or not the seller of such assets) on tangible assets (other than
assets acquired to replace,
A-63
<PAGE>
repair, upgrade or alter assets owned by the Company or any Subsidiary on
the Closing Date) acquired, improved or constructed by the Company or any
Subsidiary after the Closing Date, which Lien secures all or a portion of
the related purchase price or improvement or construction costs of such
assets (or Debt incurred to pay such purchase price or costs), or any Lien
existing on any tangible assets of any corporation at the time it becomes a
Subsidiary, and extensions (as to time), renewals and replacements of any
such Lien or the Debt secured thereby, provided that, in each such case
such Lien does not extend to any other asset of the Company or any
Subsidiary; provided, further, that any Lien on acquired Property, or on
Property of a corporation at the time it becomes a Subsidiary, was not
created in contemplation of such acquisition or such corporation becoming a
Subsidiary, as the case may be.
"PURCHASERS" shall have the meaning specified in the introductory
paragraph of this Agreement.
"RATABLE PREPAYMENT AMOUNT" shall mean, in respect of the Notes:
(i) in connection with any Letter of Credit Prepayment Event, an
amount equal to the product of:
(a) the aggregate principal amount of San Marcos Bonds
redeemed, reacquired or repurchased, or with respect to which
cash collateral has been deposited to secure reimbursement
obligations of the Company relating to the San Marcos Bonds or
any letter of credit relating thereto, as the case may be, by the
Company; times
(b) the quotient of:
(I) the aggregate amount of Notes then outstanding;
divided by
(II) the aggregate amount of the Notes and the 9.35%
Senior Notes due January 29, 2000 of the Company then
outstanding;
and
(ii) with respect to each other Prepayment Event, a principal
amount of the Notes equal to the product of:
(a) the highest percentage of any issue of Debt being
prepaid, or as to which any offer to prepay shall apply, as a
result of the occurrence of such Prepayment Event, multiplied by
(b) the outstanding principal amount of the Notes.
"REQUIRED HOLDERS" shall mean at any time the holder or holders of at
least sixty-six and two-thirds percent (66 2/3%) of the aggregate
principal amount of the Notes
A-64
<PAGE>
outstanding at such time, provided that Notes owned by the Company, any
Subsidiary or any Affiliate at such time shall be deemed not to be
outstanding for purposes of determining such percentage.
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of
the Company or any other officer of the Company involved principally in its
financial administration or its controllership function.
"RESTRICTED STOCK PLANS" shall mean the 1969, 1970, 1972, 1974 and
1984 Restricted Stock Plans of the Company and any other comparable future
plan.
"RIGHT TO PUT" shall have the meaning specified in clause (i) of
paragraph 4.E hereof.
"RIGHTS AGREEMENT" shall mean the Rights Agreement dated as of August
15, 1986, between the Company and The First National Bank of Chicago, as in
effect on December 21, 1992.
"S&P" means Standard & Poor's Corporation.
"SAN MARCOS BONDS" shall mean bonds originally issued in connection
with the IDB Financing of Company's San Marcos, Texas facility or
replacement bonds issued on substantially the same terms as the originally
issued bonds.
"SECOND AMENDMENT" shall mean the Second Amendment Agreement entered
into as of September 24, 1993, between the Company and the holder of Notes
named therein.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITY" shall have the meaning specified in Section 2(1) of the
Securities Act.
"SENIOR DEBT" shall mean all Debt of Subsidiaries, all Debt of the
Company secured by any Lien and all other Debt ranking senior to or pari
passu with the Notes with respect to distributions of the Company's
Property in any bankruptcy proceeding.
"SENIOR OFFICER" shall mean with respect to any corporation each of
the Chairman, President, any Vice-President, the Chief Financial Officer,
the Secretary, and the Treasurer of such corporation.
"SIGNIFICANT HOLDER" shall mean (i) each Purchaser, so long as such
Purchaser shall hold (or be committed under this Agreement to purchase) any
Note, or (ii) any other holder of at least five percent (5%) of the
aggregate principal amount of the Notes from time to time outstanding.
"STOCK INCENTIVE PLANS" shall mean the 1989 Stock Incentive Plan of
the Company and any other future comparable plan.
A-65
<PAGE>
"STOCK OPTION PLANS" shall mean the 1972, 1973, 1974, 1982 and 1984
Stock Option Plans of the Company and any other future comparable plan.
"SUBSIDIARY" shall mean any corporation organized under the laws of
any state of the United States of America, Canada, or any province of
Canada, that has the majority of its Property located in and makes the
major portion of its sales to Persons located in the United States of
America or Canada, and more than fifty percent (50%) of the total combined
voting power of all classes of Voting Stock of which shall, at the time as
of which any determination is being made, be owned, directly or indirectly,
by the Company.
"THIRD AMENDMENT" shall mean the Third Amendment Agreement entered
into as of May 10, 1994, between the Company and the holder of Notes named
therein.
"THIRD AMENDMENT DATE" shall mean the "Effective Date," as such term
is defined in the Third Amendment.
"TRADE RECEIVABLES AGREEMENT" shall mean
(i) the Amended and Restated Trade Receivables Purchase and Sale
Agreement dated as of January 26, 1990 and as amended thereafter among
the Company, Corporate Asset Funding Company, Inc., Citibank, N.A. and
Citicorp North America, Inc., individually and as agent,
(ii) the Amended and Restated Trade Receivables Purchase and Sale
Agreement dated as of January 26, 1990 and as amended thereafter among
the Company, Citibank, N.A. and Citicorp North America, Inc.,
individually and as agent, and
(iii) other agreements for the sale of receivables, or other
amounts payable to the Company on account of any pre-production costs,
by the Company or any Subsidiary, with recourse to the Company or such
Subsidiary no greater than as set forth in the agreement referred to
in clause (i) of this definition,
provided that in no event shall
(a) the Company or any Subsidiary sell Property (or subject
Property to any Liens) under any such agreements other than Property
of the type that may be sold under any such agreements in accordance
with the terms of any such agreements as in effect on the Closing
Date, and in no event shall such sales be made unless they are sales
of interests in accounts and general intangibles as such terms are
defined by the Uniform Commercial Code as in effect in New York,
(b) at any time the aggregate amount of claims (whether or not
asserted at such time) against any one or more of the Company or the
Subsidiaries, or assets of any of them, arising out of such agreements
(but only that portion of such claims that represents principal)
exceed the greater of,
A-66
<PAGE>
(I) thirty-five percent (35%) of Adjusted Consolidated
Tangible Net Worth, or
(II) Sixty Million Dollars ($60,000,000), and
(c) for any period of ten consecutive Business Days, the
aggregate amount of claims (whether or not asserted at such time)
against any one or more of the Company or the Subsidiaries, or assets
of any of them, arising out of such agreements (but only that portion
of such claims that represents principal) exceed ninety-one percent
(91%) of the aggregate face amount of the receivables and general
intangibles with respect to which the Company may or has sold
interests under any such agreements and which receivables and general
intangibles are outstanding at such time.
"TRANSFEREE" shall mean any direct or indirect transferee of all or
any part of any Note purchased by any Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency).
"WARRANT AGREEMENT" shall mean that certain Warrant Agreement entered
into among the Company and holders of the Notes and certain other Debt of
the Company on or after the Amendment Date in compliance with the
provisions of paragraph 7A of the Amendment.
"WARRANTS" shall mean warrants to purchase shares of the common stock
of the Company issued pursuant to the Warrant Agreement.
"WHOLLY-OWNED SUBSIDIARY" shall mean any Subsidiary one hundred
percent (100%) of the capital stock of which (other than directors'
qualifying shares) is held of record and beneficially owned by the Company
or any other Wholly-Owned Subsidiary.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on, and
Agreed Put Consideration and any Yield-Maintenance Amount payable with respect
to, such Note, by wire transfer of immediately available funds for credit (not
later than 12:00 noon, New York City time, on the date due) to such Purchaser's
account or accounts as specified in the Purchaser Schedule attached hereto, or
such other account or accounts in the United States as such Purchaser may
designate in writing, notwithstanding any contrary provision herein or in any
Note with respect to the place of payment. Each Purchaser agrees that, before
disposing of any Note, such Purchaser will make a notation thereon (or on a
schedule attached thereto) of all principal payments previously made thereon and
of the date to which interest thereon has been paid. The Company agrees
A-67
<PAGE>
to afford the benefits of this paragraph 11A to any Transferee which shall have
made the same agreement as each Purchaser has made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser and
any Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and
expenses of any special counsel engaged by such Purchaser or such
Transferee in connection with this Agreement, the transactions contemplated
hereby and any subsequent proposed modification of, or proposed consent
under, this Agreement, whether or not such proposed modification shall be
effected or proposed consent granted, and
(ii) the costs and expenses, including attorneys' fees, incurred by
such Purchaser or such Transferee in enforcing (or determining whether or
how to enforce) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the transactions
contemplated hereby or by reason of such Purchaser's or such Transferee's
having acquired any Note, including without limitation costs and expenses
incurred in any bankruptcy case.
The obligations of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by any Purchaser or
any Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement and the Notes may be amended,
and the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, if the Company shall obtain the
written consent to such amendment, action or omission to act, of the Required
Holders except that, without the written consent of the holder or holders of all
Notes at the time outstanding, no amendment to this Agreement shall change the
maturity of any Note, or change the principal of, or the rate or time of payment
of interest on or any Agreed Put Consideration or Yield-Maintenance Amount
payable with respect to any Note, or affect the time, amount or allocation of
any prepayments, or change the proportion of the principal amount of the Notes
required with respect to any consent, amendment, waiver or declaration. With
respect to waivers or consents to amendments to or concerning the provisions of
paragraph 5I hereof, the provisions of such paragraph and (except as set forth
in this sentence) the definitions used therein (as used therein) may not be
waived, amended or supplemented without the consent of each holder of Notes, but
waivers concerning the occurrence of any Prepayment Event, and waivers and
consents to amendments or supplements to the definition of Prepayment Event, may
be given by the Required Holders.
Each holder of any Note at the time or thereafter outstanding shall be
bound by any consent authorized by this paragraph 11C, whether or not such Note
shall have been marked to indicate such consent, but any Notes issued thereafter
may bear a notation referring to any such consent. No course of dealing between
the Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights
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<PAGE>
of any holder of such Note. As used herein and in the Notes, the term "this
Agreement" and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The
Notes are issuable as registered notes without coupons in denominations of at
least One Million Dollars ($1,000,000), except as may be necessary to reflect
any principal amount not evenly divisible by One Million Dollars ($1,000,000).
The Company shall keep at its principal office a register in which the Company
shall provide for the registration of Notes and of transfers of Notes. Upon
surrender for registration of transfer of any Note at the principal office of
the Company, the Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount, registered in
the name of the Transferee or Transferees, provided that any such Transferee or
Transferees are Institutional Investors. At the option of the holder of any
Note, such Note may be exchanged for other Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Note to be exchanged at the principal office of the Company. Whenever
any Notes are so surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the exchange is entitled
to receive. Every Note surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by a written instrument of transfer
duly executed, by the holder of such Note or such holder's attorney duly
authorized in writing. Any Note or Notes issued in exchange for any Note or
upon transfer thereof shall carry the rights to unpaid interest and interest to
accrue which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange. Upon receipt of written notice from the holder of any Note of the
loss, theft, destruction or mutilation of such Note and, in the case of any such
loss, theft or destruction, upon receipt of such holder's unsecured indemnity
agreement, or in the case of any such mutilation upon surrender and cancellation
of such Note, the Company will make and deliver a new Note, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for
registra-tion of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of, interest on and any Yield-Maintenance Amount
payable with respect to such Note and for all other purposes whatsoever, whether
or not such Note shall be overdue, and the Company shall not be affected by
notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in such Note to any
Institutional Investor on such terms and conditions as may be determined by such
holder in its sole and absolute discretion, provided that any such participation
shall be in a principal amount of at least One Hundred Thousand Dollars
($100,000).
11F. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the financial
statements contained in the Company's Quarterly Report on Form 10-Q for fiscal
quarter ended May 2, 1993. If any change in accounting principles from those
used in the preparation of such financial statements hereafter occasioned by the
promulgation of rules and regulations by or required by the Financial Accounting
Standards Board, the Cost Accounting Standards Board or the Securities and
Exchange Commission (or successors thereto or agencies with similar functions)
result in a material change
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<PAGE>
in the accounting principles used to prepare the financial statements contained
in the Company's Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q,
the Company and the holders of Notes agree, upon notification of such change by
the Company to the holders of Notes or by a holder of Notes to the Company, to
enter into negotiations in order to amend paragraph 6 and the Financial
Covenants incorporated by reference herein, as applicable, so as to equitably
reflect such change with the desired result that the criteria for evaluating the
Company's financial condition shall be the same after such change as if such
change had not been made.
11G. DIRECTLY OR INDIRECTLY. Where any provision in this Agreement refers
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person, including actions taken by or on behalf of any
partnership in which such Person is a general partner.
11H. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
11I. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11J. DISCLOSURE TO OTHER PERSONS. Each Purchaser agrees to use its best
efforts to hold in confidence and not to disclose any Confidential Information,
provided, that any Purchaser will be free, after notice to the Company, to
correct any false or misleading information that may become public concerning
its relationship to the Company and the Subsidiaries or to the transactions
contemplated by this Agreement. Notwithstanding the foregoing, the Company
acknowledges that the holder of any Note may deliver copies of any financial
statements and other documents delivered to such holder, and disclose any other
information disclosed to such holder (including, without limitation,
Confidential Information), by or on behalf of the Company or any Subsidiary in
connection with or pursuant to this Agreement, to
(i) such holder's directors, officers, employees, agents and
professional consultants,
(ii) any other holder of any Note,
(iii) any Institutional Investor to which such holder sells or offers
to sell such Note or any part thereof, provided that such Institutional
Investor signs a written agreement to comply with the confidentiality
provisions of this Agreement, regardless of whether or not such offeree
purchases any Notes, and provided further that no such
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<PAGE>
agreement shall be required so long as such Institutional Investor is
furnished only with information that is not Confidential Information,
(iv) any Institutional Investor to which such holder sells or offers
to sell a participation in all or any part of such Note, provided that such
Institutional Investor signs a written agreement to comply with the
confidentiality provisions of this Agreement, regardless of whether or not
such offeree purchases any Notes, and provided further that no such
agreement shall be required so long as such Institutional Investor is
furnished only with information that is not Confidential Information,
(v) any federal or state regulatory authority having jurisdiction over
such holder,
(vi) the National Association of Insurance Commissioners or any
similar organization or
(vii) any other Person to which such delivery or disclosure may be
necessary,
(a) in compliance with any law, rule, regulation or order
applicable to such holder,
(b) in response to any subpoena or other legal process, or
(c) in connection with any litigation to which such holder is a
party.
11K. NOTICES. All written communications provided for hereunder shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid) and
(i) if to any Purchaser, addressed to such Purchaser at the address
specified for such communications in the Purchaser Schedule attached
hereto, or at such other address as such Purchaser shall have specified to
the Company in writing,
(ii) if to any other holder of any Note, addressed to such other
holder at such address as such other holder shall have specified to the
Company in writing or, if any such other holder shall not have so specified
an address to the Company, then addressed to such other holder in care of
the last holder of such Note which shall have so specified an address to
the Company, and
(iii) if to the Company, addressed to it at:
Rohr, Inc.
Foot of H Street
Chula Vista, CA 92012
Attention: Treasurer
copy to: General Counsel
or at such other address as the Company shall have specified to the holder
of each Note in writing; provided, however, that any such communication to
the Company may also,
A-71
<PAGE>
at the option of the holder of any Note, be delivered by any other means
either to the Company at its address specified above or to any officer of
the Company.
11L. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day. If the date for any payment is extended to the
next succeeding Business Day by reason of the preceding sentence, the period of
such extension shall be included in the computation of the interest payable on
such Business Day.
11M. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser or to the Required Holders, the
determination of such satisfaction shall be made by such Purchaser or the
Required Holders, as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such determination.
11N. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK.
11O. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11P. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11Q. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.
11R. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers are to
be several sales, and the obligations of the Purchasers under this Agreement are
several obligations. Except as provided in paragraph 3F, no failure by any
Purchaser to perform its obligations under this Agreement shall relieve any
other Purchaser or the Company of any of its obligations hereunder, and no
Purchaser shall be responsible for the obligations of, or any action taken or
omitted by, any other Purchaser hereunder.
A-72
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement among the
Company and the Purchasers.
Very truly yours,
ROHR, INC.
By___________________________________
Name:
Title:
The foregoing Agreement is
hereby accepted as of the
date first above written.
[PURCHASER]
By________________________________
Name:
Title:
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<PAGE>
ROHR, INC.
AND
IBJ SCHRODER BANK & TRUST COMPANY,
AS TRUSTEE
----------------------------
$100,000,000
11 5/8% Senior Notes due 2003
----------------------------
INDENTURE
Dated as of May 15, 1994
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 Definitions................................................. 1
SECTION 1.01 Definitions.............................................. 1
SECTION 1.02 Other Definitions........................................ 20
SECTION 1.03 Incorporation by Reference of Trust Indenture Act........ 21
SECTION 1.04 Rules of Construction.................................... 21
ARTICLE 2 The Senior Notes............................................ 22
SECTION 2.01 Form and Dating.......................................... 22
SECTION 2.02 Execution and Authentication............................. 22
SECTION 2.03 Registrar and Paying Agent............................... 23
SECTION 2.04 Paying Agent To Hold Money in Trust...................... 23
SECTION 2.05 Holder Lists............................................. 23
SECTION 2.06 Transfer and Exchange.................................... 24
SECTION 2.07 Replacement Senior Notes................................. 24
SECTION 2.08 Outstanding Senior Notes................................. 24
SECTION 2.09 When Treasury Senior Notes Disregarded................... 25
SECTION 2.10 Temporary Senior Notes................................... 25
SECTION 2.11 Cancellation............................................. 25
SECTION 2.12 Defaulted Interest....................................... 25
SECTION 2.13 CUSIP Number............................................. 26
ARTICLE 3 Redemption.................................................. 26
SECTION 3.01 Notices to Trustee....................................... 26
SECTION 3.02 Selection of Senior Notes To Be Redeemed................. 26
SECTION 3.03 Notice of Redemption..................................... 27
SECTION 3.04 Effect of Notice of Redemption........................... 27
SECTION 3.05 Deposit of Redemption Price.............................. 28
SECTION 3.06 Senior Notes Redeemed in Part............................ 28
ARTICLE 4 Covenants................................................... 28
SECTION 4.01 Payment of Senior Notes.................................. 28
SECTION 4.02 Commission Reports....................................... 28
SECTION 4.03 Compliance Certificate................................... 29
SECTION 4.04 Maintenance of Office or Agency.......................... 29
SECTION 4.05 Limitation on Indebtedness............................... 30
SECTION 4.06 Limitation on Restricted Payments........................ 30
SECTION 4.07 Limitations on Payment Restrictions Affecting
Subsidiaries........................................... 31
SECTION 4.08 Limitations on Transactions with Affiliates.............. 33
SECTION 4.09 Limitation on Subsidiary Indebtedness and
Preferred Stock........................................ 33
SECTION 4.10 Limitation on Sale of Assets............................. 35
</TABLE>
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<TABLE>
<S> <C>
SECTION 4.11 Limitation on Liens...................................... 37
SECTION 4.12 Continued Existence...................................... 38
SECTION 4.13 Taxes.................................................... 38
SECTION 4.14 Stay, Extension and Usury Laws........................... 39
SECTION 4.15 Investment Company Act................................... 39
SECTION 4.16 Change of Control........................................ 39
SECTION 4.17 Limitation on Sale and Leaseback Transactions............ 41
SECTION 4.18 Appointments to Fill Vacancies in Trustee's Office....... 41
SECTION 4.19 Further Instruments and Acts............................. 41
ARTICLE 5 Successors.................................................. 42
SECTION 5.01 When the Company May Merge, Etc.......................... 42
SECTION 5.02 Successor Corporation Substituted........................ 43
SECTION 5.03 Purchase Option on Change of Control..................... 43
ARTICLE 6 Defaults and Remedies....................................... 44
SECTION 6.01 Events of Default........................................ 44
SECTION 6.02 Acceleration............................................. 45
SECTION 6.03 Other Remedies........................................... 46
SECTION 6.04 Waiver of Past Defaults.................................. 46
SECTION 6.05 Control by Majority...................................... 46
SECTION 6.06 Limitation on Suits...................................... 47
SECTION 6.07 Rights of Holders To Receive Payment..................... 47
SECTION 6.08 Collection Suit by Trustee............................... 47
SECTION 6.09 Trustee May File Proofs of Claim......................... 48
SECTION 6.10 Priorities............................................... 48
SECTION 6.11 Undertaking for Costs.................................... 48
ARTICLE 7 The Trustee................................................. 48
SECTION 7.01 Duties of the Trustee.................................... 49
SECTION 7.02 Rights of the Trustee.................................... 50
SECTION 7.03 Individual Rights of the Trustee......................... 50
SECTION 7.04 Trustee's Disclaimer..................................... 50
SECTION 7.05 Notice of Defaults....................................... 51
SECTION 7.06 Reports by the Trustee to Holders........................ 51
SECTION 7.07 Compensation and Indemnity............................... 51
SECTION 7.08 Replacement of the Trustee............................... 52
SECTION 7.09 Successor Trustee by Merger, Etc......................... 53
SECTION 7.10 Eligibility, Disqualification............................ 53
SECTION 7.11 Preferential Collection of Claims Against Company........ 53
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
ARTICLE 8 Satisfaction and Discharge of Indenture.................... 54
SECTION 8.01 Termination of Company's Obligations.................... 54
SECTION 8.02 Application of Trust Money.............................. 57
SECTION 8.03 Repayment to Company.................................... 57
SECTION 8.04 Reinstatement........................................... 57
ARTICLE 9 Amendments................................................. 58
SECTION 9.01 Without the Consent of Holders.......................... 58
SECTION 9.02 With the Consent of Holders............................. 58
SECTION 9.03 Compliance with the Trust Indenture Act................. 59
SECTION 9.04 Revocation and Effect of Consents....................... 59
SECTION 9.05 Notation on or Exchange of Senior Notes................. 60
SECTION 9.06 Trustee Protected....................................... 60
ARTICLE 10 General Provisions......................................... 60
SECTION 10.01 Trust Indenture Act Controls............................ 60
SECTION 10.02 Notices................................................. 61
SECTION 10.03 Communication by Holders With Other Holders............. 61
SECTION 10.04 Certificate and Opinion as to Conditions Precedent...... 61
SECTION 10.05 Statements Required in Certificate or Opinion........... 62
SECTION 10.06 Rules by Trustee and Agents............................. 62
SECTION 10.07 Legal Holidays.......................................... 63
SECTION 10.08 No Recourse Against Others.............................. 63
SECTION 10.09 Counterparts............................................ 63
SECTION 10.10 Other Provisions........................................ 63
SECTION 10.11 Governing Law........................................... 64
SECTION 10.12 No Adverse Interpretation of Other Agreements........... 64
SECTION 10.13 Successors.............................................. 64
SECTION 10.14 Severability............................................ 64
SECTION 10.15 Table of Contents, Headings, Etc........................ 64
</TABLE>
iii
<PAGE>
CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT SECTION
- - ---------------------------
INDENTURE SECTION
-----------------
310(a)(1).............................................................7.10
(a)(2)................................................................7.11
(a)(3)................................................................N.A
(a)(4)................................................................N.A
(b)......................................................7.08, 7.10, 10.02
(c)...................................................................N.A
311(a)................................................................7.11
(b)...................................................................7.11
(c)...................................................................N.A.
312(a)................................................................2.05
(b)..................................................................10.03
(c)..................................................................10.03
313(a)................................................................7.06
(b)(1)................................................................N.A.
(b)(2)................................................................7.06
(c)............................................................7.06, 10.02
(d)...................................................................7.06
314(a).........................................................4.01, 10.02
(b)...................................................................N.A.
(c)(1)...............................................................10.04
(c)(2)...............................................................10.04
(c)(3)................................................................N.A.
(d)...................................................................N.A.
(e)..................................................................10.05
(f)...................................................................N.A.
315(a).............................................................7.01(b)
(b)............................................................7.05, 10.02
(c)................................................................7.01(a)
(d)................................................................7.01(c)
(e)...................................................................6.11
A-i
<PAGE>
316(a)(last sentence).................................................2.09
(a)(1)(A).............................................................6.05
(a)(2)(B).............................................................6.04
(a)(2)................................................................N.A.
(b)...................................................................6.02
317(a)(1).............................................................6.08
(a)(2)................................................................6.09
(b)...................................................................2.04
318(a)...............................................................10.01
N.A. means not applicable.
- - --------------------------
* This Cross-Reference Table is not part of the Indenture.
A-ii
<PAGE>
THIS INDENTURE, dated as of May 15, 1994, is between Rohr, Inc., a Delaware
corporation (the "Company"), and IBJ Schroder Bank & Trust Company, a New York
banking corporation ("Trustee"). The Company has duly authorized the creation of
its 11 5/8% Senior Notes due 2003 (the "Senior Notes") and to provide therefor
the Company has duly authorized the execution and delivery of this Indenture.
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the holders from time to time of the Senior Notes.
ARTICLE 1
Definitions
SECTION 1.01 Definitions.
-----------
"Acquired Indebtedness" of any specified Person means Indebtedness of any
other Person and its Subsidiaries existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person or assumed by the
specified Person in connection with the acquisition of assets from such other
Person including, without limitation, Indebtedness of such other Person and its
Subsidiaries incurred in connection with or in anticipation of (a) such other
Person and its Subsidiaries being merged with or into or becoming a Subsidiary
of such specified Person or (b) such acquisition by the specified Person.
"Affiliate" means, when used with reference to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, the referent Person, as the case may be, or any Person who
beneficially owns (within the meaning of Rule 13d-3 and Rule 13d-5 under the
Exchange Act), directly or indirectly, 10% or more of the equity interests of
the referent Person or warrants, options or other rights to acquire or hold more
than 10% of any class of equity interests of the referent Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct or cause the direction of management or
policies of the referent Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative of the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means any sale, lease, transfer, exchange or other disposition
by the Company or any Subsidiary (or series of related sales, leases, transfers,
exchanges or dispositions) in excess of $1,000,000, including, without
limitation, dispositions pursuant to merger, consolidation or sale and leaseback
transactions, of (a) shares of Capital Stock of a Subsidiary of the Company (pro
rated to the extent of the Company's interest therein), (b) all or substantially
all of the properties and assets of any division or line of business of the
1
<PAGE>
Company or any Subsidiary of the Company or (c) any other property or assets of
the Company (pro rated to the extent of the Company's interest therein) or of
any Subsidiary of the Company (pro rated to the extent of the Company's interest
therein,) (each referred to for purposes of this definition as a "disposition")
by the Company or by any of its Subsidiaries (other than (i) dispositions by the
Company to a Wholly Owned Subsidiary of the Company or by a Subsidiary of the
Company to the Company or to a Wholly Owned Subsidiary of the Company, (ii)
sales or other dispositions of inventory in the ordinary course of business,
(iii) any disposition of properties or assets that is consummated in accordance
with the provisions of Section 5.01, (iv) any disposition of any account
receivable pursuant to the Pooling and Servicing Agreement, (v) dispositions by
the Company or any Subsidiary of the Company of the business jet product line,
the overhaul and repair business, as conducted by Rohr Aero Services, Inc. and
Rohr Aero Services Europe, respectively, on the Issue Date, the Hagerstown,
Maryland plant and the Auburn, Washington plant, in each case, including related
assets, (vi) the disposition by the Company or any Subsidiary of the Company of
interests owned on the Issue Date in two trusts which own an Airbus A300
aircraft and a McDonnell Douglas DC10 aircraft, respectively and (vii) the
disposition of Building 107 (at the Company's facility in Chula Vista,
California) to (A) any pension plan of the Company or (B) to any other Person if
the net proceeds of such disposition are delivered to any pension plan referred
to in clause (A) of this definition, in either case resulting in the full
satisfaction (or in case the full amount of such net proceeds are so delivered
and shall be insufficient to effect such full satisfaction, the partial
satisfaction,) of the Company's funding liabilities with respect to any such
pension plans).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or security, the quotient obtained by dividing (a) the sum of the
product of (i) the number of years from such date to the date of each successive
scheduled principal or redemption payment of such Indebtedness or security
multiplied by (ii) the amount of such principal or redemption payment by (b) the
sum of all such principal or redemption payments.
"Bank Agent" means, at any time, the then-acting agent under the Revolving
Credit Agreement, which shall initially be Citicorp USA, Inc.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock, including each
class of Common Stock or Preferred Stock of such Person, whether outstanding on
the Issue Date or issued after the Issue Date, and any and all rights, warrants
or options exchangeable for or convertible into such capital stock (but
excluding any debt security that is exchangeable for or convertible into such
capital stock).
2
<PAGE>
"Capitalized Lease Obligation" means any obligation under a lease that is
required to be classified and accounted for as a capital lease obligation under
GAAP and, for purposes of this Indenture, the amount of such obligations at any
date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP. The Stated Maturity of such obligation
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without penalty.
"Cash Equivalents" means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within three years from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having a long-term rating of at least A
from either Standard & Poor's Corporation ("S&P") or Moody's Investors Service,
Inc. ("Moody's") or a short-term rating of at least A-1 from S&P or P-1 from
Moody's, (c) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at least A-
1 from S&P or at least P-1 from Moody's, (d) certificates of deposit, bankers'
acceptances, time deposits, eurocurrency deposits or similar types of
investments routinely offered by commercial banks and maturing within one year
from the date of acquisition thereof issued by any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia or any United States branch of a foreign bank having, at
the date of acquisition thereof, combined capital and surplus of not less than
$500 million, (e) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (a) above entered
into with any commercial bank meeting the qualifications specified in clause (d)
above or with investment banks reporting to the Market Reports Division of the
Federal Reserve Bank ("FRB") meeting the FRB's capital criteria and having a
long-term rating of at least A from either S&P or Moody's and (f) investments in
money market funds which invest substantially all their assets in securities of
the types described in clauses (a) through (e) above.
"Change of Control" means the occurrence of one or more of the following
events (whether or not approved by the Board of Directors of the Company): (a)
an event or series of events by which any Person or other entity or group of
Persons or other entities acting in concert as determined in accordance with
Section 13(d) of the Exchange Act, whether or not applicable (a "Group of
Persons") shall, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases, merger or otherwise (i) be or become,
directly or indirectly, the beneficial owner (within the meaning of Rule 13d-3
and Rule 13d-5 under the Exchange Act, whether or not applicable) of 50% or more
of the combined voting power of the then outstanding Voting Stock of the Company
or (ii) have the ability to elect, directly or indirectly, a majority of the
members of the Board of Directors of the Company or other equivalent governing
body thereof, (b) the stockholders of the Company shall approve any Plan of
Liquidation of the Company (whether or not otherwise in compliance
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with the provisions of this Indenture), (c) individuals who at the beginning of
any period of two consecutive calendar years constituted the Board of Directors
of the Company (together with any new directors whose election or appointment by
the Board of Directors of the Company or whose nomination for election by the
Company's shareholders was approved by a vote of at least a majority of the
members of the Board of Directors of the Company then still in office who either
were members of the Board of Directors of the Company at the beginning of such
period or whose election, appointment or nomination for election was previously
so approved) cease for any reason to constitute a majority of the members of the
Board of Directors of the Company then in office, or (d) the direct or indirect
sale, lease, exchange or other transfer, in one transaction or a series of
related transactions, of all or substantially all of the property or assets of
the Company to any Person or Group of Persons (whether or not otherwise in
compliance with the provisions of this Indenture).
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of any Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such above until a successor replaces it
in accordance with Article 5 and thereafter means the successor.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of (a) the aggregate amount of EBITDA of such Person for the
four full fiscal quarters ending on or immediately prior to the date of the
transaction (the "Transaction Date") giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio (such four full fiscal quarter period
being referred to herein as the "Four Quarter Period") to (b) the aggregate
Consolidated Fixed Charges of such Person for such Four Quarter Period. For
purposes of this definition, if the Transaction Date occurs prior to the first
anniversary of the Issue Date, EBITDA and Consolidated Fixed Charges shall be
calculated, in the case of the Company, after giving effect on a pro forma basis
as if the issuance of the Senior Notes and the application of the net proceeds
therefrom occurred on the first day of the Four Quarter Period. In addition to
and without limitation of the foregoing, for purposes of this definition, EBITDA
and Consolidated Fixed Charges shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (x) the incurrence or
retirement, as the case may be, of any Indebtedness (including Acquired
Indebtedness) of such Person or of any of its Subsidiaries during the period
commencing on the first day of the Four Quarter Period to and including the
Transaction Date (the "Reference Period"), including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such calculation,
as if such incurrence or retirement, as the case may be, occurred on the first
day of the Reference Period and (y) the EBITDA attributable to any Person,
business, property or asset acquired or divested during the Reference Period
(provided that with respect to any such acquisition, only to the extent the
EBITDA of such Person is otherwise includible in the referent Person's
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EBITDA) as if such transaction occurred on the first day of the Reference
Period. Furthermore, in calculating "Consolidated Fixed Charges" for purposes
of determining the denominator (but not the numerator) of this "Consolidated
Fixed Charge Coverage Ratio," (i) interest on Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (ii) if interest on any Indebtedness actually incurred on the Transaction
Date may be optionally determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the entire Reference Period; and (iii) notwithstanding the
foregoing, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by Interest Rate Protection Agreements, shall be
deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum of, without duplication, the amounts for such period, taken as a
single accounting period, of (a) Consolidated Interest Expense and (b) the
product of (i) the amount of all dividend requirements whether in cash or
otherwise (except dividends payable in shares of Common Stock) paid, accrued or
scheduled to be paid or accrued during such period multiplied by (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated Federal, state, local and foreign
tax rate (expressed as a decimal number between 1 and 0) of such Person (as
reflected in the audited consolidated financial statements of such Person for
the most recently completed fiscal year).
"Consolidated Interest Expense" means, with respect to any Person for any
period, the aggregate of the interest expense (without deduction of interest
income) of such Person and its Consolidated Subsidiaries for such period, on a
consolidated basis, as determined in accordance with GAAP, including all
amortization of original issue discount, the interest component of Capitalized
Lease Obligations, net cash costs under all Interest Rate Protection Agreements
(including amortization of fees), all capitalized interest, the interest portion
of any deferred payment obligations for such period and cash contributions to
any employee stock ownership plan to the extent such contributions are used by
such employee stock ownership plan to pay interest or fees to any Person (other
than the referent Person or one of its Wholly Owned Subsidiaries) in connection
with loans incurred by such employee stock ownership plan to purchase capital
stock of the referent Person, but net of any amortization of any debt issuance
costs. If the Person for whom this calculation is being made or any of its
Subsidiaries directly or indirectly guarantees Indebtedness of a third person,
the calculation shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or Subsidiary of such Person had directly
incurred or otherwise assumed such guaranteed Indebtedness as of the first day
of the Reference period.
"Consolidated Net Income" means, with respect to any Person for any period,
the consolidated net income (or deficit) of such Person and its Consolidated
Subsidiaries for such
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period, on a consolidated basis, as determined in accordance with GAAP
consistently applied, provided that the net income of any other Person (other
than a Subsidiary) in which the referent Person or any Subsidiary of the
referent Person has a joint interest with a third party (which interest does not
cause the net income of such other Person to be consolidated into the net income
of the referent Person in accordance with GAAP) shall be included only to the
extent of the lesser of (a) such net income that has been actually received by
the referent Person or Wholly Owned Subsidiary of the referent Person in the
form of cash dividends or similar cash distributions (subject to, in the case of
a dividend or other distribution to a Wholly Owned Subsidiary of the referent
Person, the limitations set forth in clause (i)(1) of the next proviso hereof)
or (b) the net income of such other Person (which in no event shall be less than
zero); provided further, that there shall be excluded (i)(1) the net income (but
not loss) of any Subsidiary of the referent Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary, (2) the net income of any Person acquired in a
pooling of interests transaction accrued prior to the date it became a
Subsidiary of the referent Person, and (3) all gains and losses resulting from
the cumulative effect of any accounting change pursuant to the application of
Accounting Principles Board Opinion No. 20, as amended, or any successor
thereto; (ii) any gain (but not loss), net of any related provisions for taxes,
realized upon the sale or other disposition (including, without limitation,
dispositions pursuant to Sale-Leaseback Financings) of any property or assets
which are not sold or otherwise disposed of in the ordinary course of business
and upon the sale or other disposition of any Capital Stock of any Subsidiary of
the referent Person; (iii) any gain arising from the acquisition of any
securities, or the extinguishment, under GAAP, of any Indebtedness of the
referent Person; (iv) any extraordinary gain (but not extraordinary loss) net of
any related provision for taxes on any such extraordinary gain; (v) any amounts
paid or accrued as dividends on Preferred Stock of such Person or Preferred
Stock of any Subsidiary of such Person; (vi) income or loss attributable to
discontinued operations; and (vii) in the case of a successor to the Company by
consolidation or merger or as a transferee of the Company's assets, any earnings
of the successor corporation prior to such consolidation, merger or transfer of
assets.
"Consolidated Net Worth" of a Person at any date means the Consolidated
Stockholders' Equity of such Person less (a) the amount of any gain resulting,
directly or indirectly, from the extinguishment, retirement or repurchase of any
Indebtedness of such Person or of any of its Subsidiaries, (b) any revaluation
or other write-ups subsequent to the Issue Date in the book value of any asset
owned by such Person or a Consolidated Subsidiary and (c) any amounts
attributable to the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of Capital Stock of such Person or of
any of its Subsidiaries. Notwithstanding any of the foregoing, net deferred
income tax assets recorded in accordance with Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes ("SFAS 109"), shall be calculated
without regard to any valuation allowance with respect to such net deferred tax
asset recorded by the Company in accordance with SFAS 109.
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"Consolidated Stockholders' Equity" as of any date means, with respect to
any Person, the amount by which the assets of such Person and of its
Subsidiaries on a consolidated basis exceed (a) the total liabilities of such
Person and its Subsidiaries on a consolidated basis, plus (b) any redeemable
Preferred Stock (including Disqualified Capital Stock) of such Person or any
redeemable Preferred Stock (including Disqualified Capital Stock) of any
Subsidiary of such Person issued to any Person other than to such Person or to a
Wholly Owned Subsidiary of such Person, in each case determined in accordance
with GAAP.
"Consolidated Subsidiary" of any Person means a Subsidiary which for
financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such Person as a consolidated subsidiary.
"Consolidated Tax Expense" means, with respect to any Person for any
period, the aggregate of the U.S. Federal, state and local tax expense
attributable to taxes based on income and foreign income tax expenses of such
Person and its Consolidated Subsidiaries for such period (net of any income tax
benefit), determined in accordance with GAAP.
"Convertible Subordinated Notes" means the 7 3/4% Convertible Subordinated
Notes due 2004 of the Company offered concurrently with the Senior Notes.
"Convertible Subordinated Note Indenture" means that certain indenture by
and between the Company and The Bank of New York, as Trustee, governing the
Convertible Subordinated Notes as amended or supplemented from time to time.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any of its Subsidiaries against fluctuations in currency values to or
under which the Company or any of its Subsidiaries is a party or a beneficiary
on the date of this Indenture or becomes a party or a beneficiary thereafter.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default (as defined in Section 6.01).
"Disqualified Capital Stock" means any Capital Stock that, other than
solely at the option of the issuer thereof, by its terms (or by the terms of any
security into which it is convertible or exchangeable) is, or upon the happening
of an event or the passage of time would be, required to be redeemed or
repurchased, in whole or in part, or has, or upon the happening of an event or
the passage of time would have, a redemption or similar payment due on or prior
to the first anniversary of the Maturity Date of the Senior Notes, or is
convertible into or exchangeable for debt securities at the option of the holder
thereof at any time prior to such Maturity Date.
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"EBITDA" for any Person means for any period for which it is to be
determined the sum of, without duplication, the amounts for such period, taken
as a single accounting period, of (a) Consolidated Net Income of such Person for
such period, plus (b) only to the extent Consolidated Net Income has been
reduced thereby, (i) Consolidated Tax Expense of such Person paid or accrued in
accordance with GAAP for such period, (ii) Consolidated Interest Expense of such
Person for such period, (iii) depreciation and amortization expenses (including,
without limitation, amortization of capitalized debt issuance costs) of such
Person and its Consolidated Subsidiaries for such period; all as determined on a
consolidated basis in conformity with GAAP consistent with those principles
applied in the preparation of the audited financial statements of such Person
and its Consolidated Subsidiaries on the Issue Date; provided that if a Person
has any Subsidiary that is not a Wholly Owned Subsidiary, EBITDA of such Person
shall be reduced by an amount equal to (1) the Consolidated Net Income of such
Subsidiary for such period multiplied by (2) the quotient of (A) the number of
shares of outstanding Common Stock of such Subsidiary not owned on the last day
of such period by such Person or by any Wholly Owned Subsidiary of such Person
that is not subject to any encumbrance or restriction on the payment of
dividends to such Person divided by (B) the total number of shares of
outstanding Common Stock of such Subsidiary on the last day of such period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" has the meaning set forth in the definition of
Permitted Refinancing Indebtedness.
"Fair Market Value" or "fair value" means, with respect to any asset or
property or Capital Stock, the price which could be negotiated in an arm's-
length, free market transaction, for cash, between an informed and willing
seller and an informed, willing and able buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value shall be
determined by the Board of Directors of the Company acting reasonably and in
good faith and shall be evidenced by a written resolution of said Board of
Directors (certified by the Secretary or Assistant Secretary of the Company)
delivered to the Trustee, provided that if the aggregate non-cash consideration
to be received by the Company or any of its Subsidiaries from any Asset Sale
shall exceed $10,000,000, then Fair Market Value shall be determined by an
Independent Financial Advisor.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise
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become liable in respect of such Indebtedness or other obligation or the
recording, as required pursuant to GAAP or otherwise, of any such Indebtedness
or other obligation on the balance sheet of such Person (and "incurrence,"
"incurred," "incurable" and "incurring" shall have meanings correlative to the
foregoing), provided that the accrual of interest (whether such interest is
payable in cash or in kind) and the accretion of original issue discount shall
not be deemed an incurrence of Indebtedness, provided, further, that (a) any
Indebtedness or Disqualified Capital Stock of a Person existing at the time such
Person becomes (after the Issue Date) a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) of the Company shall be deemed to be
incurred by such Subsidiary at the time it becomes a Subsidiary of the Company
and (b) any amendment, modification or waiver of any document pursuant to which
Indebtedness was previously incurred shall be deemed to be an incurrence of
Indebtedness unless such amendment, modification or waiver does not (i) increase
the principal or premium thereof or interest rate thereon (including by way of
original issue discount), (ii) change to an earlier date the Stated Maturity
thereof or the date of any scheduled or required principal payment thereon or
the time or circumstances under which such Indebtedness may or shall be
redeemed, (iii) if such Indebtedness is subordinated to the Senior Notes, modify
or affect, in any manner adverse to the holders such subordination, (iv) if the
Company is the obligor thereon, provide that a Subsidiary of the Company not
already an obligor thereon shall be an obligor thereon or (v) violate, or cause
the Indebtedness to violate, the provisions described under Sections 4.07 and
4.11 of this Indenture.
"Indebtedness" means, with respect to any Person, at any date, any of the
following, without duplication, (a) any liability, contingent or otherwise, of
such Person (i) for borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof) (ii)
evidenced by a note, bond, debenture or similar instrument or (iii) for the
payment of money relating to a Capitalized Lease Obligation or other obligations
(whether issued or assumed) relating to the deferred purchase price of property
or services but excluding advances, deposits, partial and progress payments,
unpaid wages and related employee obligations, trade accounts payable and
accrued liabilities in each case arising in the ordinary course of business that
are not overdue by 180 days or more or are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted; (b) all
conditional sale obligations and all obligations under any title retention
agreement (even if the rights and remedies of the seller under such agreement in
the event of default are limited to repossession or sale of such property); (c)
reimbursement obligations of such Person with respect to letters of credit and
all obligations of such Person in respect of any banker's acceptance or similar
credit transaction entered into in the ordinary course of business; (d) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
any asset or property (including, without limitation, leasehold interests and
any other tangible or intangible property) of such Person, whether or not such
Indebtedness is assumed by such Person or is not otherwise such Person's legal
liability, provided that if the obligations so secured have not been assumed in
full by such Person or are otherwise not such Person's legal liability in full,
the amount of such Indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of such Indebtedness secured by such Lien or
the Fair
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Market Value of the assets or property securing such Lien; (e) all Indebtedness
of others guaranteed (including all dividends of other Persons the payment of
which is guaranteed), directly or indirectly, by such Person or that is
otherwise its legal liability or which such Person has agreed to purchase or
repurchase or in respect of which such Person has agreed contingently to supply
or advance funds; (f) all Disqualified Capital Stock issued by such Person
(other than such Disqualified Capital Stock owned by the referent Person or by
any Wholly Owned Subsidiary of the referent Person, provided that if any Wholly
Owned Subsidiary of the referent Person shall cease to be a Wholly Owned
Subsidiary of the referent Person or shall transfer such Disqualified Capital
Stock (other than to the referent Person or another Wholly Owned Subsidiary of
the referent Person) the date on which such Wholly Owned Subsidiary so ceases to
be a Wholly Owned Subsidiary of the referent Person or so transfers such
Disqualified Capital Stock shall be deemed to be the issuance of such
Disqualified Capital Stock by the Subsidiary issuer thereof) with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends if any; and (g) all
obligations under Currency Agreements and Interest Rate Protection Agreements.
For purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date, provided that the amount outstanding
at any time of any Indebtedness issued with original issue discount is the full
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable and good faith judgment of the Board of Directors of the Company,
qualified to perform the task for which such firm has been engaged and
disinterested and independent with respect to the Company and its Affiliates.
"Interest Rate Protection Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement or
arrangement designed to protect a Person or any of its Subsidiaries against
fluctuations in interest rates to or under which such Person or any of its
Subsidiaries is a party or a beneficiary on the Issue Date or becomes a party or
a beneficiary thereafter.
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"Investment" by any Person means (a) any direct or indirect loan, advance
or other extension of credit or capital contribution to (by means of transfers
of cash or other property (valued at the Fair Market Value thereof as of the
date of transfer) to others or payments for property or services for the account
or use of others, or otherwise), (b) any direct or indirect purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidences of Indebtedness issued by any other Person (whether by merger,
consolidation, amalgamation or otherwise and whether or not purchased directly
from the issuer of such securities or evidences of Indebtedness), (c) any direct
or indirect guarantee or assumption of the Indebtedness of any other Person, and
(d) all other items that would be classified as investments (including, without
limitation, purchases of assets outside the ordinary course of business) on a
balance sheet of such Person prepared in accordance with GAAP. The amount of
any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"Issue Date" means the date on which the Senior Notes are originally issued
under this Indenture.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, including any sale and leaseback transaction, any option or other
similar agreement to sell, in each case securing obligations of such Person and
any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statute or statutes) of any jurisdiction other
than to reflect ownership by a third party of property leased to the referent
Person or any of its Subsidiaries under a lease that is not in the nature of a
conditional sale or title retention agreement).
"Material Subsidiary" means, at any date of determination, any Subsidiary
of the Company that, together with its Subsidiaries, (i) for the most recent
fiscal year of the Company accounted for more than 5% of the consolidated
revenues of the Company or (ii) as of the end of such fiscal year, was the owner
of more than 5% of the consolidated assets of the Company, all as set forth on
the most recently available consolidated financial statements of the Company and
its consolidated Subsidiaries for such fiscal year prepared in conformity with
generally accepted accounting principles as then in effect.
"Maturity Date" means May 15, 2003.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds of
such Asset Sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or Cash Equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any Subsidiary
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of the Company) and proceeds from the conversion of other property received when
converted to cash or Cash Equivalents, net of (a) reasonable third-party
brokerage commissions and other reasonable third-party fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (b) provisions for all taxes as a result of such Asset Sale computed
on a consolidated basis reflecting the consolidated results of operations of the
Company and its Subsidiaries, taken as a whole, (c) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that was incurred in accordance with this Indenture and that either (i) is
secured by a Lien incurred in accordance with this Indenture on the property or
assets sold or (ii) is required to be paid as a result of such sale in each case
to the extent actually repaid in cash and (d) appropriate amounts to be provided
by the Company or any Subsidiary of the Company as a reserve against liabilities
associated with such Asset Sale, including without limitation pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with generally accepting
accounting principles as then in effect. For purposes of this definition and
Section 4.10, "cash" means U.S. dollars or such money as is freely and readily
convertible into U.S. dollars.
"Net Equity Proceeds" means (a) in the case of any sale by the Company of
Qualified Capital Stock of the Company, the aggregate net proceeds received by
the Company, after payment of expenses, commissions and the like incurred in
connection therewith, whether such proceeds are in cash or in other property
(valued as determined reasonably and in good faith by the Board of Directors of
the Company, as evidenced by a written resolution of said Board of Directors, at
the Fair Market Value thereof at the time of receipt) and (b) in the case of any
exchange, exercise, conversion or surrender of any outstanding Indebtedness of
the Company or any Subsidiary for or into shares of Qualified Capital Stock of
the Company, the amount of such Indebtedness (or, if such Indebtedness was
issued at an amount less than the stated principal amount thereof, the accrued
amount thereof as determined in accordance with generally accepted accounting
principles as then in effect) as reflected in the consolidated financial
statements of the Company prepared in accordance with generally accepted
accounting principles as then in effect as of the most recent date next
preceding the date of such exchange, exercise, conversion or surrender (plus any
additional amount required to be paid by the holder of such Indebtedness of the
Company or to any wholly owned Subsidiary of the Company upon such exchange,
exercise, conversion or surrender) and less any and all payments made to the
holders of such Indebtedness, and all other expenses incurred by the Company in
connection therewith, in the case of each of clauses (a) and (b) to the extent
consummated after the Issue Date, provided that the exchange exercise,
conversion or surrender of any Indebtedness outstanding on the Issue Date,
including the Convertible Subordinated Notes, which is subordinated (whether
pursuant to its terms or by operation of law) to the Senior Notes shall not be
or be deemed to be included in Net Equity Proceeds.
"New Indebtedness" has the meaning set forth in the definition of Permitted
Refinancing Indebtedness.
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"Officer" means the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Chief Accounting Officer, any
Executive Vice President, Senior Vice President or Vice President, the
Treasurer, any other executive officer, the Secretary and any Assistant
Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the principal executive officer, principal financial officer, the
treasurer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee except to the extent otherwise indicated
in this Indenture.
"Pari Passu Indebtedness" means the Senior Notes and any Indebtedness under
the Company's Revolving Credit Agreement, its 9.33% Senior Notes due 2002, its
9.35% Senior Notes due 2000, and any other Indebtedness permitted under this
Indenture which is pari passu in right of payment with the Senior Notes.
"Permitted Indebtedness" means, without duplication, (a) Indebtedness of
the Company and its Subsidiaries remaining outstanding immediately after the
Issue Date after giving effect to the consummation of the transactions described
in the Prospectus under "Use of Proceeds"; (b) $110 million of Indebtedness of
the Company evidenced by or arising under the Revolving Credit Agreement; (c)
Indebtedness of the Company evidenced by or arising under the Senior Notes and
this Indenture; (d) Permitted Refinancing Indebtedness incurred by the Company
or by any of its Subsidiaries; (e) unsecured Indebtedness of the Company to a
Wholly Owned Subsidiary of the Company, provided that (i) any Indebtedness of
the Company to a Wholly Owned Subsidiary of the Company shall be evidenced by an
intercompany promissory note that is subordinated in right of payment to the
payment and performance of the Company's obligations under this Indenture and
the Senior Notes, and (ii) any subsequent issuance or transfer of Capital Stock
of a Wholly Owned Subsidiary of the Company (the "Creditor Subsidiary") that
results in such Creditor Subsidiary ceasing to be a Wholly Owned Subsidiary of
the Company or any subsequent transfer of Indebtedness owing from the Company to
such Creditor Subsidiary (other than a transfer to another Wholly Owned
Subsidiary of the Company) shall be deemed in each case to constitute the
incurrence of Indebtedness by the Company to the extent of any such Indebtedness
then outstanding; (f) Indebtedness of the Company in an aggregate principal
amount not to exceed, when added to Indebtedness and Preferred Stock of
Subsidiaries of the Company incurred under clause (d) of Section 4.09 hereof,
10% of Consolidated Net Worth of the Company, provided, however, that no Default
or Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of such Indebtedness; and (g) Indebtedness (1) of
the Company or of any Subsidiary of the Company in respect of bankers'
acceptances provided in the ordinary course of business, (2) of the Company
under Currency Agreements and Interest Rate Protection Agreements which are
entered into for the purpose of protection
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<PAGE>
against risk of currency or interest rate fluctuations affecting the Company or
any of its Subsidiaries in the ordinary course of business that are related to
payment obligations of the Company or any of its Subsidiaries otherwise
permitted under this Indenture, provided that in the case of Currency Agreements
or Interest Rate Protection Agreements that relate to other Indebtedness, such
Currency Agreements or Interest Rate Protection Agreements do not increase the
obligations of the Company outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest rates, as
applicable, or by reason of fees, indemnities and compensation payable
thereunder and (3) of the Company or any of the Subsidiaries of the Company in
respect of letters of credit issued in connection with self-insurance and
reinsurance obligations incurred in the ordinary course of business, provided
that the total amount of outstanding Indebtedness incurred under this clause
(3), other than in connection with workers' compensation, unemployment insurance
and other social security obligations, shall not exceed $9 million at any one
time.
"Permitted Investments" means (a) investments held in the form of cash and
Cash Equivalents; (b) Investments in any Wholly Owned Subsidiary (or any Person
which will, upon the making of such Investment, become a Wholly Owned
Subsidiary) of the Company by the Company or by any other Wholly Owned
Subsidiary of the Company, provided that (i) any Indebtedness evidencing an
Investment in a Wholly Owned Subsidiary of the Company shall not be subordinated
or junior to any other Indebtedness or other obligation of such Wholly Owned
Subsidiary and (ii) such Investment shall only be a Permitted Investment so long
as any such Wholly Owned Subsidiary in which the Investment has been made or
which has made such Investment remains a Wholly Owned Subsidiary of the Company;
(c) Investments made after the Issue Date, not exceeding $15 million at any one
time in excess of Investments made as Restricted Payments, in joint ventures,
partnerships or Persons that are not Wholly Owned Subsidiaries of the Company
that are made solely for the purpose of acquiring or furthering businesses
related to the Company's business; (d) Investments of the Company and its
Subsidiaries arising as a result of any Asset Sale otherwise complying with the
terms of this Indenture, provided that for each Asset Sale the maximum aggregate
amount of Investments permitted under this clause (d) shall not exceed 20% of
the total consideration received for such Asset Sale by the Company or any
Subsidiary of the Company; (e) Investments in the Company by any Subsidiary of
the Company, provided that any Indebtedness evidencing such Investment is
subordinated to the Senior Notes; (f) Investments of the Company and its
Subsidiaries in the form of promissory notes or deferred payment obligations as
a result of the sale of the Company's business jet product line or its
Hagerstown, Maryland plant; provided that the aggregate amount of such non-cash
consideration does not exceed $15 million; (g) Investments arising from, or of
the type contemplated by, the Company's Pooling and Servicing Agreement as in
effect on the Issue Date; (h) Investments received in connection with the bona
fide settlement of legal proceedings or other disputed obligations arising in
the ordinary course of business; (i) loans, advances or other extensions of
credit to actual or potential customers or suppliers that are made as part of
the purchase or sale of goods or services by the Company or any of its
Subsidiaries, as made from time to time by the Company or any Subsidiary in the
ordinary course of business and consistent with practices in the industry of the
Company; and (j) other
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<PAGE>
Investments made after the Issue Date in the ordinary course of business of the
Company not to exceed $10 million at any one time.
"Permitted Liens" means, without duplication, (a) Liens for taxes,
assessments and governmental charges or levies (other than any Lien imposed by
the Employee Retirement Income Security Act of 1974, as amended) that are not
yet subject to penalties for non-payment or are being contested in good faith by
appropriate proceedings and for which adequate reserves, if required, have been
established or other provisions have been made in accordance with GAAP; (b)
statutory mechanics', workmen's, materialmen's, operators', warehousemen's,
repairmen's, and bankers' liens, and similar Liens imposed by law and arising in
the ordinary course of business for sums which are not overdue by more than 15
days, or if so overdue, are being contested in good faith by appropriate
proceedings and for which adequate reserves, if required, have been established
or other provisions have been made in accordance with GAAP; (c) minor
imperfections of, or encumbrances on, title that do not impair the value of
property for its intended use; (d) Liens (other than any Lien under the Employee
Retirement Income Security Act of 1974, as amended) incurred or deposits made in
the ordinary course of business in connection with (or made to secure
reinsurance obligations of the Company or any of its Subsidiaries incurred in
connection with its or their obligations with respect to) workers' compensation,
unemployment insurance and other types of social security; (e) Liens incurred or
deposits made to secure the performance of tenders, bids, leases, statutory or
regulatory obligations, bankers' acceptances, surety and appeal bonds,
government contracts, performance and return of money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (f) easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or of any of its
Subsidiaries; (g) Liens (including extensions and renewals thereof) upon real or
tangible personal property acquired after the Issue Date, provided that (1) any
such Lien is created solely for the purpose of securing Indebtedness (other than
Permitted Indebtedness) (A) that is incurred in accordance with Section 4.05 or
4.09 to finance the cost (including the cost of improvement or construction) of
the item of property or assets subject thereto and such Lien is created prior
to, at the time of or within 365 days after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property or (B) that is Permitted Refinancing Indebtedness to Refinance any
Indebtedness previously so secured, (2) the principal amount of the Indebtedness
secured by any such Lien does not exceed 100% of such cost and (3) any such Lien
shall not extend to or cover any property or assets of the Company or of any of
its Subsidiaries other than such item of property or assets and any improvements
on such item; (h) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company or of any of its
Subsidiaries; (i) Liens encumbering property or assets to secure repayment of
advances, deposits or progress or partial payments by a customer of the Company
or of any of its Subsidiaries relating to such property or assets; (j) Liens
arising from filing Uniform Commercial Code financing statements regarding
leases; (k) Liens in favor of the Company or any Wholly Owned Subsidiary of the
Company; (l) Liens secured by real property or
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<PAGE>
other assets of the Company or of any Subsidiary of the Company in connection
with the financing of industrial revenue and similar bond facilities and related
obligations or of any equipment or other property designed primarily for the
purpose of air or water pollution control, provided that any such Lien on such
facilities, equipment or other property shall not apply to any other property or
assets of the Company or of such Subsidiary of the Company; (m) Liens arising
from the rendering of a final judgment or order against the Company or any
Subsidiary of the Company that does not give rise to an Event of Default; (n)
Liens securing reimbursement obligations with respect to letters of credit
incurred in accordance with this Indenture that encumber documents and other
property relating to such letters of credit and the products and proceeds
thereof; (o) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; (p) Liens encumbering customary initial deposits and
margin deposits, and other Liens that are within the general parameters
customary in the industry and incurred in the ordinary course of business
securing Indebtedness under Interest Rate Protection Agreements and Currency
Agreements and forward contracts, options, futures contracts, futures options or
fluctuations in the price of commodities; (q) Liens on sales of receivables; (r)
Liens in favor of the Trustee arising under this Indenture; (s) Liens incurred
or deposits made in the ordinary course of business to secure up to $9 million
of self-insurance and reinsurance obligations, other than obligations related to
workers' compensation, unemployment insurance and other types of social
security; and (t) deposits made to secure procurement credit card obligations
arising from miscellaneous, non-repetitive purchases of supplies and services in
the ordinary course of business, with no such purchase to exceed $5,000.
"Permitted Payments" means, so long as no Default or Event of Default shall
have occurred and be continuing or would result as a consequence thereof, (a)
the prepayment, acquisition, retirement or decrease of Indebtedness of the
Company that is subordinated (whether pursuant to its terms or by operation of
law) to the Senior Notes that is prepaid, acquired, decreased or retired (i) by
conversion into or in exchange for Qualified Capital Stock of the Company or
(ii) in exchange for or with or out of the net cash proceeds of the
substantially concurrent sale (other than by the Company to a Subsidiary of the
Company) of Permitted Refinancing Indebtedness (b) payroll, travel, relocation
and similar advances to employees of the Company or any Subsidiaries in the
ordinary course of the Company's business; (c) loans to employees (other than
travel advances) not to exceed $500,000 in the aggregate at any one time
outstanding; (d) any purchases, redemptions, acquisitions, cancellations or
other retirement for value of shares of Capital Stock of the Company or of any
Subsidiary of the Company, options on any such shares or related stock
appreciation rights or similar securities held by officers, directors or
employees or former officers or employees (or their estates or beneficiaries
under their estates) and which were issued pursuant to any stock option plan (or
other director officer or employee benefit plan or agreement), upon death,
disability, retirement, termination of employment or pursuant to the terms of
such plan or agreement and which in the aggregate do not exceed $1,000,000 in
any fiscal year; (e) the purchase at a price of not more than $.05 per right of
any rights issued or issuable pursuant to currently existing or future rights
plans of the Company, provided that
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<PAGE>
such purchase shall not exceed $3 million in the aggregate; or (f) the
retirement of shares of the Company's Capital Stock in exchange for or out of
the proceeds of a substantially concurrent sale (other than a sale to a
Subsidiary of the Company) of other shares of its Capital Stock (other than
Disqualified Capital Stock).
"Permitted Program Investment" means an investment in design, engineering,
tooling or similar costs related to a program undertaken by the Company in the
ordinary course of its business.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company or
of any of the Company's Subsidiaries or Preferred Stock of a Subsidiary of the
Company, the net proceeds of which are used to Refinance outstanding
Indebtedness of the Company or of any of the Company's Subsidiaries that was
outstanding as of the Issue Date or incurred in accordance with this Indenture
or Preferred Stock of a Subsidiary of the Company that was out standing as of
the Issue Date or issued in accordance with this Indenture, provided that (a) if
the Indebtedness (including the Senior Notes) being Refinanced (the "Existing
Indebtedness") is pari passu with or subordinated to the Senior Notes, then any
Indebtedness Refinancing the Existing Indebtedness (the "New Indebtedness")
shall be pari passu with or subordinated to, as the case may be, the Senior
Notes, at least to the same extent and in the same manner as the Existing
Indebtedness is to the Senior Notes, (b) such New Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the Existing Indebtedness, (c)
such New Indebtedness has an Average Life at the time such New Indebtedness is
incurred that is equal to or greater than the Average Life of the Existing
Indebtedness as of the date of such Refinancing, (d) such New Indebtedness is in
an aggregate principal amount (or, if such New Indebtedness is issued at a price
less than the principal amount thereof, the aggregate amount of gross proceeds
therefrom is) not in excess of the aggregate principal amount outstanding under
the Existing Indebtedness on the date of the proposed Refinancing thereof (or if
the Existing Indebtedness was issued at a price less than the principal amount
thereof, then not in excess of the amount of liability in respect thereof
determined in accordance with GAAP as of the date of such proposed Refinancing),
(e) with respect to such Preferred Stock of the Company's Subsidiaries,
Preferred Stock issued in exchange for or the proceeds of which are used to
Refinance such existing Preferred Stock of a Subsidiary ("New Preferred Stock")
shall have (i) a Stated Maturity no earlier than the Stated Maturity of the
Preferred Stock being exchanged or Refinanced, (ii) an Average Life at the time
such New Preferred Stock is proposed to be incurred that is equal to or greater
than the Average Life of the Preferred Stock to be exchanged or Refinanced as of
the date of such proposed exchange or Refinancing and (iii) a liquidation value
no greater than the liquidation value of the Preferred Stock to be exchanged or
Refinanced as of the date of such proposed exchange or Refinancing and (f) if
such Existing Indebtedness is Indebtedness solely of the Company, such New
Indebtedness will only be permitted if it is Indebtedness solely of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.
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<PAGE>
"Plan of Liquidation" means a plan (including by operation of law) that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously) (a) the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company otherwise than as an entirety or substantially as an entirety and
(b) the distribution of all or substantially all of the proceeds of such sale,
lease, conveyance or other disposition and all or substantially all of the
remaining assets of the Company to holders of Capital Stock of the Company.
"Pooling and Servicing Agreement" means the Pooling and Servicing Agreement
dated as of December 23, 1992, among the Company, the Company's Wholly Owned
Subsidiary RI Receivables, Inc. and Bankers Trust Company, as trustee on behalf
of the Certificateholders (as defined therein), and related documentation and
any extension, renewal, modification, restatement or replacement thereof (in
whole or in part), as the same may be amended, supplemented or otherwise
modified from time to time, provided, however, the investors in any such
receivables program shall not obtain an interest in receivables sold under such
program which exceeds $70 million in aggregate principal amount at any one time.
"Preferred Stock" means the Capital Stock of any Person (other than the
Common Stock of such Person) of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding-up of such
Person, to shares of Capital Stock of any other class of such Person.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act.
"Prospectus" means the Company's final prospectus dated May 12, 1994 in
respect of the public offering of the Senior Notes.
"Qualified Capital Stock" means, with respect to any Person, any Capital
Stock of such Person that is not Disqualified Capital Stock or convertible into
or exchangeable or exercisable for Disqualified Capital Stock and includes
rights and other securities issuable under the Company's Amended and Restated
Rights Agreement, dated as of April 6, 1990, between the Company and The First
National Bank of Chicago, as Rights Agent, as such agreement may be amended or
supplemented from time to time.
"redemption date" when used with respect to any of the Senior Notes to be
redeemed, means the date fixed by the Company for such redemption pursuant to
this Indenture and the Senior Notes.
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<PAGE>
"redemption price" when used with respect to any of the Senior Notes to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Senior Notes.
"Reference Period" has the meaning set forth in the definition of
"Consolidated Fixed Charge Coverage Ratio."
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Restricted Payment" means (a) the declaration or payment of any dividend
or the making of any other distribution, including any dividend or distribution
made in connection with the merger or consolidation of the Company (whether in
any such case in cash, securities or other property or assets of the Company or
of any of its Subsidiaries), on the Company's or any of its Subsidiaries'
Capital Stock, or to the holders of the Company's or any of its Subsidiaries'
Capital Stock, whether outstanding on the Issue Date or thereafter (other than
dividends or distributions payable solely in Qualified Capital Stock of the
Company or of such Subsidiary (subject to the last paragraph of Section 4.06)
and other than any dividend or distribution declared or paid by any Wholly Owned
Subsidiary of the Company); (b) the making of any Investment by the Company or
any of its Subsidiaries in any Person other than Permitted Investments; (c) any
purchase, redemption, retirement or other acquisition for value by the Company
or any Subsidiary of any Capital Stock of the Company or of any of its
Subsidiaries or of any Affiliate of the Company or any other securities of a
direct or indirect parent of the Company, whether outstanding on the Issue Date
or thereafter, or any warrants, rights or options to purchase or acquire shares
of the Capital Stock of the Company or of any of its Subsidiaries or of any
Affiliate of the Company, whether outstanding on the Issue Date or thereafter,
held by any Person other than the Company or one of its Wholly Owned
Subsidiaries, other than through the issuance in exchange therefor solely of
Qualified Capital Stock of the Company or of such Subsidiary; or (d) the
prepayment, acquisition, decrease or retirement for value prior to maturity,
scheduled repayment or scheduled sinking fund payment of any Indebtedness of the
Company that is subordinated (whether pursuant to its terms or by operation of
law) to the Senior Notes, in each case to the extent not contained within the
definition of "Permitted Payments". The dollar amount of any non-cash dividend
or distribution by the Company or any of its Subsidiaries on the Company's or
any Subsidiary's Capital Stock shall be equal to the Fair Market Value of such
dividend or distribution at the time of such dividend or distribution.
"Revolving Credit Agreement" means the Credit Agreement dated as of April
26, 1989, among the Company, the lenders party thereto, and the Bank Agent, and
any agreement governing Indebtedness incurred to refund or Refinance the
borrowings, letters of credit and commitments then outstanding or permitted to
be outstanding under the Revolving Credit Agreement, in each case together with
the related notes and any other instruments and
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agreements executed from time to time in connection therewith, and in each case
as amended, modified, supplemented, extended, renewed, restated, refunded,
replaced or refinanced (in whole or in party, and without limitation as to
amount, terms, conditions, covenants and other provisions) from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Notes" means the Senior Notes issued under this Indenture.
"Stated Maturity" means, with respect to any security or Indebtedness, the
date specified therein as the fixed date on which any principal of such security
or Indebtedness is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
thereof at the option of the holder thereof).
A "Subsidiary" of a Person means (a) a corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person or (b) any other Person (other than a corporation)
in which such Person, one or more Subsidiaries of such Person or such Person and
one or more Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, have (i) at least a majority ownership interest or (ii)
the power to elect or direct the election of the directors or other governing
body of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77-
bbbb) as in effect on the date of execution of this Indenture, except as
provided in Section 9.03.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
"Trust Officer" means any officer within the Corporate Trust & Agencies
Administration Department (or any successor department) of the Trustee,
including any vice president, assistant vice president, assistant secretary,
director or associate director; any other officer of the Trustee customarily
performing functions similar to those performed by any officer of the Corporate
Trust & Agencies Administration Department; and any other officer of the Trustee
to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock of such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
"Wholly Owned Subsidiary" means, with respect to any Person, any Subsidiary
of such Person all the outstanding shares of Capital Stock (other than
directors' qualifying
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shares, if applicable) of which are owned directly by such Person or another
Wholly Owned Subsidiary of such Person.
SECTION 1.02 Other Definitions.
-----------------
<TABLE>
<CAPTION>
Defined in
Section
<S> <C>
"Affiliate Transaction"...................... 4.08
"Asset Sale Offer"........................... 4.10
"Asset Sale Offer Amount".................... 4.10
"Asset Sale Offer Payment Date".............. 4.10
"Asset Sale Offer Termination Date".......... 4.10
"Asset Sale Offer Trigger Date".............. 4.10
"Bankruptcy Law"............................. 6.01
"Business Day"............................... 10.07
"Change of Control Date"..................... 4.16
"Change of Control Offer".................... 4.16
"Change of Control Offer Payment Date"....... 4.16
"Change of Control Offer Termination Date"... 4.16
"Custodian".................................. 6.01
"Event of Default"........................... 6.01
"Legal Holiday".............................. 10.07
"Paying Agent"............................... 2.03
"Registrar".................................. 2.03
"United States Government Obligations"....... 8.01
</TABLE>
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Commission;
"indenture securities" means the Senior Notes;
"indenture security holder" means a holder of a Senior Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
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"obligor" on the Senior Notes means the Company or any other obligor
on the Senior Notes.
All other terms in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular; and
(e) the male, female and neuter genders include one another.
ARTICLE 2
The Senior Notes
SECTION 2.01 Form and Dating.
---------------
The Senior Notes and the Trustee's certificate of authentication relating
thereto shall be substantially in the form set forth in Exhibit A, which is part
of this Indenture, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture. The Senior
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. The Company shall approve the form of the Senior Notes
and any notation, legend or endorsement on them. Each Senior Note shall be dated
the date of its authentication.
The terms and provisions contained in the Senior Notes shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
22
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SECTION 2.02 Execution and Authentication.
----------------------------
Two Officers shall sign the Senior Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Senior Notes.
If an Officer whose signature is on a Senior Note no longer holds that
office at the time the Senior Note is authenticated, the Senior Note shall
nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Senior Note has been authenticated under this Indenture.
Upon a written order of the Company signed by an Officer of the Company,
the Trustee shall authenticate Senior Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Senior Notes. The
aggregate principal amount of Senior Notes outstanding at any time may not
exceed that amount except as provided in Section 2.07.
The Senior Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 or any integral multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Senior Notes. An authenticating agent may authenticate Senior
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same right as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.03 Registrar and Paying Agent.
--------------------------
The Company shall maintain or cause to be maintained in the Borough of
Manhattan, New York, New York (the "New York Office"), and in such other
locations as it shall determine, an office or agency: (a) where securities may
be presented for registration of transfer or for exchange ("Registrar"); (b)
where Senior Notes may be presented for payment ("Paying Agent"); and (c) where
notices and demand to or upon the Company in respect of Senior Notes and this
Indenture may be served by the holders of Senior Notes. The Registrar shall keep
a register of the Senior Notes and of their transfer and exchange. The Company
may appoint one or more co-registrars and one or more additional paying agents.
The term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent, Registrar or co-registrar without prior notice. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture and shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture.
The agreement shall implement the provisions of this Indenture that relate to
such Agent. The Company or any of its Subsidiaries may act as Paying Agent,
Registrar or co-registrar, except that for purposes of Articles 3 and 8 and
Sections 4.10 and 4.16, neither the Company nor any of its Subsidiaries shall
act as Paying Agent. If the Company fails to appoint or maintain
23
<PAGE>
another entity as Registrar or Paying Agent, the Trustee shall act as such, and
the Trustee shall initially act as such. The Trustee shall cause the New York
Office to be maintained as long as it acts as Registrar or Paying Agent.
SECTION 2.04 Paying Agent To Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent (other than the Trustee, who
hereby so agrees), to agree in writing that the Paying Agent will hold in trust
for the benefit of holders of Senior Notes or the Trustee all money held by the
Paying Agent for the payment of principal or interest on the Senior Notes, and
will notify the Trustee of any default by the Company in respect of making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary
of the Company) shall have no further liability for the money. If the Company or
a Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the holders of Senior Notes all money
held by it as Paying Agent.
SECTION 2.05 Holder Lists.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
holders of Senior Notes. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least seven days before each interest payment date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of holders of Senior Notes.
SECTION 2.06 Transfer and Exchange.
---------------------
Where Senior Notes are presented to the Registrar or a co-registrar with a
request to register a transfer or to exchange them for an equal principal amount
of Senior Notes for other denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transactions are met.
To permit registrations of transfers and exchanges, the Company shall issue and
the Trustee shall authenticate Senior Notes at the Registrar's request. No
service charge shall be made for any registration of transfer or exchange
(except as otherwise expressly permitted herein), but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable upon exchanges pursuant to Sections 2.10, 3.06 or 9.05.
The Company shall not be required (a) to issue, register the transfer of or
exchange Senior Notes during a period beginning at the opening of business 15
days before the day of any selection of Senior Notes for redemption under
Section 3.02 and ending at the close of business on the day of selection, or (b)
to register the transfer or exchange of any Senior Note so selected
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for redemption in whole or in part, except the unredeemed portion of any Senior
Note being redeemed in part.
SECTION 2.07 Replacement Senior Notes.
------------------------
If the holder of a Senior Note claims that the Senior Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Senior Note if the Trustee's requirements are met. If
required by the Trustee or the Company as a condition of receiving a replacement
Senior Note, the holder of Senior Note must provide an indemnity bond
sufficient, in the judgment of both the Company and the Trustee, to fully
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss which any of them may suffer if the Senior Note is replaced. The
Company and the Trustee may charge the relevant holder for their expenses in
replacing any Senior Note.
Every replacement Senior Note is an additional obligation of the Company.
SECTION 2.08 Outstanding Senior Notes.
------------------------
The Senior Notes outstanding at any time are all the Senior Notes properly
authenticated by the Trustee except for those cancelled by the Trustee, those
delivered to it for cancellation, and those described in this Section as not
outstanding.
If a Senior Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Senior Note is held by a bona fide purchaser.
If Senior Notes are considered paid under Section 4.01, they cease to be
outstanding and interest on them ceases to accrue.
A Senior Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Senior Note.
SECTION 2.09 When Treasury Senior Notes Disregarded.
--------------------------------------
In determining whether the holders of the required principal amount of
Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company or an Affiliate of the Company shall be considered as
though they are not outstanding except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Senior Notes which the Trustee knows are so owned shall be so
disregarded.
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SECTION 2.10 Temporary Senior Notes.
----------------------
Until definitive Senior Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Senior Notes. Temporary
Senior Notes shall be substantially in the form of definitive Senior Notes but
may have variations that the Company considers appropriate for temporary Senior
Notes. If temporary Senior Notes are issued, the Company will cause definitive
Senior Notes to be prepared without unreasonable delay. After the preparation of
definitive Senior Notes, the temporary Senior Notes shall be exchangeable for
definitive Senior Notes upon surrender of the temporary Senior Notes at any
office or agency of the Company designated pursuant to Section 2.03 without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Senior Notes the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Senior Notes of authorized denominations. Until so exchanged, the
temporary Senior Notes shall in all respects be entitled to the same benefits
under this Indenture as definitive Senior Notes.
SECTION 2.11 Cancellation.
------------
The Company at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Senior Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel Senior Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall dispose of cancelled Senior Notes as the Company directs. The Company may
not issue new Senior Notes to replace Senior Notes that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.12 Defaulted Interest.
------------------
If the Company fails to make a payment of interest on the Senior Notes, it
shall pay such defaulted interest plus, to the extent lawful, any interest
payable on the defaulted interest. It may pay such defaulted interest, plus any
such interest payable on it, to the persons who are holders of Senior Notes on a
subsequent special record date. The Company shall fix any such record date and
payment date. At least 15 days before any such record date, the Company shall
mail to holders of Senior Notes a notice that states the record date, payment
date and amount of such interest to be paid.
SECTION 2.13 CUSIP Number.
------------
The Company in issuing the Senior Notes may use a "CUSIP" number, and if
so, such CUSIP number shall be included in notices of redemption or exchange as
a convenience to holders of Senior Notes; provided, however, that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Senior Notes and
that reliance may be placed only on the other identification numbers printed
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on the Senior Notes. The Company will promptly notify the Trustee of any change
in the CUSIP number.
ARTICLE 3
Redemption
SECTION 3.01 Notices to Trustee.
------------------
If the Company elects to redeem Senior Notes pursuant to the optional
redemption provisions of paragraph 5 of the Senior Notes, it shall notify the
Trustee of the redemption date and the principal amount of Senior Notes to be
redeemed. The redemption price shall be the amount determined pursuant to
paragraph 5 of the Senior Notes.
The Company shall give each notice provided for in this Section at least 50
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee).
SECTION 3.02 Selection of Senior Notes To Be Redeemed.
----------------------------------------
If less than all the Senior Notes are to be redeemed, the Trustee shall
select the Senior Notes to be redeemed by lot or pro rata or by any other method
that the Trustee considers fair and appropriate. The Trustee shall make the
selection not more than 75 days and not less than 30 days before the redemption
date from Senior Notes outstanding not previously called for redemption. The
Trustee may select for redemption a portion of the principal of Senior Note that
has a denomination larger than $1,000. Senior Notes and portions thereof will be
redeemed in the amount of $1,000 or integral multiples of $1,000. Provisions of
this Indenture that apply to Senior Notes called for redemption also apply to
portions of Senior Notes called for redemption. The Trustee will make the
selection of Senior Notes outstanding and not previously called for redemption.
The Trustee shall notify the Company promptly of the Senior Notes or portions of
Senior Notes to be called for redemption.
SECTION 3.03 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption to each holder whose Senior Notes are
to be redeemed.
The notice shall identify the Senior Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
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(c) if any Senior Note is being redeemed in part, the portion of the
principal amount of such Senior Note to be redeemed and that, after the
redemption date, upon surrender of such Senior Note, a new Senior Note or
Senior Notes in principal amount equal to the unredeemed portion will be
issued;
(d) that Senior Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(e) that interest on Senior Notes called for redemption and for which
funds have been set apart for payment, ceases to accrue on and after the
redemption date (unless the Company defaults in the payment of the
redemption price);
(f) the paragraph of the Senior Notes pursuant to which the Senior
Notes are being redeemed;
(g) the aggregate principal amount of Senior Notes that are being
redeemed;
(h) the CUSIP number of the Senior Notes (provided that the disclaimer
permitted by Section 2.13 may be made); and
(i) the name and address of the Paying Agent.
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at its expense.
SECTION 3.04 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Senior Notes called for redemption
become due and payable on the redemption date at the price set forth in the
Senior Note.
SECTION 3.05 Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money in immediately available funds sufficient
to pay the redemption price of and accrued interest on all Senior Notes to be
redeemed on that date. The Trustee or the Paying Agent shall return to the
Company any money not required for that purpose.
SECTION 3.06 Senior Notes Redeemed in Part.
-----------------------------
Upon surrender of a Senior Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the holder of a Senior Note at the
expense of the Company a new Senior Note equal in principal amount to the
unredeemed portion of the Senior Note surrendered.
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ARTICLE 4
Covenants
SECTION 4.01 Payment of Senior Notes.
-----------------------
The Company shall pay the principal of and interest on the Senior Notes on
the dates and in the manner provided in the Senior Notes. Principal and
interest shall be considered paid on the date due if the Trustee or Paying Agent
(other than the Company or a Subsidiary of the Company) holds as of 1:00 P.M.
Eastern Time on that date immediately available funds designated for and
sufficient to pay all principal and interest then due.
To the extent lawful, the Company shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on (a) overdue
principal, at the rate borne by Senior Notes, compounded semiannually; and (b)
overdue installments of interest (without regard to any applicable grace period)
at the same rate, compounded semiannually.
SECTION 4.02 Commission Reports.
------------------
So long as any Senior Note is outstanding, the Company shall file with the
Commission and, within 15 days after it files them with the Commission, file
with the Trustee and thereafter promptly mail or promptly cause the Trustee to
mail to the holders of Senior Notes at their addresses as set forth in the
register of the Senior Notes copies of the annual reports and of the
information, documents and other reports which the Company is required to file
with Commission pursuant to Section 13 or 15(d) of the Exchange Act or which the
Company would be required to file with the Commission if the Company then had a
class of securities registered under the Exchange Act. In addition, the Company
shall cause its annual report to stockholders and any quarterly or other
financial reports furnished to its stockholders generally to be filed with the
Trustee, no later than the date such materials are mailed or made available to
the Company's stockholders, and thereafter mailed promptly to the holders of
Senior Notes at their addresses as set forth in the register of Senior Notes.
SECTION 4.03 Compliance Certificate.
----------------------
The Company shall deliver to the Trustee, within 60 days after the end of
the first three fiscal quarters and within 120 days after the end of each fiscal
year of the Company, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal
period has been made under the supervision of the signing Officers with a view
to determining whether the Company has fully performed its obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms and conditions hereof (or, if any Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have
29
<PAGE>
knowledge) and that to the best of his or her knowledge no event has occurred
and remains in existence by reason of which payments on account of the principal
of or interest on the Senior Notes are prohibited.
The Company shall, so long as any of the Senior Notes are outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Default, Event of
Default or default in the performance of any term or condition in this
Indenture, without regard to any period of grace or requirement of notice
provided hereunder, an Officers' Certificate specifying such Defaults, Event of
Default or default.
So long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, at the time the Officers' Certificate
described in the second preceding paragraph is filed with respect to any fiscal
year end of the Company, the Company also shall file with the Trustee a letter
or statement of the independent accountants who shall have certified the
financial statements of the Company for its preceding fiscal year in connection
with the annual report of the Company to its stockholders for such year to that
effect that, in making the examination necessary for certification of such
financial statements, nothing came to their attention that would lead them to
believe that the Company has violated any of the terms or conditions contained
in Sections 4.05, 4.06 and 4.09 of this Indenture, which Default remains uncured
at the date of such letter or statement or, if they shall have obtained
knowledge of any such uncured Default, specifying in such letter or statement
such Default or Defaults and the nature thereof, it being understood that such
accountants shall not be liable directly or indirectly for failure to obtain
knowledge of any such Default or Defaults and that their examination was not
directed primarily toward obtaining knowledge of such non compliance.
SECTION 4.04 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain or cause to be maintained the office or agency
required under Section 2.03. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency not maintained by the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Senior Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designation; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain or cause to be maintained an office or
agency in the City of New York for such purpose.
SECTION 4.05 Limitation on Indebtedness.
--------------------------
The Company shall not, directly or indirectly, incur any Indebtedness
(including Acquired Indebtedness) other than Permitted Indebtedness, unless (a)
no Default or Event of Default shall have occurred and be continuing at the time
of the proposed incurrence thereof or shall occur as a result of such proposed
incurrence and (b) after giving effect to such proposed incurrence
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the Company's Consolidated Fixed Charge Coverage Ratio would be greater than 2.0
to 1.0 on or prior to July 31, 1996, and 2.25 to 1.0 on or after August 1, 1996.
SECTION 4.06 Limitation on Restricted Payments.
---------------------------------
The Company shall not, and shall not permit or cause any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment unless, at
the time of such proposed Restricted Payment, and on a pro forma basis
immediately after giving effect thereto:
A. no Default or Event of Default has occurred and is continuing;
B. the aggregate amount expended for all Restricted Payments
subsequent to the Issue Date would not exceed the sum of:
(1) 50% of aggregate Consolidated Net Income of the Company (or
if such Consolidated Net Income is a loss, minus 100% of such loss)
earned on a cumulative basis during the period beginning on May 2,
1994 and ending on the last date of the Company's fiscal quarter
immediately preceding such proposed Restricted Payment; plus
(2) 100% of the aggregate Net Equity Proceeds received by the
Company from any Person (other than from a Subsidiary of the Company)
from the issuance and sale subsequent to the Issue Date of Qualified
Capital Stock of the Company (excluding (a) any Qualified Capital
Stock of the Company paid as a dividend on any Capital Stock of the
Company or of any of its Subsidiaries or as interest on any
Indebtedness of the Company or of any of its Subsidiaries, (b) the
issuance of Qualified Capital Stock upon the conversion of, or in
exchange for, any Capital Stock of the Company or of any of its
Subsidiaries and (c) any Qualified Capital Stock of the Company with
respect to which the purchase price thereof has been financed directly
or indirectly using funds (i) borrowed from or advanced by the Company
or any of its Subsidiaries, unless and until and to the extent such
borrowing advanced is repaid or (ii) contributed or guaranteed by the
Company or by any of its Subsidiaries (including, without limitation,
in respect of any employee stock ownership or benefit plan) unless
and until such guarantee terminates; and
C. The Company would be able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under Section 4.05
(assuming a market rate of interest with respect thereto).
The foregoing provisions of this covenant will not prevent: (a) the
payment of any dividend within 60 days after the date of its declaration if at
such date of declaration the payment of such dividend would comply with the
provisions set forth above, provided that (i) such dividend will be deemed to
have been paid as of its date of declaration for the purposes of this
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covenant and (ii) at the time of payment of such dividend no other Default or
Event of Default shall have occurred and be continuing or would result
therefrom, (b) if no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof, the purchase, redemption,
retirement or acquisition of any shares of Capital Stock of the Company or of
any Subsidiary or any Indebtedness of the Company that is subordinated to the
Senior Notes solely by conversion into, in exchange for or with or out of the
net cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company
and neither such purchase, redemption, retirement, acquisition, conversion or
exchange nor the proceeds of any such sale shall be included in any computation
made under clause (B)(2) above or (c) the making of any Permitted Payments. The
amounts expended pursuant to clauses (a) and (c) (with respect to those items
identified in clauses (a)(i), (d), (e) or (f) of the definition of Permitted
Payments) of this paragraph will be included in computing the amounts available
for Restricted Payments for purposes of the immediately preceding paragraph.
For purposes of this covenant a distribution to holders of the Company's
Capital Stock of (a) shares of Capital Stock of any of its Subsidiaries or (b)
other assets of the Company or of any of its Subsidiaries, without, in either
case, the receipt of equivalent consideration therefor shall be deemed to be the
equivalent of a cash dividend equal to the excess of the Fair Market Value of
the shares or other assets being so distributed at the time of such distribution
over the consideration, if any, received therefor.
SECTION 4.07 Limitations on Payment Restrictions Affecting Subsidiaries.
----------------------------------------------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become (after the Issue Date) subject to any
consensual encumbrance or restriction of any kind (a) on the ability of any such
Subsidiary to (i) pay dividends, in cash or otherwise, or make other payments or
distributions on its Capital Stock or any other equity interest or participation
in, or measured by, its profits, owned by the Company or by any of its
Subsidiaries, or make payments on any Indebtedness owed to the Company or to any
of its Subsidiaries, (ii) make loans or advances to the Company or to any of its
Subsidiaries, (iii) transfer any of their respective property or assets to the
Company or to any of its Subsidiaries or (b) on the ability of the Company or
any of its Subsidiaries to receive or retain any such (i) dividends, payments or
distributions, (ii) loans or advances or (iii) transfer of property or assets,
except for such encumbrances or restrictions existing under or by reason of (1)
customary provisions restricting subletting, transfer or assignment under any
lease governing a leasehold interest of the Company or of any of its
Subsidiaries, (2) applicable law, (3) reasonable covenants set forth in the
agreements governing the formation of a joint venture otherwise permitted by
this Indenture, (4) Acquired Indebtedness incurred in accordance with this
Indenture, provided that such encumbrance or restriction in respect of such
Acquired Indebtedness is not applicable to any Person, or the property of any
Person, other than the Person, or the property of the Person, so acquired and
that such Acquired Indebtedness was not incurred by the Company or any of its
Subsidiaries or by the Person being acquired in connection with or anticipation
of such acquisition, (5) with respect to clause (a)(iii) and (b)(iii)
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above, purchase money obligations for property acquired in the ordinary course
of business, (6) Indebtedness outstanding immediately after the Issue Date (as
in effect on the Issue Date), (7) customary provisions in instruments or
agreements relating to a Lien permitted to be created, incurred or assumed
pursuant to the provisions of Section 4.11 hereof which restrict the transfer of
the property or assets subject to such Lien, (8) customary provisions in any
agreement otherwise permitted under this Indenture which (i) provide that
transactions between the Company and its Subsidiaries be no less favorable to
any such Subsidiary than could be obtained from an unaffiliated third party, and
(ii) do not have any material adverse effect on the ability of such Subsidiary
to pay dividends to the Company or otherwise advance cash, directly or
indirectly to the Company on terms no less favorable to any such Subsidiary than
could be obtained from an unaffiliated third party or (9) any New Indebtedness
that is Permitted Refinancing Indebtedness incurred to Refinance any of the
Indebtedness set forth in clauses (4), (5) and (6) above to the extent such
encumbrance or restriction in respect of the New Indebtedness is no less
favorable to the holders and no more restrictive than such encumbrances or
restrictions contained in the Indebtedness being Refinanced as of the date of
such Refinancing and do not extend to or cover any other Person or the property
of any other Person other than the Person in respect of whom such encumbrance or
restriction relating to the Indebtedness being Refinanced applied or any
replacement of the Pooling and Servicing Agreement to the extent such
encumbrance or restriction in respect of the replacement Pooling and Servicing
Agreement is no less favorable to the holders and no more restrictive in any
material respect than such encumbrances or restrictions contained in the Pooling
and Servicing Agreement as in effect on the Issue Date.
SECTION 4.08 Limitations on Transactions with Affiliates.
-------------------------------------------
The Company shall not, nor shall the Company permit any of its Subsidiaries
to, (a) sell, lease, transfer or otherwise dispose of any of its property or
assets to, (b) purchase any property or assets from, (c) make any Investment in,
or (d) enter into or amend any contract, agreement or understanding with or for
the benefit of, any Affiliate of the Company or of any Subsidiary of the Company
(an "Affiliate Transaction"), other than Affiliate Transactions that, in its
reasonable judgment are necessary or desirable for the Company or such
Subsidiary in the conduct of its business and that (i) a majority of the members
of the Board of Directors of the Company reasonably and in good faith determines
are in the best interests of the Company or such Subsidiary and (ii) are on
terms (which terms are in writing) that are fair and reasonable to the Company
or the Subsidiary and that are no less favorable to the Company or such
Subsidiary than those that could be obtained in a comparable arm's length
transaction by the Company or such Subsidiary from an unaffiliated party, as
determined reasonably and in good faith by the Board of Directors of the
Company, provided that if the Company or any Subsidiary of the Company enters
into an Affiliate Transaction or series of Affiliate Transactions involving or
having an aggregate value of more than $10 million such Affiliate Transaction
shall, prior to the consummation thereof, have been approved by a majority of
the disinterested directors of the Company (or by a majority of the
disinterested directors on any committee of directors authorized to consider
such matter, provided that the delegation of such matter to such committee has
been approved by a majority of disinterested directors of the Company) and,
provided,
33
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further, that with respect to any such transaction or series of related
transactions that involve an aggregate value of more than $20 million the
Company or such Subsidiary shall, prior to the consummation thereof, obtain a
favorable opinion as to the fairness to itself of such transaction or series of
related transactions from a financial point of view from an Independent
Financial Advisor and file the same with the Trustee. The foregoing restriction
shall not apply to (x) any transaction between Wholly Owned Subsidiaries of the
Company, or between the Company and any Wholly Owned Subsidiary of the Company
if such transaction is not otherwise prohibited by the terms of this Indenture
and (y) any Restricted Payment made in accordance with Section 4.06.
Notwithstanding the foregoing, the term "Affiliate Transaction" shall not
include any contract, agreement or understanding with or for the benefit of, or
a plan for the benefit of, any or all employees of the Company or its
Subsidiaries (in their capacity as such) that has been approved by the Company's
Board of Directors, a disinterested committee thereof, or a stock issuance to
directors pursuant to plans approved by stockholders of the Company.
SECTION 4.09 Limitation on Subsidiary Indebtedness and Preferred Stock.
---------------------------------------------------------
The Company shall not permit any Subsidiary to, directly or indirectly,
incur any Indebtedness or issue any Preferred Stock other than, without
duplication: (a) Indebtedness or Preferred Stock issued to and held by the
Company or a Wholly Owned Subsidiary of the Company, provided that (i) such
Indebtedness is not subordinated to any other Indebtedness of such Subsidiary,
and (ii) any subsequent issuance or transfer of Capital Stock of a Wholly Owned
Subsidiary of the Company (the "Obligee Subsidiary") to whom a Subsidiary of the
Company is indebted (the "Obligor Subsidiary") that results in such Obligee
Subsidiary ceasing to be a Wholly Owned Subsidiary of the Company or any
subsequent transfer such Indebtedness or Preferred Stock of such Obligor
Subsidiary by such Obligee Subsidiary (other than to the Company or another
Wholly Owned Subsidiary of the Company) shall be deemed in each case to be the
incurrence of such Indebtedness or the issuance of such Preferred Stock by each
Obligor Subsidiary owing to or issued to, as the case may be, such Obligee
Subsidiary to the extent outstanding as of such date; (b) Indebtedness or
Preferred Stock of a Subsidiary of the Company which represents the assumption
by such Subsidiary of Indebtedness or Preferred Stock of another Subsidiary of
the Company in connection with a merger of such Subsidiaries; (c) Indebtedness
or Preferred Stock of any Person (other than a Person that has acquired,
directly or indirectly, assets from the Company other than in the ordinary
course of business) existing at the time such Person becomes a Subsidiary of the
Company, provided that (i) such Indebtedness or Preferred Stock was not incurred
or issued as a result of or in connection with or in anticipation of such Person
becoming a Subsidiary of the Company, (ii) immediately after giving effect to
such Person becoming a Subsidiary of the Company (as if such Indebtedness and
Preferred Stock were incurred and issued on the first day of the Reference
Period) the Company could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under Section 4.05 (assuming a market rate of interest
with respect thereto), and (iii) the total of the aggregate principal amount of
Indebtedness and the aggregate liquidation value of Preferred Stock of such
Person outstanding on the date it becomes a Subsidiary of the Company, plus the
total of the
34
<PAGE>
aggregate principal amount of Indebtedness and the aggregate liquidation value
of Preferred Stock of such other Persons incurred under this clause (c) (but
only to the extent such debt or Preferred Stock remains outstanding on the date
of determination), does not exceed 10% of the Consolidated Net Worth of the
Company; (d) Indebtedness and Preferred Stock of any Subsidiary of the Company,
provided that (i) immediately after giving effect thereto (as if the incurrence
or issuance thereof occurred on the first day of the Reference Period) the
Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under Section 4.05 (assuming a market rate of interest with
respect thereto), and (ii) the total of the aggregate principal amount of the
Indebtedness and the aggregate liquidation value of Preferred Stock proposed to
be issued and incurred by such Subsidiary plus the total of the aggregate
principal amount of Indebtedness and the aggregate liquidation value of
Preferred Stock incurred and issued by all Subsidiaries of the Company under
this clause (d) does not exceed, when added to Indebtedness of the Company
incurred under clause (f) of the definition of "Permitted Indebtedness," 10% of
Consolidated Net Worth; (e) Permitted Indebtedness incurred by any Subsidiary of
the Company under clauses (a) and (g) of the definition of "Permitted
Indebtedness"; (f) Indebtedness or Preferred Stock that is Permitted Refinancing
Indebtedness incurred or issued to Refinance any Indebtedness or Preferred Stock
incurred or issued by a Subsidiary of the Company prior to the Issue Date or in
accordance with this Indenture; or (g) Indebtedness of the Company's non-U.S.
Subsidiaries under any working capital or other revolving credit facility in an
aggregate amount not to exceed $5 million at any one time.
SECTION 4.10 Limitation on Sale of Assets.
----------------------------
The Company will not, and will not permit any of its Subsidiaries to,
consummate any Asset Sale unless such Asset Sale is for at least Fair Market
Value and at least 80% of the consideration therefrom received by the Company or
such Subsidiary is in the form of cash or Cash Equivalents.
Following any Asset Sale, an amount equal to the Net Cash Proceeds of such
Asset Sale shall be applied by the Company or such Subsidiary within 365 days of
the date of the Asset Sale, at its election, to either: (a) the payment of Pari
Passu Indebtedness with an equal and concurrent reduction in the commitment
related to such Pari Passu Indebtedness, if applicable, provided any Net Cash
Proceeds which are applied on such pro rata basis to reduce Indebtedness under
the Revolving Credit Agreement shall result in a permanent reduction of the
borrowing availability thereunder; (b) make any Permitted Program Investment or
any other investment in capital assets usable in the Company's or its
Subsidiaries' lines of business or in an asset or business in the same line of
business as the Company; or (c) a combination of payment and investment
permitted by the foregoing clauses (a) and (b). On the earlier of (A) the 366th
day after the date of an Asset Sale or (B) such date as the Board of Directors
of the Company or of such Subsidiary determines (as evidenced by a written
resolution of said Board of Directors) not to apply an amount equal to the Net
Cash Proceeds relating to such Asset Sale as set forth in the immediately
preceding sentence (each of (A) and (B), an "Asset Sale Offer Trigger Date"),
the Company or such Subsidiary shall be obligated to apply an amount equal to
aggregate amount of Net Cash Proceeds which have not been applied on or before
such Asset Sale Offer
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Trigger Date as permitted by the foregoing clauses (a), (b) and (c) of the
immediately preceding sentence (each an "Asset Sale Offer Amount") to make an
offer to purchase for cash (the "Asset Sale Offer") from all holders of Senior
Notes on a pro rata basis that amount of Senior Notes equal to the Asset Sale
Offer Amount at a price equal to 100% of the principal amount of the Senior
Notes to be repurchased, plus accrued and unpaid interest thereon to the date of
repurchase. Notwithstanding the foregoing, if an Asset Sale Offer Amount is
less than $10 million, the application of such Asset Sale Offer Amount to an
Asset Sale Offer may be deferred until such time as such Asset Sale Offer Amount
plus the aggregate amount of all Asset Sale Offer Amounts arising subsequent to
such Asset Sale Offer Trigger Date from all Asset Sales by the Company and its
Subsidiaries aggregates at least $10 million, at which time the Company or such
Subsidiary shall apply all Asset Sale Offer Amounts that have been so deferred
to make an Asset Sale Offer (the first date the aggregate of all such deferred
Asset Sale Offer Amounts is equal to $10 million or more shall be deemed to be
an "Asset Sale Offer Trigger Date").
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company as an entirety to a Person in a transaction
permitted under Section 5.01, the successor corporation shall be deemed to have
sold the properties and assets of the Company not so transferred for purposes of
this covenant, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale.
Each Asset Sale Offer shall be mailed to the holders of the Senior Notes at
the addresses shown on the register of holders maintained by the Registrar with
a copy to the Trustee and the Paying Agent, within 10 days following the
applicable Asset Sale Offer Trigger Date, and shall comply with each of the
procedures for notice set forth below. Each Asset Sale Offer shall remain open
until a specified date (the "Asset Sale Offer Termination Date") which is at
least 20 Business Days from the date such Asset Sale Offer is mailed. During
the period specified in the Asset Sale Offer, holders of Senior Notes may elect
to tender their Senior Notes in whole or in part in integral multiples of $1,000
in exchange for cash. Payment shall be made by the Company (or applicable
Subsidiary) in respect of Senior Notes properly tendered pursuant to this
Section on a specified Business Day (the "Asset Sale Offer Payment Date") which
shall be no earlier than three Business Days after the Asset Sale Offer
Termination Date and no later then 60 days after such applicable Asset Sale
Offer Trigger Date. To the extent holders of Senior Notes properly tender
Senior Notes in an amount exceeding the Asset Sale Offer Amount, Senior Notes of
tendering holders will be repurchased on a pro rata basis (based on amounts
tendered).
The notice, which shall govern the terms of the Asset Sale Offer, shall
include such disclosures as are required by law and shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
4.10;
(b) the purchase price (including the amount of the accrued interest,
if any) for each Senior Note, the Asset Sale Offer Termination Date and the
Asset Sale Offer Payment Date;
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(c) that any Senior Note not tendered or accepted for payment will
continue to accrue interest in accordance with the terms thereof;
(d) that, unless the Company defaults on making the payment, any
Senior Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Asset Sale Offer Payment Date;
(e) that holders electing to have Senior Notes purchased pursuant to
an Asset Sale Offer will be required to surrender their Senior Notes to the
Paying Agent at the address specified in the notice prior to 5:00 p.m., New
York City time, on the Asset Sale Offer Termination Date and must complete
any form letter of transmittal proposed by the Company and acceptable to
the Trustee and the Paying Agent;
(f) that holders of Senior Notes will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Asset Sale Offer Termination Date, a tested telex,
facsimile transmission or letter setting forth the name of the holder, the
principal amount of Senior Notes the holder delivered for purchase, the
Senior Note certificate number (if any) and a statement that such holder is
withdrawing his election to have such Senior Notes purchased;
(g) that if Senior Notes in a principal amount in excess of the Asset
Sale Offer Amount are tendered pursuant to the Asset Sale Offer, the
Company shall purchase Senior Notes on a pro rata basis among the Senior
Notes tendered (with such adjustments as may be deemed appropriate by the
Company so that only Senior Notes in denominations of $1,000 or integral
multiples of $1,000 shall be acquired);
(h) that holders whose Senior Notes are purchased only in part will be
issued new Senior Notes equal in principal amount to the unpurchased
portion of the Senior Notes surrendered; and
(i) the instructions that holders must follow in order to tender their
Senior Notes.
On the Asset Sale Offer Termination Date, the Company shall (i) accept for
payment Senior Notes or portions thereof tendered pursuant to the Asset Sale
Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase
price of all Senior Notes or portions thereof so tendered and accepted and (iii)
deliver to the Trustee the Senior Notes so accepted together with an Officers'
Certificate setting forth the Senior Notes or portions thereof tendered to and
accepted for payment by the Company. On the Asset Sale Offer Payment Date, the
Paying Agent shall mail or deliver to the holders of Senior Notes so accepted
payment in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail or deliver to such holders a new Senior Note equal in
principal amount to any unpurchased portion of the Senior Note surrendered. Any
Senior Notes not so accepted shall be promptly mailed or delivered by the
Company to the holder thereof.
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If an offer is made to repurchase the Senior Notes pursuant to an Asset
Sale Offer, the Company will and will cause its Subsidiaries to comply with all
tender offer rules under state and Federal securities laws, including, but not
limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to
the extent applicable to such offer. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.10,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.10 by
virtue thereof.
SECTION 4.11 Limitation on Liens.
-------------------
The Company may not, and may not permit any of its Subsidiaries to,
voluntarily or involuntarily, create, incur or assume any Liens upon any of
their respective properties or assets whether owned on the Issue Date or
acquired thereafter, or on any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits thereon, securing any
Indebtedness of the Company or of any of its Subsidiaries other than, without
duplication (a) Liens granted by the Company securing Indebtedness of the
Company that is incurred in accordance with this Indenture and that is Pari
Passu Indebtedness, provided that the Senior Notes are secured on an equal and
ratable basis to such Liens, (b) Liens granted by the Company securing
Indebtedness of the Company incurred in accordance with this Indenture and that
is subordinated to the Senior Notes, provided that the Senior Notes are secured
by Liens ranking prior to such Liens, (c) Liens existing on the Issue Date to
the extent and in the manner such Liens are in effect on the Issue Date, (d)
Permitted Liens, (e) Liens relating to other Indebtedness and Sale-Leaseback
Financings in an aggregate amount not to exceed at any one time 10% of the
Company's Consolidated Net Worth, (f) Liens in respect of Acquired Indebtedness
incurred by the Company in accordance with Section 4.05 and in respect of
Acquired Indebtedness incurred by a Subsidiary of the Company in accordance with
clause (d) of Section 4.09, provided that the Lien in respect of such Acquired
Indebtedness secured such Acquired Indebtedness at the time of the incurrence of
such Acquired Indebtedness by the Company or by one of its Subsidiaries and such
Lien and the Acquired Indebtedness were not incurred by the Company or any of
its Subsidiaries or by the Person being acquired or from whom the assets are
proposed to be acquired in connection with, or in anticipation of, the
incurrence of such Acquired Indebtedness by the Company or by one of its
Subsidiaries and, provided further, that such Liens do not extend to or cover
any property or assets of the Company or of any of its Subsidiaries other than
the property or assets that secured the Acquired Indebtedness prior to the time
such Indebtedness became Acquired Indebtedness of the Company or of one of its
Subsidiaries, (g) Liens granted by a corporation, which Liens are in existence
at the time such corporation becomes a Subsidiary of the Company, provided that
such Liens were not created by such corporation in connection with or in
anticipation of such corporation becoming a Subsidiary of the Company, and
provided further that such Liens do not extend to or cover any property or
assets of the Company or any of its Subsidiaries other than the property or
assets of such acquired corporation prior to the time it became a Subsidiary of
the Company and (h) Liens in respect of New Indebtedness that is Permitted
Refinancing Indebtedness incurred to Refinance any of the Indebtedness set forth
in clauses (a), (b), (c), (e), (f) and (g) above, provided that such Liens in
respect of such New Indebtedness are no less favorable to the
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holders of Senior Notes than the Liens in respect of the Indebtedness being
Refinanced and such Liens in respect of New Indebtedness do not extend to or
cover any properties or assets of the Company or of any of the Company's
Subsidiaries other than the property or assets that secured the Indebtedness
being Refinanced.
SECTION 4.12 Continued Existence.
-------------------
Subject to Article 5, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
SECTION 4.13 Taxes.
-----
The Company shall pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings or where the failure to do so (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole.
SECTION 4.14 Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the Company's
obligation to pay the Senior Notes; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
insofar as such law applies to the Senior Notes, and covenants that it shall
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law has been enacted.
SECTION 4.15 Investment Company Act.
----------------------
The Company, as of the Issue Date, is not and shall not become an
investment company subject to registration under the Investment Company Act of
1940, as amended.
SECTION 4.16 Change of Control.
-----------------
Following a Change of Control (the date of each such occurrence being the
"Change of Control Date"), the Company shall notify the holders of Senior Notes
in writing of such occurrence and shall make an offer (the "Change of Control
Offer") to purchase all Senior Notes then outstanding at a purchase price equal
to 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the "Change of Control Offer Payment Date" (as defined below).
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Notice of a Change of Control shall be mailed by or at the direction of the
Company to the holders of Senior Notes as shown on the register of such holders
maintained by the Registrar not less than 15 days nor more than 30 days after
the applicable Change of Control Date at the addresses as shown on the register
of holders maintained by the Registrar, with a copy to the Trustee and the
Paying Agent. The Change of Control Offer shall remain open until a specified
date (the "Change of Control Offer Termination Date") which is at least 20
Business Days from the date such notice is mailed. During the period specified
in such notice, holders of Senior Notes may elect to tender their Senior Notes
in whole or in part in integral multiples of $1,000 in exchange for cash.
Payment shall be made by the Company in respect of Senior Notes properly
tendered pursuant to this Section on a specified Business Day (the "Change of
Control Offer Payment Date") which shall be no earlier than three Business Days
after the applicable Change of Control Offer Termination Date and no later than
60 days after the applicable Change of Control Date.
The notice, which shall govern the terms of the Change of Control Offer,
shall include such disclosures as are required by law and shall state:
(a) that a Change of Control Offer is being made pursuant to this
Section 4.16 and that all Senior Notes will be accepted for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Senior Note, the Change of Control Offer Termination Date and
the Change of Control Offer Payment Date;
(c) that any Senior Note not accepted for payment will continue to
accrue interest in accordance with the terms thereof;
(d) that, unless the Company defaults on making the payment, any
Senior Note accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Offer Payment
Date;
(e) that holders electing to have Senior Notes purchased pursuant to a
Change of Control Offer will be required to surrender their Senior Notes to
the Paying Agent at the address specified in the notice prior to 5:00 p.m.,
New York City time, on the Change of Control Offer Termination Date and
must complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(f) that holders of Senior Notes will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Change of Control Offer Termination Date, a tested telex,
facsimile transmission or letter setting forth the name of the holder, the
principal amount of Senior Notes the holder delivered for purchase, the
Senior Note certificate number (if any) and a statement that such holder is
withdrawing his election to have such Senior Notes purchased;
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(g) that holders whose Senior Notes are purchased only in part will be
issued Senior Notes equal in principal amount to the unpurchased portion of
the Senior Notes surrendered;
(h) the instructions that holders must follow in order to tender their
Senior Notes; and
(i) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with respect to pro
forma historical financial information after giving effect to such Change
of Control, information regarding the Persons acquiring control and such
Persons' business plans going forward).
On the Change of Control Offer Termination Date, the Company shall (i)
accept for payment Senior Notes or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent money sufficient to
pay the purchase price of all Senior Notes or portions thereof so tendered and
accepted and (iii) deliver to the Trustee the Senior Notes so accepted together
with an Officers' Certificate setting forth the Senior Notes or portions thereof
tendered to and accepted for payment by the Company. On the Change of Control
Offer Payment Date, the Paying Agent shall mail or deliver to the holders of
Senior Notes so accepted payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail or deliver to such holders a
new Senior Note equal in principal amount to any unpurchased portion of the
Senior Note surrendered. Any Senior Notes not so accepted shall be promptly
mailed or delivered by the Company to the holder thereof.
In addition, in the event of any Change of Control, the Company shall not,
and shall not permit any of its Subsidiaries to, purchase, redeem or otherwise
acquire any Indebtedness subordinated or junior to the Senior Notes pursuant to
any analogous provision relating to such Indebtedness on or prior to the payment
in full in cash or Cash Equivalents of all Senior Notes, together with accrued
and unpaid interest thereon with respect to which the Change of Control Offer
was accepted.
If an offer is made to redeem Senior Notes as a result of a Change of
Control, the Company will be required to comply with all tender offer rules
under state and Federal securities laws, including, but not limited to, Section
14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent applicable
to such offer.
SECTION 4.17 Limitation on Sale and Leaseback Transactions.
---------------------------------------------
The Company will not, and will not permit any of its Subsidiaries to, enter
into any sale and leaseback transaction, provided that the Company (and not a
Subsidiary of the Company) may enter into such a sale and leaseback transaction
if (a) with respect to any such transaction involving the incurrence of
Capitalized Lease Obligations, the Company could have (i) incurred Indebtedness
in an amount equal to the debt relating to such sale and leaseback transaction
pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in
Section 4.05 and (ii)
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incurred a Lien to secure such Indebtedness pursuant to Section 4.11, (b) the
proceeds of such sale and leaseback transaction are at least equal to the Fair
Market Value of the property that is subject of such sale and leaseback
transaction and (c) the Company shall apply or cause to be applied the proceeds
of such transaction in compliance with Section 4.10.
SECTION 4.18 Appointments to Fill Vacancies in Trustee's Office.
--------------------------------------------------
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 4.19 Further Instruments and Acts.
----------------------------
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
ARTICLE 5
Successors
SECTION 5.01 When the Company May Merge, Etc.
--------------------------------
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets to,
any Person or adopt a Plan of Liquidation unless:
(a) either (i) the Company shall be the surviving or continuing
corporation or (ii) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer or lease the properties and assets of the
Company substantially as an entirety or in the case of a Plan of
Liquidation, the Person to which all or substantially all of the assets of
the Company have been transferred (1) shall be a corporation organized and
validly existing under the laws of the United States or any State thereof
or the District of Columbia and (2) shall expressly assume, by supplemental
indenture, executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of
the Senior Notes and the performance of every covenant of the Senior Notes
and this Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction and any
assumption contemplated by clause (2) above (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Company
(in the case of clause (i) of the foregoing
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clause (a)) or such Person (in the case of clause (ii) thereof) (i) shall
have a Consolidated Net Worth (immediately after the transaction but prior
to any purchase accounting adjustments relating to such transaction) equal
to or greater than the Consolidated Net Worth of the Company immediately
prior to such transaction and (ii) shall be able to incur (assuming a
market rate of interest with respect thereto) at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under Section 4.05,
provided that in determining the "Consolidated Fixed Charge Coverage Ratio"
of the resulting, transferee or surviving Person, such ratio shall be
calculated as if the transaction (including the incurrence of any
Indebtedness or Acquired Indebtedness) occurred on the first day of the
Reference Period;
(c) immediately before and after giving effect to such transaction and
the assumption contemplated by clause (a)(ii)(2) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred in connection
with or in respect of the transaction) no Default or Event of Default shall
have occurred and be continuing;
(d) the Company or such Person shall have delivered to the Trustee (i)
an Officers' Certificate and an Opinion of Counsel (which may be in-house
counsel of the Company), each stating that such consolidation, merger,
sale, assignment, conveyance, transfer or lease or Plan of Liquidation and,
if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with the provisions of
this Indenture and that all conditions precedent in this Indenture relating
to such transaction have been satisfied and (ii) a certification from the
Company's independent certified public accountants stating that the Company
has made the calculations required by clause (b) above in accordance with
the terms of this Indenture; and
(e) neither the Company nor any Subsidiary of the Company nor such
Person, as the case may be, would thereupon become obligated with respect
to any Indebtedness (including Acquired Indebtedness), nor any of its
property or assets subject to any Lien, unless the Company or such
Subsidiary or such Person, as the case may be, could incur such
Indebtedness (including Acquired Indebtedness) or create such Lien under
this Indenture (giving effect to such Person being bound by all the terms
of this Indenture).
For purposes of Section 5.01, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of the
Company, the Capital Stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
SECTION 5.02 Successor Corporation Substituted.
---------------------------------
Upon any such consolidation, merger, sale, assignment, conveyance, lease or
transfer in accordance with Section 5.01, the successor Person formed by such
consolidation or into which
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the Company is merged or to which such conveyance, lease or transfer is made
will succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
had been named as the Company therein, and thereafter (except in the case of a
sale, assignment, transfer, lease, conveyance or other disposition) the
predecessor corporation will be relieved of all further obligations and
covenants under this Indenture and the Senior Notes.
SECTION 5.03 Purchase Option on Change of Control.
------------------------------------
This Article 5 does not affect the obligations of the Company (including
without limitation any successor to the Company) under Section 4.16.
ARTICLE 6
Defaults and Remedies
SECTION 6.01 Events of Default.
-----------------
An "Event of Default" with respect to any Senior Notes occurs if:
(a) the Company defaults in the payment of principal of, or premium,
if any, on the Senior Notes when due at maturity, upon repurchase, upon
acceleration or otherwise, including, without limitation, failure of the
Company to repurchase the Senior Notes on the date required pursuant to
Section 4.10 or 4.16 or failure to make any optional redemption payment
when due; or
(b) the Company defaults in the payment of any installment of interest
on the Senior Notes when due (including any interest payable in connection
with any optional redemption payment) and continuance of such default for
more than 30 days; or
(c) the Company fails to observe, perform or comply with any of the
provisions described under Sections 4.05, 4.06, 4.09, 4.10, 4.16 and 5.01
and the failure to remedy such failure prior to the receipt of written
notice from the Trustee by the holders of at least 25% in aggregate
principal amount of the outstanding Senior Notes; or
(d) the Company defaults (other than a default set forth in Section
6.01, clauses (a), (b) and (c) above) in the performance of, or breach of,
any other covenant or warranty of the Company in this Indenture or the
Senior Notes and fails to remedy such default or breach within a period of
45 days after the receipt of written notice from the Trustee or the holders
of at least 25% in aggregate principal amount of the then outstanding
Senior Notes; or
(e) (i) the Company fails to pay at maturity or a default in the
obligation to pay when due the principal of, interest on (but only to the
extent any such failure to pay
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interest is not fully cured prior to the expiration of the grace period
provided in such Indebtedness on the date such interest payment was
initially due), or any other payment obligation on any other Indebtedness
(other than the Senior Notes) of the Company or of any Subsidiary of the
Company, whether such Indebtedness exists on the Issue Date or shall be
incurred thereafter, having, individually or in the aggregate, an
outstanding principal amount of $15,000,000 or more or (ii) any other
Indebtedness (other than the Senior Notes) of the Company or of any
Subsidiary of the Company, whether such Indebtedness exists on the Issue
Date or shall be incurred thereafter, having, individually or in the
aggregate, an outstanding principal amount of $15,000,000 or more, is
declared due and payable prior to its stated maturity; or
(f) a court of competent jurisdiction enters one or more judgments or
orders against the Company or any Subsidiary of the Company or any of their
respective property or assets in an aggregate amount in excess of
$15,000,000 and that are not covered by insurance written by third parties,
which judgments or orders have not been vacated, discharged, satisfied or
stayed pending appeal within 60 days from the entry thereof; or
(g) the Company or any Material Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(h) a court of competent jurisdiction enters a judgment, order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Material Subsidiary
in an involuntary case,
(B) appoints a Custodian of the Company or any Material
Subsidiary for all or substantially all of its property, or
(C) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
60 days.
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The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
SECTION 6.02 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in clauses
(g) and (h) of Section 6.01) occurs and is continuing, then and in every such
case the Trustee, by written notice to the Company, or the holders of at least
25% in aggregate principal amount of the then outstanding Senior Notes, by
written notice to the Company and the Trustee, may declare the unpaid principal
of and accrued interest on all the Senior Notes to be due and payable. Upon
such declaration such principal amount, premium, if any, and accrued and unpaid
interest shall be immediately due and payable notwithstanding anything contained
in this Indenture or the Senior Notes to the contrary. If an Event of Default
with respect to the Company specified in clauses (g) or (h) of Section 6.01
occurs, all unpaid principal of, and premium, if any, and accrued and unpaid
interest or, Senior Notes then outstanding shall automatically become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder of Senior Notes.
The holders of a majority in principal amount of the then outstanding
Senior Notes by notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal and premium, if any, and interest on the Senior Notes which has become
due solely by virtue of such acceleration have been cured or waived and if the
rescission would not conflict with any judgment or decree of any court of
competent jurisdiction. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.
SECTION 6.03 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Senior Notes or to enforce the performance of
any provision of the Senior Notes or this Indenture. The Trustee may maintain a
proceeding even if it does not possess any of the Senior Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or
any holder of a Senior Note in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
SECTION 6.04 Waiver of Past Defaults.
-----------------------
The holders of a majority in aggregate principal amount of the Senior Notes
then outstanding may, on behalf of the holders of all the Senior Notes, waive an
existing Default or Event of Default and its consequences, except Default or
Event of Default in the payment of the principal of or interest on the Senior
Notes (other than nonpayment of principal of and premium,
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if any, or interest on the Senior Notes which has become due solely by virtue of
an acceleration which has been duly rescinded, as provided above), or in respect
of a covenant or provision of this Indenture which cannot be modified or amended
without the consent of all holders of Senior Notes. When a Default is waived,
it is cured and stops continuing. No waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
-------------------
The holders of a majority in principal amount of the then outstanding
Senior Notes may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other holders of Senior Notes or that may involve
the Trustee in personal liability; provided that the Trustee may take any other
action the Trustee deems proper that is not inconsistent with such directions.
SECTION 6.06 Limitation on Suits.
-------------------
A holder of a Senior Note may not pursue any remedy with respect to this
Indenture or the Senior Notes unless:
(a) the holder gives to the Trustee notice of a continuing Event of
Default;
(b) the holders of at least 25% in principal amount of the then
outstanding Senior Notes make a request to the Trustee to pursue the
remedy;
(c) such holder or holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the holders of a majority in principal
amount of the then outstanding Senior Notes do not give the Trustee a
direction inconsistent with the request.
A holder of a Senior Note may not use this Indenture to prejudice the
rights of another holder or to obtain a preference or priority over another
holder.
SECTION 6.07 Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
holder of a Senior Note to receive payment of principal and interest on the
Senior Note, on or after the respective due dates expressed in the Senior Note,
or to bring suit for the enforcement of any such payment
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on or after such respective dates, shall not be impaired or affected without the
consent of the holder of a Senior Note.
SECTION 6.08 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the Senior Notes and interest on overdue principal
and interest and such further amount as shall be sufficient to cover the costs
and, to the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
holders of Senior Notes allowed in any judicial proceedings relative to the
Company, its creditors or its property. Nothing contained herein shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any holder of a Senior Note any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Notes or the rights of any holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
holder in any such proceeding.
SECTION 6.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07, including payment
of all compensation, expenses and liabilities incurred, and all advances made,
by the Trustee, and the costs and expenses of collection;
Second: to holders of Senior Notes for amounts due and unpaid on the Senior
Notes for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Senior Notes for principal
and interest, respectively; and
Third: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a record
date and payment date for any payment to holders of Senior Notes.
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SECTION 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.07
or a suit by holders of more than 10% in principal amount of the then
outstanding Senior Notes.
ARTICLE 7
The Trustee
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
SECTION 7.01 Duties of the Trustee.
---------------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(i) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) This paragraph does not limit the effect of paragraph (b) of this
Section;
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(ii) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that is in any way related to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
SECTION 7.02 Rights of the Trustee.
---------------------
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in such a document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
Officers of the Company.
(f) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.
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SECTION 7.03 Individual Rights of the Trustee.
--------------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Senior Notes and may otherwise deal with the Company or an Affiliate
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Sections 7.10 and
7.11.
SECTION 7.04 Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Senior Notes, it shall not be
accountable for the Company's use of the proceeds from the Senior Notes or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Senior
Notes or any other document in connection with the sale of the Senior Notes or
pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each holder of a Senior Note a
notice of the Default or Event of Default within 60 days after it occurs. A
Default or an Event of Default shall not be considered known to the Trustee
unless it is a Default or Event of Default in the payment of principal or
interest when due under Section 6.01(a) or (b) or the Trustee shall have
received notice thereof, in accordance with this Indenture, from the Company or
from the holders of a majority in principal amount of the outstanding Senior
Notes. Except in the case of a Default or Event of Default in payment of
principal or interest on any Senior Note, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interest of the holders of Senior Notes.
SECTION 7.06 Reports by the Trustee to Holders.
---------------------------------
Within 60 days after the reporting date stated in Section 10.10, the
Trustee shall mail to holders of Senior Notes a brief report dated as of such
reporting date that complies with TIA (S) 313(a) (but if no event described in
TIA (S) 313(a) has occurred within twelve months preceding the reporting date,
no report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA (S) 313(c).
A copy of each report at the time of its mailing to holders of Senior Notes
shall be filed with the Commission and each stock exchange, if any, on which the
Senior Notes are listed. The Company shall notify the Trustee when the Senior
Notes are listed on any stock exchange.
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SECTION 7.07 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and its services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses may
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee against any loss, liability or
expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, except as set forth in the
next paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim with counsel designated by the Company, who may be outside
counsel to the Company but shall in all events be reasonably satisfactory to the
Trustee, and the Trustee shall cooperate in the defense. In addition, the
Trustee may retain one separate counsel and, if deemed advisable by such
counsel, local counsel, and the Company shall pay the reasonable fees and
expenses of such separate counsel and local counsel. The indemnification herein
extends to any settlement, provided that the Company will not be liable for any
settlement made without its consent, provided, further, that such consent will
not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through its own negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Senior Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on Senior Notes. Such Liens shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.08 Replacement of the Trustee.
--------------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign at any time and be discharged from the trust hereby
created by so notifying the Company. The holders of a majority in principal
amount of the then outstanding
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Senior Notes may remove the Trustee by so notifying the Trustee and the Company.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the then outstanding Senior Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
holders of at least 10% in principal amount of the then outstanding Senior Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee after written request by any holder of a Senior Note who has
been a holder for at least six months fails to comply with Section 7.10, such
holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
holders of Senior Notes. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided that all sums
owing to the retiring Trustee hereunder have been paid and subject to the lien
provided for in Section 7.07. Notwithstanding the replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger, Etc.
---------------------------------
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
national banking association, the resulting, surviving or transferee corporation
or national banking association without any further act shall be the successor
Trustee.
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SECTION 7.10 Eligibility, Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1). The Trustee shall always have a combined capital and
surplus as stated in Section 10.10. The Trustee is subject to TIA (S) 310(b)
regarding the disqualification of a trustee upon acquiring a conflicting
interest.
SECTION 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship set forth in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
Satisfaction and Discharge of Indenture
SECTION 8.01 Termination of Company's Obligations.
------------------------------------
(i) This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 and 8.03 shall survive) when all
outstanding Senior Notes theretofore authenticated and issued have been
delivered (other than destroyed, lost or stolen Senior Notes that have been
replaced or paid) to the Trustee for cancellation and the Company has paid all
sums payable hereunder. In addition, the Company may terminate its obligations
under this Indenture (except the Company's obligations under Sections 7.07 and
8.03) if, under terms satisfactory to the Trustee: (a) the Senior Notes have
either become due and payable or are by their terms due and payable within one
year (or scheduled for redemption within one year); and (b) the Company
irrevocably deposits in trust with the Trustee money or United States Government
Obligations (defined below in this Section 8.01), or a combination thereof,
sufficient, without consideration of the reinvestment of interest in the opinion
of the chief financial officer of the Company expressed in a written certificate
delivered to the Trustee, to pay principal and interest on the Senior Notes to
maturity or upon redemption, as the case may be. The Company may make the
deposit only during the one year period.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 4.01, 4.04, 7.07, 7.08, 8.03 and 8.04 shall survive until the Senior Notes
are no longer outstanding. Thereafter, only the Company's obligations in
Sections 7.07 and 8.03 shall survive.
After a deposit made pursuant to this Section 8.01, the Trustee upon
request of the Company shall acknowledge in writing the discharge of the
Company's obligations under this Indenture except for those surviving
obligations specified above.
54
<PAGE>
In addition, the Company may elect to have either clause (ii) or clause
(iii) below be applied to the outstanding Senior Notes upon compliance with the
conditions set forth in clause (iv) below.
(ii) Upon the Company's exercise under the last sentence of paragraph (i)
above of the option applicable to this paragraph (ii), the Company shall be
deemed to have been released and discharged from its obligations with respect to
the outstanding Senior Notes on the date the conditions set forth below are
satisfied ("legal defeasance"). For this purpose, legal defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Senior Notes, which shall thereafter be deemed to
be "outstanding" only for the purpose of the Sections of and matters under this
Indenture referred to in subclauses (A), (B), (C) and (D) of this clause (ii),
and to have satisfied all its other obligations under such Senior Notes and this
Indenture insofar as such Senior Notes are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following, which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of holders of outstanding Senior Notes
to receive solely from the trust fund described in clause (iv) below and as more
fully set forth in such clause, payments in respect of the principal of, and
premium, if any, and interest on such Senior Notes when such payments are due,
(B) the Company's obligations with respect to such Senior Notes when such
payments are due, (C) the Company's obligations with respect to such Senior
Notes under Sections 2.03, 2.05, 2.06, 2.07 and 4.04, and, with respect to the
Trustee, under Section 7.07, (D) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (E) this Section 8.01 and Sections 8.03
and 8.04. Subject to compliance with this Section 8.01, the Company may
exercise its option under this clause (ii) notwithstanding the prior exercise of
its option under paragraph (iii) below with respect to the Senior Notes.
(iii) Upon the Company's exercise under the last sentence of clause (i) of
the option applicable to this clause (iii), the Company shall be released and
discharged from its obligations under any covenant contained in Article 4
(except for Sections 4.01 and 4.04) and Article 5 with respect to the
outstanding Senior Notes on and after the date the conditions set forth below
are satisfied ("covenant defeasance"), and the Senior Notes shall thereafter be
deemed to be not "outstanding" for the purpose of any direction, waiver, consent
or declaration or act of holders of Senior Notes (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the outstanding Senior Notes, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 but, except as specified above, the
remainder of this Indenture (including without limitation obligations set forth
in Sections 8.03 and 8.04 hereof) and such Senior Notes shall be unaffected
thereby.
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<PAGE>
(iv) The following shall be the conditions to the application of either
clause (ii) or (iii) above to the outstanding Senior Notes:
(a) the Company has irrevocably deposited in trust with the Trustee
or, at the option of the Trustee, with a trustee, satisfactory to the
Trustee and the Company, under terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, cash in United States
dollars, United States Government Obligations, or a combination thereof,
sufficient, without consideration of the reinvestment of interest, in the
opinion of the chief financial officer of the Company expressed in a
written certificate delivered to the Trustee, to pay at maturity principal
and interest on the Senior Notes; provided that (i) the trustee of the
irrevocable trust shall have been irrevocably instructed to pay such money
or the proceeds of such United States Government Obligations to the Trustee
and (ii) the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such United States Government Obligations to the
payment of said principal and interest with respect to the Senior Notes;
(b) in the case of an election under clause (ii) above, the Company
shall have delivered to the Trustee an Opinion of Counsel from nationally
recognized counsel reasonably acceptable to the Trustee stating that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to
the effect that the holders of the outstanding Senior Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such legal defeasance and will be subject to federal income tax on the
same amount and in the same manner and at the same time as would have been
the case if such legal defeasance had not occurred;
(c) in the case of an election under clause (iii) above, the Company
shall have delivered to the Trustee an Opinion of Counsel from nationally
recognized counsel reasonably acceptable to the Trustee (i) to the effect
that the holders of the outstanding Senior Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amount and
in the same manner and at the same time as would have been the case if such
covenant defeasance had not occurred or (ii) that the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
to the foregoing effect.
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(e) such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default under
any material agreement or instrument to which the Company or any of its
subsidiaries is bound;
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(f) The Company shall deliver to the Trustee an Opinion of Counsel to
the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the holders over the other creditors of the Company
with the intent of defeating, hindering, delaying or defrauding creditors
of the Company or others; and
(h) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel stating that all conditions precedent provided
for relating to the legal defeasance under clause (ii) above or the
covenant defeasance under clause (iii) above, as the case may be, have been
complied with.
After such irrevocable deposit made pursuant to this Section 8.01 (and
satisfaction of the other conditions set forth herein), the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified above.
As used herein, "United States Government Obligations" means obligations
for which the full faith and credit of the United States of America is pledged
and which are not callable at the issuer's option.
SECTION 8.02 Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 8.01. It shall apply the
deposited money and the money from United States Government Obligations through
the Paying Agent and in accordance with this Indenture to the payment of
principal and interest on the Senior Notes.
SECTION 8.03 Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years after the date upon which such payment shall have become
due; provided, however, that the Company shall have first caused notice of such
payment to the Company to be mailed to each holder entitled thereto no less than
30 days prior to such payment. After payment to the Company, holders entitled
to the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and all liability of
the Trustee and such Paying Agent with respect to such money shall cease.
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SECTION 8.04 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money in accordance
with Section 8.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Senior Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02; provided, however, that if
the Company makes any payment of interest on or principal of any Senior Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the holders of such Senior Notes to receive such payment from
the money held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01 Without the Consent of Holders.
------------------------------
The Company and the Trustee may amend or modify this Indenture (including
the terms and conditions of the Senior Notes) without notice to or the consent
of any holder of Senior Notes for the purpose of:
(a) adding to the covenants of the Company for the benefit of the
holders of Senior Notes;
(b) surrendering any right or power conferred upon the Company;
(c) evidencing the successor of another corporation to the Company and
the assumption of the Company thereunder and in the Senior Notes as
permitted herein;
(d) curing any ambiguity, or correcting or supplementing any defective
provision contained herein or making any changes in any other provisions of
this Indenture which the Company and the Trustee deem necessary or
desirable and which, in either case, will not adversely affect the
interests of the holders of Senior Notes.
SECTION 9.02 With the Consent of Holders.
---------------------------
Subject to Section 6.07, the Company and the Trustee may amend this
Indenture or the Senior Notes with the written consent of the holders of
not less than a majority in aggregate principal amount of the then
outstanding Senior Notes.
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Subject to Sections 6.04 and 6.07, the holders of a majority in
principal amount of the Senior Notes then outstanding may also waive
compliance in a particular instance by the Company with any provision of
this Indenture or the Senior Notes.
However, without the consent of each holder of a Senior Note affected,
an amendment or waiver under this Section may not:
(a) reduce the amount of Senior Notes whose holders must consent to an
amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of, interest,
including defaulted interest, on any Senior Note;
(c) reduce the principal of or premium on or change the fixed maturity
of any Senior Note or alter the redemption provisions with respect thereto;
(d) make the principal of or premium, if any, or interest on, any
Senior Note payable in money other than as provided for in this Indenture
and the Senior Note;
(e) waive a continuing default in the payment of the principal of or
premium, if any, interest on, or redemption or repurchase payment with
respect to, any Senior Note, including, without limitation, a continuing
default to make payment when required upon a Change of Control or after an
Asset Sale Offer Trigger Date;
(f) after the Company's obligation to purchase the Senior Notes arises
hereunder, to then amend, modify or change the obligation of the Company to
make or consummate a Change of Control Offer in the event of a Change of
Control or an Asset Sale Offer in the event of an Asset Sale Offer Trigger
Date or waive any default in the performance thereof or modify any of the
provisions or definitions with respect to any such offers; or
(g) make any change in provisions relating to waivers of defaults, the
abilities of holders of Senior Notes to enforce their rights hereunder or
the provisions of clauses (a) through (g) of this Section 9.02.
To secure a consent of the holders under this Section, it shall not be
necessary for such holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to holders of Senior Notes a notice briefly describing the
amendment or waiver.
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SECTION 9.03 Compliance with the Trust Indenture Act.
---------------------------------------
Every amendment to this Indenture or the Senior Notes shall be set forth in
a supplemental indenture that complies with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a holder
of a Senior Note is a continuing consent by the holder and every subsequent
holder of a Senior Note or portion of a Senior Note that evidences the same debt
as the consenting holder's Senior Note, even if notation of the consent is not
made on any Senior Note. However, any such holder or subsequent holder may
revoke the consent as to his or her Senior Note or portion of a Senior Note if
the Trustee receives the notice of revocation before the date on which the
Trustee receives an Officers' Certificate certifying that the holders of the
requisite principal amount of Senior Notes have consented to the amendment or
waiver.
The Company may, but shall not obligated to, fix a record date for the
purpose of determining the holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those persons who were holders at such record
date (or their duly designated proxies), and only those persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such persons continue to be holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from holders of the principal amount of Senior
Notes required hereunder for such amendment or waiver to be effective shall have
also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every holder,
unless it is of the type described in any of clauses (a) through (g) of Section
9.02. In such case, the amendment or waiver shall bind each holder of a Senior
Note who has consented to it.
SECTION 9.05 Notation on or Exchange of Senior Notes.
---------------------------------------
Senior Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 9 may, and shall if required by
the Trustee, bear a notation in the form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Senior Notes so modified as to conform, in the opinion of the
Company and the Trustee, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for outstanding Senior Notes.
SECTION 9.06 Trustee Protected.
-----------------
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if such amendment or supplemental indenture does not
adversely affect the rights,
60
<PAGE>
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
but need not, sign it. In signing such amendment or supplemental indenture, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE 10
General Provisions
SECTION 10.01 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S) 318(c), the imposed duties shall control.
SECTION 10.02 Notices.
-------
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in person or mailed by first-class mail,
with postage prepaid (registered or certified, return receipt requested),
facsimile or overnight air couriers guaranteeing next day delivery, to the
other's address stated in Section 10.10. The Company or the Trustee by notice
to the other may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to holders of Senior
Notes) shall be deemed to have been duly given at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when transmission confirmed, if transmitted by
facsimile; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a holder of a Senior Note shall be mailed by
first-class mail, with postage prepaid, to his or her address shown on the
register kept by the Registrar. Failure to mail a notice or communication to a
holder or any defect in it shall not affect its sufficiency with respect to
other holders.
If a notice or communication is sent in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company sends a notice or communication to holders of Senior Notes,
it shall send a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
61
<PAGE>
SECTION 10.03 Communication by Holders With Other Holders.
-------------------------------------------
Holders of Senior Notes may communicate pursuant to TIA (S) 312(b) with
other holders with respect to their rights under this Indenture or the Senior
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA (S) 312(c).
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of such person, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 10.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA (S) 314(a)(4)) shall include:
(a) a statement that the person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his certificate may be based as aforesaid
is erroneous. Any Opinion of Counsel may be based, insofar as it relates to
factual matters, upon certificates, statements or opinions of, or
62
<PAGE>
representations by an officer or officers of the Company, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous.
Any Officers' Certificate, statement or Opinion of Counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or
representation by an accountant (who may be an employee of the Company), or firm
of accountants, unless such Officer or counsel, as the case may be, knows that
the certificate or opinion or representation with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid is erroneous.
SECTION 10.06 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or a meeting of holders
of Senior Notes. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 10.07 Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York are not required to be open, and a
"Business Day" is any day that is not a Legal Holiday. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
SECTION 10.08 No Recourse Against Others.
--------------------------
No director, officer, employee or stockholder, as such, of the Company from
time to time shall have any liability for any obligations of the Company under
the Senior Notes or this Indenture or for any claim based on, in respect of, or
by reason of such obligations or their creation. Each holder by accepting a
Senior Note waives and releases all such liability. This waiver and release are
part of the consideration for the Senior Notes. Each of such directors,
officers, employees and stockholders is a third party beneficiary of this
Section 10.08.
SECTION 10.09 Counterparts.
------------
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
63
<PAGE>
SECTION 10.10 Other Provisions.
----------------
The Company initially appoints the Trustee as Paying Agent, Registrar and
authenticating agent.
The first certificate pursuant to Section 4.03 shall be for the first full
fiscal quarter of the Company following the issuance of Senior Notes hereunder.
The reporting date for Section 7.06 is February 15 of each year. The first
reporting date is the first February 15th following the issuance of Senior Notes
hereunder.
The Trustee shall always have, or shall be a Subsidiary of a bank or bank
holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is:
Rohr, Inc.
850 Lagoon Drive
Chula Vista, CA 91910
Attention: General Counsel
Facsimile: (619) 691-4222
Telephone: (619) 691-2025
The Trustee's address is:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust & Agencies Administration
Facsimile: (212) 858-2952
Telephone: (212) 858-2529
SECTION 10.11 Governing Law.
-------------
The internal laws of the State of New York shall govern this Indenture and
the Senior Notes, without regard to the conflict of laws provisions thereof.
SECTION 10.12 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such other indenture, loan or debt
agreement may not be used to interpret this Indenture.
64
<PAGE>
SECTION 10.13 Successors.
----------
All agreements of the Company in this Indenture and the Senior Notes shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 10.14 Severability.
------------
In case any provision in this Indenture or in the Senior Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.15 Table of Contents, Headings, Etc.
---------------------------------
The Table of Contents, Cross-Reference Table and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
65
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.
SIGNATURES
ROHR, INC.
By: /s/ A.L. Majors
---------------
Name: A.L. Majors
Title: Vice President and Chief
Accounting Officer
Attest:
/s/ R.W. Madsen
- - ---------------
Secretary
IBJ SCHRODER BANK & TRUST
COMPANY
By: /s/ Barbara McCluskey
---------------------
Name: Barbara McCluskey
Title: Assistant Vice President
Attest:
/s/ Susan Lowelle
- - -----------------
S-1
<PAGE>
EXHIBIT A
(Face of Security)
No. _____________ $
CUSIP 775416 AC 4
ROHR, INC.
11 5/8% SENIOR NOTE DUE 2003
promises to pay to
or registered assigns,
the principal sum of Dollars on May 15, 2003
Interest Payment Dates: May 15 and November 15
Regular Record Dates: May 1 and November 1
Certificate of Authentication
This Senior Note is one of the Senior Notes
issued pursuant to the within-mentioned Indenture.
IBJ SCHRODER ROHR, INC.
Bank & Trust Company
as Trustee
By By
------------------------------ -----------------------------------
Authorized Signatory President and Chief
Executive Officer
Dated: By
-----------------------------------
Secretary
(SEAL)
A-1
<PAGE>
(Back of Security)
ROHR, INC.
11 5/8% SENIOR NOTE DUE 2003
1. INTEREST. Rohr, Inc., a Delaware corporation (the "Company"), promises
to pay interest on the principal amount of this Senior Note at the rate per
annum shown above. The Company will pay interest semiannually on May 15 and
November 15 of each year. Interest on the Senior Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from May 19, 1994. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) to the person in whose name each Senior Note is
registered at the close of business on the May 1 or November 1 immediately
preceding the relevant interest payment date even though Senior Notes are
cancelled after such record date and on or before the interest payment date.
Holders must surrender Senior Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money, and may mail such check to the holder's registered
address.
3. PAYING AGENT AND REGISTRAR. IBJ Schroder Bank & Trust Company, a New
York banking corporation (together with any successor trustee under the
Indenture referred to below, the "Trustee"), will act as Paying Agent and
Registrar. The Company may change the Paying Agent, Registrar or co-registrar
without prior notice. Subject to certain limitations in the Indenture, the
Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Senior Notes under an Indenture
dated as of May 15, 1994 (the "Indenture") between the Company and the Trustee.
The terms of the Senior Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. The
Senior Notes are subject to, and qualified by, all such terms, certain of which
are summarized hereon, and holders are referred to the Indenture and such Act
for a statement of such terms. The Senior Notes are unsecured general
obligations of the Company limited to $100,000,000 in aggregate principal
amount. Capitalized terms not defined below have the same meaning as is given
to them in the Indenture.
5. OPTIONAL REDEMPTION. The Company may redeem the Senior Notes, in whole
or in part, prior to maturity at any time on or after May 15, 1999 at the
redemption prices (expressed in percentages of principal amount) set forth below
plus accrued interest to the date fixed for redemption, if redeemed during the
12-month period beginning on May 15 of each year starting with the year
indicated below.
A-2
<PAGE>
<TABLE>
<CAPTION>
Redemption
Year Price
- - ---------------------- -----------
<S> <C>
1999.................. 105.81%
2000.................. 103.88%
2001.................. 101.94%
2002 and thereafter... 100.00%
</TABLE>
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the date fixed for redemption to each
holder of Senior Notes to be redeemed at his or her registered address. Senior
Notes in denominations larger than $1,000 may be redeemed in part but only in
whole multiples of $1,000. In the event of a redemption of less than all of the
Senior Notes, the Senior Notes will be chosen for redemption by the Trustee by
lot or pro rata or, if required, in compliance with the requirements of the
principal national securities exchange, if any, on which the Senior Notes are
listed. On and after the redemption date interest ceases to accrue on Senior
Notes or portions of them called for redemption (unless the Company defaults in
the payment of the redemption price). If this Senior Note is redeemed subsequent
to a record date with respect to any interest payment date specified above and
on or prior to such interest payment date, then any accrued interest will be
paid to the person in whose name this Senior Note is registered at the close of
business on such record date.
7. CHANGE OF CONTROL. Upon a Change of Control, the Company shall make a
Change of Control Offer to purchase all outstanding securities at a price equal
to 101% of the aggregate principal amount of the Senior Notes, plus accrued and
unpaid interest to the date of purchase, such offer to be made as provided in
the Indenture. To accept the Change of Control Offer, the holder hereof must
comply with the terms thereof, including surrendering this Senior Note, with the
"Option of Holder to Elect Purchase" portion hereof completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent, at the address
specified in the notice of the Change of Control Offer mailed to holders as
provided in the Indenture, prior to termination of the Change of Control Offer.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Senior Notes may be registered and Senior Notes may be
exchanged as provided in the Indenture. As a condition of transfer, the
Registrar may require a holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a holder to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Senior Note or portion of a
Senior Note selected for redemption. Also, it need not exchange or register the
transfer of any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed.
9. PERSONS DEEMED OWNERS. The registered holder of a Senior Note may be
treated as its owner for all purposes.
A-3
<PAGE>
10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or
the Senior Notes may be amended with the consent of the holders of at least a
majority in principal amount of the then outstanding Senior Notes and any
existing default may be waived with the consent of the holders of a majority in
principal amount of the then outstanding Senior Notes. Without the consent of
any holder, the Indenture or the Senior Notes may be amended to: add to the
covenants of the Company for the benefit of the holders; surrender any right or
power conferred upon the Company; evidence the succession of another person to
the Company and the assumption by such successor of the covenants and
obligations of the Company thereunder and in the Senior Notes as permitted in
the Indenture; and cure any ambiguity or correct or supplement any defective
provision herein or make any changes in any other provisions of the Indenture
which the Company and the Trustee deem necessary or desirable and which in
either case will not adversely affect the interest of the holders of the Senior
Notes.
11. DEFAULTS AND REMEDIES. An Event of Default is: default for 30 days in
payment of interest on the Senior Notes; default in payment of principal of or
premium if any, on the Senior Notes; failure by the Company for 45 days after
notice to it to comply with any of its other agreements in the Indenture or the
Senior Notes (except that with respect to certain other covenants, such defaults
shall be Events of Default with such notice but without such passage of time);
certain defaults under and accelerations prior to maturity of certain
indebtedness; certain final judgments which remain undischarged; and certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the then outstanding Senior Notes may declare all the Senior Notes to be due and
payable immediately, except that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Senior Notes become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Senior Notes except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Senior Notes. Subject to certain limitations, holders of a majority in principal
amount of the then outstanding Senior Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from holders notice of
any continuing default (except a default in payment of principal or interest) if
it determines that withholding notice is in their interests. The Company must
furnish quarterly compliance certificates to the Trustee.
12. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its
Affiliates, in their individual or any other capacities, may make or continue
loans to or guaranteed by, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not Trustee.
13. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
stockholder, as such, of the Company shall have any liability for any
obligations of the Company under the Senior Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each holder by accepting a Senior Note waives and releases all such
liability. The waiver and release are part of the consideration for the Senior
Notes.
A-4
<PAGE>
14. AUTHENTICATION. This Senior Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name of a
holder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by
the entireties, JT TEN = joint tenants with right of survivorship and not as
tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act.
The Company will furnish to any holder upon written request and without
charge a copy of the Indenture. Requests may be made to: General Counsel, Rohr,
Inc., 850 Lagoon Drive, Chula Vista, California 91910.
A-5
<PAGE>
ASSIGNMENT FORM
If you the holder want to assign this Senior Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Senior Note to ________________________________
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________ agent to
transfer this Senior Note on the books of the Company. The agent may
substitute another to act for him.
Date:______________ Your signature: ---------------------------------
(Sign exactly as your name appears
on the other side of this Senior Note)
Signature Guarantee:____________________________________________________________
A-6
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Senior Note purchased by the Company pursuant to
Sections 4.10 or 4.16 of the Indenture, check the Box:
If you wish to have a portion of this Senior Note purchased by the Company
pursuant to Sections 4.10 or 4.16 of the Indenture, state the amount in
multiples of $1,000:
$_______________
Date:_____________________________
Your signature:________________________________________________
(Sign exactly as your name appears
on the other side of this Senior Note)
Signature Guarantee:___________________________________________
A-7
<PAGE>
ROHR, INC.
AND
THE BANK OF NEW YORK,
AS TRUSTEE
----------------------------
$50,000,000
7 3/4% Convertible Subordinated Notes due 2004*
----------------------------
INDENTURE
Dated as of May 15, 1994
- - ----------------------------------
*Plus an over-allotment option up to $7,500,000
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1 Definitions...................................... 1
SECTION 1.01 Definitions............................... 1
SECTION 1.02 Other Definitions......................... 11
SECTION 1.03 Incorporation by Reference of Trust
Indenture Act........................... 12
SECTION 1.04 Rules of Construction..................... 13
ARTICLE 2 The Convertible Subordinated Notes............... 13
SECTION 2.01 Form and Dating........................... 13
SECTION 2.02 Execution and Authentication.............. 13
SECTION 2.03 Registrar and Paying Agent................ 14
SECTION 2.04 Paying Agent To Hold Money in Trust....... 15
SECTION 2.05 Holder Lists.............................. 15
SECTION 2.06 Transfer and Exchange..................... 15
SECTION 2.07 Replacement Convertible Subordinated
Notes................................... 16
SECTION 2.08 Outstanding Convertible Subordinated
Notes................................... 16
SECTION 2.09 When Treasury Convertible Subordinated
Notes Disregarded....................... 16
SECTION 2.10 Temporary Convertible Subordinated
Notes................................... 17
SECTION 2.11 Cancellation.............................. 17
SECTION 2.12 Defaulted Interest........................ 17
SECTION 2.13 CUSIP Number.............................. 17
ARTICLE 3 Redemption....................................... 18
SECTION 3.01 Notices to Trustee........................ 18
SECTION 3.02 Selection of Convertible Subordinated
Notes To Be Redeemed.................... 18
SECTION 3.03 Notice of Redemption...................... 18
SECTION 3.04 Effect of Notice of Redemption............ 19
SECTION 3.05 Deposit of Redemption Price............... 20
SECTION 3.06 Convertible Subordinated Notes Redeemed
in Part................................. 20
ARTICLE 4 Covenants........................................ 20
SECTION 4.01 Payment of Convertible Subordinated
Notes................................... 20
SECTION 4.02 Commission Reports........................ 21
SECTION 4.03 Compliance Certificate.................... 21
SECTION 4.04 Maintenance of Office or Agency........... 21
SECTION 4.05 Limitation on Sale of Assets.............. 22
SECTION 4.06 Continued Existence....................... 25
SECTION 4.07 Taxes..................................... 25
SECTION 4.08 Change of Control......................... 25
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 4.09 Appointments to Fill Vacancies in
Trustee's Office......................... 27
SECTION 4.10 Further Instruments and Acts.............. 27
SECTION 4.11 Stay, Extension and Usury Laws............ 27
SECTION 4.12 Investment Company Act.................... 28
ARTICLE 5 Successors....................................... 28
SECTION 5.01 When the Company May Merge, Etc........... 28
SECTION 5.02 Successor Corporation Substituted......... 29
SECTION 5.03 Purchase Option on Change of Control...... 29
ARTICLE 6 Defaults and Remedies............................ 29
SECTION 6.01 Events of Default......................... 29
SECTION 6.02 Acceleration.............................. 31
SECTION 6.03 Other Remedies............................ 32
SECTION 6.04 Waiver of Past Defaults................... 32
SECTION 6.05 Control by Majority....................... 32
SECTION 6.06 Limitation on Suits....................... 33
SECTION 6.07 Rights of Holders To Receive Payment...... 33
SECTION 6.08 Collection Suit by Trustee................ 33
SECTION 6.09 Trustee May File Proofs of Claim.......... 34
SECTION 6.10 Priorities................................ 34
SECTION 6.11 Undertaking for Costs..................... 34
ARTICLE 7 The Trustee...................................... 35
SECTION 7.01 Duties of the Trustee..................... 35
SECTION 7.02 Rights of the Trustee..................... 36
SECTION 7.03 Individual Rights of the Trustee.......... 37
SECTION 7.04 Trustee's Disclaimer...................... 37
SECTION 7.05 Notice of Defaults........................ 37
SECTION 7.06 Reports by the Trustee to Holders......... 38
SECTION 7.07 Compensation and Indemnity................ 38
SECTION 7.08 Replacement of the Trustee................ 39
SECTION 7.09 Successor Trustee by Merger, etc.......... 40
SECTION 7.10 Eligibility, Disqualification............. 40
SECTION 7.11 Preferential Collection of Claims
Against Company......................... 40
ARTICLE 8 Satisfaction and Discharge of Indenture.......... 41
SECTION 8.01 Termination of Company's Obligations...... 41
SECTION 8.02 Application of Trust Money................ 44
SECTION 8.03 Repayment to Company...................... 44
SECTION 8.04 Reinstatement............................. 45
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 9 Amendments....................................... 45
SECTION 9.01 Without the Consent of Holders............ 45
SECTION 9.02 With the Consent of Holders............... 46
SECTION 9.03 Compliance with the Trust Indenture
Act..................................... 47
SECTION 9.04 Revocation and Effect of Consents......... 47
SECTION 9.05 Notation on or Exchange of Convertible
Subordinated Notes...................... 48
SECTION 9.06 Trustee Protected......................... 48
ARTICLE 10 General Provisions............................... 48
SECTION 10.01 Trust Indenture Act Controls.............. 48
SECTION 10.02 Notices................................... 48
SECTION 10.03 Communication by Holders With Other
Holders................................. 49
SECTION 10.04 Certificate and Opinion as to
Conditions Precedent.................... 49
SECTION 10.05 Statements Required in Certificate
or Opinion.............................. 50
SECTION 10.06 Rules by Trustee and Agents............... 50
SECTION 10.07 Legal Holidays............................ 51
SECTION 10.08 No Recourse Against Others................ 51
SECTION 10.09 Counterparts.............................. 51
SECTION 10.10 Other Provisions.......................... 51
SECTION 10.11 Governing Law............................. 52
SECTION 10.12 No Adverse Interpretation of Other
Agreements.............................. 52
SECTION 10.13 Successors................................ 52
SECTION 10.14 Severability.............................. 53
SECTION 10.15 Table of Contents, Headings, Etc.......... 53
ARTICLE 11 Subordination.................................... 53
SECTION 11.01 Agreement To Subordinate.................. 53
SECTION 11.02 Liquidation; Dissolution; Bankruptcy...... 53
SECTION 11.03 Default on Designated Senior
Indebtedness............................ 54
SECTION 11.04 Acceleration of Convertible
Subordinated Notes...................... 54
SECTION 11.05 When Distributions Must Be Paid Over...... 55
SECTION 11.06 Notice by the Company..................... 55
SECTION 11.07 Subrogation............................... 55
SECTION 11.08 Relative Rights........................... 56
SECTION 11.09 Subordination May Not Be Impaired by
the Company............................. 56
SECTION 11.10 Distribution of Notice to the
Representative.......................... 57
SECTION 11.11 Rights of the Trustee and Paying
Agent................................... 57
SECTION 11.12 No Fiduciary Duty to Holders of
Senior Indebtedness..................... 58
SECTION 11.13 Authorization to Effect Subordination..... 58
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 12 Conversion of Convertible Subordinated Notes.... 58
SECTION 12.01 Conversion Privilege..................... 58
SECTION 12.02 Manner of Exercise of Conversion
Privilege.............................. 59
SECTION 12.03 Cash Payments in Lieu of Fractional
Shares................................. 60
SECTION 12.04 Adjustment of Conversion Price........... 60
SECTION 12.05 Notice to Holders Prior to Certain
Corporate Actions...................... 66
SECTION 12.06 Reservation of Shares of Common
Stock.................................. 67
SECTION 12.07 Taxes upon Conversion.................... 67
SECTION 12.08 Covenants as to Common Stock............. 68
SECTION 12.09 Consolidation or Merger or Sale
of Assets.............................. 68
SECTION 12.10 Disclaimer of Responsibility for
Certain Matters........................ 69
SECTION 12.11 Cancellation of Converted Notes.......... 69
SECTION 12.12 Voluntary Reduction...................... 70
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture Act Section
---------------------------
Indenture Section
-----------------
310(a)(1)..................................................................7.10
(a)(2)...................................................................7.11
(a)(3)...................................................................N.A.
(a)(4)...................................................................N.A.
(b).........................................................7.08, 7.10, 10.02
(c)......................................................................N.A.
311(a).....................................................................7.11
(b)......................................................................7.11
(c)......................................................................N.A.
312(a).....................................................................2.05
(b).....................................................................10.03
(c).....................................................................10.03
313(a).....................................................................7.06
(b)(1)...................................................................N.A.
(b)(2)...................................................................7.06
(c)...............................................................7.06, 10.02
(d)......................................................................7.06
314(a)..............................................................4.01, 10.02
(b)......................................................................N.A.
(c)(1)..................................................................10.04
(c)(2)..................................................................10.04
(c)(3)...................................................................N.A.
(d)......................................................................N.A.
(e).....................................................................10.05
(f)......................................................................N.A.
315(a)..................................................................7.01(b)
(b)...............................................................7.05, 10.02
(c)...................................................................7.01(a)
(d)...................................................................7.01(c)
(e)......................................................................6.11
316(a)(last sentence)......................................................2.09
(a)(1)(A)................................................................6.05
(a)(2)(B)................................................................6.04
v
<PAGE>
(a)(2)...................................................................N.A.
(b)......................................................................6.02
317(a)(1)..................................................................6.08
(a)(2)...................................................................6.09
(b)......................................................................2.04
vi
<PAGE>
THIS INDENTURE, dated as of May 15, 1994, is between Rohr, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, a New York State banking
corporation ("Trustee"). The Company has duly authorized the creation of its
7 3/4% Convertible Subordinated Notes due 2004 (the "Convertible Subordinated
Notes") and to provide therefor the Company has duly authorized the execution
and delivery of this Indenture. Each party agrees as follows for the benefit of
the other party and for the equal and ratable benefit of the holders from time
to time of the Convertible Subordinated Notes.
ARTICLE 1
Definitions
SECTION 1.01 Definitions.
-----------
"Acquired Indebtedness" of any specified Person means Indebtedness of any
other Person and its subsidiaries existing at the time such other Person merged
with or into or became a subsidiary of such specified Person or assumed by the
specified Person in connection with the acquisition of assets from such other
Person including, without limitation, Indebtedness of such other Person and its
subsidiaries incurred in connection with or in anticipation of (a) such other
Person and its subsidiaries being merged with or into or becoming a subsidiary
of such specified Person or (b) such acquisition by the specified Person.
"Affiliate" means, when used with reference to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, the referent Person, as the case may be, or any Person who
beneficially owns (within the meaning of Rule 13d-3 and Rule 13d-5 under the
Exchange Act), directly or indirectly, 10% or more of the equity interests of
the referent Person or warrants, options or other rights to acquire or hold more
than 10% of any class of equity interests of the referent Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct or cause the direction of management or
policies of the referent Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative of the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or co-
registrar.
"Asset Sale" means any sale, lease, transfer, exchange or other disposition
by the Company or any subsidiary (or series of related sales, leases, transfers,
exchanges or dispositions) in excess of $1,000,000, including, without
limitation, dispositions pursuant to merger, consolidation or sale and leaseback
transactions, of (a) shares of Capital Stock of a subsidiary of the Company (pro
rated to the extent of the Company's interest therein), (b) all or substantially
all of the properties and assets of any division or line of business of the
Company or any subsidiary of the Company or (c) any other property or assets of
the
1
<PAGE>
Company (pro rated to the extent of the Company's interest therein) or of any
subsidiary of the Company (pro rated to the extent of the Company's interest
therein) outside the ordinary course of business of the Company or such
subsidiary (each referred to for purposes of this definition as a "disposition")
by the Company or by any of its subsidiaries (other than (i) dispositions by the
Company to a wholly owned subsidiary of the Company or by a subsidiary of the
Company to the Company or to a wholly owned subsidiary of the Company, (ii)
sales or other dispositions of inventory in the ordinary course of business,
(iii) any disposition of properties or assets that is consummated in accordance
with the provisions of Section 5.01, (iv) any disposition of any account
receivable pursuant to the Pooling and Servicing Agreement, (v) dispositions by
the Company or any subsidiary of the Company of the business jet related product
line, the overhaul and repair business as conducted by Rohr Aero Services, Inc.
and Rohr Aero Services Europe, respectively, on the Issue Date, the Hagerstown,
Maryland plant and the Auburn, Washington plant, in each case, including related
assets, (vi) the disposition by the Company or any subsidiary of the Company of
interests owned on the Issue Date in two trusts which own an Airbus A300
aircraft and a McDonnell Douglas DC10 aircraft, respectively and (vii) the
disposition of Building 107 (at the Company's facility in Chula Vista,
California) to (A) any pension plan of the Company or (B) to any other Person if
the net proceeds of such disposition are delivered to any pension plan referred
to in clause (A) of this definition, in either case resulting in the full
satisfaction (or in case the full amount of such net proceeds are so delivered
and shall be insufficient to effect such full satisfaction, the partial
satisfaction) of the Company's funding liabilities with respect to any such
pension plan or plans).
"Bank Agent" means, at any time, the then-acting agent under the Revolving
Credit Agreement, which shall initially be Citicorp USA, Inc.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock, including each
class of Common Stock or Preferred Stock of such Person, whether outstanding on
the Issue Date or issued after the Issue Date, and any and all rights, warrants
or options exchangeable for or convertible into such capital stock (but
excluding any debt security that is exchangeable for or convertible into such
capital stock).
"Capitalized Lease Obligation" means any obligation under a lease that is
required to be classified and accounted for as a capital lease obligation under
GAAP and, for purposes of this Indenture, the amount of such obligations at any
date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP. The Stated Maturity of such obligation
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without penalty.
2
<PAGE>
"Cash Equivalents" means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"), (c) commercial paper maturing no more than
one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's, (d)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any commercial bank organized under
the laws of the United States of America or any state thereof or the District of
Columbia or any United States branch of a foreign bank having, at the date of
acquisition thereof, combined capital and surplus of not less than $250 million,
(e) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (a) above entered into
with any bank meeting the qualifications specified in clause (d) above and (f)
investments in money market funds which invest substantially all their assets in
securities of the types described in clauses (a) through (e) above.
"Change of Control" means the occurrence of one or more of the following
events (whether or not approved by the Board of Directors of the Company): (a)
an event or series of events by which any Person or other entity or group of
Persons or other entities acting in concert as determined in accordance with
Section 13(d) of the Exchange Act, whether or not applicable (a "Group of
Persons") shall, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases, merger or otherwise (i) be or become,
directly or indirectly, the beneficial owner (within the meaning of Rule 13d-3
and Rule 13d-5 under the Exchange Act, whether or not applicable) of 50% or more
of the combined voting power of the then outstanding Voting Stock of the Company
or (ii) have the ability to elect, directly or indirectly, a majority of the
members of the Board of Directors of the Company or other equivalent governing
body thereof, (b) the shareholders of the Company shall approve any Plan of
Liquidation of the Company (whether or not otherwise in compliance with the
provisions of this Indenture), (c) individuals who at the beginning of any
period of two consecutive calendar years constituted the Board of Directors of
the Company (together with any new directors whose election or appointment by
the Board of Directors of the Company or whose nomination for election by the
Company's shareholders was approved by a vote of at least a majority of the
members of the Board of Directors of the Company then still in office who either
were members of the Board of Directors of the Company at the beginning of such
period or whose election, appointment or nomination for election was previously
so approved) cease for any reason to constitute a majority of the members of the
Board of Directors of the Company then in office, or (d) the direct or indirect
sale, lease, exchange or other transfer, in one transaction or a series of
related transactions, of all or substantially all of the property or assets of
the Company to any Person or Group of Persons (whether or not otherwise in
compliance with the provisions of this Indenture).
3
<PAGE>
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of any Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such above until a successor replaces it
in accordance with Article 5 and thereafter means the successor.
"Consolidated Net Worth" of a Person at any date means the Consolidated
Stockholders' Equity of such Person less (a) the amount of any gain resulting,
directly or indirectly, from the extinguishment, retirement or repurchase of any
Indebtedness of such Person or of any of its subsidiaries, (b) any revaluation
or other write-ups subsequent to the Issue Date in the book value of any asset
owned by such Person or a Consolidated Subsidiary and (c) any amounts
attributable to the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of Capital Stock of such Person or of
any of its subsidiaries. Notwithstanding any of the foregoing, net deferred
income tax assets recorded in accordance with Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes ("SFAS 109"), shall be
calculated without regard to any valuation allowance with respect to such net
deferred tax asset recorded by the Company in accordance with SFAS 109.
"Consolidated Stockholders' Equity" as of any date means, with respect to
any Person, the amount by which the assets of such Person and of its
subsidiaries on a consolidated basis exceed (a) the total liabilities of such
Person and of its subsidiaries on a consolidated basis, plus (b) any redeemable
Preferred Stock of any such Person or any redeemable Preferred Stock of any
subsidiary of such issued to any Person other than to such Person or to a wholly
owned subsidiary of such Person, in each case determined in accordance with
GAAP.
"Consolidated Subsidiary" of any Person means a subsidiary which for
financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such Person as a consolidated subsidiary.
"Convertible Subordinated Notes" means the Convertible Subordinated Notes
issued under this Indenture.
"Conversion Agent" means any Person authorized by the Company to accept
Convertible Subordinated Notes for conversion pursuant to this indenture and
deliver shares of Common Stock (or other securities or property) deliverable
upon such conversion.
"Conversion Notice" has the meaning specified in Section 12.02.
4
<PAGE>
"Conversion Price" means the initial conversion price specified in the form
of Note in Section 17 of such form, as adjusted in accordance with the
provisions of Article 12.
"Daily Market Price" when used with reference to the Common Stock or
another security means the price of a share of Common Stock or such other
security on any date, determined (a) on the basis of the last reported sales
price of the Common Stock or such other security for such date (i) as reported
on the composite tape, or similar reporting system, for issues listed on the New
York Stock Exchange (or if the Common Stock or such other security has not been
listed on that exchange, for issues listed on such other national securities
exchange upon which the Common Stock or such other securities are listed as may
be designated by the Board of Directors from time to time for the purposes
hereof) or (ii) if the Common Stock or such other security is not listed or
admitted to trading on any national securities exchange, as reported on the
National Market System of the National Association of Securities Dealers
Automated Quotation System ("Nasdaq") or (b) if there is no such reported sale
on the date in question, on the basis of the average of the closing bid and
asked quotations regular way so reported for such date or (c) if the Common
Stock or security is not listed on any national securities exchange or on the
Nasdaq National Market System, on the basis of the average of the high bid and
low asked quotations regular way on the date in question in the over-the-counter
market as reported by Nasdaq, or if not so quoted, as reported by National
Quotation Bureau, Incorporated or a similar organization.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default (as defined in Section 6.01).
"Designated Senior Indebtedness" means Senior Indebtedness of the Company
now or hereafter outstanding under (i) the Revolving Credit Agreement; (ii) the
Company's 9.35% Senior Notes due 2000 and 9.33% Senior Notes due 2002; (iii) the
Senior Notes; and (iv) any other Senior Indebtedness issued in one or more
substantially concurrent issuances on substantially similar terms, the aggregate
original principal amount of which is $50 million or more.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" or "fair value" means, with respect to any asset or
property or Capital Stock, the price which could be negotiated in an arm's-
length, free market transaction, for cash, between an informed and willing
seller and an informed and willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair Market Value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a written resolution of said Board
of Directors (certified by the Secretary or Assistant Secretary of the Company)
delivered to the Trustee, provided that if the aggregate non-cash consideration
to be received by the Company or any of its subsidiaries from any Asset Sale
shall exceed $10,000,000, then Fair Market Value shall be determined by an
Independent Financial Advisor.
5
<PAGE>
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or other obligation on the balance sheet of such Person (and
"incurrence," "incurred," "incurable" and "incurring" shall have meanings
correlative to the foregoing), provided that the accrual of interest (whether
such interest is payable in cash or in kind) and the accretion of original issue
discount shall not be deemed an incurrence of Indebtedness, provided, further,
that (a) any Indebtedness of a Person existing at the time such Person becomes
(after the Issue Date) a subsidiary (whether by merger, consolidation,
acquisition or otherwise) of the Company shall be deemed to be incurred by such
subsidiary at the time it becomes a subsidiary of the Company and (b) any
amendment, modification or waiver of any document pursuant to which Indebtedness
was previously incurred shall be deemed to be an incurrence of Indebtedness
unless such amendment, modification or waiver does not (i) increase the
principal or premium thereof or interest rate thereon (including by way of
original issue discount), (ii) change to an earlier date the Stated Maturity
thereof or the date of any scheduled or required principal payment thereon or
the time or circumstances under which such Indebtedness may or shall be
redeemed, (iii) if such Indebtedness is subordinated to the Convertible
Subordinated Notes, modify or affect, in any manner adverse to the holders of
the Convertible Subordinated Notes, such subordination or (iv) if the Company
is the obligor thereon, provide that a subsidiary of the Company not already an
obligor thereon shall be an obligor thereon.
"Indebtedness" means, with respect to any Person, at any date, any of the
following, without duplication, (a) any liability, contingent or otherwise, of
such Person (i) for borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (ii)
evidenced by a note, bond, debenture or similar instrument, (iii) for the
payment of money relating to a Capitalized Lease Obligation or (iv) with respect
to an obligation (whether issued or assumed) relating to the deferred purchase
price of property or services but excluding advances, deposits, partial and
progress payments, unpaid wages and related employee obligations, trade accounts
payable and accrued liabilities in each case arising in the ordinary course of
business that are not overdue by 180 days or more or are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted;
(b) all conditional sale obligations and all obligations under any title
retention agreement (even if the rights and remedies of the seller under such
agreement in the event of default are limited to repossession or sale of such
property); (c) reimbursement obligations of such Person with respect to letters
of credit and
6
<PAGE>
all obligations of such Person in respect of any banker's acceptance or similar
credit transaction entered into in the ordinary course of business; (d) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
any asset or property (including, without limitation, leasehold interests and
any other tangible or intangible property) of such Person, whether or not such
Indebtedness is assumed by such Person or is not otherwise such Person's legal
liability, provided that if the obligations so secured have not been assumed in
full by such Person or are otherwise not such Person's legal liability in full,
the amount of such Indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of such Indebtedness secured by such Lien or
the Fair Market Value of the assets or property securing such Lien; and (e) all
Indebtedness of others guaranteed (including all dividends of other Persons the
payment of which is guaranteed), directly or indirectly, by such Person or that
is otherwise its legal liability or which such Person has agreed to purchase or
repurchase or in respect of which such Person has agreed contingently to supply
or advance funds.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable and good faith judgment of the Board of Directors of the Company,
qualified to perform the task for which such firm has been engaged and
disinterested and independent with respect to the Company and its Affiliates.
"Interest Payment Date" means May 15 and November 15 of each year.
"Issue Date" means the date on which the Convertible Subordinated Notes are
originally issued under this Indenture.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, including any sale and leaseback transaction, any option or other
similar agreement to sell, in each case securing obligations of such Person and
any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statute or statutes) of any jurisdiction other
than to reflect ownership by a third party of property leased to the referent
Person or any of its subsidiaries under a lease that is not in the nature of a
conditional sale or title retention agreement).
"Material Subsidiary" means, at any date of determination, any subsidiary
of the Company that, together with its subsidiaries, (i) for the most recent
fiscal year of the Company accounted for more than 5% of the consolidated
revenues of the Company or (ii) as of the end of such fiscal year, was the owner
of more than 5% of the consolidated assets of the Company, all as set forth on
the most recently available consolidated financial
7
<PAGE>
statements of the Company and its Consolidated Subsidiaries for such fiscal year
prepared in conformity with generally accepted accounting principles as then in
effect.
"Maturity Date" means May 15, 2004.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds of
such Asset Sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or Cash Equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any subsidiary of the Company) and proceeds
from the conversion of other property received when converted to cash or Cash
Equivalents, net of (a) reasonable third-party brokerage commissions and other
reasonable third-party fees and expenses (including fees and expenses of counsel
and investment bankers) related to such Asset Sale, (b) provisions for all
taxes as a result of such Asset Sale computed on a consolidated basis reflecting
consolidated results of operations of the Company and its subsidiaries, taken as
a whole, (c) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that was incurred in accordance with
this Indenture and that either (i) is secured by a Lien incurred in accordance
with this Indenture on the property or assets sold or (ii) is required to be
paid as a result of such sale in each case to the extent actually repaid in cash
and (d) appropriate amounts to be provided by the Company or any subsidiary of
the Company as a reserve against liabilities associated with such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
determined in conformity with generally accepted accounting principles as then
in effect. For purposes of this definition and Section 4.05 "cash" means U.S.
dollars or such money as is freely and readily convertible into U.S. dollars.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Chief Accounting Officer, any
Executive Vice President, Senior Vice President or Vice President, the
Treasurer, any other executive officer, the Secretary and any Assistant
Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the principal executive officer, principal financial officer, the
treasurer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who may be
an employee of or counsel to the Company or the Trustee except to the extent
otherwise indicated in this Indenture.
8
<PAGE>
"Permitted Program Investment" means an investment in design, engineering,
tooling or similar costs related to a program undertaken by the Company in the
ordinary course of its business.
"Person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.
"Plan of Liquidation" means a plan (including by operation of law) that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously) (i) the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company otherwise than as an entirety or substantially as an entirety and
(ii) the distribution of all or substantially all of the proceeds of such sale,
lease, conveyance or other disposition and all or substantially all of the
remaining assets of the Company to holders of capital stock of the Company.
"Pooling and Servicing Agreement" means the Pooling and Servicing Agreement
dated as of December 23, 1992, among the Company, the Company's wholly owned
subsidiary RI Receivables, Inc. and Bankers Trust Company, as trustee on behalf
of the Certificateholders (as defined therein), and related documentation and
any extension, renewal, modification, restatement or replacement thereof (in
whole or in part), as the same may be amended, supplemented or otherwise
modified from time to time; provided, however, the investors in any such
receivables program shall not obtain an interest in receivables sold under such
program which exceeds $70 million in aggregate principal amount at any one time.
"Preferred Stock" means the Capital Stock of any Person (other than the
Common Stock of such Person) of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding-up of such
Person, to shares of Capital Stock of any other class of such Person.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act.
"Prospectus" means the Company's final prospectus dated May 12, 1994 in
respect of the public offering of the Convertible Subordinated Notes.
"Qualified Capital Stock" means, with respect to any Person, any Capital
Stock of such Person that is not Disqualified Capital Stock or convertible into
or exchangeable or exercisable for Disqualified Capital Stock and includes
Rights and other securities issuable under the Company's Amended and Restated
Rights Agreement, dated as of April 6, 1990, between the Company and The First
National Bank of Chicago, as Rights Agent, as such agreement may be amended or
supplemented from time to time.
9
<PAGE>
"redemption date" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the date fixed by the Company for such
redemption pursuant to this Indenture and the Convertible Subordinated Notes.
"redemption price" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the price fixed for such redemption
pursuant to this Indenture and the Convertible Subordinated Notes.
"Regular Record Date" means the May 1 or November 1 immediately preceding
each interest payment date.
"Representative" means the Bank Agent and each trustee, agent or other
representative of the holders of any class of Senior Indebtedness (or, with
respect to any class of Senior Indebtedness which does not have any such
trustee, agent or other representative, any holder of such Senior Indebtedness
acting with the consent of the required lenders necessary to bind such class of
Senior Indebtedness) who has been so identified in writing to the Trustee and
the Company provided, however that solely for the purposes of 11.03 hereof, (i)
in the case of the Company's 9.33% Senior Notes, holders, acting as a group, who
represent in writing to the Trustee and the Company that they are owners of
record of at least 66-2/3% in interest of the Company's outstanding 9.33% Senior
Notes, or in the case of the 9.35% Senior Notes, holders, acting as a group, who
represent in writing to the Trustee and the Company that they are the owners of
record of at least 66-2/3% in interest of the Company's outstanding 9.35% Senior
Notes.
"Revolving Credit Agreement" means the Credit Agreement dated as of April
26, 1989, among the Company, the lenders party thereto, and the Bank Agent, and
any agreement governing Indebtedness incurred to refund or refinance the
borrowings, letters of credit and commitments then outstanding or permitted to
be outstanding under the Revolving Credit Agreement, in each case together with
the related notes and any other instruments and agreements executed from time to
time in connection therewith, and in each case as amended, modified,
supplemented, extended, renewed, restated, refunded, replaced or refinanced (in
whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Notes" means the 11-5/8% Senior Notes due 2003 of the Company
offered concurrently with the Convertible Subordinated Notes.
"Senior Note Indenture" means that certain indenture by and between the
Company and IBJ Schroder Bank & Trust Company, as Trustee, governing the Senior
Notes as amended or supplemented from time to time.
10
<PAGE>
"Senior Indebtedness" means all present or future Indebtedness of the
Company described in clauses (a)(i), (a)(ii), (a)(iv) and (c) of the definition
of Indebtedness, created, incurred, assumed or, except to the extent described
below, guaranteed (to the extent of the guarantee) by the Company (and all
renewals, modifications, extensions or refundings thereof), together with all
other obligations owing in connection therewith, including principal, interest
(including interest accruing on any such indebtedness which is Designated Senior
Indebtedness after the filing of a petition by or against the Company under any
bankruptcy law, whether or not the claim for such interest is allowed as a claim
after such filing in any proceeding under such bankruptcy law), premium, if any,
fees, costs, expenses and indemnities unless the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed provides that such
Indebtedness is not senior or superior in right of payment to the Convertible
Subordinated Notes. Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include (a) any Indebtedness of the Company owing
to any of its subsidiaries, (b) Capitalized Lease Obligations, (c) Indebtedness
or other obligations in respect of the Pooling and Servicing Agreement, (d) the
Company's 9.25% Subordinated Debentures due 2017 and its 7% Convertible
Subordinated Debentures due 2012 and (e) with respect to an obligation relating
to the deferred purchase price of property or services, any advances, deposits,
partial or progress payments, payables, unpaid wages and related employee
obligations, trade accounts and accrued liabilities.
"Stated Maturity" means, with respect to any security or Indebtedness, the
date specified therein as the fixed date on which any principal of such security
or Indebtedness is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
thereof at the option of the holder thereof).
A "subsidiary" of any Person means (a) a corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person or (b) any other Person (other than a corporation)
in which such Person, one or more subsidiaries of such Person or such Person and
one or more subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, have (i) at least a majority ownership interest or (ii)
the power to elect or direct the election of the directors or other governing
body of such Person.
"Time of Determination" means the time and date of the earlier of (i) the
record date or determining stockholders entitled to receive their rights,
warrants or distributions referred to in Section 12.04(b) and (c), or (ii) the
commencement of "ex-dividend" trading on the exchange or market referred to in
the definition of the term "Daily Market Price."
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S) (S) 77aaa-
77-bbbb) as in effect on the date of execution of this Indenture, except as
provided in Section 9.03.
11
<PAGE>
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
"Trust Officer" means the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporation trust matters.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock of such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
SECTION 1.02 Other Definitions.
-----------------
<TABLE>
<CAPTION>
Defined in
Section
<S> <C>
"Asset Sale Offer"........................... 4.05
"Asset Sale Offer Amount".................... 4.05
"Asset Sale Offer Payment Date".............. 4.05
"Asset Sale Offer Termination Date".......... 4.05
"Asset Sale Offer Trigger Date".............. 4.05
"Bankruptcy Law"............................. 6.01
"business day"............................... 10.07
"Change of Control Date"..................... 4.08
"Change of Control Offer".................... 4.08
"Change of Control Offer Payment Date"....... 4.08
"Change of Control Offer Termination Date"... 4.08
"Custodian".................................. 6.01
"Event of Default"........................... 6.01
"Expiration Time"............................ 12.04
"Legal Holiday".............................. 10.07
"non-electing share"......................... 12.09
"Other Subordinated Notes"................... 11.02
"Paying Agent"............................... 2.03
"Purchased Shares"........................... 12.04
"Registrar".................................. 2.03
"United States Government Obligations"....... 8.01
</TABLE>
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
12
<PAGE>
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Commission;
"indenture securities" means the Convertible Subordinated Notes;
"indenture security holder" means a holder of a Convertible
Subordinated Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Convertible Subordinated Notes means the Company or
any other obligor on the Convertible Subordinated Notes.
All other terms in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) the male, female and neuter genders include one another.
ARTICLE 2
The Convertible Subordinated Notes
SECTION 2.01 Form and Dating.
---------------
The Convertible Subordinated Notes and the Trustee's certificate of
authentication relating thereto shall be substantially in the form set forth in
Exhibit A, which is part of this
13
<PAGE>
Indenture, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture. The Convertible
Subordinated Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage. The Company shall approve the form of the
Convertible Subordinated Notes and any notation, legend or endorsement on them.
Each Convertible Subordinated Note shall be dated the date of its
authentication.
The terms and provisions contained in the Convertible Subordinated Notes
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
SECTION 2.02 Execution and Authentication.
----------------------------
Two Officers shall sign the Convertible Subordinated Notes for the Company
by manual or facsimile signature. The Company's seal shall be reproduced on the
Convertible Subordinated Notes.
If an Officer whose signature is on a Convertible Subordinated Note no
longer holds that office at the time the Convertible Subordinated Note is
authenticated, the Convertible Subordinated Note shall nevertheless be valid.
A Convertible Subordinated Note shall not be valid until authenticated by
the manual signature of the Trustee. The signature shall be conclusive evidence
that the Convertible Subordinated Note has been authenticated under this
Indenture.
Upon a written order of the Company signed by an Officer of the Company,
the Trustee shall authenticate Convertible Subordinated Notes for original issue
up to an aggregate principal amount of $50,000,000 (plus up to $7,500,000
aggregate principal amount of Convertible Subordinated Notes that may be sold by
the Company pursuant to the over-allotment option granted pursuant to the
Underwriting Agreement, dated as of May 12, 1994, between the Company and
Salomon Brothers Inc). The aggregate principal amount of Convertible
Subordinated Notes outstanding at any time may not exceed that amount except as
provided in Section 2.07.
The Convertible Subordinated Notes shall be issuable only in registered
form without coupons and only in denominations of $1,000 or any integral
multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Convertible Subordinated Notes. An authenticating agent may
authenticate Convertible Subordinated Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has same right as an Agent
to deal with the Company or an Affiliate of the Company.
14
<PAGE>
SECTION 2.03 Registrar and Paying Agent.
--------------------------
The Company shall maintain or cause to be maintained in the Borough of
Manhattan, New York, New York (the "New York Office"), and in such other
locations as it shall determine, an office or agency: (i) where securities may
be presented for registration of transfer or for exchange ("Registrar"); (ii)
where Convertible Subordinated Notes may be presented for payment ("Paying
Agent"); and (iii) where notices and demand to or upon the Company in respect of
Convertible Subordinated Notes and this Indenture may be served by the holders
of the Convertible Subordinated Notes. The Registrar shall keep a register of
the Convertible Subordinated Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent. The
Company may change any Paying Agent, Registrar or co-registrar without prior
notice. The Company shall notify the Trustee of the name and address of any
Agent not a party to this Indenture and shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to this
Indenture. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company or any of its subsidiaries may act as Paying
Agent, Registrar or co-registrar, except that for purposes of Articles 3 and 8
and Sections 4.05 and 4.08, neither the Company nor any of its subsidiaries
shall act as Paying Agent. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such, and the
Trustee shall initially act as such. The Trustee shall cause the New York Office
to be maintained as long as it acts as Registrar or Paying Agent.
SECTION 2.04 Paying Agent To Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent (other than the Trustee, who
hereby so agrees), to agree in writing that the Paying Agent will hold in trust
for the benefit of holders of the Convertible Subordinated Notes or the Trustee
all money held by the Paying Agent for the payment of principal or interest on
the Convertible Subordinated Notes, and will notify the Trustee of any default
by the Company in respect of making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a subsidiary of the Company) shall have no further
liability for the money. If the Company or a subsidiary of the Company acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the holders of the Convertible Subordinated Notes all money held by
it as Paying Agent.
SECTION 2.05 Holder Lists.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
holders of Convertible Subordinated Notes. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least seven days before each
interest payment date and at such other times as the Trustee may request
15
<PAGE>
in writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of holders of Convertible Subordinated Notes.
SECTION 2.06 Transfer and Exchange.
---------------------
Where Convertible Subordinated Notes are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Convertible Subordinated Notes for other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Company shall issue and the Trustee shall
authenticate Convertible Subordinated Notes at the Registrar's request. No
service charge shall be made for any registration of transfer or exchange
(except as otherwise expressly permitted herein), but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable upon exchanges pursuant to Sections 2.10, 3.06 or 9.05.
The Company shall not be required (i) to issue, register the transfer of or
exchange Convertible Subordinated Notes during a period beginning at the opening
of business 15 days before the day of any selection of Convertible Subordinated
Notes for redemption under Section 3.02 and ending at the close of business on
the day of selection, or (ii) to register the transfer or exchange of any
Convertible Subordinated Note so selected for redemption in whole or in part,
except the unredeemed portion of any Convertible Subordinated Note being
redeemed in part.
SECTION 2.07 Replacement Convertible Subordinated Notes.
------------------------------------------
If the holder of a Convertible Subordinated Note claims that the
Convertible Subordinated Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Convertible
Subordinated Note if the Trustee's requirements are met. If required by the
Trustee or the Company as a condition of receiving a replacement Convertible
Subordinated Note, the holder of a Convertible Subordinated Note must provide an
indemnity bond sufficient, in the judgment of both the Company and the Trustee,
to fully protect the Company, the Trustee, any Agent and any authenticating
agent from any loss which any of them may suffer if the Convertible Subordinated
Note is replaced. The Company and the Trustee may charge the relevant holder for
their expenses in replacing any Convertible Subordinated Note.
Every replacement Convertible Subordinated Note is an additional obligation
of the Company.
SECTION 2.08 Outstanding Convertible Subordinated Notes.
------------------------------------------
The Convertible Subordinated Notes outstanding at any time are all the
Convertible Subordinated Notes properly authenticated by the Trustee except for
those cancelled by the Trustee, those delivered to it for cancellation, and
those described in this Section as not outstanding.
16
<PAGE>
If a Convertible Subordinated Note is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Convertible Subordinated Note is held by a bona fide
purchaser.
If Convertible Subordinated Notes are considered paid under Section 4.01,
they cease to be outstanding and interest on them ceases to accrue.
A Convertible Subordinated Note does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Convertible Subordinated
Note.
SECTION 2.09 When Treasury Convertible Subordinated Notes Disregarded.
--------------------------------------------------------
In determining whether the holders of the required principal amount of
Convertible Subordinated Notes have concurred in any direction, waiver or
consent, Convertible Subordinated Notes owned by the Company or an Affiliate of
the Company shall be considered as though they are not outstanding except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Convertible Subordinated
Notes which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10 Temporary Convertible Subordinated Notes.
----------------------------------------
Until definitive Convertible Subordinated Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Convertible
Subordinated Notes. Temporary Convertible Subordinated Notes shall be
substantially in the form of definitive Convertible Subordinated Notes but may
have variations that the Company considers appropriate for temporary Convertible
Subordinated Notes. If temporary Convertible Subordinated Notes are issued, the
Company will cause definitive Convertible Subordinated Notes to be prepared
without unreasonable delay. After the preparation of definitive Convertible
Subordinated Notes, the temporary Convertible Subordinated Notes shall be
exchangeable for definitive Convertible Subordinated Notes upon surrender of the
temporary Convertible Subordinated Notes at any office or agency of the Company
designated pursuant to Section 2.03 without charge to the holder of the
Convertible Subordinated Note. Upon surrender for cancellation of any one or
more temporary Convertible Subordinated Notes the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Convertible Subordinated Notes of authorized denominations.
Until so exchanged, the temporary Convertible Subordinated Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Convertible Subordinated Notes.
SECTION 2.11 Cancellation.
------------
The Company at any time may deliver Convertible Subordinated Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Convertible Subordinated Notes surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel
Convertible Subordinated Notes surrendered for registration
17
<PAGE>
of transfer, exchange, payment, replacement or cancellation and shall dispose of
cancelled Convertible Subordinated Notes as the Company directs, provided that
the Trustee shall not be required to destroy such Convertible Subordinated
Notes. The Company may not issue new Convertible Subordinated Notes to replace
Convertible Subordinated Notes that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.12 Defaulted Interest.
------------------
If the Company fails to make a payment of interest on the Convertible
Subordinated Notes, it shall pay such defaulted interest plus, to the extent
lawful, any interest payable on the defaulted interest. It may pay such
defaulted interest, plus any such interest payable on it, to the persons who are
holders of Convertible Subordinated Notes on a subsequent special record date.
The Company shall fix any such record date and payment date. At least 15 days
before any such record date, the Company shall mail to holders of the
Convertible Subordinated Notes a notice that states the record date, payment
date and amount of such interest to be paid.
SECTION 2.13 CUSIP Number.
------------
The Company in issuing the Convertible Subordinated Notes may use a "CUSIP"
number, and if so, such CUSIP number shall be included in notices of redemption
or exchange as a convenience to holders of Convertible Subordinated Notes;
provided, however, that any such notice may state that no representation is made
as to the correctness or accuracy of the CUSIP number printed in the notice or
on the Convertible Subordinated Notes and that reliance may be placed only on
the other identification numbers printed on the Convertible Subordinated Notes.
The Company will promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
Redemption
SECTION 3.01 Notices to Trustee.
------------------
If the Company elects to redeem Convertible Subordinated Notes pursuant to
the optional redemption provisions of paragraph 5 of the Convertible
Subordinated Notes, it shall notify the Trustee of the redemption date and the
principal amount of Convertible Subordinated Notes to be redeemed. The
redemption price shall be the amount determined pursuant to paragraph 5 of the
Convertible Subordinated Notes.
The Company shall give each notice provided for in this Section at least 50
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee).
18
<PAGE>
SECTION 3.02 Selection of Convertible Subordinated Notes To Be Redeemed.
----------------------------------------------------------
If less than all the Convertible Subordinated Notes are to be redeemed, the
Trustee shall select the Convertible Subordinated Notes to be redeemed by lot or
pro rata or by a method that complies with the requirements of any exchange on
which the Convertible Subordinated Notes are listed that the Trustee considers
fair and appropriate. The Trustee shall make the selection not more than 75 days
and not less than 30 days before the redemption date from Convertible
Subordinated Notes outstanding not previously called for redemption. The Trustee
may select for redemption portions of the principal of Convertible Subordinated
Notes that have a denomination larger than $1,000. Convertible Subordinated
Notes and portions thereof will be redeemed in the amount of $1,000 or integral
multiples of $1,000. Provisions of this Indenture that apply to Convertible
Subordinated Notes called for redemption also apply to portions of Convertible
Subordinated Notes called for redemption. The Trustee will make the selection of
Convertible Subordinated Notes outstanding and not previously called for
redemption. The Trustee shall notify the Company promptly of the Convertible
Subordinated Notes or portions of Convertible Subordinated Notes to be called
for redemption.
SECTION 3.03 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption to each holder whose Convertible
Subordinated Notes are to be redeemed.
The notice shall identify the Convertible Subordinated Notes to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Convertible Subordinated Note is being redeemed in part,
the portion of the principal amount of such Convertible Subordinated Note
to be redeemed and that, after the redemption date, upon surrender of such
Convertible Subordinated Note, a new Convertible Subordinated Note or
Convertible Subordinated Notes in principal amount equal to the unredeemed
portion will be issued;
(4) that Convertible Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) that interest on Convertible Subordinated Notes called for
redemption and for which funds have been set apart for payment, ceases to
accrue on and after the redemption date (unless the Company defaults in the
payment of the redemption price);
19
<PAGE>
(6) the paragraph of the Convertible Subordinated Notes pursuant to
which the Convertible Subordinated Notes are being redeemed;
(7) the aggregate principal amount of Convertible Subordinated Notes
that are being redeemed;
(8) the CUSIP number of the Convertible Subordinated Notes (provided
that the disclaimer permitted by Section 2.13 may be made);
(9) the name and address of the Paying Agent; and
(10) that Convertible Subordinated Notes called for redemption may be
converted at any time prior to the close of business on the redemption date
and if not converted prior to the close of business on such date, the right
of conversion will be lost.
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at its expense.
SECTION 3.04 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Convertible Subordinated Notes called
for redemption become due and payable on the redemption date at the price set
forth in the Convertible Subordinated Note.
SECTION 3.05 Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money in immediately available funds sufficient
to pay the redemption price of and accrued interest on all Convertible
Subordinated Notes to be redeemed on that date. The Trustee or the Paying Agent
shall return to the Company any money not required for that purpose.
SECTION 3.06 Convertible Subordinated Notes Redeemed in Part.
-----------------------------------------------
Upon surrender of a Convertible Subordinated Note that is redeemed in part,
the Company shall issue and the Trustee shall authenticate for the holder of a
Convertible Subordinated Note at the expense of the Company a new Convertible
Subordinated Note equal in principal amount to the unredeemed portion of the
Convertible Subordinated Note surrendered.
ARTICLE 4
Covenants
20
<PAGE>
SECTION 4.01 Payment of Convertible Subordinated Notes.
-----------------------------------------
The Company shall pay the principal of and interest on the Convertible
Subordinated Notes on the dates and in the manner provided in the Convertible
Subordinated Notes. Principal and interest shall be considered paid on the date
due if the Trustee or Paying Agent (other than the Company or a subsidiary of
the Company) holds as of 1:00 P.M. Eastern Time on that date immediately
available funds designated for and sufficient to pay all principal and interest
then due, provided, however, that money held by the Agent for the benefit of
holders of Senior Indebtedness pursuant to the provisions of Article 11 hereof
or the payment of which to the holders of the Convertible Subordinated Notes is
prohibited by Article 11 shall not be considered to be designated for the
payment of any principle of or interest on the Convertible Subordinated Notes
within the meaning of this Section 4.01.
To the extent lawful, the Company shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on (i) overdue
principal, at the rate borne by Convertible Subordinated Notes, compounded
semiannually; and (ii) overdue installments of interest (without regard to any
applicable grace period) at the same rate, compounded semiannually.
SECTION 4.02 Commission Reports.
------------------
So long as any Convertible Subordinated Note is outstanding, the Company
shall file with the Commission and, within 15 days after it files them with the
Commission, file with the Trustee and thereafter mail promptly or cause the
Trustee to mail promptly to the holders of Convertible Subordinated Notes at
their addresses as set forth in the register of the Convertible Subordinated
Notes copies of the annual reports and of the information, documents and other
reports which the Company is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act or which the Company would be required
to file with the Commission if the Company then had a class of securities
registered under the Exchange Act. In addition, the Company shall cause its
annual report to stockholders and any quarterly or other financial reports
furnished to its stockholders generally to be filed with the Trustee, no later
than the date such materials are mailed or made available to the Company's
stockholders, and thereafter mailed promptly to the holders of Convertible
Subordinated Notes at their addresses as set forth in the register of
Convertible Subordinated Notes.
SECTION 4.03 Compliance Certificate.
----------------------
The Company shall deliver to the Trustee, within 60 days after the end of
the first three fiscal quarters and within 120 days after the end of each fiscal
year of the Company, an Officers' Certificate stating that a review of the
activities of the Company and its subsidiaries during the preceding fiscal
period has been made under the supervision of the signing Officers with a view
to determining whether the Company has fully performed its obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every
21
<PAGE>
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms and conditions hereof (or, if any Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the Convertible
Subordinated Notes are prohibited.
The Company shall, so long as any of the Convertible Subordinated Notes are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default, Event of Default or default in the performance of any term or condition
in this Indenture, without regard to any period of grace or requirement of
notice provided hereunder, an Officers' Certificate specifying such Default,
Event of Default or default.
SECTION 4.04 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain or cause to be maintained the office or agency
required under Section 2.03. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency not maintained by the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Convertible Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designation; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain or cause to be
maintained an office or agency in the City of New York for such purpose.
SECTION 4.05 Limitation on Sale of Assets.
----------------------------
The Company will not, and will not permit any of its subsidiaries to,
consummate any Asset Sale unless such Asset Sale is for at least Fair Market
Value and at least 80% of the consideration therefrom received by the Company or
such subsidiary is in the form of cash or Cash Equivalents.
Following any Asset Sale, an amount equal to the Net Cash Proceeds of such
Asset Sale shall be applied by the Company or such subsidiary within 365 days of
the date of the Asset Sale, at its election, to either: (a) the payment of
Senior Indebtedness; provided, however, any Net Cash Proceeds which are applied
to reduce Indebtedness under the Revolving Credit Agreement shall result in a
permanent reduction of the borrowing availability thereunder; (b) make any
Permitted Program Investment or any other investment in capital assets usable in
the Company's or its subsidiaries' lines of business or in an asset or business
in the same line of business as the Company; or (c) a combination of payment and
investment permitted by the foregoing clauses (a) and (b). On the earlier of
(A) the 366th day after the date of an Asset Sale or (B) such date as the Board
of Directors of the Company or of such subsidiary determines (as
22
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evidenced by a written resolution of said Board of Directors) not to apply an
amount equal to the Net Cash Proceeds relating to such Asset Sale as set forth
in the immediately preceding sentence (each of (A) and (B), an "Asset Sale Offer
Trigger Date"), the Company or such subsidiary shall be obligated to apply an
amount equal to aggregate amount of Net Cash Proceeds which have not been
applied on or before such Asset Sale Offer Trigger Date as permitted by the
foregoing clauses (a), (b) and (c) of the immediately preceding sentence (each
an "Asset Sale Offer Amount") to make an offer to purchase for cash (the "Asset
Sale Offer") from all holders of Convertible Subordinated Notes on a pro rata
basis that amount of Convertible Subordinated Notes equal to the Asset Sale
Offer Amount at a price equal to 100% of the principal amount of the Convertible
Subordinated Notes to be repurchased, plus accrued and unpaid interest thereon
to the date of repurchase. Notwithstanding the foregoing, if an Asset Sale
Offer Amount is less than $10 million, the application of such Asset Sale Offer
Amount to an Asset Sale Offer may be deferred until such time as such Asset Sale
Offer Amount plus the aggregate amount of all Asset Sale Offer Amounts arising
subsequent to such Asset Sale Offer Trigger Date from all Asset Sales by the
Company and its subsidiaries aggregates at least $10 million, at which time the
Company or such subsidiary shall apply all Asset Sale Offer Amounts that have
been so deferred to make an Asset Sale Offer (the first date the aggregate of
all such deferred Asset Sale Offer Amounts is equal to $10 million or more shall
be deemed to be an "Asset Sale Offer Trigger Date").
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company as an entirety to a Person in a transaction
permitted under Section 5.01, the successor corporation shall be deemed to have
sold the properties and assets of the Company not so transferred for purposes of
this covenant, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale.
Each Asset Sale Offer shall be mailed to the holders of the Convertible
Subordinated Notes at the addresses shown on the register of holders maintained
by the Registrar with a copy to the Trustee and the Paying Agent, within 10 days
following the applicable Asset Sale Offer Trigger Date, and shall comply with
each of the procedures for notice set forth below. Each Asset Sale Offer shall
remain open until a specified date (the "Asset Sale Offer Termination Date")
which is at least 20 business days from the date such Asset Sale Offer is
mailed. During the period specified in the Asset Sale Offer, holders of
Convertible Subordinated Notes may elect to tender their Convertible
Subordinated Notes in whole or in part in integral multiples of $1,000 in
exchange for cash. Payment shall be made by the Company (or applicable
subsidiary) in respect of Convertible Subordinated Notes properly tendered
pursuant to this Section on a specified business day (the "Asset Sale Offer
Payment Date") which shall be no earlier than three business days after the
Asset Sale Offer Termination Date and no later then 60 days after such
applicable Asset Sale Offer Trigger Date. To the extent holders of Convertible
Subordinated Notes properly tender Convertible Subordinated Notes in an amount
exceeding the Asset Sale Offer Amount, Convertible Subordinated Notes of
tendering holders will be repurchased on a pro rata basis (based on amounts
tendered).
23
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The notice, which shall govern the terms of the Asset Sale Offer, shall
include such disclosures as are required by law and shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
4.05;
(b) the purchase price (including the amount of the accrued interest,
if any) for each Convertible Subordinated Note, the Asset Sale Offer
Termination Date and the Asset Sale Offer Payment Date;
(c) that any Convertible Subordinated Note not tendered or accepted
for payment will continue to accrue interest in accordance with the terms
thereof;
(d) that, unless the Company defaults on making the payment, any
Convertible Subordinated Note accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Asset Sale Offer
Payment Date;
(e) that holders electing to have Convertible Subordinated Notes
purchased pursuant to an Asset Sale Offer will be required to surrender
their Convertible Subordinated Notes to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City time, on the
Asset Sale Offer Termination Date and must complete any form letter of
transmittal proposed by the Company and acceptable to the Trustee and the
Paying Agent;
(f) that holders of Convertible Subordinated Notes will be entitled to
withdraw their election if the Paying Agent receives, not later than 5:00
p.m., New York City time, on the Asset Sale Offer Termination Date, a
tested telex, facsimile transmission or letter setting forth the name of
the holder, the principal amount of Convertible Subordinated Notes the
holder delivered for purchase, the Convertible Subordinated Note
certificate number (if any) and a statement that such holder is withdrawing
his election to have such Convertible Subordinated Notes purchased;
(g) that if Convertible Subordinated Notes in a principal amount in
excess of the Asset Sale Offer Amount are tendered pursuant to the Asset
Sale Offer, the Company shall purchase Convertible Subordinated Notes on a
pro rata basis among the Convertible Subordinated Notes tendered (with such
adjustments as may be deemed appropriate by the Company so that only
Convertible Subordinated Notes in denominations of $1,000 or integral
multiples of $1,000 shall be acquired);
(h) that holders whose Convertible Subordinated Notes are purchased
only in part will be issued new Convertible Subordinated Notes equal in
principal amount to the unpurchased portion of the Convertible Subordinated
Notes surrendered; and
(i) the instructions that holders must follow in order to tender their
Convertible Subordinated Notes.
24
<PAGE>
On the Asset Sale Offer Termination Date, the Company shall (i) accept for
payment Convertible Subordinated Notes or portions thereof tendered pursuant to
the Asset Sale Offer, (ii) deposit with the Paying Agent money sufficient to pay
the purchase price of all Convertible Subordinated Notes or portions thereof so
tendered and accepted and (iii) deliver to the Trustee the Convertible
Subordinated Notes so accepted together with an Officers' Certificate setting
forth the Convertible Subordinated Notes or portions thereof tendered to and
accepted for payment by the Company. On the Asset Sale Offer Payment Date, the
Paying Agent shall mail or deliver to the holders of Convertible Subordinated
Notes so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail or deliver to such holders a new
Convertible Subordinated Note equal in principal amount to any unpurchased
portion of the Convertible Subordinated Note surrendered. Any Convertible
Subordinated Notes not so accepted shall be promptly mailed or delivered by the
Company to the holder thereof.
If an offer is made to repurchase the Convertible Subordinated Notes
pursuant to an Asset Sale Offer, the Company will and will cause its
subsidiaries to comply with all tender offer rules under state and Federal
securities laws, including, but not limited to, Section 14(e) under the Exchange
Act and Rule 14e-1 thereunder, to the extent applicable to such offer. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this Section 4.05, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.05 by virtue thereof.
SECTION 4.06 Continued Existence.
-------------------
Subject to Article 5, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
SECTION 4.07 Taxes.
-----
The Company shall pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings or where the failure to do so (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company and its subsidiaries, taken as a whole.
SECTION 4.08 Change of Control.
-----------------
Following a Change of Control (the date of each such occurrence being the
"Change of Control Date"), the Company shall notify the holders of Convertible
Subordinated Notes in writing of such occurrence and shall make an offer (the
"Change of Control Offer") to purchase all Convertible Subordinated Notes then
outstanding at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the "Change of Control Offer
Payment Date" (as defined below).
25
<PAGE>
Notice of a Change of Control shall be mailed by or at the direction of the
Company to the holders of Convertible Subordinated Notes as shown on the
register of such holders maintained by the Registrar not less than 15 days nor
more than 30 days after the applicable Change of Control Date at the addresses
as shown on the register of holders maintained by the Registrar, with a copy to
the Trustee and the Paying Agent. The Change of Control Offer shall remain open
until a specified date (the "Change of Control Offer Termination Date") which is
at least 20 business days from the date such notice is mailed. During the
period specified in such notice, holders of Convertible Subordinated Notes may
elect to tender their Convertible Subordinated Notes in whole or in part in
integral multiples of $1,000 in exchange for cash. Payment shall be made by the
Company in respect of Convertible Subordinated Notes properly tendered pursuant
to this Section on a specified business day (the "Change of Control Offer
Payment Date") which shall be no earlier than three business days after the
applicable Change of Control Offer Termination Date and no later than 60 days
after the applicable Change of Control Date.
The notice, which shall govern the terms of the Change of Control Offer, shall
include such disclosures as are required by law and shall state:
(a) that a Change of Control Offer is being made pursuant to this
Section 4.08 and that all Convertible Subordinated Notes will be accepted
for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Convertible Subordinated Note, the Change of Control Offer
Termination Date and the Change of Control Offer Payment Date;
(c) that any Convertible Subordinated Note not accepted for payment
will continue to accrue interest in accordance with the terms thereof;
(d) that, unless the Company defaults on making the payment, any
Convertible Subordinated Note accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Offer Payment Date;
(e) that holders electing to have Convertible Subordinated Notes
purchased pursuant to a Change of Control Offer will be required to
surrender their Convertible Subordinated Notes to the Paying Agent at the
address specified in the notice prior to 5:00 p.m., New York City time, on
the Change of Control Offer Termination Date and must complete any form
letter of transmittal proposed by the Company and acceptable to the Trustee
and the Paying Agent;
(f) that holders of Convertible Subordinated Notes will be entitled to
withdraw their election if the Paying Agent receives, not later than 5:00
p.m., New York City time, on the Change of Control Offer Termination Date,
a tested telex, facsimile transmission or letter setting forth the name of
the holder, the principal amount of Convertible Subordinated Notes the
holder delivered for purchase, the Convertible
26
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Subordinated Note certificate number (if any) and a statement that such
holder is withdrawing his election to have such Convertible Subordinated
Notes purchased;
(g) that holders whose Convertible Subordinated Notes are purchased
only in part will be issued Convertible Subordinated Notes equal in
principal amount to the unpurchased portion of the Convertible Subordinated
Notes surrendered;
(h) the instructions that holders must follow in order to tender their
Convertible Subordinated Notes; and
(i) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with respect to pro
forma historical financial information after giving effect to such Change
of Control, information regarding the Persons acquiring control and such
Persons' business plans going forward).
On the Change of Control Offer Termination the Company shall (i) accept
for payment Convertible Subordinated Notes or portions thereof tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Convertible Subordinated Notes or
portions thereof so tendered and accepted and (iii) deliver to the Trustee the
Convertible Subordinated Notes so accepted together with an Officers'
Certificate setting forth the Convertible Subordinated Notes or portions thereof
tendered to and accepted for payment by the Company. On the Change of Control
Payment Date, the Paying Agent shall mail or deliver to the holders of
Convertible Subordinated Notes so accepted payment in an amount equal to the
purchase price, and the Trustee shall promptly authenticate and mail or deliver
to such holders a new Convertible Subordinated Note equal in principal amount to
any unpurchased portion of the Convertible Subordinated Note surrendered. Any
Convertible Subordinated Notes not so accepted shall be promptly mailed or
delivered by the Company to the holder thereof.
In addition, in the event of any Change of Control, the Company shall not,
and shall not permit any of its subsidiaries to, purchase, redeem or otherwise
acquire any Indebtedness subordinated or junior to the Convertible Subordinated
Notes pursuant to any analogous provision relating to such Indebtedness on or
prior to the payment in full in cash or Cash Equivalents of all Convertible
Subordinated Notes, together with accrued and unpaid interest thereon with
respect to which the Change of Control Offer was accepted.
If an offer is made to redeem Convertible Subordinated Notes as a result of
a Change of Control, the Company will be required to comply with all tender
offer rules under state and Federal securities laws, including, but not limited
to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to the
extent applicable to such offer.
27
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SECTION 4.09 Appointments to Fill Vacancies in Trustee's Office.
--------------------------------------------------
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 4.10 Further Instruments and Acts.
----------------------------
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 4.11 Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter enforced, that may affect the Company's
obligation to pay the Convertible Subordinated Notes; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law insofar as such law applies to the Convertible
Subordinated Notes, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 4.12 Investment Company Act.
----------------------
The Company, as of the Issue Date, is not and shall not become an
investment company subject to registration under the Investment Company Act of
1940, as amended.
ARTICLE 5
Successors
SECTION 5.01 When the Company May Merge, Etc.
-------------------------------
The Company will not, in a single transaction or series of related transactions,
consolidate or merge with or into, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets to, any Person or
adopt a Plan of Liquidation unless:
(a) either (i) the Company shall be the surviving or continuing
corporation or (ii) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer or lease the properties and assets of the
Company substantially as an entirety or in the case of a Plan
28
<PAGE>
of Liquidation, the Person to which all or substantially all of the assets
of the Company have been transferred (1) shall be a corporation organized
and validly existing under the laws of the United States or any State
thereof or the District of Columbia and (2) shall expressly assume, by
supplemental indenture, executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and interest on
all of the Convertible Subordinated Notes and the performance of every
covenant of the Convertible Subordinated Notes and this Indenture on the
part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction and any
assumption contemplated by clause (a)(ii)(2) above (including giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Company
(in the case of clause (i) of the foregoing clause (a)) or such Person (in
the case of clause (ii) thereof) shall have a Consolidated Net Worth
(immediately after the transaction but prior to any purchase accounting
adjustments relating to such transaction) equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such
transaction;
(c) immediately before and after giving effect to such transaction and
any assumption contemplated by clause (a)(ii)(2) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred in connection
with or in respect of the transaction) no Default and no Event of Default
shall have occurred and be continuing; and
(d) the Company or such Person shall have delivered to the Trustee (i)
an Officers' Certificate and an Opinion of Counsel (which counsel may be
in-house counsel of the Company), each stating that such consolidation,
merger, conveyance, transfer or lease or Plan of Liquidation and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this provision of this Indenture
and that all conditions precedent in this Indenture relating to such
transaction have been satisfied and (ii) a certificate from the Company's
independent certified public accountants stating that the Company has made
the calculations required by clause (b) above in accordance with the terms
of this Indenture.
For purposes of this Section 5.01, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more subsidiaries of the
Company, the Capital Stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
SECTION 5.02 Successor Corporation Substituted.
---------------------------------
Upon any such consolidation, merger, conveyance, lease or transfer in
accordance with Section 5.01, the successor Person formed by such consolidation
or into which the Company is
29
<PAGE>
merged or to which such conveyance, lease or transfer is made will succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor had been named as
the Company therein, and thereafter (except in the case of a sale, assignment,
transfer, lease, conveyance or other disposition) the predecessor corporation
will be relieved of all further obligations and covenants under this Indenture
and the Convertible Subordinated Notes.
SECTION 5.03 Purchase Option on Change of Control.
------------------------------------
This Article 5 does not affect the obligations of the Company (including
without limitation any successor to the Company) under Section 4.08.
ARTICLE 6
Defaults and Remedies
SECTION 6.01 Events of Default.
-----------------
An "Event of Default" with respect to any Convertible Subordinated Notes
occurs if:
(a) the Company defaults in the payment of principal of, or premium,
if any, on the Convertible Subordinated Notes when due at maturity, upon
repurchase, upon acceleration or otherwise, including, without limitation,
failure of the Company to repurchase the Convertible Subordinated Notes on
the date required pursuant to Section 4.05 or following a Change of Control
or failure to make any optional redemption payment when due; or
(b) the Company defaults in the payment of any installment of interest
on the Convertible Subordinated Notes when due (including any interest
payable in connection with any optional redemption payment) and continuance
of such default for more than 30 days; or
(c) the Company fails to observe, perform or comply with any of the
provisions described in Sections 4.05, 4.08 and 5.01, and the failure to
remedy such failure prior to the receipt of written notice from the trustee
or the holders of at least 25% in aggregate principal amount of the then
outstanding Convertible Subordinated Notes; or
(d) the Company defaults (other than a default set forth in clauses
(a), (b) and (c) above) in the performance of, or breach of, any other
covenant or warranty of the Company set forth in this Indenture or the
Convertible Subordinated Notes and fails to remedy such default or breach
within a period of 45 days after the receipt of written notice from the
Trustee or the holders of at least 25% in aggregate principal amount of the
then outstanding Convertible Subordinated Notes; or
30
<PAGE>
(e) any Indebtedness (other than the Convertible Subordinated Notes)
of the Company or of any subsidiary, whether such Indebtedness exists on
the Issue Date or shall be incurred thereafter, having, individually or in
the aggregate, an outstanding principal amount of $15 million or more,
either (i) is declared due and payable prior to its stated maturity or (ii)
is not paid upon the final maturity of such Indebtedness; or
(f) a court of competent jurisdiction enters one or more judgments or
orders against the Company or any subsidiary of the Company or any of their
respective property or assets in an aggregate amount in excess of $15
million and they are not covered by insurance written by third parties,
which judgments or orders have not been vacated, discharged, satisfied or
stayed pending appeal within 60 days from the entry thereof; or
(g) the Company or any Material Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors;
or
(h) a court of competent jurisdiction enters a judgment, order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Material Subsidiary
in an involuntary case,
(ii) appoints a Custodian of the Company or any Material
Subsidiary for all or substantially all of its property, or
(iii) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
60 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
31
<PAGE>
SECTION 6.02 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in clauses
(g) and (h) of Section 6.01) occurs and is continuing, then and in every such
case the Trustee, by written notice to the Company (with a copy to the Bank
Agent, each of the holders of the Company's 9.33% Senior Notes and its 9.35%
Senior Notes and any other Representatives of Designated Senior Indebtedness),
or the holders of at least 25% in aggregate principal amount of the then
outstanding Convertible Subordinated Notes, by written notice to the Company and
the Trustee (with a copy to the Bank Agent, each of the holders of the Company's
9.33% Senior Notes and its 9.35% Senior Notes and any other Representatives of
Designated Senior Indebtedness), may declare the unpaid principal of and accrued
interest on all the Convertible Subordinated Notes to be due and payable,
provided, however that failure to provide a copy of such notice to any party
other than the Company and the Trustee shall have no effect on any such
declaration. Upon such declaration such principal amount, premium, if any, and
accrued and unpaid interest shall become immediately due and payable,
notwithstanding anything contained in this Indenture or the Convertible
Subordinated Notes to the contrary but subject to the provisions of Article 11
hereof; and provided further, that so long as any Designated Senior Indebtedness
is outstanding, any such declaration shall not be effective until the earlier of
(a) five business days after the delivery of such notice to the Company or (b)
the acceleration of any Designated Senior Indebtedness. If any Event of Default
with respect to the Company specified in clauses (g) or (h) of Section 6.01
occurs, all unpaid principal of and premium, if any, and accrued and unpaid
interest on the Convertible Subordinated Notes then outstanding shall become
automatically due and payable subject to the provisions of Article 11 hereof,
without any declaration or other act on the part of the Trustee or any holder of
Convertible Subordinated Notes.
The holders of a majority in principal amount of the then outstanding
Convertible Subordinated Notes by notice to the Trustee may rescind an
acceleration of the Convertible Subordinated Notes and its consequences if all
existing Events of Default (other than nonpayment of principal of or premium, if
any, and interest on the Convertible Subordinated Notes which has become due
solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree of any court of
competent jurisdiction. No such rescission shall affect any subsequent Default
or Event of Default or impair any right consequent thereto.
SECTION 6.03 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Convertible Subordinated Notes or to enforce the
performance of any provision of the Convertible Subordinated Notes or this
Indenture. The Trustee may maintain a proceeding even if it does not possess
any of the Convertible Subordinated Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any holder of a Convertible
Subordinated Note in exercising any right or remedy accruing upon an Event of
Default shall
32
<PAGE>
not impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Past Defaults.
-----------------------
The holders of a majority in aggregate principal amount of the Convertible
Subordinated Notes then outstanding may, on behalf of the holders of all the
Convertible Subordinated Notes waive an existing Default or Event of Default and
its consequences, except a Default or Event of Default in the payment of the
principal of or interest on the Convertible Subordinated Notes (other than the
non-payment of principle of and premium, if any, and interest on the Convertible
Subordinated Notes which has become due solely by virtue of an acceleration
which has been duly rescinded as provided above), or in respect of a covenant or
provision of this Indenture which cannot be modified or amended without the
consent of all holders of convertible Subordinated Notes. When a Default is
waived, it is cured and stops continuing. No waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
-------------------
The holders of a majority in principal amount of the then outstanding
Convertible Subordinated Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of other holders of
Convertible Subordinated Notes or that may involve the Trustee in personal
liability; provided, that the Trustee may take any other action the Trustee
deems proper that is not inconsistent with such directions.
SECTION 6.06 Limitation on Suits.
-------------------
A holder of a Convertible Subordinated Note may not pursue any remedy with
respect to this Indenture or the Convertible Subordinated Notes unless:
(1) the holder gives to the Trustee notice of a continuing Event of
Default;
(2) the holders of at least 25% in principal amount of the then
outstanding Convertible Subordinated Notes make a request to the Trustee to
pursue the remedy;
(3) such holder or holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
33
<PAGE>
(5) during such 60-day period the holders of a majority in principal
amount of the then outstanding Convertible Subordinated Notes do not give
the Trustee a direction inconsistent with the request.
A holder of a Convertible Subordinated Note may not use this Indenture to
prejudice the rights of another holder or to obtain a preference or priority
over another holder.
SECTION 6.07 Rights of Holders To Receive Payment.
------------------------------------
Subject to the provisions of Article 11 hereof, notwithstanding any other
provision of this Indenture, the right of any holder of a Convertible
Subordinated Note to receive payment of principal and interest on the
Convertible Subordinated Note, on or after the respective due dates expressed in
the Convertible Subordinated Note, or to bring suit for the enforcement of any
such payment on or after such respective dates, and such rights shall not be
impaired or affected without the consent of the holder of a Convertible
Subordinated Note.
SECTION 6.08 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the Convertible Subordinated Notes and interest on
overdue principal and interest and such further amount as shall be sufficient to
cover the costs and, to the extent lawful, expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
holders of Convertible Subordinated Notes allowed in any judicial proceedings
relative to the Company, its creditors or its property. Nothing contained
herein shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any holder of a Convertible Subordinated Note any
plan of reorganization, arrangement, adjustment or composition affecting the
Convertible Subordinated Notes or the rights of any holder thereof, or to
authorize the Trustee to vote in respect of the claim of any holder in any such
proceeding.
SECTION 6.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
34
<PAGE>
First: to the Trustee for amounts due under Section 7.07, including
payment of all compensation, expenses and liabilities incurred, and all
advances made, by the Trustee, and the costs and expenses of collection;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
Third: to holders of Convertible Subordinated Notes for amounts due
and unpaid on the Convertible Subordinated Notes for principal and
interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Convertible Subordinated Notes for
principal and interest, respectively; and
Fourth: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a record
date and payment date for any payment to holders of Convertible Subordinated
Notes.
SECTION 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit, other than the Trustee, of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
holder pursuant to Section 6.07 or a suit by holders of more than 10% in
principal amount of the then outstanding Convertible Subordinated Notes.
ARTICLE 7
The Trustee
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed. Whether or not
herein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article 7.
SECTION 7.01 Duties of the Trustee.
---------------------
(a) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
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(b) Except during the continuance of an Event of Default known to the
Trustee:
(1) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the form required by this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section;
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that is in any way related to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability in the performance of any of its
duties or the exercise of any of its rights and powers hereunder. The Trustee
may refuse to perform any duty or exercise any right or power unless it receives
indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
SECTION 7.02 Rights of the Trustee.
---------------------
(a) The Trustee may rely on and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate, or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, security or other document believed by it to be
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genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter contained therein.
(b) Any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof is herein specifically prescribed). In addition,
before the Trustee acts or refrains from acting, it may require an Officers'
Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its attorneys and
agents and other Persons not regularly in its employ and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its discretion,
rights or powers.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
Officers of the Company.
(f) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.
(g) The Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Indenture at the request, order or discretion of
any of the holders of Convertible Subordinated Notes pursuant to the provisions
of this Indenture, unless such holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred therein or thereby.
(h) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, security or other document
unless requested in writing to do so by the holders of not less than a majority
in aggregate principal amount of the Convertible Subordinated Notes then
outstanding, provided that if the Trustee determines in its sole and absolute
discretion to make any such investigation, then it shall be entitled, upon
reasonable prior notice and during normal business hours, to examine the books
and records and the premises of the Company, personally or by agent or attorney,
and the reasonable expenses of every such examination shall be paid by the
Company or, if paid by the Trustee or any predecessor Trustee, shall be
reimbursed by the Company upon demand.
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SECTION 7.03 Individual Rights of the Trustee.
--------------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Convertible Subordinated Notes with the same rights it would have if
it were not the Trustee and may otherwise deal with the Company or an Affiliate
and receive, collect, hold and retain collections from the Company with the same
rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Convertible Subordinated
Notes. It shall not be accountable for the Company's use of the proceeds from
the Convertible Subordinated Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture. It shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Convertible Subordinated Notes or any
other document in connection with the sale of the Convertible Subordinated Notes
or pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each holder of a Convertible
Subordinated Note a notice of the Default or Event of Default within 45 days
after it occurs. A Default or an Event of Default shall not be considered known
to the Trustee unless it is a Default or Event of Default in the payment of
principal or interest when due under Section 6.01(a) or (b) or the Trustee shall
have received notice thereof, in accordance with this Indenture, from the
Company or from the holders of a majority in principal amount of the outstanding
Convertible Subordinated Notes. Except in the case of a Default or Event of
Default in payment of principal or interest on any Convertible Subordinated
Note, the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interest of the holders of the Convertible Subordinated Notes.
SECTION 7.06 Reports by the Trustee to Holders.
---------------------------------
Within 60 days after the reporting date stated in Section 10.10, the
Trustee shall mail to holders of Convertible Subordinated Notes a brief report
dated as of such reporting date that complies with TIA (S) 313(a) (but if no
event described in TIA (S) 313(a) has occurred within twelve months preceding
the reporting date, no report need be transmitted). The Trustee also shall
comply with TIA (S) 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA (S) 313(c).
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A copy of each report at the time of its mailing to holders of Convertible
Subordinated Notes shall be filed, at the expense of the Company, by the Trustee
with the Commission and each stock exchange, if any, on which the Convertible
Subordinated Notes are listed. The Company shall timely notify the Trustee when
the Convertible Subordinated Notes are listed on any stock exchange.
SECTION 7.07 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time and the Trustee
shall be entitled to reasonable compensation for its acceptance of this
Indenture and its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by or on behalf of it in
addition to the compensation for its services. Such expenses may include the
reasonable compensation, disbursements and expenses of the Trustee's agents,
counsel and other Persons not regularly in its employ.
The Company shall indemnify the Trustee against any loss, liability or
expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture and the trusts hereunder,
including the costs and expenses of defending itself against or investigating
any claim of liability in the premises, except as set forth in the next
paragraph. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall
not relieve the Company of its obligations hereunder. The Company shall defend
the claim with counsel designated by the Company, who may be outside counsel to
the Company but shall in all events be reasonably satisfactory to the Trustee,
and the Trustee shall cooperate in the defense. In addition, the Trustee may
retain one separate counsel and, if deemed advisable by such counsel, local
counsel, and the Company shall pay the reasonable fees and expenses of such
separate counsel and local counsel. The indemnification herein extends to any
settlement, provided that the Company will not be liable for any settlement made
without its consent, provided, further, that such consent will not be
unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through its own negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Convertible Subordinated Notes on all
money or property held or collected by the Trustee, except that held in trust to
pay principal and interest on Convertible Subordinated Notes. Such Liens and
the Company's obligations under this Section shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) occurs, the expenses and the
compensation for the services (including
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the fees and expenses of its agents and counsel) are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 7.08 Replacement of the Trustee.
--------------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign at any time and be discharged from the trust hereby
created by so notifying the Company. The holders of a majority in principal
amount of the then outstanding Convertible Subordinated Notes may remove the
Trustee by so notifying the Trustee and the Company in writing and may appoint a
successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the then outstanding Convertible
Subordinated Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
holders of at least 10% in principal amount of the then outstanding Convertible
Subordinated Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee after written request by any holder of a Convertible
Subordinated Note who has been a holder for at least six months fails to comply
with Section 7.10, such holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
40
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holders of Convertible Subordinated Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
that all sums owing to the retiring Trustee hereunder have been paid and subject
to the lien provided for in Section 7.07. Notwithstanding the replacement of
the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 shall continue for the benefit of the retiring Trustee.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
SECTION 7.09 Successor Trustee by Merger, etc.
---------------------------------
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
national banking association, the resulting, surviving or transferee corporation
or national banking association without any further act shall be the successor
Trustee with the same effect as if the successor Trustee had been named as the
Trustee herein.
SECTION 7.10 Eligibility, Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1). The Trustee shall always have a combined capital and
surplus as stated in Section 10.10. The Trustee is subject to TIA (S) 310(b)
regarding the disqualification of a trustee upon acquiring a conflicting
interest.
SECTION 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship set forth in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
Satisfaction and Discharge of Indenture
SECTION 8.01 Termination of Company's Obligations.
------------------------------------
(i) This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 and 8.03 shall survive) when all
outstanding Convertible Subordinated Notes theretofore authenticated and issued
have been delivered (other than destroyed, lost or stolen Convertible
Subordinated Notes that have been replaced or paid) to the Trustee for
cancellation and the Company has paid all sums payable hereunder. In addition,
the Company may terminate its obligations under this Indenture (except the
Company's obligations
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under Sections 7.07 and 8.03) if, under terms satisfactory to the Trustee: (a)
the Convertible Subordinated Notes have either become due and payable or are by
their terms due and payable within one year or scheduled for redemption within
one year; and (b) the Company irrevocably deposits in trust with the Trustee
money or United States Government Obligations (defined below in this Section
8.01), or a combination thereof, sufficient, without consideration of the
reinvestment of interest in the opinion of the chief financial officer of the
Company expressed in a written certificate delivered to the Trustee, to pay
principal and interest on the Convertible Subordinated Notes to maturity or upon
redemption, as the case may be. The Company may make the deposit only if
Article 11 permits it.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 4.01, 4.04, 7.07, 7.08, 8.03 and 8.04 shall survive until the Convertible
Subordinated Notes are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.07 and 8.03 shall survive.
After a deposit made pursuant to this Section 8.01, the Trustee upon
request of the Company shall acknowledge in writing the discharge of the
Company's obligations under this Indenture except for those surviving
obligations specified above.
In addition, the Company may elect to have either clause (ii) or clause
(iii) below be applied to the outstanding Convertible Subordinated Notes upon
compliance with the conditions set forth in clause (iv) below.
(ii) Upon the Company's exercise under the last sentence of paragraph (i)
above of the option applicable to this paragraph (ii), the Company shall be
deemed to have been released and discharged from its obligations with respect to
the outstanding Convertible Subordinated Notes on the date the conditions set
forth below are satisfied ("legal defeasance"). For this purpose, legal
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the outstanding Convertible Subordinated
Notes, which shall thereafter be deemed to be "outstanding" only for the purpose
of the Sections of and matters under this Indenture referred to in subclauses
(A), (B), (C) and (D) of this clause (ii), and to have satisfied all its other
obligations under such Convertible Subordinated Notes and this Indenture insofar
as such Convertible Subordinated Notes are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following, which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of holders of outstanding Convertible
Subordinated Notes to receive solely from the trust fund described in clause
(iv) below and as more fully set forth in such clause, payments in respect of
the principal of premium, if any, and interest on such Convertible Subordinated
Notes when such payments are due, (B) the Company's obligations with respect to
such Convertible Subordinated Notes when such payments are due, (C) the
Company's obligations with respect to such Convertible Subordinated Notes under
Sections 2.03, 2.05, 2.06, 2.07 and 4.04, and, with respect to the Trustee,
under Section 7.07, (D) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (E) this Section 8.01 and Sections 8.03 and 8.04. Subject
to compliance with this Section 8.01, the Company may exercise its option under
this
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clause (ii) notwithstanding the prior exercise of its option under paragraph
(iii) below with respect to the Convertible Subordinated Notes.
(iii) Upon the Company's exercise under the last sentence of clause (i) of
the option applicable to this clause (iii), the Company shall be released and
discharged from its obligations under any covenant contained in Article 4
(except for Sections 4.01 and 4.04) and Article 5 with respect to the
outstanding Convertible Subordinated Notes on and after the date the conditions
set forth below are satisfied ("covenant defeasance"), and the Convertible
Subordinated Notes shall thereafter be deemed to be not "outstanding" for the
purpose of any direction, waiver, consent or declaration or act of holders of
Convertible Subordinated Notes (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the outstanding Convertible Subordinated Notes, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.01 but, except as specified
above, the remainder of this Indenture (including without limitation obligations
set forth in Sections 8.03 and 8.04 hereof) and such Convertible Subordinated
Notes shall be unaffected thereby.
(iv) The following shall be the conditions to the application of either
clause (ii) or (iii) above to the outstanding Convertible Subordinated Notes:
(a) the Company has irrevocably deposited in trust with the Trustee or,
at the option of the Trustee, with a trustee, satisfactory to the Trustee
and the Company, under terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, cash in U.S. dollars, United States
Government Obligations, or a combination thereof, in such amounts as will
be sufficient, in the opinion of the Chief Financial Officer of the Company
expressed in a written certificate delivered to the Trustee, to pay the
principal of, premium, if any, and interest on the outstanding Convertible
Subordinated Notes on the stated maturity or on the applicable redemption
date, as the case may be, of such principal or installment of principal of,
premium, if any, or interest on the outstanding Convertible Subordinated
Notes; provided that (i) the trustee of the irrevocable trust shall have
been irrevocably instructed to pay such money or the proceeds of such
United States Government Obligations to the Trustee, (ii) the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such United States Government Obligations to the payment of said principal
and interest with respect to the Convertible Subordinated Notes, and (iii)
such deposit does not violate Article 11 hereto;
(b) in the case of an election under clause (ii) above, the Company
shall have delivered to the Trustee an Opinion of Counsel from nationally
recognized counsel reasonably acceptable to the Trustee stating that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date
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of this Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that the holders of the outstanding
Convertible Subordinated Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such legal defeasance and will
be subject to federal income tax on the same amount and in the same manner
and at the same time as would have been the case if such legal defeasance
had not occurred;
(c) in the case of an election under clause (iii) above, the Company
shall have delivered to the Trustee an Opinion of Counsel from nationally
recognized counsel reasonably acceptable to the Trustee (i) to the effect
that the holders of the outstanding Convertible Subordinated Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such covenant defeasance and will be subject to federal income tax on
the same amount and in the same manner and at the same time as would have
been the case if such covenant defeasance had not occurred or (ii) that the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling to the foregoing effect;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(e) such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default under,
any material agreement or instrument (including any agreement or instrument
governing or evidencing Designated Senior Indebtedness) to which the
Company or any of its subsidiaries is bound;
(f) The Company shall deliver to the Trustee an Opinion of Counsel to
the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the holders of Convertible Subordinated Notes over the
other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(h) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel stating that all conditions precedent provided
for relating to the legal defeasance under clause (ii) above or the
covenant defeasance under clause (iii) above, as the case may be, have been
complied with.
After such irrevocable deposit made pursuant to this Section 8.01 (and
satisfaction of the other conditions set forth herein), the Trustee upon request
shall acknowledge in writing the
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discharge of the Company's obligations under this Indenture except for those
surviving obligations specified above.
As used herein, "United States Government Obligations" means obligations
for which the full faith and credit of the United States of America is pledged
and which are not callable at the issuer's option.
SECTION 8.02 Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 8.01. It shall apply the
deposited money and the money from United States Government Obligations through
the Paying Agent and in accordance with this Indenture to the payment of
principal and interest on the Convertible Subordinated Notes. Money and
securities so held in trust are not subject to Article 11.
SECTION 8.03 Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years after the date upon which such payment shall have become
due; provided, however, that the Company shall have first caused notice of such
payment to the Company to be mailed to each holder of a Convertible Subordinated
Note entitled thereto no less than 30 days prior to such payment. After payment
to the Company, holders entitled to the money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person and all liability of the Trustee and such Paying Agent
with respect to such money shall cease.
SECTION 8.04 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money in accordance
with Section 8.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Convertible
Subordinated Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02; provided,
however, that if the Company makes any payment of interest on or principal of
any Convertible Subordinated Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders of
such Convertible Subordinated Notes to receive such payment from the money held
by the Trustee or Paying Agent.
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ARTICLE 9
Amendments
SECTION 9.01 Without the Consent of Holders.
------------------------------
The Company and the Trustee may amend this Indenture or the
Convertible Subordinated Notes without notice to or the consent of any holder of
a Convertible Subordinated Note for the purposes of:
(a) adding to the covenants of the Company for the benefit of the
holders of Convertible Subordinated Notes;
(b) surrendering any right or power herein conferred upon the Company;
(c) providing for conversion rights of holders of Convertible
Subordinated Notes in the event of consolidation, merger or sale of all or
substantially all of the assets of the Company and to otherwise comply with
Section 5.01;
(d) evidencing the succession of another Person to the Company and the
assumption by such successor of the covenants and obligations of the
Company thereunder and in the Convertible Subordinated Notes as permitted
herein;
(e) reducing the Conversion Price, provided that such reduction will
not adversely affect the interests of holders of Convertible Subordinated
Notes in any material respect; or
(f) curing any ambiguity or correcting or supplementing any defective
provision contained in this Indenture, or making any other changes in the
provisions of this Indenture which the Company and the Trustee may deem
necessary or desirable and which will not adversely affect the interest of
the holders of Convertible Subordinated Notes.
SECTION 9.02 With the Consent of Holders.
---------------------------
Subject to Section 6.07, the Company and the Trustee may amend this
Indenture or the Convertible Subordinated Notes with the written consent of the
holders of at least a majority in principal amount of the then outstanding
Convertible Subordinated Notes.
Subject to Sections 6.04 and 6.07, the holders of a majority in principal
amount of the Convertible Subordinated Notes then outstanding may also waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Convertible Subordinated Notes.
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However, without the consent of each holder of a Convertible Subordinated
Note affected, an amendment or waiver under this Section may not:
(a) reduce the amount of Convertible Subordinated Notes whose holders
must consent to an amendment or waiver;
(b) reduce the rate of, or extend the time for payment of, interest,
including defaulted interest, on any Convertible Subordinated Note;
(c) reduce the principal of or premium on or change the fixed maturity
of any Convertible Subordinated Note or alter redemption provisions with
respect thereto;
(d) make the principal of, or premium, if any, or interest on, any
Convertible Subordinated Note payable in money other than as provided for
herein and in the Convertible Subordinated Notes;
(e) waive continuing default in the payment of the principal of or
premium, if any, or interest on, redemption or repurchase payment with
respect to, any Convertible Subordinated Notes, including without
limitation a continuing failure to make payment when required upon a Change
of Control or after an Asset Sale Offer Trigger Date;
(f) after the Company's obligation to purchase the Convertible
Subordinated Notes arises hereunder, to then amend, modify or change the
obligation of the Company to make or consummate a Change of Control Offer
in the event of a Change of Control or an Asset Sale Offer in the event of
an Asset Sale Offer Trigger Date or waive any default in the performance
thereof or modify any of the provisions or definitions with respect to such
offers;
(g) modify the provision contained herein relating to conversion of or
subordination of the Convertible Subordinated Notes in a manner adverse to
the holders thereof; or
(h) make any change in provisions relating to waivers of defaults, the
abilities of holders of Convertible Subordinated Notes to enforce their
rights hereunder or the provisions of clauses (a) through (h) of this
Section 9.02.
To secure a consent of the holders of Convertible Subordinated Notes under
this Section, it shall not be necessary for such holders to approve the
particular form of any proposed amendment or waiver, but it shall be sufficient
if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to holders of Convertible Subordinated Notes a notice briefly
describing the amendment or waiver.
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The Company agrees that no amendment, supplement or waiver under this
Article 9 may make any change that adversely affects the rights under Article 11
of any holders of any Designated Senior Indebtedness unless the percentage of
holders necessary to amend or waive terms of such Designated Senior Indebtedness
consent to such change.
SECTION 9.03 Compliance with the Trust Indenture Act.
---------------------------------------
Every amendment to this Indenture or the Convertible Subordinated Notes
shall be set forth in a supplemental indenture that complies with the TIA as
then in effect.
SECTION 9.04 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a holder
of a Convertible Subordinated Note is a continuing consent by the holder and
every subsequent holder of a Convertible Subordinated Note or portion of a
Convertible Subordinated Note that evidences the same debt as the consenting
holder's Convertible Subordinated Note, even if notation of the consent is not
made on any Convertible Subordinated Note. However, any such holder or
subsequent holder may revoke the consent as to his or her Convertible
Subordinated Note or portion of a Convertible Subordinated Note if the Trustee
receives the notice of revocation before the date on which the Trustee receives
an Officers' Certificate certifying that the holders of the requisite principal
amount of Convertible Subordinated Notes have consented to the amendment or
waiver.
The Company may, but shall not obligated to, fix a record date for the
purpose of determining the holders of Convertible Subordinated Notes entitled to
consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
persons who were holders of Convertible Subordinated Notes at such record date
(or their duly designated proxies), and only those persons, shall be entitled to
consent to such amendment or waiver or to revoke any consent previously given,
whether or not such persons continue to be holders after such record date. No
consent shall be valid or effective for more than 90 days after such record date
unless consents from holders of the principal amount of Convertible Subordinated
Notes required hereunder for such amendment or waiver to be effective shall have
also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every holder
of a Convertible Subordinated Note, unless it is of the type described in any of
clauses (1) through (9) of Section 9.02. In such case, the amendment or waiver
shall bind each holder of a Convertible Subordinated Note who has consented to
it.
SECTION 9.05 Notation on or Exchange of Convertible Subordinated Notes.
---------------------------------------------------------
Convertible Subordinated Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article 9 may, and
shall if required by the Trustee, bear a notation in the form approved by the
Trustee as to any matter provided for in such
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supplemental indenture. If the Company shall so determine, new Convertible
Subordinated Notes so modified as to conform, in the opinion of the Company and
the Trustee, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Convertible Subordinated Notes.
SECTION 9.06 Trustee Protected.
-----------------
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if such amendment or supplemental indenture does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign it. In signing such amendment
or supplemental indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that such amendment or supplemental indenture is
authorized or permitted by this Indenture, that it is not inconsistent herewith,
and that it will be valid and binding upon the Company in accordance with its
terms.
ARTICLE 10
General Provisions
SECTION 10.01 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S) 318(c), the imposed duties shall control.
SECTION 10.02 Notices.
-------
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in person or mailed by first-class mail,
with postage prepaid (registered or certified, return receipt requested),
facsimile or overnight air couriers guaranteeing next day delivery, to the
other's address stated in Section 10.10. The Company or the Trustee by notice
to the other may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to holders of
Convertible Subordinated Notes) shall be deemed to have been duly given at the
time delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when transmission confirmed,
if transmitted by facsimile; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a holder of a Convertible Subordinated Note
shall be mailed by first-class mail, with postage prepaid, to his or her address
shown on the register kept
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by the Registrar. Failure to mail a notice or communication to a holder or any
defect in it shall not affect its sufficiency with respect to other holders.
If a notice or communication is sent in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company sends a notice or communication to holders of Convertible
Subordinated Notes, it shall send a copy to the Trustee and each Agent at the
same time.
All other notices or communications shall be in writing.
SECTION 10.03 Communication by Holders With Other Holders.
-------------------------------------------
Holders may communicate pursuant to TIA (S) 312(b) with other holders with
respect to their rights under this Indenture or the Convertible Subordinated
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA (S) 312(c).
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of such person, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 10.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
50
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(3) a statement that, in the opinion of such person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his certificate may be based as aforesaid
is erroneous. Any Opinion of Counsel may be based, insofar as it relates to
factual matters, upon certificates, statements or opinions of, or
representations by an officer or officers of the Company, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous.
Any Officers' Certificate, statement or Opinion of Counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or
representation by an accountant (who may be an employee of the Company), or firm
of accountants, unless such Officer or counsel, as the case may be, knows that
the certificate or opinion or representation with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid is erroneous.
SECTION 10.06 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or a meeting of holders
of Convertible Subordinated Notes. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
SECTION 10.07 Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York are not required to be open, and a business
day is any day that is not a Legal Holiday. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 10.08 No Recourse Against Others.
--------------------------
No director, officer, employee or stockholder, as such, of the Company from
time to time shall have any liability for any obligations of the Company under
the Convertible Subordinated Notes or this Indenture or for any claim based on,
in respect of, or by reason of such obligations or their creation. Each holder
by accepting a Convertible Subordinated Note waives and releases all such
liability. This waiver and release are part of the consideration for
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the Convertible Subordinated Notes. Each of such directors, officers, employees
and stockholders is a third party beneficiary of this Section 10.08.
SECTION 10.09 Counterparts.
------------
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 10.10 Other Provisions.
----------------
The Company initially appoints the Trustee as Paying Agent, Registrar and
authenticating agent.
The first certificate pursuant to Section 4.03 shall be for the first full
fiscal quarter of the Company following the issuance of Convertible Subordinated
Notes hereunder.
The reporting date for Section 7.06 is April 15 of each year. The first
reporting date is the first April 15 following the issuance of Convertible
Subordinated Notes hereunder.
The Trustee shall always have, or shall be a subsidiary of a bank or bank
holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is:
Rohr, Inc.
850 Lagoon Drive
Chula Vista, CA 91910
Attention: General Counsel
Facsimile: (619) 691-4222
Telephone: (619) 691-2025
The Trustee's address is:
The Bank of New York
101 Barclay Street, 21st Floor West
New York, New York 10286
Attention: Corporate Trust Administration
Facsimile: (212) 815-5915
Telephone: (212) 815-5736
The Bank Agent's address is:
52
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Citicorp USA, Inc.
c/o Citicorp North America, Inc.
725 South Figueroa Street
Los Angeles, CA 90017
Attention: Airline and Aerospace Group
Facsimile: (213) 623-3592
SECTION 10.11 Governing Law.
-------------
The internal laws of the State of New York shall govern this Indenture and
the Convertible Subordinated Notes, without regard to the conflict of laws
provisions thereof.
SECTION 10.12 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a subsidiary. Any such other indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 10.13 Successors.
----------
All agreements of the Company in this Indenture and the Convertible
Subordinated Notes shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.
SECTION 10.14 Severability.
------------
In case any provision in this Indenture or in the Convertible Subordinated
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 10.15 Table of Contents, Headings, Etc.
--------------------------------
The Table of Contents, Cross-Reference Table and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
ARTICLE 11
Subordination
53
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SECTION 11.01 Agreement To Subordinate.
------------------------
The Company agrees, and each holder by accepting a Convertible Subordinated
Note agrees, that the indebtedness evidenced by the Convertible Subordinated
Notes is subordinated and junior in right of payment, to the extent and in the
manner provided in this Article, to the prior payment in full in cash or Cash
Equivalents of all Senior Indebtedness and that the subordination is for the
benefit of the holders of Senior Indebtedness from time to time.
SECTION 11.02 Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any distribution to creditors of the Company in a liquidation,
reorganization or dissolution of the Company (in each case whether total or
partial) or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding or upon assignment for the benefit of creditors relating to the
Company or its property, or a marshalling of assets or liabilities of the
Company (in each case whether voluntary or involuntary);
(1) holders of Senior Indebtedness shall first be entitled to be paid
all obligations owing thereon or in respect thereof in full in cash or Cash
Equivalents before any payment or distribution may be made on or in respect
of the Convertible Subordinated Notes, except to the extent that holders
receive securities that are subordinated to Senior Indebtedness to at least
the same extent as the Convertible Subordinated Notes (the "Other
Subordinated Securities"); and
(2) holders of Convertible Subordinated Notes (or the Trustee on their
behalf) will be required to pay over their share of such distribution
directly to any Representative of the holders of Senior Indebtedness for
payment thereto or, if such holders have no Representative, directly to
such holders of Senior Indebtedness, until such Senior Indebtedness is paid
in full in cash or Cash Equivalents except to the extent that holders of
Convertible Subordinated Notes receive Other Subordinated Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by payment, transfer, set-off or otherwise.
SECTION 11.03 Default on Designated Senior Indebtedness.
-----------------------------------------
The Company may not make any direct or indirect payment on or in respect of
any obligations on the Convertible Subordinated Notes and may not acquire or
defease any Convertible Subordinated Notes from the Trustee or any holder of
Convertible Subordinated Notes for cash or property (other than Other
Subordinated Securities) if:
(a) a default in the payment of any principal or other obligation in
respect of Designated Senior Indebtedness occurs and is continuing beyond
any applicable grace period; or
54
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(b) a default, other than a default referred to in clause (a) above,
on any Designated Senior Indebtedness occurs and is continuing that then
permits holders of such Designated Senior Indebtedness to accelerate its
maturity and the Trustee receives a notice of the default from the Bank
Agent or other Representative on behalf of Designated Senior Indebtedness
requesting that payments in respect of the Convertible Subordinated Notes
be prohibited.
So long as payments on the Convertible Subordinated Notes are otherwise
permitted, then the Company may and shall resume payments on the Convertible
Subordinated Notes and may acquire them upon the earlier of:
(x) the date upon which such default is cured or waived, or
(y) in the case of a default and notice referred to in (b) above, 179
days after such notice is received by the Trustee (the "Payment Blockage
Period").
Only one Payment Blockage Period may be commenced within any consecutive
365-day period with respect to the Convertible Subordinated Notes.
SECTION 11.04 Acceleration of Convertible Subordinated Notes.
----------------------------------------------
If payment of the Convertible Subordinated Notes is accelerated because of
an Event of Default, the Company and the Trustee each shall promptly notify
holders of Senior Indebtedness of the acceleration.
SECTION 11.05 When Distributions Must Be Paid Over.
------------------------------------
In the event that any payment or distribution of assets of the Company,
whether in cash, property or securities (other than Other Subordinated
Securities) shall be received by the Trustee on account of the principal or
interest on or other obligations in respect of the Convertible Subordinated
Notes at a time when the Trustee shall have received notice in accordance with
Section 11.11 that such payment is prohibited by Section 11.02 or 11.03, such
payment or distribution shall be segregated and held by the Trustee in trust for
the benefit of, and shall forthwith be paid over and delivered to any
Representative of the holders of Senior Indebtedness for payments thereto, or,
if such holders have no Representative, directly to such holders of Senior
Indebtedness (pro rata as to each of such holders on the basis of the respective
amounts of Senior Indebtedness held by them), as their respective interests may
appear, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or
Cash Equivalents in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
Any distribution to the holders of the Senior Indebtedness or their
Representatives of assets other than cash or Cash Equivalents may be held by
such holders or Representatives as collateral securing the payment of such
Senior Indebtedness without any duty to liquidate or otherwise realize on such
assets or to apply such assets to any Senior Indebtedness.
55
<PAGE>
If a payment or distribution is made to holders of Convertible Subordinated
Notes that because of this Article 11 should not have been made to them, the
holders of Convertible Subordinated Notes who receive the payment or
distribution shall hold it segregated from other assets and hold it in trust for
holders of Senior Indebtedness and pay it over to them as their interests may
appear for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or
Cash Equivalents in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
SECTION 11.06 Notice by the Company.
---------------------
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of principal of or
interest on the Convertible Subordinated Notes to violate this Article, but
failure to give such notice shall not affect the subordination of the
Convertible Subordinated Notes to the Senior Indebtedness provided in this
Article. Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 11.07 Subrogation.
-----------
After all Senior Indebtedness is paid in full in cash or Cash Equivalents
and all letters of credit under the Revolving Credit Agreement have expired or
been terminated or the reimbursement obligations of the Company in respect of
such letters of credit then outstanding have been fully secured by cash or Cash
Equivalents and until the Convertible Subordinated Notes are paid in full,
holders of Convertible Subordinated Notes shall be subrogated to the rights of
holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the holders
of Convertible Subordinated Notes have been applied to the payment of Senior
Indebtedness. A distribution made under this Article to holders of Senior
Indebtedness which otherwise would have been made to holders of Convertible
Subordinated Notes is not, as between the Company and such holders, a payment by
the Company on Senior Indebtedness.
SECTION 11.08 Relative Rights.
---------------
This Article defines the relative rights of holders of Convertible
Subordinated Notes and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and holders of Convertible
Subordinated Notes, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Convertible
Subordinated Notes in accordance with their terms;
56
<PAGE>
(2) affect the relative rights of holders of Convertible Subordinated
Notes and creditors of the Company, other than their rights in relation to
holders of Senior Indebtedness; or
(3) prevent the Trustee or any holder of a Convertible Subordinated
Note from exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders of Senior Indebtedness to receive
payments and distributions otherwise payable to holders of Convertible
Subordinated Notes.
If the Company fails because of this Article to pay principal of or
interest on a Convertible Subordinated Note on the due date, the failure is
still a Default or Event of Default.
SECTION 11.09 Subordination May Not Be Impaired by the Company.
------------------------------------------------
No right of any holder of Senior Indebtedness to enforce the subordination
of the indebtedness evidenced by the Convertible Subordinated Notes shall be
impaired by any act or failure to act by the Company or by its failure to comply
with this Indenture (regardless of any knowledge thereof that such holder may
have or otherwise be charged with), or by any act or failure to act by such
holder.
If at any time any payment of any obligations with respect to any Senior
Indebtedness is rescinded or must otherwise be returned upon the insolvency,
bankruptcy, reorganization or liquidation of the Company or otherwise, the
provisions of this Article 11 shall continue to be effective or reinstated, as
the case may be, to the same extent as though such payment had not been made.
SECTION 11.10 Distribution of Notice to the Representative.
--------------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative, if any. Whenever a distribution is to be made or notice is to
be given to holders of the Company's outstanding 9.33% Senior Notes or its 9.35%
Senior Notes, such distribution shall be made and such notice shall be given to
each holder of record of such notes at the address specified in the register of
holders of such notes maintained by the Company.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the holders of Convertible Subordinated Notes
shall be entitled to rely conclusively upon any order or decree made by any
court of competent jurisdiction or upon any certificate of any Representative
(as to the Senior Indebtedness for which it is the Representative) or of any
liquidating trustee or agent or an Officers' Certificate (as to any Senior
Indebtedness for which there is no Representative) for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness
57
<PAGE>
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 11.
SECTION 11.11 Rights of the Trustee and Paying Agent.
--------------------------------------
Notwithstanding any provision of this Article 11 or any other provision of
this Indenture, the Trustee and the Paying Agent shall not at any time be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment or distribution to or by the trustee or a Paying Agent or
the taking of any other action (pursuant to this Article 11) by the Trustee or a
Paying Agent unless and until the Trustee or such Paying Agent, as the case may
be, shall have received at its office specified in Section 10.10 written notice
thereof from the Company, a Representative or a holder of Senior Indebtedness
entitled to give such notice and, prior to the receipt of any such written
notice, the Trustee and such paying Agent shall be entitled in all respects
conclusively to assume that no such fact exists. The Trustee or the Paying
Agent may continue to make payments on the Convertible Subordinated Notes unless
it receives such a notice at least one business day prior to the date upon which
payment is due.
The Trustee shall be entitled to rely in good faith on the delivery to it
of a written notice by a Person representing himself, herself or itself to be a
Representative on behalf of a holder of Senior Indebtedness to establish that
such notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not the Trustee. Any
Agent may do the same with like rights.
SECTION 11.12 No Fiduciary Duty to Holders of Senior Indebtedness.
---------------------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or the Paying Agent. Neither the
Trustee nor the Paying Agent shall be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness, and the Trustee shall not be liable to any
holder of such Senior Indebtedness if it shall, in the absence of bad faith, pay
over or deliver to holders of Convertible Subordinated Notes, the Company or any
other person monies or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article 11 or otherwise.
SECTION 11.13 Authorization to Effect Subordination.
-------------------------------------
Each holder of a Convertible Subordinated Note by its or his acceptance
thereof authorizes and expressly directs the Trustee on its or his behalf to
take such action as may be necessary or appropriate to effect the subordination
provisions contained in this Article 11, and
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appoints the Trustee its or his attorney-in-fact for such purpose, including, in
the event of any liquidation, reorganization or dissolution of the Company,
whether in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding or otherwise, the immediate filing of a claim for the unpaid balance
of its or his Convertible Subordinated Notes in the form required in such
proceeding, and to cause such claim to be approved. If the Trustee does not
file a proper claim or proof of debt in the form required in such proceeding
prior to 30 days before the expiration of the time to file such claim or claims,
then the holders of any Senior Indebtedness or their Representatives are hereby
authorized to file an appropriate claim for and on behalf of the holders of the
Convertible Subordinated Notes.
ARTICLE 12
Conversion of Convertible Subordinated Notes
SECTION 12.01 Conversion Privilege.
--------------------
Subject to and upon compliance with the provisions of this Article 12, the
holder of any Convertible Subordinated Note shall have the right, at its option,
at any time on or prior to the close of business on May 15, 2004 (or, if such
Note or portion thereof is called for redemption prior to May 15, 2004, then in
respect of such Convertible Subordinated Note or portion thereof, on or prior to
the close of business on the date fixed for redemption, unless the Company shall
default in payment due upon redemption thereof in which case such conversion
right will terminate at the close of business on the date such default is
cured), to convert the principal amount of any such Convertible Subordinated
Note, or any portion of such principal amount which is $1,000 or an integral
multiple thereof, into that number of fully paid and nonassessable whole shares
of Common Stock obtained by dividing the principal amount of the Convertible
Subordinated Note or portion thereof to be converted by the Conversion Price in
effect at such time and by surrender of the Convertible Subordinated Note so to
be converted in whole or in part, such surrender to be made in the manner
provided in Section 12.02.
SECTION 12.02 Manner of Exercise of Conversion Privilege.
------------------------------------------
In order to exercise the conversion privilege, the holder of any
Convertible Subordinated Note to be converted in whole or in part shall
surrender such Convertible Subordinated Note, duly endorsed or assigned to the
Company or in blank, at any of the offices or agencies to be maintained for such
purpose by the Company pursuant to Section 4.04, accompanied by the funds, if
any, required by the last paragraph of this Section, and shall give irrevocable
written notice of conversion in the form provided on the Convertible
Subordinated Notes (or such other notice as is acceptable to the Company) to the
Company (a "Conversion Notice") at such office or agency that the holder elects
to convert such Convertible Subordinated Note or the portion thereof specified
in said notice. Such Conversion Notice shall also state the name or names,
together with the address or addresses, in which the certificate or certificates
for shares of Common Stock which shall be issuable in such conversion shall be
issued. Each Convertible
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Subordinated Note surrendered for conversion shall, unless the shares issuable
on conversion are to be issued in the same name as the name in which such
Convertible Subordinated Note is registered, be accompanied by instruments of
transfer, in form satisfactory to the Company, duly executed by the holder or
his duly authorized attorney and in amount sufficient to pay any transfer or
similar tax. As promptly as practicable after the surrender of such Convertible
Subordinated Note and the receipt of such Conversion Notice, instruments of
transfer and funds, if any, as aforesaid, the Company shall issue and shall
deliver at such office or agency to such holder, or on his written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Convertible Subordinated Note or portion
thereof in accordance with the provisions of this Article 12 and a check or cash
in respect of any fractional interest in a share of Common Stock arising upon
such conversion, as provided in Section 12.03. In case any Convertible
Subordinated Note of a denomination greater than $1,000 shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall register or
cause to be registered and shall authenticate and deliver to or upon the order
of the holder of the Convertible Subordinated Note so surrendered at the expense
of the Company, a new Convertible Subordinated Note in authorized denominations
in an aggregate principal amount equal to the unconverted portion of the
surrendered Note.
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which such Convertible Subordinated shall
have been surrendered and such Conversion Notice (and any applicable instruments
of transfer and any required funds) received by the Company as aforesaid, and
the Person or Persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby at
such time on such date and such conversion shall be at the Conversion Price in
effect at such time on such date, unless the stock transfer books of the Company
shall be closed on that date, in which event such Person or Persons shall be
deemed to have become such holder or holders of record at the close of business
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Convertible Subordinated Note shall have been surrendered and such
Conversion Notice received by the Company.
Any Convertible Subordinated Note or portion thereof surrendered for
conversion after the close of business on a Regular Record Date for payment of
interest and before the close of business on the next succeeding Interest
Payment Date (unless such Convertible Subordinated Note or portion thereof being
converted is called for redemption on a redemption date in that period) shall be
accompanied by payment, in funds acceptable to the Company, of an amount equal
to the interest thereon that is to be paid on such Interest Payment Date on the
principal amount being converted; provided, however, that no such payment need
be made if there shall exist at the time of conversion a default in the payment
of interest on the Convertible Subordinated Notes. An amount equal to such
payment shall be paid by the Company on such Interest Payment Date to the holder
of such Convertible Subordinated Notes at the close of business on such Regular
Record Date; provided, however, that, if the Company shall default in the
payment of interest on such Interest Payment Date, such amount shall be paid to
the
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Person who made such required payment. Except as provided for above in this
Section, no payments or adjustments shall be made upon conversion on account of
accrued interest on the Convertible Subordinated Notes or for any dividends or
distributions on any shares of Common Stock delivered upon the conversion of
such Convertible Subordinated Notes as provided in this Article.
SECTION 12.03 Cash Payments in Lieu of Fractional Shares.
------------------------------------------
No fractional shares or scrip representing fractions of shares of Common
Stock shall be issued upon conversion of the Convertible Subordinated Notes. If
more than one Convertible Subordinated Note shall be surrendered for conversion
at one time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Convertible Subordinated Notes, or specified portions
thereof to be converted, so surrendered. Instead of any fractional interest in
a share of Common Stock which would otherwise be deliverable upon the conversion
of any Convertible Subordinated Note or Convertible Subordinated Notes, the
Company shall pay to the holder of such Convertible Subordinated Note an amount
in cash (computed to the nearest cent) equal to the Daily Market Price thereof
at the close of business on the business day next preceding the day of
conversion multiplied by the fractional interest (expressed as a percentage)
that otherwise would have been deliverable to such holder upon such conversion
of the Convertible Subordinated Notes.
SECTION 12.04 Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be as specified in the form of Convertible
Subordinated Note set forth in Article 17 thereof subject to adjustment as
provided below. The Conversion Price shall be adjusted from time to time by the
Company as follows:
(a) In case the Company, after the date of this Indenture, shall (i)
pay a dividend or make a distribution on its Common Stock in shares of
Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares, or (iv) issue by reclassification of
its Common Stock any shares of Capital Stock of the Company, the Conversion
Price in effect immediately prior to such action shall be adjusted so that
the holder of any Convertible Subordinated Note thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common
Stock or other Capital Stock of the Company that it would have owned or
been entitled to receive immediately following such action had such
Convertible Subordinated Note been converted immediately prior to the
occurrence of such event. An adjustment made pursuant to this subsection
(a) shall become effective immediately after the record date, in the case
of a dividend or distribution, or immediately after the effective date, in
the case of a subdivision, combination or reclassification. If, as a
result of an adjustment made pursuant to this subsection (a), the holder of
any Convertible Subordinated Note thereafter surrendered for conversion
shall become entitled to receive shares of two or more classes of Capital
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Stock or shares of Common Stock and other Capital Stock of the Company, the
Board of Directors (whose determination shall be conclusive and shall be
described in a statement filed by the Company with the Trustee and with any
Conversion Agent as soon as practicable) shall determine the allocation of
the adjusted Conversion Price between or among shares of such classes of
Capital Stock or shares of Common Stock and other Capital Stock.
(b) In case the Company, after the date of this Indenture, shall issue
rights, warrants or options to all holders of its outstanding shares of
Common Stock entitling them to subscribe for or purchase shares of Common
Stock (or securities convertible into Common Stock) at a price per share
less than the current market price per share (as determined pursuant to
subsection (h) of this Section 12.04) of the Common Stock, the Conversion
Price in effect immediately prior thereto shall be adjusted so that it
shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of issuance of such rights, warrants
or options by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights,
warrants or options (immediately prior to such issuance), plus the number
of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or purchase
(or the aggregate conversion price of the convertible securities so offered
for subscription or purchase) would purchase at such current market price,
and of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, warrants or options
(immediately prior to such issuance) plus the number of additional shares
of Common Stock so offered for subscription or purchase (or into which the
convertible securities so offered for subscription or purchase are
convertible). Such adjustment shall be made successively whenever any such
rights, warrants or options are issued, and shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such rights, warrants or options. In determining
whether any rights, warrants or options entitle the holders to subscribe
for or purchase shares of Common Stock (or securities convertible into
Common Stock) at less than such current market price, and in determining
the aggregate offering price of such shares of Common Stock (or conversion
price of such convertible securities), there shall be taken into account
any consideration received by the Company for such rights, warrants or
options (and for such convertible securities), the value of such
consideration, if other than cash, to be determined by the Board of
Directors (whose determination shall be conclusive and shall be described
in a certificate filed with the Trustee and with any Conversion Agent by
the Company as soon as practicable). If at the end of the period during
which such warrants, rights or options are exercisable not all such
warrants, rights or options shall have been exercised, the adjusted
Conversion Price shall be immediately readjusted to what it would have been
based on the number of additional shares of Common Stock actually issued
(or the number of shares of Common Stock issuable upon conversion of
convertible securities actually issued).
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(c) In case the Company, after the date of this Indenture, shall
distribute to all or substantially all holders of its outstanding Common
Stock any shares of Capital Stock (other than Common Stock), evidences of
its indebtedness or assets (including securities and cash, but excluding
any cash dividend paid out of current or retained earnings of the Company
and dividends or distributions payable in stock for which adjustment is
required pursuant to subsection (a) of this Section 12.04) or rights,
warrants or options to subscribe for or purchase securities of the Company
(excluding those referred to in subsection (b) of this Section 12.04), then
in each such case the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the record date of such distribution by a
fraction of which the numerator shall be the current market price per share
(as determined pursuant to subsection (h) of this Section 12.04) of the
Common Stock less the fair market value on such record date (as determined
by the Board of Directors, whose determination shall be conclusive and
shall be described in a certificate filed with the Trustee and with any
Conversion Agent by the Company as soon as practicable) of the portion of
the Capital Stock or the evidences of indebtedness or the assets so
distributed to the holder of one share of Common Stock or of such
subscription rights, warrants or options applicable to one share of Common
Stock and of which the denominator shall be such current market price per
share of Common Stock. Such adjustment shall become effective immediately
after the record date for the determination of stockholders entitled to
receive such distribution. In the event of a distribution to all or
substantially all holders of Common Stock of rights to subscribe for
additional shares of the Company's Capital Stock (other than those referred
to in subsection (b) of this Section 12.04), the Company may, instead of
making an adjustment in the Conversion Price, make proper provision so that
each holder of a Convertible Subordinate Note who converts such Convertible
Subordinated Note after the record date for such distribution and prior to
the expiration or redemption of such rights shall be entitled to receive
upon such conversion, in addition to shares of Common Stock, an appropriate
number of such rights. If at the end of the period during which warrants,
rights or options described in this subsection (c) are exercisable not all
such warrants, rights or options shall have been exercised, the adjusted
Conversion Price shall be immediately readjusted to what it would have been
based on the number of warrants, rights or options actually exercised.
(d) Notwithstanding anything in subsection (b) or (c) of this Section
12.04 to the contrary, with respect to any rights, warrants or options
covered by subsection (b) or (c) of this Section 12.04, if such rights,
warrants or options are only exercisable upon the occurrence of certain
triggering events, then for purposes of this Section 12.04 such rights,
warrants or options shall not be deemed issued or distributed, and any
adjustment to the Conversion Price required by subsection (b) or (c) of
this Section 12.04 shall not be made until such triggering events occur and
such rights, warrants or options become exercisable.
(e) In case the Company, after the date of this Indenture, shall issue
to an Affiliate shares of its Common Stock (excluding those rights,
warrants, options, shares
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of Capital Stock or evidences of its indebtedness or assets referred to in
subsection (b) or (c) to this Section 12.04) at a net price per share less
than the current market price per share (as determined pursuant to
subsection (h) of this Section 12.04) on the date the Company fixes the
offering price of such additional shares, the Conversion Price shall be
reduced immediately thereafter so that it shall equal the price determined
by multiplying such Conversion Price in effect immediately prior thereto by
a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately prior to the issuance of such additional
shares plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered
would purchase at the current market price and the denominator shall be the
number of shares of Common Stock that would be outstanding immediately
after the issuance of such additional shares. Such adjustment shall be
made successively whenever such an issuance is made. This subsection (e)
shall not apply to Common Stock issued to any Affiliate under a bona fide
employee or director benefit plan or agreement adopted by the Company or
any subsidiary thereof and approved by either the stockholders of the
Company or a majority of the Company's outside directors.
(f) In case the Company, after the date of this Indenture, shall, by
dividend or otherwise, at any time distribute to all holders of its Common
Stock cash (including any cash that is distributed as part of a
distribution referred to in subsection (c) of this Section) in an aggregate
amount that, together with (i) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash
within the 12 months preceding the date fixed for determining the
stockholders entitled to such distribution and in respect of which no
Conversion Price adjustment pursuant to this subsection (f) has been made
and (ii) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of such date of
determination, of consideration payable in respect of any tender offer by
the Company or a subsidiary for all or any portion of the Common Stock
consummated within 12 months preceding the date fixed for determining the
stockholders entitled to such distribution and in respect of which no
Conversion Price adjustment pursuant to subsection (g) of this Section has
been made, exceeds 15% of the product of the current market price per share
(determined as provided in subsection (h) of this Section) on the date
fixed for the determination of stockholders entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date, the Conversion Price shall be reduced by multiplying such Conversion
Price by a fraction of which the numerator shall be the current market
price per share (determined as provided in subsection (h) of this Section)
on the date fixed for such determination less the amount of cash so
distributed at such time applicable to one share of Common Stock and the
denominator shall be such current market price, such reduction to become
effective immediately prior to the opening of business on the date after
the date fixed for such determination.
(g) In case a tender offer made by the Company or any subsidiary,
after the date of this Indenture, for all or any portion of the Common
Stock shall be consummated and
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such tender offer shall involve an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) as of the last
time (the "Expiration Time") that tenders may be made pursuant to such
tender offer (as it may be amended) that, together with (i) aggregate of
the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the consummation of such tender offer, of other
consideration paid or payable in respect of any tender offer by the Company
or a subsidiary for all or any portion of the Common Stock consummated
within the 12 months preceding the consummation of such tender offer and in
respect of which no Conversion Price adjustment pursuant to this subsection
(g) has been made and (ii) the aggregate amount of any distributions to
all holders of Common Stock made exclusively in cash within the 12 months
preceding the consummation of such tender offer and in respect of which no
Conversion Price adjustment pursuant to subsection (f) of this Section has
been made, exceeds 15% of the product of the current market price per share
(determined as provided in subsection (h) of this Section) immediately
prior to the Expiration Time times the number of shares of Common Stock
outstanding (including any tendered shares) at the Expiration Time, the
Conversion Price shall be reduced by multiplying the Conversion Price in
effect immediately prior to the Expiration Time by a fraction of which the
numerator shall be (i) the product of the current market price per share
(determined as provided in subsection (h) of this Section) immediately
prior to the Expiration Time times the number of shares of Common Stock
outstanding (including any tendered shares) at the Expiration Time minus
(ii) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders upon consummation of such tender
offer (the shares accepted for payment in the tender offer being referred
to as the "Purchased Shares") and the denominator shall be the product of
(x) such current market price per share times (y) such number of
outstanding shares at the Expiration Time minus the number of Purchased
Shares, such reduction to become effective immediately prior to the opening
of business on the day following the Expiration Time; provided that if the
number of Purchased Shares or the aggregate consideration payable therefor
have not been finally determined by such opening of business, the
adjustment required by this subsection (g) shall, pending such final
determination, be made based upon the preliminary announced results of such
tender offer, and, after such final determination shall have been made, the
adjustment required by this subsection (g) shall be made based upon the
number of Purchased Shares and the aggregate consideration payable therefor
as so finally determined.
(h) For the purpose of any computation under subsections (b) through
(g) of this Section 12.04, the current market price per share of Common
Stock on any date shall be deemed to be the average of the Daily Market
Prices for the shorter of (i) 30 consecutive business days ending on the
last full trading day on the exchange or market referred to in determining
such Daily Market Prices prior to the Time of Determination or (ii) the
period commencing on the date next succeeding the first public announcement
of the
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issuance of such rights or warrants or such distribution through such last
full trading day prior to the Time of Determination.
(i) In any case in which this Section 12.04 shall require that an
adjustment be made immediately following a record date or an effective
date, the Company may elect to defer (but only until five business days
following the filing by the Company with the Trustee and any Conversion
Agent of the certificate required by subsection (k) of this Section 12.04)
issuing to the holder of any Convertible Subordinated Note converted after
such record date or effective date the shares of Common Stock issuable upon
such conversion over and above the shares of Common Stock issuable upon
such conversion on the basis of the Conversion Price prior to adjustment,
and paying to such holder any amount of cash in lieu of a fractional share.
(j) No adjustment in the Conversion Price shall be required to be made
unless such adjustment would require an increase or decrease of at least 1%
in such price; provided, however, that any adjustments which by reason of
this subsection (j) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations
under this Section 12.04 shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be. No adjustment to the
Conversion Price need be made if only the par value of the Common Stock is
changed (including any change to no par value Common Stock). To the extent
that the Notes become convertible into cash, no adjustment need be made
thereafter as to such cash and interest will not accrue on such cash.
Anything in this Section 12.04 to the contrary notwithstanding, the Company
shall be entitled to make such reduction in the Conversion Price, in
addition to those required by this Section 12.04, as it in its discretion
shall determine to be advisable in order that any stock dividend,
subdivision of shares, distribution of rights to purchase stock or
securities, or distribution of securities convertible into or exchangeable
for stock hereafter made by the Company to its stockholders shall not be
taxable to the recipients.
(k) Whenever the Conversion Price is adjusted as herein provided, (i)
the Company shall promptly file with the Trustee and any Conversion Agent
other than the Trustee a certificate signed by the President, any Vice
President or the Treasurer of the Company setting forth the Conversion
Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and the manner of computing the same, which
certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall forthwith be
given by the Company to the holders of Convertible Subordinated Notes in
the manner provided in Section 10.02. The Company may correct any previous
certificate and notice given pursuant to this subsection (k) by (i)
promptly filing with the Trustee and any Conversion Agent other than the
Trustee a new certificate in the form required by this subsection (k) and
(ii) giving a new notice to the holders of Convertible Subordinated Notes
in the form and manner required by this subsection (k). Such new
certificate and notice shall state that
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such certificate and notice are being provided to correct the previous
certificate and notice. Except as otherwise provided in Section 7.01,
neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to the certificate required by this subsection
(k) except to exhibit the same to any holder of Convertible Subordinated
Notes who requests to inspect it. The certificate required by this
subsection (k) shall be filed at each office or agency maintained for the
purposes of conversion of Notes pursuant to Section 2.03.
(l) In the event that at any time, as a result of an adjustment made
pursuant to subsection (a) of this Section 12.04, the holder of any
Convertible Subordinated Note thereafter surrendered for conversion shall
become entitled to receive any shares of the Company other than shares of
Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of any Note shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to Common Stock contained in this Article 12
and the other provisions of this Article 12 applicable to Common Stock
shall apply to such other shares.
SECTION 12.05 Notice to Holders Prior to Certain Corporate Actions.
----------------------------------------------------
In case:
(a) the Company shall take any action that would require an adjustment
in the Conversion Price pursuant to Section 12.04(c); or
(b) the Company shall authorize the granting to the holders of its
Common Stock generally of rights, warrants or options to subscribe for or
purchase any shares of stock of any class or of any other rights (other
than employee or director stock options); or
(c) there shall be any reorganization or reclassification of the
Common Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common Stock),
or any consolidation or merger to which the Company is a party, or any
conveyance, transfer, sale or lease of the Company's properties and assets
as, or substantially as, an entirety; or
(d) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with the Trustee and any Conversion
Agent, and shall cause to be given to the holders of Convertible Subordinated
Notes, in the manner provided in Section 10.02, as promptly as possible, but in
any event at least 10 days prior to the applicable date hereinafter specified, a
notice stating (i) the date on which a record is to be taken for the purpose of
such dividend, or distribution or rights or warrants, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such distribution
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or rights are to be determined, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up is expected to become effective or occur,
and, if applicable, the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
liquidation or winding up. Failure to give such notice or any defect therein
shall not affect the legality or validity of the proceedings described in
subsection (a), (b), (c) or (d) of this Section 12.05.
SECTION 12.06 Reservation of Shares of Common Stock.
-------------------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued shares of
Common Stock or its issued shares of Common Stock held in its treasury, or both,
for the purpose of effecting conversions of Convertible Subordinated Notes, the
full number of shares of Common Stock deliverable upon the conversion of all
outstanding Notes not theretofore converted.
Before taking any action that would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common Stock
deliverable upon conversion of the Convertible Subordinated Notes, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Conversion Price.
SECTION 12.07 Taxes upon Conversion.
---------------------
The Company shall pay any and all documentary, stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of shares of Common
Stock on conversions of Notes pursuant hereto; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issue or delivery of shares of Common Stock in a
name other than that of the holder of the Convertible Subordinated Note or
Convertible Subordinated Notes to be converted and no such issue or delivery
shall be made unless and until the Person requesting such issue or delivery has
paid to the Company the amount of any such tax or has established to the
satisfaction of the Company that such tax has been paid.
SECTION 12.08 Covenants as to Common Stock.
----------------------------
The Company covenants that all shares of Common Stock which may be
delivered upon conversions of Convertible Subordinated Notes will upon delivery
be duly and validly issued and fully paid and nonassessable, free of all Liens
and charges and not subject to any preemptive rights.
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The Company further covenants that, for so long as the Common Stock shall
be listed on the New York Stock Exchange or any other national securities
exchange, the Company will, if permitted by the rules of such exchange, list and
keep listed all Common Stock issuable upon conversion of the Convertible
Subordinated Notes.
SECTION 12.09 Consolidation or Merger or Sale of Assets.
-----------------------------------------
Notwithstanding any other provision herein to the contrary, in case of any
consolidation or merger to which the Company is a party (other than a merger or
consolidation which does not result in any reclassification, conversion,
exchange or cancellation of the outstanding shares of Common Stock of the
Company), or in case of any conveyance, transfer, sale or lease to another
corporation of the properties and assets of the Company as, or substantially as,
an entirety, the corporation formed by such consolidation, or the corporation
whose securities, cash or other property will immediately after the merger or
consolidation be owned, by virtue of the merger or consolidation, by the holders
of Common Stock of the Company immediately prior to the merger or the
corporation which shall have acquired such properties and assets of the Company,
as the case may be, shall promptly execute and deliver to the Trustee a
supplemental indenture providing that the holder of each Convertible
Subordinated Note then outstanding shall have the right thereafter to convert
such Note, during the period such Note is convertible as specified in this
Article 12, into the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, conveyance, transfer, sale or lease
by a holder of the number of shares of Common Stock into which such Note might
have been converted immediately prior to such consolidation, merger, conveyance,
transfer, sale or lease, assuming such holder of Common Stock (i) is not a
Person with which the Company consolidated or into which the Company merged or
was merged or to which such conveyance, transfer, sale or lease was made or an
Affiliate of such Person and (ii) did not exercise statutory rights of election,
if any, as to the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, conveyance, transfer, sale or lease
(provided that if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, conveyance, transfer, sale or lease
is not the same for each share of Common Stock in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purposes of this Section 12.09 the kind and amount of securities, cash or other
property receivable upon such consolidation, merger, conveyance, transfer, sale
or lease for each non-electing share shall be deemed to be the kind and amount
so receivable per share by the holders of a plurality of the non-electing
shares). Such supplemental indenture shall provide for adjustments which, for
events subsequent to the effective date of such supplemental indenture, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article 12 in relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of the Notes.
The above provisions of this Section 12.09 shall similarly apply to
successive consolidations, mergers, conveyances, transfers, sales or leases.
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The Company shall give notice of the execution of such a supplemental
indenture to the holders of Convertible Subordinated Notes in the manner
provided in Section 10.02 within 30 days after the execution thereof; provided,
however, that such notice need not be given if such information has been
provided prospectively in the notice given pursuant to Section 12.05. Failure
to give such notice, or any defects therein, shall not affect the legality or
validity of any such supplemental indenture or any transaction contemplated in
this Section 12.09.
SECTION 12.10 Disclaimer of Responsibility for Certain Matters.
------------------------------------------------
Neither the Trustee nor any Conversion Agent shall at any time be under any
duty or responsibility to any holder of Convertible Subordinated Notes to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. Neither the
Trustee nor any Conversion Agent shall be accountable with respect to the
listing or registration referred to in Section 12.08 or the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities,
cash or other property, which may at any time be issued or delivered upon the
conversion of any Note; and neither the Trustee nor any Conversion Agent makes
any representation with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or to make any cash payment upon the surrender of any Note for the
purpose of conversion or, subject to the provisions of Section 7.01, to comply
with any of the covenants of the Company contained in this Article 12.
SECTION 12.11 Cancellation of Converted Notes.
-------------------------------
All Notes delivered for conversion shall be delivered to the Trustee to be
cancelled by or at the direction of the Trustee, which shall dispose of the same
as provided in Section 2.11.
SECTION 12.12 Voluntary Reduction.
-------------------
The Company from time to time may reduce the Conversion Price by any amount
for any period of time if the period is at least 20 days or such longer period
as may be required by law and if the reduction is irrevocable during such
period.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.
ROHR, INC.
By: /s/ A.L. Majors
---------------
Name: A.L. Majors
-----------
Title: Vice President and Chief Accounting
-----------------------------------
Officer
-------
Attest:
/s/ R.W. Madsen
- - ---------------
Secretary
THE BANK OF NEW YORK
By: /s/ Robert F. McIntyre
----------------------
Name: Robert F. McIntyre
------------------
Title: Assistant Vice President
------------------------
Attest:
/s/ DML
- - -------
S-1
<PAGE>
EXHIBIT A
(Face of Security)
No. _____________ $ ________________
CUSIP 775416 AD 2
ROHR, INC.
7 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
promises to pay to
or registered assigns,
the principal sum of Dollars on May 15, 2004
Interest Payment Dates: May 15 and November 15
Regular Record Dates: May 1 and November 1
Certificate of Authentication
This is one of the Convertible Subordinated Notes
described in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
ROHR, INC.
By By
-------------------------------- ---------------------------------------
Authorized Signatory President and Chief Executive Officer
Dated:
By
---------------------------------------
Secretary
(SEAL)
A-1
<PAGE>
(Back of Security)
ROHR, INC.
7 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
1. INTEREST. Rohr, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Convertible
Subordinated Note at the rate per annum shown above. The Company will pay
interest semiannually on May 15 and November 15 of each year. Interest on the
Convertible Subordinated Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from May 19, 1994.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest on the Convertible
Subordinated Notes (except defaulted interest) to the person in whose name each
Convertible Subordinated Note is registered at the close of business on the May
1 or November 1 immediately preceding the relevant interest payment date (each a
"Regular Record Date") even though Convertible Subordinated Notes are cancelled
after the record date and on or before the interest payment date. Holders must
surrender Convertible Subordinated Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money, and may mail such check to the holder's registered
address.
3. PAYING AGENT AND REGISTRAR. The Bank of New York, a New York State
banking corporation (together with any successor Trustee under the Indenture
referred to below, the "Trustee"), will act as Paying Agent and Registrar. The
Company may change the Paying Agent, Registrar or co-registrar without prior
notice. Subject to certain limitations in the Indenture, the Company or any of
its subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Convertible Subordinated Notes under
an Indenture dated as of May 15, 1994 (the "Indenture") between the Company and
the Trustee. The terms of the Convertible Subordinated Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code (S) (S) 77aaa-77bbbb) as in effect on
the date of the Indenture. The Convertible Subordinated Notes are subject to,
and qualified by, all such terms, certain of which are summarized hereon, and
holders are referred to the Indenture and such Act for a statement of such
terms. The Convertible Subordinated Notes are unsecured general obligations of
the Company limited to (except as otherwise provided in the Indenture) up to
$50,000,000 in aggregate principal amount, unless an election has been made as
set forth in Article 2 of the Indenture to increase such aggregate principal
amount by an amount not to exceed $7,500,000. Capitalized terms not defined
below have the same meaning as is given to them in the Indenture.
A-2
<PAGE>
5. OPTIONAL REDEMPTION. The Company may redeem the Convertible
Subordinated Notes, in whole or in part, prior to maturity at any time on or
after May 15, 1998 at the following redemption prices (expressed as percentages
of the principal amount), plus accrued and unpaid interest to the date fixed for
redemption, if redeemed during the twelve-month period beginning May 15 of each
year indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
1998................................... 104.650%
1999................................... 103.875%
2000................................... 103.100%
2001................................... 102.325%
2002................................... 101.550%
2003................................... 100.775%
2004................................... 100.000%
</TABLE>
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the date fixed for redemption to each
holder of Convertible Subordinated Notes to be redeemed at his or her registered
address. Convertible Subordinated Notes in denominations larger than $1,000 may
be redeemed in part but only in whole multiples of $1,000. In the event of a
redemption of less than all of the Convertible Subordinated Notes, the
Convertible Subordinated Notes will be chosen for redemption by the Trustee by
lot or pro rata or, if required, in compliance with the requirements of the
principal national securities exchange, if any, on which the Convertible
Subordinated Notes are listed. On and after the redemption date interest ceases
to accrue on Convertible Subordinated Notes or portions of them called for
redemption (unless the Company defaults in the payment of the redemption price).
If this Convertible Subordinated Note is redeemed subsequent to a record date
with respect to any interest payment date specified above and on or prior to
such interest payment date, then any accrued interest will be paid to the person
in whose name this Convertible Subordinated Note is registered at the close of
business on such record date.
7. CHANGE OF CONTROL. Upon a Change of Control, the Company shall make a
Change of Control Offer to purchase all outstanding securities at a price equal
to 101% of the aggregate principal amount of the Convertible Subordinated Notes,
plus accrued and unpaid interest to the date of purchase, such offer to be made
as provided in the Indenture. To accept the Change of Control Offer, the holder
hereof must comply with the terms thereof, including surrendering this
Convertible Subordinated Note, with the "Option of Holder to Elect Purchase"
portion hereof completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent, at the address specified in the notice of the Change
of Control Offer mailed to holders as provided in the Indenture, prior to
termination of the Change of Control Offer.
A-3
<PAGE>
8. SUBORDINATION. To the extent set forth in Article 11 of the Indenture
the Convertible Subordinated Notes are subordinated to Senior Indebtedness.
Senior Indebtedness shall not include (a) any indebtedness of the Company to any
of its subsidiaries, (b) Capitalized Lease Obligations, (c) indebtedness or
other obligations in respect of the Pooling and Servicing Agreement, (d) the
Company's 9.25% Subordinated Debentures due 2017 and its 7% Convertible
Subordinated Debentures due 2012, and (e) with respect to an obligation relating
to the deferred purchase price of property or services, any advances, deposits,
partial or progress payments, payables, unpaid wages and related employee
obligations, trade accounts and accrued liabilities. To the extent provided in
the Indenture, Senior Indebtedness must be paid before the Convertible
Subordinated Notes may be paid. The Company agrees, and each holder by accepting
a Convertible Subordinated Note agrees, to the subordination and authorizes the
Trustee to give it effect.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Convertible Subordinated Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Convertible Subordinated Notes may be
registered and Convertible Subordinated Notes may be exchanged as provided in
the Indenture. As a condition of transfer, the Registrar may require a holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a holder to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not exchange or register the
transfer of any Convertible Subordinated Note or portion of a Convertible
Subordinated Note selected for redemption. Also, it need not exchange or
register the transfer of any Convertible Subordinated Note for a period of 15
days before a selection of Convertible Subordinated Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered holder of a Convertible
Subordinated Note may be treated as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or
the Convertible Subordinated Notes may be amended with the consent of the
holders of at least a majority in principal amount of the then outstanding
Convertible Subordinated Notes and any existing default may be waived with the
consent of the holders of a majority in principal amount of the then outstanding
Convertible Subordinated Notes. Without the consent of any holder, the Indenture
or the Convertible Subordinated Notes may be amended to: add to the covenants of
the Company for the benefit of the holders of Convertible Subordinated Notes;
surrender any right or power conferred upon the Company; provide for conversion
rights of holders of Convertible Subordinated Notes in the event of
consolidation, merger or sale of all or substantially all of the assets of the
Company; evidence the succession of another person to the Company and the
assumption by such successor of the covenants and obligations of the Company
thereunder and in the Convertible Subordinated Notes as permitted by the
Indenture; reduce the Conversion Price, provided that such reduction will not
adversely affect the interest of holders of Convertible Subordinated Notes in
any material respect; cure any ambiguity or correct or supplement any defective
provision contained in the Indenture, or make any other change in the provisions
of the Indenture which the Company and the Trustee may deem
A-4
<PAGE>
necessary or desirable and which will not adversely affect the interest of the
holders of Convertible Subordinated Notes.
12. DEFAULTS AND REMEDIES. An Event of Default is: default for 30 days in
payment of interest on the Convertible Subordinated Notes; default in payment of
principal of or premium, if any, on the Convertible Subordinated Notes; failure
by the Company to comply with certain covenants of the Indenture upon the
receipt of written notice of such default as set forth in the Indenture; failure
by the Company for 60 days after notice to it to comply with any of its other
agreements in the Indenture or the Convertible Subordinated Notes; certain
defaults under and accelerations prior to maturity of certain indebtedness;
certain final judgments which remain undischarged; and certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in principal amount of the then
outstanding Convertible Subordinated Notes may declare all the Convertible
Subordinated Notes to be due and payable immediately, except that in the case of
an Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Convertible Subordinated Notes become due and payable without
further action or notice. Holders may not enforce the Indenture or the
Convertible Subordinated Notes except as provided in the Indenture. The Trustee
may require an indemnity satisfactory to it before it enforces the Indenture or
the Convertible Subordinated Notes. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Convertible Subordinated
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from holders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is in
their interests. The Company must furnish quarterly compliance certificates to
the Trustee.
13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its
Affiliates, in their individual or any other capacities, may make or continue
loans to or guaranteed by, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
stockholder, as such, of the Company shall have any liability for any
obligations of the Company under the Convertible Subordinated Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each holder by accepting a Convertible
Subordinated Note waives and releases all such liability. The waiver and release
are part of the consideration for the Convertible Subordinated Notes.
15. AUTHENTICATION. This Convertible Subordinated Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
holder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by
the entireties, JT TEN = joint tenants with right of survivorship and not as
tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act.
A-5
<PAGE>
17. CONVERSIONS. Subject to and upon compliance with the provisions of the
Indenture, the registered holder of this Note has the right, at its option, at
any time or prior to the close of business on May 15, 2004 (or in case this
Convertible Subordinated Note or any portion hereof shall be called for
redemption prior to such date, then on or prior to the close of business on the
date fixed for redemption), to convert the principal amount hereof, or any
portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and nonassessable whole shares of common
stock of the Company ("Common Stock") obtained by dividing the principal amount
of the Convertible Subordinated Note or portion thereof to be converted by the
conversion price of $10.35 per share, or the conversion price as adjusted from
time to time as provided in the Indenture, upon surrender of this Convertible
Subordinated Note to the Company at the office or agency maintained for such
purpose in New York, New York (and at such other offices or agencies designated
for such purpose by the Company), accompanied by written notice of conversion
duly executed and (if the shares of Common Stock to be issued on conversion are
to be issued in any name other than that of the registered holder of this
Convertible Subordinated Note) by instruments of transfer, in form satisfactory
to the Company, duly executed by the registered holder or its duly authorized
attorney and, in case such surrender shall be made during the period starting
after the close of business on the Regular Record Date immediately preceding any
Interest Payment Date through the close of business on such Interest Payment
Date (unless this Note or the portion thereof being converted is subject to
redemption on a redemption date in that period), also accompanied by payment in
funds acceptable to the Company of an amount equal to the interest otherwise
payable on such Interest Payment Date on the principal amount of this Note then
being converted. Subject to the aforesaid requirement for a payment in the event
of conversion after the close of business on a Regular Record Date immediately
preceding an Interest Payment Date, no payment or adjustment shall be made on
conversion for interest accrued hereon or for dividends on Common Stock
delivered on conversion. The right to convert this Note is subject to the
provisions of the Indenture relating to conversion rights in the case of certain
consolidations, mergers, or sales or transfers of substantially all the
Company's assets.
The Company shall not issue fractional shares or scrip representing
fractions of shares of Common Stock upon any such conversion, but shall make an
adjustment therefor in cash on the basis of the then current market value of
such fractional interest as provided in the Indenture.
The Company will furnish to any holder upon written request and without
charge a copy of the Indenture. Requests may be made to: General Counsel, Rohr,
Inc., 850 Lagoon Drive, Chula Vista, California 91910.
A-6
<PAGE>
FORM OF CONVERSION NOTICE
To: ROHR, INC.
The undersigned registered owner of the Convertible Subordinated Note
hereby irrevocably exercises the option to convert this Convertible Subordinated
Note, or portion hereof (which is $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of Rohr, Inc. in accordance with the
terms of the Indenture referred to in this Convertible Subordinated Note, and
directs that the shares issuable and deliverable upon the conversion, together
with any check in payment for fractional shares and Convertible Subordinated
Notes representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Convertible Subordinated Note
not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest and taxes accompanies this Convertible Subordinated Note.
Dated: _______________________________________
Fill in for registration of shares if _______________________________________
to be delivered, and Notes if to Signature(s)
be issued, other than to and in
the name of the registered holder Principal amount to be converted
(Please Print): (if less than all):
$ ,000
_______________________________________
Social Security or other Tax-
payer Identification Number
__________________________________
(Name)
__________________________________
(Street Address)
__________________________________
(City, State and zip code)
Signature Guarantee:
__________________________________
A-7
<PAGE>
ASSIGNMENT FORM
If you the holder want to assign this Convertible Subordinated Note, fill
in the form below and have your signature guaranteed:
I or we assign and transfer this Convertible Subordinated Note to ______________
________________________________________________________________________________
(Insert assignee's social security or tax ID number) ___________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________agent to
transfer this Convertible Subordinated Note on the books of the Company. The
agent may substitute another to act for him.
Date: __________________ Your Signature:____________________________________
(Sign exactly as your name appears on the other
side of this Convertible Subordinated Note)
Signature Guarantee: ___________________________________________________________
A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Convertible Subordinated Note purchased by the
Company pursuant to Sections 4.05 or 4.08 of the Indenture, check the Box:
If you wish to have a portion of this Convertible Subordinated Note
purchased by the Company pursuant to Section 4.05 or 4.08 of the Indenture,
state the amount (in multiples of $1,000): $_______________
Date: ___________________ Your Signature:____________________________________
(Sign exactly as your name appears on the other
side of this Convertible Subordinated Note)
Signature Guarantee: __________________________________________________________
A-9
<PAGE>
Exhibit 10.11.6
SIXTH AMENDMENT
This SIXTH AMENDMENT, dated as of September 24, 1993 among ROHR, INC.
(formerly known as Rohr Industries, Inc.) (the "Borrower"), the Lenders parties
to the Credit Agreement as defined and referred to below, and CITIBANK, N.A.
("Citibank"), as Agent (the "Agent") for such Lenders.
PRELIMINARY STATEMENT. The Borrower has entered into a Credit Agreement
dated as of April 26, 1989, as amended by the First Amendment dated as of July
21, 1989, the Second Amendment dated as of January 25, 1990, the Third Amendment
dated as of April 30, 1990, the Letter Amendment dated as of October 31, 1992,
and the Fifth Amendment dated as of July 9, 1993 (said Credit Agreement, as so
amended, being the "Credit Agreement", the terms defined therein being used
herein as therein defined unless otherwise defined herein), with the Lenders
parties thereto and the Agent. The Borrower and the Lenders have agreed to
amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendment to Credit Agreement. Effective as of the date hereof
-----------------------------
and subject to the conditions set forth in Section 2 below, clause (iv)(B) in
the definition of "Net Income Available for Fixed Charges" in Section 1.01 of
the Credit Agreement is hereby amended to read as follows:
"(B) the provisions and charges, not in excess of $38 million in
the aggregate, established by the Borrower in the third Fiscal Quarter of
Fiscal Year 1993."
SECTION 2. Conditions of Effectiveness. This Sixth Amendment shall become
---------------------------
effective as of the date hereof when:
(a) the Agent shall have received counterparts of this Sixth Amendment
executed by the Borrower and the Majority Lenders or, as to any such
Lender, advice satisfactory to the Agent that such Lender has executed
counterparts of this Sixth Amendment,
(b) the definition of "Consolidated Net Income Available for Fixed
Charges" in each of the Note Agreements, dated as of January 15, 1990 and
December 21, 1992, between the Borrower and the note holders parties
thereto, each as amended through June 30, 1993, shall have been amended in
substantially the same manner as set forth in Section 1 hereof, and
(c) the definition of "Net Income Available for Fixed Charges"
incorporated from the Credit Agreement into the Sublease Agreement, dated
as of September 14,
1
<PAGE>
1992, between the Borrower and State Street Bank and Trust Company of
California, National Association, and W. Jeffrey Kramer, not in an
individual capacity but solely as owner trustee under a trust for the
benefit of General Electric Capital Corporation, as amended through July 9,
1993, shall have been effectively amended in substantially the same manner
as set forth in Section 1 hereof.
SECTION 3. Reference to and Effect on the Credit Agreement. (a) On and
-----------------------------------------------
after the date hereof each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words of like import referring to
the Credit Agreement, and each reference in the Notes to the "Credit Agreement",
"thereunder", "thereof", "therein" or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby.
(b) Except as specifically amended above, the Credit Agreement and the
A Notes, and each B Note outstanding on the date hereof, shall remain in full
force and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Sixth Amendment
shall not operate as a waiver of any right, power or remedy of any Lender or the
Agent under the Credit Agreement or any of the Notes nor constitute a waiver of
any of the provisions contained therein.
SECTION 4. Costs and Expenses. The Borrower agrees to pay on demand all
------------------
costs and expenses of the Agent in connection with the preparation, execution
and delivery of this Sixth Amendment, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent with respect
hereto and with respect to advising the Agent as to its rights and
responsibilities hereunder.
SECTION 5. Execution in Counterparts. This Sixth Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Sixth Amendment by telecopier shall be effective as delivery of a
manually executed counterpart of this Sixth Amendment.
SECTION 6 Governing Law. This Sixth Amendment shall be governed by, and
--------------
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to
be executed by their respective
2
<PAGE>
officers thereunto duly authorized, as of the date first above written.
ROHR, INC.
By /s/ R. M. Miller
--------------------------------
Vice President and
Treasurer
CITIBANK, N.A., as Agent
By /s/ Barbara A. Cohen
--------------------------------
Vice President
BANKS
-----
CITIBANK, N.A.
By /s/ Barbara A. Cohen
--------------------------------
Vice President
BANKERS TRUST COMPANY
By /s/ Edward Benedict
--------------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Levoyd E. Robinson
--------------------------------
Title: Assistant Vice President
WELLS FARGO BANK, N.A.
By /s/ Dan Pallaras
--------------------------------
Title: Vice President
3
<PAGE>
SEVENTH AMENDMENT
This SEVENTH AMENDMENT, dated as of May 10, 1994 among ROHR, INC.
(formerly known as Rohr Industries, Inc.) (the "Borrower"), the financial
institutions listed on the signature pages hereof under the heading "Lenders"
(collectively the "Lenders"), BANKERS TRUST COMPANY, as "Assignor" under, and as
defined in, Section 3 hereof, and CITIBANK, N.A. ("Citibank"), as resigning
Agent for such Lenders pursuant to Section 2 below, and CITICORP USA, INC., a
Delaware corporation ("CUSA"), as successor Agent for the Lenders from time to
time pursuant to said Section 2.
PRELIMINARY STATEMENT. The Borrower has entered into a Credit
Agreement dated as of April 26, 1989, as amended by the First Amendment dated as
of July 21, 1989, the Second Amendment dated as of January 25, 1990, the Third
Amendment dated as of April 30, 1990, the Letter Amendment dated as of October
31, 1992, the Fifth Amendment dated as of July 9, 1993, and the Sixth Amendment
dated as of September 24, 1993 (said Credit Agreement, as so amended, being the
"Credit Agreement", the terms defined therein being used herein as therein
defined unless otherwise defined herein), with the Lenders party thereto and the
Agent. The Borrower and the Lenders have agreed to amend and modify the Credit
Agreement as hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendment to Credit Agreement. The Credit Agreement is,
-----------------------------
effective as of the date hereof and subject to the satisfaction of the
conditions set forth in Section 4 below, hereby amended as follows:
(a) Section 1.01 is hereby amended by adding the following definitions
in appropriate alphabetical order:
"'Affiliate' means, as to any Person, any other Person that,
---------
directly or indirectly, controls, is controlled by or is under common
control with such Person."
"'Agent's Account' means the account of the Agent maintained by
---------------
the Agent with Citibank at its office at 399 Park Avenue, New York, New
York 10043, Account No. 36852248, Attention: Rohr, Inc. Account."
"'Agent's Syndication Account' means the account of the Agent
---------------------------
maintained by the Agent with Citibank at its office at 399 Park
Avenue, New York,
<PAGE>
2
New York 10043, Account No. 36852248, Attention: Rohr, Inc. Account."
"'Borrower's Account' means the account of the Borrower maintained
------------------
by the Borrower with Citibank at its offices at 399 Park Avenue, New
York, New York 10043, Account No. 38007777."
"'CUSA' means Citicorp USA, Inc., a Delaware corporation."
----
"'Debt Date' means the date of issuance and sale by the Borrower
---------
of the Senior Notes and the Subordinated Debt."
"'Environmental Action' means any administrative, regulatory or
--------------------
judicial action, suit, demand, demand letter, claim, notice of non-
compliance or violation, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief."
"'Environmental Permit' means any permit, approval, identification
--------------------
number, license or other authorization required under any applicable
Environmental Law."
"'Gross Operating Income' means, for any period, sales less costs
---------------------- ----
and expenses attributable to sales (other than amortization and
depreciation), in each case as reflected on the consolidated statements
of operations and cash flows of the Borrower and the Subsidiaries for
such period."
"'Hazardous Materials' means petroleum and petroleum products, by
-------------------
products or breakdown products, radioactive materials, asbestos-
containing materials, radon gas and any other chemicals, materials or
substances designated, classified or regulated as being 'hazardous' or
'toxic', or words of similar import, under any federal, state, local or
foreign statute, law, ordinance, rule,
<PAGE>
3
regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance."
"'Insufficiency' means, with respect to any Plan, the amount, if
-------------
any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA."
"'Material Adverse Effect' means a material adverse effect of (a)
-----------------------
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole, (b) the rights and remedies of the Agent
or any Lender under this Agreement or any Note or (c) the ability of
the Borrower to perform its obligations under this Agreement or any
Note."
"'Senior Notes' means promissory notes of the Borrower that are
------------
(i) publicly issued after April 1, 1994 and (ii) subject to such terms
and provisions as shall be (a) acceptable to the Majority Lenders and
the Agent and (b) substantially similar to those terms and provisions
described in the draft prospectus of April 19, 1994 filed by the
Borrower with the Securities and Exchange Commission in connection with
the offering of the Borrower's Senior Notes due 2003."
"'Seventh Amendment' means the Seventh Amendment, dated as of May
-----------------
10, 1994 among the Borrower, the Lenders, Bankers Trust Company (as an
'Assignor' thereunder) and the Agent (including Citibank as resigning
Agent and CUSA as successor Agent)."
(b) The definitions of "Commitment", "Eligible Assignee",
"Environmental Laws", "ERISA Event", "Lenders", "Permitted Liens",
"Repayment Date", "Subordinated Debt", and "Termination Date" in Section
1.01 are hereby amended to read, respectively, as follows:
"'Commitment' means, with respect to any Lender at any time, the
----------
amount set forth opposite such Lender's name on the signature pages of
the Seventh Amendment or, if such Lender has entered into one or more
Assignments and Acceptances after the date of the Seventh Amendment,
set forth for such Lender in the Register maintained by the Agent
pursuant to
<PAGE>
4
Section 8.07(c) as such Lender's 'Commitment', as such amount may be
reduced at or prior to such time pursuant to Section 2.05."
"'Eligible Assignee' means (a) any Affiliate of any Lender, (b)
-----------------
any Federal Reserve Bank (other than with respect to any assignment of
a Commitment) or (c) any Person approved by the Agent and the Borrower,
such approval not to be unreasonably withheld; provided, that in the
--------
case of clauses (a) and (c) of this definition, such Affiliate or
Person is a financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary
course of its business; and provided, further, however, that an
-------- ------- -------
Affiliate of the Borrower shall not qualify as an Eligible Assignee
under clause (c) of this definition."
"'Environmental Law' means any federal, state, local or foreign
-----------------
statute, law, ordinance, rule, regulation, code, order, judgment or
decree or written judicial or agency interpretation, policy or guidance
having the force of law relating to the environment, health, safety or
Hazardous Materials."
"'ERISA Event' means (i) the occurrence of a reportable event,
-----------
within the meaning of Section 4043(b) of ERISA (other than an event
described in Section 4043(b)(3)), unless the 30-day notice requirement
with respect thereto was waived by the PBGC as of the date of the
Seventh Amendment, (ii) the provision by the administrator of any Plan
of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA), (iii) the cessation
of operations at a facility in the circumstances described in Section
4062(e) of ERISA, (iv) the withdrawal by the Borrower or an ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA,
(v) the failure by the Borrower or any ERISA Affiliate to make a
payment to a Plan required under Section 302(f)(1) of ERISA, which
Section imposes a lien for failure to make required payments, (vi) the
adoption of an amendment to a Plan requiring the provision of security
to such Plan, pursuant to
<PAGE>
5
Section 307 of ERISA, or (vii) the institution by the PBGC of
proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition which would constitute grounds
under Section 4042(a)(i) and (ii) of ERISA for the termination of, or
the appointment of a trustee to administer, a Plan."
"'Lenders' means (i) the financial institutions listed on the
-------
signature pages of the Seventh Amendment under the heading 'Lenders'
and (ii) each Eligible Assignee that shall become a party hereto
pursuant to Section 8.07."
"'Permitted Liens' means such of the following as to which no
---------------
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced (except as permitted below):
[clauses (i) through (viii) remain unchanged]
. . .
"(ix) pledges or deposits of cash or Permitted Investments
to secure obligations in respect of letters of credit issued in
connection with any workers' compensation or self-insurance or
reinsurance program established by the Borrower or any of its
Subsidiaries;"
[clauses (x) and (xi) remain unchanged]
"'Repayment Date' means the date on which any Debt (other than (i)
--------------
Debt resulting from Advances, (ii) Debt owed to any Subsidiary of the
Borrower, and (iii) Debt described in clause (vi) of the definition of
"Debt" contained in Section 1.01) of the Borrower is prepaid, redeemed,
purchased, defeased or otherwise satisfied prior to the scheduled
repayment date or stated maturity thereof; provided, however, that the
-------- -------
date on which any of the following occurs shall not be a Repayment
Date: (a) the satisfaction of Debt through its surrender to the
Borrower in payment for stock issuable upon exercise of a warrant
issued pursuant to the Warrant Agreement dated as of July 31, 1993
between the Borrower and the purchasers identified therein, (b) the
conversion of the
<PAGE>
6
Borrower's 7% Convertible Subordinated Debentures due 2012 and 7 3/4%
Convertible Subordinated Notes due 2004 into common stock of the
Borrower in accordance with their respective terms, and (c)
prepayments, redemptions, purchases, defeasances or other satisfactions
of Debt (other than Debt evidenced by the Borrower's 9.35% and 9.33%
senior notes due 2000 and 2002, respectively, 9.25% subordinated notes
due 2017, 7% convertible subordinated notes due 2012, Senior Notes and
Subordinated Debt) aggregating not more than $500,000 in any Fiscal
Year, and provided, further, that it is understood and agreed that the
-------- -------
scheduled repayment date or stated maturity of the industrial
development bonds (in an aggregate principal amount up to $16,500,000)
related to the Borrower's San Marcos, Texas facility shall include the
date on which such bonds shall be prepaid, redeemed or purchased in
connection with the expiration of the letter of credit related thereto
or upon tender by the holders thereof in accordance with the terms of
the indenture governing such bonds."
"'Subordinated Debt' means Debt of the Borrower that is (i)
-----------------
publicly issued after April 1, 1994, (ii) convertible into shares of
common stock of the Borrower, and (iii) subject to such other terms and
provisions as shall be (A) acceptable to the Majority Lenders and the
Agent and (B) substantially similar to those terms and provisions
described in the draft prospectus of April 19, 1994 filed by the
Borrower with the Securities and Exchange Commission in connection with
the offering of the Borrower's Convertible Subordinated Notes due
2004."
"'Termination Date' means April 25, 1997 or the earlier date of
----------------
termination in whole of the Commitments pursuant to Section 2.05 or
6.01."
(c) Section 1.01 is hereby further amended by deleting the definitions
of "Consolidated Cash Flow", "Liquidity Fund", "Liquidity Fund Amount", "P
Commitment", "P Commitment Increase Date", "P Commitment Reduction Date", "S
Commitment" and "Subordinated Debt Date".
(d) Section 1.01 is hereby further amended by amending in their
entirety the last sentence of the definition of the term "Adjusted
Consolidated Tangible Net Worth" and the proviso to the definition of the
-------
term "Tangible Net Worth" to read as follows, respectively:
<PAGE>
7
"Notwithstanding the foregoing, (A) net deferred income tax assets recorded
in accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes ('SFAS 109') shall be treated as a tangible
asset (and not deducted pursuant to clause (i) or (iv) of this definition)
and shall be calculated without regard to any valuation allowance with
respect to such net deferred tax asset recorded by the Borrower in
accordance with SFAS 109, and (B) any asset established pursuant to
Statement of Financial Accounting Standards No. 87, Employers' Accounting
for Pensions ('SFAS 87') which corresponds to an additional minimum pension
liability recorded pursuant to SFAS 87 and any prepaid pension asset which
arises from amounts funded by the Borrower in accordance with Internal
Revenue Service regulations in excess of amounts expensed in accordance with
SFAS 87 shall be treated as a tangible asset (and not deducted pursuant to
clause (i) or (iv) of this definition)."
"; provided, however, that in calculating Tangible Net Worth (A) a net
-------- -------
deferred tax asset recorded by the Borrower in accordance with Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes ('SFAS
No. 109'), shall be treated as a tangible asset and shall be calculated
without regard to any valuation allowance with respect to such net deferred
tax asset recorded by the Borrower in accordance with SFAS No. 109 and (B)
any asset established pursuant to Statement of Financial Accounting
Standards No. 87, Employers' Accounting for Pensions ('SFAS No. 87'), which
corresponds to an additional minimum pension liability recorded by the
Borrower in accordance with SFAS No. 87 and any prepaid pension asset which
arises from amounts funded by the Borrower in accordance with Internal
Revenue Service regulations in excess of amounts expensed in accordance with
SFAS 87, shall be treated as a tangible asset."
(e) Section 2.01 is hereby amended in its entirety to read as follows:
"SECTION 2.01. The A Advances. Each Lender severally agrees, on
--------------
the terms and conditions hereinafter set forth, to make A Advances to
the Borrower from time to time on any Business Day during the period
from the date hereof until the Termination Date in an aggregate amount
not to exceed at any time outstanding (i) such Lender's Commitment on
such Business Day less (ii) the aggregate amount of such
----
<PAGE>
8
Lender's Participation in the then outstanding aggregate amount of all
Letter of Credit Liability related to all Letters of Credit; provided
--------
that the aggregate amount of the Commitments of the Lenders shall be
deemed used from time to time to the extent of the aggregate amount of
the B Advances then outstanding and such deemed use of the aggregate
amount of the Commitments shall be applied to the Lenders ratably
according to their respective Commitments (such deemed use of the
aggregate amount of the Commitments being a 'B Reduction'). Each A
Borrowing shall be in an aggregate amount of $4,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall, subject to the
provisions of Section 2.02(b), consist of A Advances of the same Type
made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment
in effect from time to time, the Borrower may borrow under this Section
2.01, repay pursuant to Section 2.06 or prepay pursuant to Section 2.09
and reborrow under this Section 2.01."
(f) Section 2.02(a) is hereby amended by amending:
(i) the first sentence thereof by replacing the time "11:00 A.M.
(New York City time)" with the time "12:00 Noon (New York City time)"
and the words "the third Business Day prior to the date of the proposed
A Borrowing" with the words "the first Business Day prior to the date
of the proposed A Borrowing if it is comprised of Base Rate Advances,
or the third Business Day prior to the date of the proposed A Borrowing
if it is comprised of A Advances of any other Type", and
(ii) the fourth and fifth sentences thereof to read as follows:
"Each Lender shall, before 1:00 P.M. (New York City time) on the
date of such A Borrowing, make available for the account of its
Applicable Lending Office to the Agent at the Agent's Syndication
Account, in same day funds, such Lender's ratable portion of such
A Borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III,
the Agent will make such funds available to the Borrower by
crediting the Borrower's Account; provided, however, that the
-------- -------
Agent shall first make a portion of such funds equal to any
drawing
<PAGE>
9
under any Letter of Credit which has remained unreimbursed for at
least two Business Days available to Citibank, as issuing bank of
such Letter of Credit, for reimbursement of such drawing as
contemplated by Section 2.14(c)."
(g) Section 2.03(a)(v) is hereby amended by adding to the end thereof
the following sentence:
"The failure of any Lender to make the B Advance to be made by it, if
any, as part of any B Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make the B Advance to be made by
such other Lender, if any, on the date of such B Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make
the B Advance, if any, to be made by such other Lender on the date of
any B Borrowing."
(h) Section 2.05 is hereby amended in its entirety to read as follows:
"SECTION 2.05. Reduction of the Commitments.
----------------------------
(a) Automatic Reduction. The Commitment of each Lender
-------------------
(determined without giving effect to any B Reduction on such day) shall
automatically reduce on October 25, 1995, April 25, 1996 and October
25, 1996 (each such day being an 'Amortization Date'), to the amount
obtained by multiplying the percentage set opposite the applicable
Amortization Date below times the Commitment of such Lender on the date
of the Seventh Amendment (determined after giving effect to any
subsequent Assignment and Acceptance but without giving effect to any B
Reduction on such day):
<TABLE>
<CAPTION>
Amortization Date Percentage
----------------- ----------
<S> <C>
October 25, 1995 90.90909%
April 25, 1996 81.81818%
October 25, 1996 72.72727%
</TABLE>
provided, however, that on the Termination Date the Commitment of each
-------- -------
Lender shall be zero.
(b) Optional Reduction. The Borrower shall have the right, upon
------------------
at least two Business Days'
<PAGE>
10
notice to the Agent, to terminate in whole or reduce ratably in part
the unused portions of the respective Commitments of the Lenders;
provided that each partial reduction shall be in the aggregate amount
--------
of $4,000,000 or an integral multiple of $1,000,000 in excess thereof.
(c) Mandatory Reduction. On each Repayment Date, the Commitment
-------------------
of each Lender shall automatically reduce by such Lender's ratable
share of the Pro Rata Amount in respect of such Repayment Date."
(i) Section 2.10 is hereby amended by deleting subsections (b), (e),
(f) and (g) thereof, and by amending subsection (d) thereof, to read as
follows:
"(d) On the Debt Date, the Borrower shall prepay (ratably, if in
part), out of the net cash proceeds referred to below, the outstanding
aggregate principal amount of the Advances in an amount equal to the
lesser of (i) the aggregate principal amount of the Advances then
outstanding and (ii) the net cash proceeds (net of all related taxes,
costs and expenses) of the issuance of the Senior Notes and the
Subordinated Debt, together with accrued interest to the date of such
prepayment on the principal amount prepaid. The Agent shall immediately
distribute such prepayment in accordance with Section 2.12. In the case
of any such prepayment of any Adjusted CD Rate Advance or Eurodollar
Rate Advance, the Borrower shall pay any additional amount for which
the Borrower shall be obligated pursuant to Section 8.04(b) not later
than three Business Days after the Borrower receives written notice
from the Agent or the applicable Lenders of such additional amount."
(j) Section 2.12(a) is hereby amended by amending the first sentence
thereof to read as follows:
"The Borrower shall make each payment hereunder and under the Notes,
irrespective of and without condition or deduction for any
counterclaim, defense, recoupment or setoff, not later than 11:00 A.M.
(New York City time) on the day when due in U.S. dollars to the Agent
at the Agent's Account in same day funds."
(k) Section 2.14(a) is hereby amended by (i) increasing the figure
"$8,500,000" contained therein as the Letter of Credit Subfacility to the
figure "$30,000,000" and (ii) replacing the parenthetical "(except itself)"
contained in the third sentence thereof
<PAGE>
11
with the parenthetical "(except itself but including CUSA)".
(l) Section 2.14(b)(i) is hereby amended by amending the second
sentence thereof by adding to the end thereof a new clause (F) to read as
follows:
"and (F) purpose for such Letter of Credit, which purpose may only be
to support the Borrower's or any Subsidiary's industrial revenue or
similar bonds, or the Borrower's or any Subsidiary's obligations in
connection with any workers' compensation or self-insurance or
reinsurance program, or the Borrower's or any Subsidiary's trade
obligations incurred in the ordinary course of its business."
(m) Section 2.14(c) is hereby amended by:
(i) amending the first sentence thereof to add after the words
"which shall be a Base Rate Advance" the parenthetical "(or, if the
Borrower shall request an A Borrowing comprised of A Advances of any
other Type on any day after the second Business Day following such
drawing, on which day any amount of such drawing shall remain
unreimbursed, an Advance of the Type so requested by the Borrower)",
(ii) amending the third and fourth sentences thereof to read as
follows:
"Each such Lender shall, on the first Business Day following such
notification, make an A Advance, which shall be a Base Rate
Advance, in an amount equal to the amount of its Participation in
such drawing for application to reimburse Citibank (but without
any requirement for compliance with the provisions of Sections
2.01 and 2.02 or the conditions set forth in Article III) and
---- ---- ------- ---
shall make available for the account of its Applicable Lending
Office to the Agent for the account of Citibank, by deposit to the
Agent's Account in same day funds, the amount of such A Advance.
If and to the extent that any such Lender shall not have so made
the amount of such A Advance available to the Agent, such Lender
and the Borrower severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day
from the date of demand by Citibank until the date such amount
<PAGE>
12
is paid to the Agent, at (i) in the case of the Borrower, the Base
Rate (or, if the Borrower shall request an A Borrowing comprised
of A Advances of a Type other than Base Rate Advances on any day
after the second Business Day following the applicable drawing, on
which day any amount of such drawing shall remain unreimbursed,
the Eurodollar Rate or Adjusted CD Rate, as applicable to such A
Advances), and (ii) in the case of such Lender, the Federal Funds
Rate." and
(iii) amending the last sentence thereof to read as follows:
"For purposes of Sections 2.14(a) and 3.03, until any A Advance
made by Citibank under this subsection (c) is repaid from the A
Advances made by the other Lenders under this subsection (c), such
A Advance made by Citibank shall not be considered outstanding as
an A Advance but rather outstanding solely as Letter of Credit
Liability."
(n) Section 2.16 is hereby amended in its entirety to read as follows:
"SECTION 2.16. Use of Proceeds. The proceeds of the Advances
---------------
shall be available (and the Borrower agrees that it shall use such
proceeds) solely to provide working capital for the Borrower (it being
understood that such working capital shall not include funds for
repayment, prepayment, redemption, purchase, defeasance or other
satisfaction of Debt or for providing cash or other collateral to
secure any Debt)."
(o) Section 3.03 is hereby amended in its entirety to read as follows:
"SECTION 3.03. Conditions Precedent to Certain A Borrowings and
------------------------------------------------
each Letter of Credit. The obligation of the Lenders to make that
---------------------
portion of the A Advances on the occasion of any A Borrowing which
would be used to repay any B Advances or would otherwise cause the sum
of the aggregate outstanding amount of A Advances owing to the Lenders
plus the then outstanding aggregate amount of all Letter of Credit
----
Liability related to all Letters of Credit, to increase over the sum of
such aggregate outstanding amount of A Advances plus outstanding
----
<PAGE>
13
aggregate amount of Letter of Credit Liability immediately prior to the
making of such A Advances on the occasion of such A Borrowing, and the
right of the Borrower to request, and the obligation of Citibank in
respect of, the Issuance of each Letter of Credit which Issuance would
cause the sum of the aggregate outstanding amount of all Letter of
Credit Liability related to all Letters of Credit plus the then
----
outstanding aggregate amount of all A Advances owing to the Lenders, to
increase over the sum of such aggregate outstanding amount of Letter of
Credit Liability plus outstanding aggregate amount of A Advances
----
immediately prior to the Issuance of such Letter of Credit, shall in
each such case be subject to the further conditions precedent that on
the date of such A Borrowing or Issuance the following statements shall
be true (and the acceptance by the Borrower of the proceeds of such A
Borrowing, and the Issuance of such Letter of Credit, shall constitute
a representation and warranty made by the Borrower that on the date of
such A Borrowing or Issuance such statements are true): (i) the
representations and warranties contained in subsections (e), (f) and
(j) of Section 4.01 are correct on and as of the date of such A
Borrowing or Issuance, before and after giving effect to such A
Borrowing or Issuance and to the application of the proceeds therefrom,
as though made on and as of such date, and (ii) no event has occurred
and is continuing, or would result from such A Borrowing or Issuance or
from the application of the proceeds therefrom, which would constitute
an Event of Default but for the requirement that notice be given or
time elapse or both."
(p) Article III is hereby amended by renumbering Sections 3.04 and 3.05
as Sections 3.05 and 3.06, respectively, and by adding to Article III a new
Section 3.04 to read as follows:
"SECTION 3.04. Conditions Precedent to certain Letters of Credit.
-------------------------------------------------
The right of the Borrower to request, and the obligation of Citibank in
respect of, the Issuance of each Letter of Credit that supports any
Debt described in clause (i) or (ii) of the definition of 'Debt'
contained in Section 1.01 (subject to the requirements of clause (F) of
Section 2.14(b)(i)) shall be subject to the further conditions
precedent that on the date of such Issuance this Agreement shall have
been amended, and the Agent shall have received such documents, as the
<PAGE>
14
Agent shall reasonably request in order to secure and otherwise protect
the obligations of the Borrower to Citibank and the Lenders in respect
of such Letter of Credit in the same manner as such Debt is secured and
otherwise protected."
(q) Section 4.01(e) is hereby amended in its entirety to read as
follows:
"(e) The Consolidated balance sheet of the Borrower and the
Subsidiaries as at July 31, 1993 and the related Consolidated
statements of operations, shareholders' equity and cash flows of the
Borrower and the Subsidiaries for the Fiscal Year then ended,
accompanied by an opinion of Deloitte & Touche, independent public
accountants, and the Consolidated balance sheet of the Borrower and the
Subsidiaries as at January 30, 1994, and the related Consolidated
statements of operations, shareholders' equity and cash flows of the
Borrower and the Subsidiaries for the six months then ended, duly
certified by the chief financial officer of the Borrower, copies of
which have been furnished to each Lender, fairly present, subject, in
the case of said balance sheet as at January 30, 1994, and said
statements of operations, shareholders' equity and cash flows for the
six months then ended, to year-end audit adjustments, the Consolidated
financial condition of the Borrower and the Subsidiaries as at such
dates and the Consolidated results of the operations and cash flows of
the Borrower and the Subsidiaries for the periods ended on such dates,
all in accordance with generally accepted accounting principles applied
on a consistent basis; and since July 31, 1993, there has been no
material adverse change in the financial condition or operations of the
Borrower and the Subsidiaries taken as a whole. The Lenders agree that
charges in the third Fiscal Quarter of Fiscal Year 1994 to
shareholders' equity in connection with increases in the underfunded
status of the Borrower's pension plans, and to income in connection
with the expensing of unamortized pension benefit past service costs,
each as described in the Borrower's Quarterly Report on Form 10-Q for
the Fiscal Quarter ended January 30, 1994, will not constitute such a
material adverse change."
(r) Section 4.01 is hereby amended by amending subsection (k) to read
as follows:
<PAGE>
15
"(k) Set forth in Schedule V is a complete and accurate list, as
of the date of the Seventh Amendment, of all the outstanding Debt of
the Borrower and its Subsidiaries (other than Debt owed by the Borrower
to any of its Subsidiaries or by any of its Subsidiaries to the
Borrower or any other of its Subsidiaries and Debt described in clause
(vi) of the definition of 'Debt' contained in Section 1.01) and the
instruments and agreements, and amendments, supplements and other
modifications thereto, evidencing such Debt."
and by adding to Section 4.01 a new subsection (l) to read as follows:
"(l) The obligations of the Borrower under this Agreement and the
Notes constitute, and are entitled to the benefits of, 'Senior
Indebtedness' and 'Designated Senior Indebtedness' as defined in, and
under, the indenture related to the Subordinated Debt."
(s) Section 5.01(c) is hereby amended in its entirety to read as
follows:
"(c) Maintenance of Consolidated Tangible Net Worth. Maintain
----------------------------------------------
for each day (or, for any day on which all of the long-term public
senior debt securities of the Borrower are rated at least BBB- by
Standard & Poor's Corporation and Baa3 by Moody's Investors Service,
Inc., for the last day of the Fiscal Quarter in which such day occurs)
a Consolidated Tangible Net Worth of not less than $125,000,000 to and
including July 31, 1994, and thereafter the sum of (i) $125,000,000
plus (ii) 50% of the sum of the positive Consolidated Net Income, if
----
any, during the period from August 1, 1994 to such day (or, for any day
on which all of the long-term public senior debt securities of the
Borrower have such ratings, to the last day of such Fiscal Quarter),
plus (iii) the aggregate amount of all capital contributions
----
(including, without limitation, all amounts attributable to the
conversion of Debt of the Borrower to equity of the Borrower) received
by the Borrower or any Subsidiary (other than such contributions
originally made by the Borrower or any of its Subsidiaries) in cash, in
other property, or by conversion of Debt of the Borrower at any time
after the date of the Seventh Amendment."
<PAGE>
16
(t) Section 5.01(d) is hereby amended in its entirety to read as
follows:
"(d) Maintenance of Ratio of Net Income Available for Fixed
------------------------------------------------------
Charges to Fixed Charges. Maintain for each day (or, for any day on
------------------------
which all of the long-term public senior debt securities of the
Borrower are rated at least BBB- by Standard & Poor's Corporation and
Baa3 by Moody's Investors Service, Inc., for the last day of the Fiscal
Quarter in which such day occurs) a ratio of Consolidated Net Income
Available for Fixed Charges for the period of 365 consecutive days (or
366 consecutive days for any such period that includes February 29)
ending on such day (or, for any day on which all of the long-term
public senior debt securities of the Borrower have such ratings, ending
on the last day of the Fiscal Quarter in which such day occurs), to
Consolidated Fixed Charges for such period of not less than the ratio
set forth opposite the period set forth below in which such day occurs:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From the date of the 1.40 to 1
Seventh Amendment to
July 31, 1994
From August 1, 1994 to 1.55 to 1
July 31, 1995
From August 1, 1995 to 1.90 to 1
July 31, 1996
From August 1, 1996 to 2.00 to 1"
the Termination Date
</TABLE>
(u) Section 5.01 is hereby amended by deleting the existing subsection
(e) thereof and by adding thereto a new subsection (e) to read as follows:
"(e) Compliance with Environmental Laws. Comply, cause each of
----------------------------------
its Subsidiaries to comply and use its best efforts to cause all other
Persons occupying its properties to comply, with all Environmental Laws
and Environmental Permits applicable to its operations and properties;
obtain and renew all Environmental Permits necessary for its operations
and properties; and conduct, and cause each of its Subsidiaries to
conduct, any
<PAGE>
17
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all applicable Environmental Law; in each case unless
------
the failure to so act would not be reasonably likely to have a Material
Adverse Effect; provided, however, that neither the Borrower nor any of
-------- -------
its Subsidiaries shall be required to undertake any such investigation,
study, sampling and testing, cleanup, removal, remedial or other action
to the extent that its obligations to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances."
(v) Section 5.02(a) is hereby amended in its entirety to read as
follows:
"(a) Debt Ratio. Permit the Debt Ratio for any day (or, for any
----------
day on which all of the long-term public senior debt securities of the
Borrower are rated at least BBB- by Standard & Poor's Corporation and
Baa3 by Moody's Investors Service, Inc., for the last day of the Fiscal
Quarter in which such day occurs) to be greater than the ratio set
forth opposite the period set forth below in which such day occurs:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From the date of the 5.60 to 1
Seventh Amendment to
July 31, 1994
From August 1, 1994 to 5.00 to 1
July 31, 1995
From August 1, 1995 to 4.10 to 1
July 31, 1996
From August 1, 1996 to 3.20 to 1"
the Termination Date
</TABLE>
(w) Section 5.02(d) is hereby amended by adding to the end thereof a
new clause (iii) to read as follows:
"and (iii) all or substantially all of the assets of Rohr Aero
Services, Inc. and Rohr Aero Services
<PAGE>
18
Europe may be sold (whether in one transaction or in a series of
transactions and, in the case of the assets of Rohr Aero Services
Europe, whether indirectly through the sale of its stock or directly)
if such sales comply with the requirements of Section 5.02(j)."
(x) Section 5.02(e) is hereby amended by deleting in its entirety
paragraph (v) of the except clause thereof, and Section 5.02(h) is hereby
------
amended by deleting in its entirety clause (iii) thereof.
(y) Section 5.02(i) is hereby amended by adding to the end thereof
under the words "Fiscal Quarter" and "Amount", respectively, the following:
-------------- ------
"Each Fiscal Quarter 1997 $7,500,000"
(z) Section 5.02(j) is hereby amended by:
(i) replacing the term "Consolidated Cash Flow" contained in
Section 5.02(j) with the term "Gross Operating Income"; and
(ii) amending Section 5.02(j)(iii) to read as follows:
"(iii) in the good faith opinion of the board of directors
of the Borrower (or a committee of such board to whom such matter
has been properly delegated), the sale, lease, transfer or other
disposition is for fair market value and is in the best interests
of the Borrower; and".
(aa) Section 5.02 is hereby amended by adding to the end thereof a new
subsection (k) to read as follows:
"(k) Incurrence of Debt. Incur, or permit any Subsidiary to
------------------
incur, any Debt other than:
(i) Debt incurred from time to time hereunder;
(ii) Debt evidenced by the Senior Notes in an aggregate
principal amount not to exceed $100,000,000, and Subordinated Debt
in an aggregate principal amount not to exceed $57,500,000;
(iii) Debt in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding; provided, however, that no
-------- -------
more than $5,000,000 of such amount may be Debt of Subsidiaries at
any time;
<PAGE>
19
(iv) Debt of Subsidiaries under revolving credit facilities,
so long as the aggregate amount of all such Debt outstanding at
any time shall not exceed $5,000,000;
(v) Debt of any Subsidiary to the Borrower or any of its
other Subsidiaries or of the Borrower to any of its Subsidiaries,
provided that in each case such Debt was incurred in the ordinary
--------
course of business;
(vi) any refinancing, renewal, extension or refunding of
outstanding Debt not resulting in an increase in the principal
amount thereof, provided that such Debt is pari passu in right of
-------- ---- -----
payment to the Debt refinanced, renewed, extended or refunded;
(vii) Debt described in clause (vi) of the definition of
'Debt' contained in Section 1.01;
(viii) Debt in an aggregate principal amount not to exceed
$16,500,000 incurred in connection with the sale or resale of
industrial development bonds relating to the Borrower's San
Marcos, Texas facility, provided, however, that such Debt may be
-------- -------
incurred only if the Borrower previously prepaid, redeemed or
purchased $16,500,000 principal amount of such bonds in connection
with the expiration of the letter of credit related thereto; and
(ix) Debt incurred in connection with the resale of the
industrial development bonds referred to in clause (viii) above
that were prepaid or purchased by the Borrower upon tender by the
holders thereof in accordance with the terms of the indenture
governing such bonds;
provided, that in the case of clauses (ii) through (vii) above the Debt
--------
referred to in such clauses shall be unsecured."
(bb) Section 5.03 is hereby amended by deleting subsection (m) thereof.
(cc) Section 6.01 is hereby amended by amending subsection (g) to read
as follows:
<PAGE>
20
"(g) There shall occur any 'Change of Control' as defined in the
indenture relating to the Senior Notes or the Subordinated Debt; or"
and by adding to Section 6.01 new subsections (h), (i), (j) and (k) to read
as follows:
"(h) any non-monetary judgment or order shall be rendered against
the Borrower or any of its Subsidiaries that is reasonably likely to
have a Material Adverse Effect, and there shall be any period of 45
consecutive 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
"(i) any ERISA Event shall have occurred with respect to a Plan
of the Borrower or any of its ERISA Affiliates and the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency
of such Plan and the Insufficiency of any and all other Plans of the
the Borrower and its ERISA Affiliates with respect to which an ERISA
Event shall have occurred and then exist (or the liability of the
Borrower and its ERISA Affiliates related to such ERISA Event) exceeds
$5,000,000; or
"(j) the Borrower or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower and its ERISA Affiliates as Withdrawal Liability
(determined as of the date of such notification, exceeds $5,000,000 or
requires payments exceeding $2,500,000 per annum; or
"(k) the Borrower or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or any
of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV
of ERISA, and as a result of such reorganization or termination the
aggregate annual contributions of the Borrower and its ERISA Affiliates
to all Multiemployer Plans that are then in reorganization or being
terminated have been or will be increased over the amounts contributed
to such Multiemployer Plans for the plan years of such Multiemployer
Plans immediately preceding the plan
<PAGE>
21
year in which such reorganization or termination occurs by an amount
exceeding $5,000,000;".
(dd) Section 8.07 is hereby amended by:
(i) replacing the words "P Commitment and S Commitment" each place
such words appear therein with the term "Commitment";
(ii) amending the proviso to the first sentence of subsection (a)
-------
thereof by adding to the end thereof new clauses (vi) and (vii) thereof
to read as follows:
", (vi) any Lender assigning all of its obligations shall not be
released from its obligations under Section 7.05 to the extent
relating to the period during which it was a Lender and (vii) in
the case of any assignee organized under the laws of a
jurisdiction outside the United States, such assignee shall have
delivered to the Agent the forms prescribed by the Internal
Revenue Service of the United States certifying as to such
assignee's status for purposes of determining exemption from
United States withholding taxes with respect to all payments to be
made to such assignee under this Agreement or such other documents
as are necessary to indicate that all such payments are subject to
such rates at a rate reduced by an applicable tax treaty";
(iii) amending clause (y) of the second sentence of subsection (a)
thereof by adding after the words "an assigning Lender's rights and
obligations" in the parenthetical contained therein the parenthetical
"(other than its obligations under Section 7.05 to the extent relating
to the period during which it was a Lender)"; and
(iv) amending the first sentence of subsection (d) thereof by
adding after the words "representing that it is an Eligible Assignee"
the words ", and, if such assignee is organized under the laws of a
jurisdiction outside the United States, the forms referred to in clause
(vii) of the proviso to Section 8.07(a),".
-------
(ee) Article VIII is hereby amended by adding thereto new Sections 8.10,
8.11 and 8.12 to read as follows:
<PAGE>
22
"SECTION 8.10. Indemnification. (a) The Borrower agrees to
---------------
indemnify and hold harmless the Agent and each Lender and each of their
Affiliates and their officers, directors, employees and agents (each,
an 'Indemnified Party') from and against any and all claims, damages,
-----------------
losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or
proceeding arising out of, related to or in connection with (i) any
credit extended or used under the Notes or this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances or (ii) the actual or alleged presence of
Hazardous Materials on any property of the Borrower or any of its
Subsidiaries or any Environmental Action relating in any way to the
Borrower or any of its Subsidiaries, in each case whether or not such
investigation, litigation or proceeding is brought by the Borrower or
its directors or shareholders (other than in the case of any litigation
for breach of this Agreement by any Indemnified Party which litigation
results in a final, non-appealable judgment against such Indemnified
Party) or its creditors or an Indemnified Party or any other Person or
any Indemnified Party is otherwise a party thereto and whether or not
the transactions contemplated hereby are consummated; provided,
--------
however, that no Indemnified Party shall be entitled to be indemnified
-------
or held harmless hereunder to the extent such claim, damage, loss,
liability or expense resulted from (x) a dispute solely between or
among the Agent, one or more Lenders, any other Indemnified Party
and/or one or more holders of participations herein, or (y) such
Indemnified Party's gross negligence or willful misconduct.
(b) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the obligations of the Borrower contained in
subsection (a) of this Section 8.10 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and
under the Notes.
"SECTION 8.11. Jurisdiction, Etc. (a) The Borrower hereby
------------------
irrevocably and unconditionally submits to the nonexclusive
jurisdiction of any
<PAGE>
23
New York State court or federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement
or the Notes, or for recognition or enforcement of any judgment, and
the Borrower hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted
by law, in such federal court. The Borrower hereby also consents to
the service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding by the
mailing of copies of such summons, complaint and other process to the
Borrower at its address specified in Section 8.02. The Borrower agrees
that a final, non-appealable judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law. Nothing in
this Agreement shall affect any right that the Borrower, any Lender or
the Agent may otherwise have to bring any action or proceeding relating
to this Agreement or the Notes in the courts of any other jurisdiction.
(b) The Borrower irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any action or
proceeding arising out of or relating to this Agreement or the Notes in
any New York State or federal court. The Borrower hereby irrevocably
waives, to the fullest extent permitted by law, the defense of any
inconvenient forum to the maintenance of such action or proceeding in
any such court.
"SECTION 8.12. Waiver of Jury Trial. Each of the Borrower, the
--------------------
Agent and the Lenders hereby irrevocably waives all right to trail by
jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this
Agreement or the Notes or the actions of the Borrower, the Agent or any
Lender in the negotiation, administration, performance or enforcement
thereof or any amendment thereof."
(ff) The term "P Commitment", used throughout the Credit Agreement in
provisions that have not been amended by the foregoing subsections (a)
through (ee), is hereby amended to read "Commitment".
<PAGE>
24
(gg) Paragraph 3 of Exhibit C to the Credit Agreement is hereby amended
by adding to the end thereof a new clause (vii) to read as follows:
"and (vii) if the Assignee is organized under the laws of a
jurisdiction outside the United States, delivers to the Agent herewith
the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect
to all payments to be made to the Assignee under the Agreement or such
other documents as are necessary to indicate that all such payments are
subject to such rates at a rate reduced by an applicable tax treaty."
(hh) A new Schedule V is hereby added to the Credit Agreement, to read
in the form of Schedule V attached hereto.
SECTION 2. Successor Agent. Notwithstanding anything to the contrary
---------------
contained in Section 7.06 of the Credit Agreement, effective as of the date
hereof and subject to the satisfaction of the conditions set forth in Section 4
below:
(a) Citibank hereby resigns as Agent under the Credit Agreement.
(b) The Lenders hereby appoint CUSA as successor Agent under the Credit
Agreement as amended by this Seventh Amendment, the Borrower hereby approves
such appointment of CUSA as Agent, and CUSA hereby accepts such appointment
as Agent.
(c) The term "Agent" as used in the Credit Agreement and each Note, in
each case as amended by this Seventh Amendment and by each subsequent
amendment or other modification of the Credit Agreement or such Note, is and
shall be and mean CUSA in its capacity as Agent under such Credit Agreement.
(d) Each reference to "Citibank, N.A." as Agent in (i) each Note, (ii)
the form of B Note attached to the Credit Agreement as Exhibit A-2, (iii)
the form of Notice of A Borrowing attached to the Credit Agreement as
Exhibit B-1, (iv) the form of Notice of B Borrowing attached to the Credit
Agreement as Exhibit B-2, (v) the form of Assignment and Acceptance attached
to the Credit Agreement as Exhibit C, and (vi) the form of Business Status
Report attached to the Credit Agreement as
<PAGE>
25
Exhibit F, is and shall be amended to be a reference to "Citicorp USA, Inc."
in its capacity as Agent under the Credit Agreement as amended hereby and by
each subsequent amendment thereof.
SECTION 3. Assignment. Notwithstanding anything to the contrary
----------
contained in Section 8.07 of the Credit Agreement, effective as of the date
hereof and subject to the satisfaction of the conditions set forth in Section 4
below:
(a) Citibank hereby sells and assigns to CUSA, and Bankers Trust
Company (together with Citibank, the "Assignors") hereby sells and assigns
to each Lender listed as an Assignee on Annex A hereto (each, together with
CUSA, an "Assignee"), and CUSA hereby purchases and assumes from Citibank
one hundred percent of, and each other Assignee hereby purchases and assumes
from Bankers Trust Company the percentage interest specified on Annex A
hereto for such Assignee in and to, all of such Assignor's rights and
obligations under the Credit Agreement as amended by this Seventh Amendment
(without giving effect to the reduction in the Commitment of such Assignor
pursuant to Section 3 of this Seventh Amendment) as of the date hereof
(other than such Assignor's obligations under Section 7.05 thereof to the
extent relating to the period during which it was a Lender and, in the case
of the assignment by Citibank, its rights and obligations under Sections
2.14 and 2.15 thereof and otherwise in connection with any Letter of Credit
or any Issuance thereof), including, without limitation, (i) such Commitment
of such Assignor, (ii) the aggregate outstanding principal amount of A
Advances owing to such Assignor as of the date hereof, and (iii) the A Note
held by such Assignor, so that as a result of such sale, assignment,
purchase and assumption, the Commitment of CUSA is as set forth on the
signature pages hereof and the aggregate outstanding principal amount of A
Advances owing to CUSA is the aggregate outstanding principal amount of A
Advances owing to Citibank immediately prior to giving effect to this
Seventh Amendment, and the Commitment of each such other Assignee is as set
forth on Annex A hereto and the signature pages hereof and the aggregate
outstanding principal amount of A Advances (prior to any payment required
under Section 2.10(d) of the Credit Agreement and Section 4(c) hereof) owing
to such Assignee is as set forth on Annex A hereto.
(b) Each Assignor and each Assignee hereby agrees that the sale and
assignment by such Assignor and to such Assignee, respectively, pursuant
to subsection (a) above,
<PAGE>
26
and the purchase and assumption by such Assignee and from such Assignor,
respectively, pursuant to subsection (a) above, is and shall be made on the
terms set forth in paragraphs 2 and 3 of the form of Assignment and
Acceptance attached to the Credit Agreement as Exhibit C thereto, as amended
by this Seventh Amendment. Without limiting the generality of the
foregoing, each Assignee hereby (i) appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under
the Credit Agreement as amended by this Seventh Amendment as are delegated
to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (ii) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement as amended by this Seventh Amendment are required to be
performed by it as a Lender, and (iii) other than in the case of CUSA,
delivers herewith the forms referred to in clause (vii) of such paragraph 3.
(c) Each Assignee specifies as its CD Lending Office, Domestic Lending
Office (and address for notices) and Eurodollar Lending Office the office
set forth next to its name on the Annex A hereto or, in the case of CUSA, on
the signature pages hereof.
(d) This Section 3 and Annex A hereto, and the signature pages hereof,
is and will be referred to as the Assignment and Acceptance pursuant to
which each Assignee became a Lender under, and for purposes of, the Credit
Agreement.
(e) The Borrower hereby approves each Assignee as an "Eligible
Assignee" under the Credit Agreement for purposes of Section 8.07 thereof
and otherwise.
SECTION 4. Conditions of Effectiveness. This Seventh Amendment shall
---------------------------
become effective as of the date hereof when
(a) the Agent shall have received (i) counterparts of this Seventh
Amendment executed by the Borrower and all of the Lenders and the Assignor,
or, as to any of the Lenders or the Assignor, advice satisfactory to the
Agent that such Lenders have, or that the Assignor has, executed
counterparts of this Seventh Amendment, and (ii) for purposes of Section 3
above, in the case of any Assignee other than CUSA, the forms referred to in
clause (iii) of Section 3(b),
<PAGE>
27
(b) the Borrower shall have paid to the Agent (i) for the ratable
account of the Lenders, (A) the amendment fee equal to 1/4 of 1% of the
Lenders' Commitments (as defined in the Credit Agreement in effect
immediately before the effectiveness of the Seventh Amendment) and (B) the
maturity extension fee equal to 3/4 of 1% of such Commitments, (ii) for the
account of each Lender whose new Commitment (as defined in the Credit
Agreement as amended by this Seventh Amendment) exceeds such Lender's old
Commitment (as defined in the Credit Agreement immediately before the
effectiveness of this Seventh Amendment), the increased commitment fee equal
to 2% of the amount by which such new Commitment exceeds such old
Commitment, and (iii) for the account of the Agent (as defined in the Credit
Agreement as modified by Section 2 of this Seventh Amendment) the agency fee
as shall have been agreed upon between the Borrower and the Agent,
(c) the Borrower shall have received at least $100,000,000 in gross
cash proceeds from the issuance and sale of the Senior Notes and at least
$50,000,000 in gross cash proceeds from the issuance and sale of the
Subordinated Debt, and shall have paid to the Agent, pursuant to Section
2.10(d), the amount of such proceeds specified by Section 2.10(d),
(d) the Agent shall have received (i) copies, certified to be true, of
the instruments, agreements, amendments, supplements and modifications
listed in Schedule V of the Credit Agreement as amended hereby, and (ii)
copies, certified to be true, of amendments to that Debt listed in such
Schedule V indicated therein as being amended, which amendments will (A)
permit the transactions contemplated by subsection (c) above, (B) provide
for the elimination of all requirements relating to the Liquidity Fund, and
(C) otherwise be in form and substance satisfactory to the Majority Lenders,
and
(e) the Agent shall have additionally received all of the following
documents, each document (unless otherwise indicated) being dated the date
of receipt thereof by the Agent (which date shall be the same for all such
documents), in form and substance satisfactory to the Agent:
(1) New Notes to the order of the Lenders, respectively, in the
principal amounts of their respective Commitments (in exchange for the
existing Notes cancelled by the Banks),
<PAGE>
28
(2) certified copies of the executed indentures relating to the
Senior Notes and the Subordinated Debt,
(3) certified copies of the resolutions of the Board of Directors
of the Borrower approving this Seventh Amendment and the matters
contemplated thereby,
(4) a certificate of the Secretary or an Assistant Secretary of
the Borrower certifying the names and true signatures of its officers
authorized to sign this Seventh Amendment and the other documents to be
delivered hereunder,
(5) a favorable opinion of Gibson, Dunn & Crutcher, counsel for
the Borrower, in substantially the form of Exhibit A hereto,
(6) a favorable opinion of Richard W. Madsen, Esq., general
counsel for the Borrower, in substantially the form of Exhibit B
hereto,
(7) a favorable opinion of Shearman & Sterling, counsel for the
Agent, in substantially the form of Exhibit C hereto, and
(8) a certificate of a duly authorized officer of the Borrower to
the effect that:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement as amended by this Seventh Amendment,
and in Section 5 of this Seventh Amendment, are correct on and as
of the date of such certificate as though made on and as of such
date,
(B) no event has occurred and is continuing, or would result
from the issuance and sale of the Senior Notes and the
Subordinated Debt or from the application of the proceeds
therefrom, which would constitute an Event of Default or an event
which with the lapse of time or the giving of notice, or both,
would constitute an Event of Default, and
(C) the Borrower has issued and sold, and received proceeds
from the issuance and sale of, the Senior Notes and the
Subordinated Debt as required by Section 4(c) above.
<PAGE>
29
Each statement made by the Borrower in the certificate delivered pursuant to
clause (8) of Section 4(e) above shall be a representation and warranty made by
the Borrower in connection with the Credit Agreement for purposes of, and within
the meaning of, Section 6.01(b) of the Credit Agreement.
SECTION 5. Representations and Warranties of the Borrower. The
------------------------------------- --------
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and is duly
qualified and in good standing as a foreign corporation in the State of
California.
(b) The execution, delivery and performance by the Borrower of this
Seventh Amendment are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action and do not contravene (i) the
Borrower's charter or by-laws, or (ii) law or any contractual restriction
binding on or affecting the Borrower.
(c) No authorization, 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 Seventh
Amendment.
(d) This Seventh Amendment constitutes legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance
with its terms.
SECTION 6. Reference to and Effect on the Credit Agreement. (a) Upon
-----------------------------------------------
the effectiveness of this Seventh Amendment, on and after the date hereof (i)
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit Agreement,
and each reference in the Notes to the "Credit Agreement", "thereunder",
"thereof", "therein" or words of like import referring to the Credit Agreement,
shall mean and be a reference to the Credit Agreement as amended or otherwise
modified by this Seventh Amendment and (ii) each reference in each Note to "this
Note", "hereunder", "hereof", "herein" or words of like import referring to such
Note, and each reference in the Credit Agreement to any or all of the Notes,
"thereunder", "thereof", "therein" or words of like import referring to such
Note or Notes, shall mean and be a reference to such Note or Notes as amended by
this Seventh Amendment.
<PAGE>
30
(b) Except as specifically amended above, the Credit Agreement and the
A Notes, and each B Note outstanding on the date hereof, shall remain in full
force and effect and are hereby ratified and confirmed.
(c) Except as the Credit Agreement may expressly be modified hereby,
the execution, delivery and effectiveness of this Seventh Amendment shall not
operate as a waiver of any right, power or remedy of any Lender or the Agent
under the Credit Agreement or any of the Notes nor constitute a waiver of any of
the provisions contained therein.
SECTION 7. Costs and Expenses. The Borrower agrees to pay on demand
------------------
all costs and expenses of the Agent in connection with the preparation,
execution and delivery of this Seventh Amendment, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the Agent with
respect hereto and with respect to advising the Agent as to its rights and
responsibilities hereunder.
SECTION 8. Execution in Counterparts. This Seventh Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Seventh Amendment, or of any document required to be delivered
hereunder, by telecopier shall be effective as delivery of a manually executed
counterpart of this Seventh Amendment or such document.
SECTION 9. Governing Law. This Seventh Amendment shall be governed
-------------
by, and construed in accordance with, the laws of the State of New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
31
IN WITNESS WHEREOF, the parties hereto have caused this Seventh
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
ROHR, INC.
By: /s/ R. M. MILLER
____________________________
Title: Vice President and
Treasurer
CITIBANK, N.A.,
as resigning Agent
By: /s/ BARBARA A. COHEN
____________________________
Vice President
CITICORP USA, INC.,
as successor Agent
By: /s/ EDWARD LETTIERI
____________________________
Vice President
Lenders
-------
Commitment
- - ----------
$ 0 CITIBANK, N.A.
By: /s/ BARBARA A. COHEN
____________________________
Vice President
$ 30,000,000 CITICORP USA, INC.
By: /s/ EDWARD LETTIERI
____________________________
Vice President
399 Park Avenue
New York, New York 10043
c/o Citicorp USA, Inc.
725 South Figueroa Street
Los Angeles, California 90017
Attention: National Corporate
Division/Loan Administration
Telex No.: 127001 GCN:LAXIS
Telephone: 213-239-1432
Telecopy: 213-623-3592
<PAGE>
32
$ 30,000,000 WELLS FARGO BANK, N.A.
By: /s/ STANLEY R. JEPPSEN
_________________________________
Title: Stanley R. Jeppsen, VP/LTL
$ 25,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ LINDA M. THOMPSON
_________________________________
Title: Vice President
$ 5,000,000 MANUFACTURERS BANK
By: /s/ V. HANAGAMI
_________________________________
Title: Vice President
$ 5,000,000 ROYAL BANK OF CANADA
By: /s/ BRIAN W. DIXON
_________________________________
Title: Brian W. Dixon
Senior Manager
$ 5,000,000 THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
Los Angeles Agency
By: /s/ SHUICH TAKENAKA
_________________________________
Title: Joint General Manager
$ 2,500,000 BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By: /s/ DAVID MUSICANT
_________________________________
Title: David Musicant
Assistant Vice President
By: /s/ PHILIPPE L. SIRAND
_________________________________
Title: Philippe L. Sirand
First VP and Manager
$ 2,500,000 BANCA COMMERCIALE ITALIANA,
Los Angeles Foreign Branch
By: /s/ G. ACCARDO
_________________________________
Title: SVP/Manager
By: /s/ J. WITYAK
_________________________________
Title: J. Wityak, VP
<PAGE>
33
$ 2,500,000 BANCO CENTRAL HISPANOAMERICANO, S.A.
By: /s/ J. ESTRUCH
____________________________
Title: Vice President
$ 2,500,000 THE MITSUBISHI TRUST AND BANKING CORPORATION,
LOS ANGELES AGENCY
By: /s/ TAKASHI SUGITA
____________________________
Title: Chief Manager
- - ---------------------------
$110,000,000 Total of the Commitments
===========
Assignors
---------
CITIBANK, N.A. (other than with
respect to Letters of Credit)
By: /s/ BARBARA A. COHEN
____________________________
Vice President
BANKERS TRUST COMPANY
By: /s/ EDWARD BENEDICT
____________________________
Title: V.P.
<PAGE>
Exhibit 10.13.3
AMENDMENT AGREEMENT
This Amendment Agreement (this "Amendment") dated as of September 24,
1993, between Rohr, Inc., a Delaware corporation ("Rohr"), State Street Bank and
Trust Company of California, National Association, a national banking
association, and W. Jeffrey Kramer, not in an individual capacity but solely as
owner trustees (State Street Bank and Trust Company of California and W. Jeffrey
Kramer are collectively referred to as the "Trustees"), and General Electric
Capital Corporation ("GE Capital").
WITNESSETH:
WHEREAS, Rohr is a party to a Sublease Agreement, dated as of
September 14, 1992, with the Trustees, as owner trustees under that certain
Trust Agreement for the benefit of GE Capital;
WHEREAS, such Sublease Agreement was amended by that certain Waiver
and Modification Agreement, dated as of July 9, 1993 (such Sublease Agreement,
as so amended, the "GE Capital Sublease"); and
WHEREAS, Rohr has requested that a financial covenant incorporated
into the GE Capital Sublease be modified;
NOW, THEREFORE, for and in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Amendment to GE Capital Sublease. Section XVII (j) of the GE
-----------------------------------
Capital Sublease is amended in its entirety to read as follows:
(j) The provisions of Sections 5.01(c), 5.01(d) and 5.02(a) of the
Credit Agreement, dated as of April 26, 1989, among Sublessee, the
Lenders parties thereto and Citibank, N.A., as agent, as in effect on
September 24, 1993 (after giving effect to the Sixth Amendment thereto
dated as of such date), together with all relevant definitions
pertaining to such Sections, are incorporated herein by reference.
2. Jury Trial Waiver EACH OF THE PARTIES HERETO HEREBY UNCONDITIONALLY
-----------------
WAIVES THEIR RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
1
<PAGE>
AMENDMENT, ANY DEALINGS AMONG ANY OF THEM RELATING TO THE SUBJECT
MATTER HEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG
THEM. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER
IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AMENDMENT. IN THE
EVENT OF LITIGATION, THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
3. Direction to Trustees GE Capital hereby joins in this Amendment to
-----------------------
acknowledge its consent to the terms and provisions hereof and to
direct the Trustees to enter into this Amendment and any other
agreements, instruments and documents to be executed in connection
herewith in their capacity as owner trustees.
4. Expenses Rohr agrees to pay all reasonable costs and expenses of the
--------
Trustees and GE Capital in connection with the preparation, execution,
delivery and enforcement of this Amendment and any other agreements,
instruments and documents executed in connection herewith.
5. Further Assurances Each of the parties hereto agrees that at any time
------------------
it shall execute and deliver all further instruments and documents,
and take all further action, in order to effectuate or otherwise
document the transactions contemplated hereby or otherwise implement
the intention of the parties under this Amendment, as any of the
parties hereto and their successors and assigns reasonably may
request.
6. Further Modifications NO VARIATION OR MODIFICATION OF THIS AMENDMENT
---------------------
OR ANY WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID
UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH
OF THE PARTIES HERETO.
2
<PAGE>
7. Multiple Counterparts This Agreement may be executed in two or more
---------------------
counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
Rohr, Inc. State Street Bank and Trust Company of
California, National Association, not
in its individual capacity but solely
By: /s/ R. M. Miller as Corporate Trustee
--------------------------------
Name: Ronald M. Miller
Title: Vice President & Treasurer By: /s/ W. Jeffrey Kramer
----------------------------------
Name: W. Jeffrey Kramer
Title: Assistant Vice President
/s/ W. Jeffrey Kramer
--------------------------------------
w. Jeffrey Kramer
not in his individual capacity, but
solely in his capacity as Individual
Trustee
General Electric Capital Corporation
By: /s/ Timothy R. Brewer
----------------------------------
Name: Timothy R. Brewer
Title: Manager - Field Operations
3
<PAGE>
Exhibit 10.13.4
AMENDMENT AGREEMENT
This Amendment Agreement (this "Amendment") dated as of May 10, 1994,
between Rohr, Inc., a Delaware corporation ("Rohr"), State Street Bank and Trust
Company of California, National Association, a national banking association, and
W. Jeffrey Kramer, not in an individual capacity but solely as owner trustees
(State Street Bank and Trust Company of California and W. Jeffrey Kramer are
collectively referred to as the "Trustees"), and General Electric Capital
Corporation ("GE Capital").
WITNESSETH:
WHEREAS, Rohr is a party to a Sublease Agreement, dated as of
September 14, 1992, with the Trustees, as owner trustees under that certain
Trust Agreement for the benefit of GE Capital (such Sublease Agreement, as
amended to date, being hereinafter referred to as the "GE Capital Sublease");
WHEREAS, Rohr has requested that a covenant in the GE Capital Sublease
be modified;
NOW, THEREFORE, for and in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Amendment to GE Capital Sublease. Section XVII (j) of the GE Capital
-----------------------------------
Sublease is amended in its entirety to read as follows:
(j) The provisions of Sections 5.01(c), 5.01(d) and 5.02(a) of the
Credit Agreement, dated as of April 26, 1989, among Sublessee, the
Lenders parties thereto and Citicorp USA, Inc., as agent, (after
giving effect to the Seventh Amendment thereto dated as of May 10,
1994), together with all relevant definitions pertaining to such
Sections, are incorporated herein by reference.
2. Effectiveness of Amendment. This Amendment shall become effective upon
---------------------------
the sale by Rohr of at least $100 Million of senior notes and at least
$50 Million of convertible subordinated notes.
3. Jury Trial Waiver EACH OF THE PARTIES HERETO HEREBY UNCONDITIONALLY
-----------------
WAIVES THEIR RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
1
<PAGE>
AMENDMENT, ANY DEALINGS AMONG ANY OF THEM RELATING TO THE SUBJECT
MATTER HEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG
THEM. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER
IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AMENDMENT. IN THE
EVENT OF LITIGATION, THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
4. Direction to Trustees GE Capital hereby joins in this Amendment to
-----------------------
acknowledge its consent to the terms and provisions hereof and to
direct the Trustees to enter into this Amendment and any other
agreements, instruments and documents to be executed in connection
herewith in their capacity as owner trustees.
5. Expenses Rohr agrees to pay all reasonable costs and expenses of the
--------
Trustees and GE Capital in connection with the preparation, execution,
delivery and enforcement of this Amendment and any other agreements,
instruments and documents executed in connection herewith.
6. Further Assurances Each of the parties hereto agrees that at any time
------------------
it shall execute and deliver all further instruments and documents,
and take all further action, in order to effectuate or otherwise
document the transactions contemplated hereby or otherwise implement
the intention of the parties under this Amendment, as any of the
parties hereto and their successors and assigns reasonably may
request.
7. Further Modifications NO VARIATION OR MODIFICATION OF THIS AMENDMENT
---------------------
OR ANY WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID
UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH
OF THE PARTIES HERETO.
2
<PAGE>
8. Multiple Counterparts This Amendment may be executed in two or more
---------------------
counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.
Rohr, Inc. State Street Bank and Trust Company of
California, National Association, not
in its individual capacity but solely
By: /s/ R. M. Miller as Corporate Trustee
--------------------------------
Name: Ronald M. Miller
Title: Vice President & Treasurer By: /s/ W. Jeffrey Kramer
----------------------------------
Name: W. Jeffrey Kramer
Title: Assistant Vice President
/s/ W. Jeffrey Kramer
--------------------------------------
W. Jeffrey Kramer
not in his individual capacity, but
solely in his capacity as Individual
Trustee
General Electric Capital Corporation
By: /s/ Timothy R. Brewer
----------------------------------
Name: Timothy R. Brewer
Title: Manager - Field Operations
3
<PAGE>
ROHR, INC. AND SUBSIDIARIES
---------------------------
CALCULATION OF PRIMARY NET INCOME PER SHARE
-------------------------------------------
OF COMMON STOCK - UNAUDITED
---------------------------
(in thousands except for share data)
------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------- --------------------
MAY 1, MAY 2, MAY 1, MAY 2,
1994 1993 1994 1993
-------- -------- ------- ---------
<S> <C> <C> <C> <C>
Income (loss) before cumulative effect of
accounting changes $(2,687) $(22,201) $ 5,048 $ (30,716)
Cumulative effect of accounting
changes, net of taxes - - - (223,950)
------- -------- ------- ---------
Net income (loss) applicable to primary
earnings per common share $(2,687) $(22,201) $ 5,048 $(254,666)
======= ======== ======= =========
Common stock and common stock
equivalents:
Average shares of common stock
outstanding during the period 18,015 17,898 18,012 17,888
Net effect of common stock equivalents
(principally stock options and rights) 48 - 29 1
------- -------- ------- ---------
Total common stock and common stock
equivalents 18,063 17,898 18,041 17,889
======= ======== ======= =========
Net income (loss) per average share of
common stock:
Before accounting changes $ (0.15) $ (1.24) $ 0.28 $ (1.72)
Effect of accounting changes - - - (12.52)
------- -------- ------- ---------
Primary net income (loss) per common
share $ (0.15) $ (1.24) $ 0.28 $ (14.24)
======= ======== ======= =========
</TABLE>
EXHIBIT 11.1
<PAGE>
ROHR, INC. AND SUBSIDIARIES
---------------------------
CALCULATION OF FULLY DILUTED NET INCOME PER SHARE
-------------------------------------------------
OF COMMON STOCK - UNAUDITED
---------------------------
(in thousands except for share data)
------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------- --------------------
MAY 1, MAY 2, MAY 1, MAY 2,
1994 1993 1994 1993
-------- -------- ------- ---------
<S> <C> <C> <C> <C>
Net income (loss) before cumulative effect of
accounting changes applicable to primary
earnings per common share $(2,687) $(22,201) $ 5,048 $ (30,716)
Add back interest and issue expense on
convertible debentures, net of tax
adjustment 1,234 1,229 3,693 3,712
------- -------- ------- ---------
Adjusted net income before cumulative
effect of accounting changes applicable to
common stock on a fully diluted basis (1,453) (20,972) 8,741 (27,004)
Cumulative effect of accounting changes,
net of taxes - - - (223,950)
------- -------- ------- ---------
Net income (loss) applicable to fully
diluted earnings per share $(1,453) $(20,972) $ 8,741 $(250,954)
======= ======== ======= =========
Average number of shares outstanding on
a fully diluted basis:
Shares used in primary earnings
per share 18,063 17,898 18,041 17,889
Shares on conversion of debentures 2,674 2,674 2,674 2,674
------- -------- ------- ---------
Average number of shares outstanding
on a fully diluted basis 20,737 20,572 20,715 20,563
======= ======== ======= =========
Fully diluted net income (loss) per
common share before cumulative
effect of accounting change $ (0.07) $ (1.02) $ 0.42 $ (1.31)
Loss from cumulative effect of
accounting changes, net of taxes (10.89)
------- -------- ------- ---------
Fully diluted net income (loss) per
common share $ (0.07) $ (1.02) $ 0.42 $ (12.20)
======= ======== ======= =========
</TABLE>
Note:
The assumed conversion of the Company's convertible debentures were anti-
dilutive or did not have a materially dilutive impact on earnings per share,
hence only primary earnings per share is presented in the Company's
Consolidated Financial Statements.
EXHIBIT 11.2
