FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-6187
BANTA CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-0148550
(State or other jurisdiction (IRS Employer
of incorporation or organization) I.D. Number)
225 Main Street, Menasha, Wisconsin 54952
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 751-7777
"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 / /"
The registrant had outstanding on July 2, 1994, 20,058,795 shares of $.10
par value common stock.
Page number of Exhibit Index 10
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
INDEX
PART I Financial Statements: Page Number
Unaudited Consolidated Condensed Balance Sheets
July 2, 1994 and January 1, 1994 3
Unaudited Consolidated Condensed Statements of Earnings for
the Three and Six Months Ended July 2, 1994 and July 3, 1993 4
Unaudited Consolidated Condensed Statements of Cash Flows
for the Six Months Ended July 2, 1994 and July 3, 1993 5
Notes to Unaudited Consolidated Condensed
Financial Statements 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-8
PART II Other Information and Signatures:
Item 6 Exhibits and Reports on Form 8-K 8
Exhibit Index 10
<PAGE>
PART I Item 1 - Financial Statements
<TABLE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<CAPTION>
ASSETS JULY 2, 1994 JANUARY 1, 1994
<S> <C> <C>
Current Assets
Cash $ 109 $ 8,230
Receivables 130,380 125,004
Inventories 48,849 52,447
Other current assets 13,105 12,225
--------- ---------
Total Current Assets 192,443 197,906
--------- ---------
Plant and Equipment 490,323 430,357
Less Accumulated Depreciation 215,689 197,469
--------- ---------
Plant and Equipment, net 274,634 232,888
--------- ---------
Other Assets 8,414 9,303
Cost in Excess of Net Assets of Subsidiaries Acquired 17,076 17,336
--------- ---------
$ 492,567 $ 457,433
========= =========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities
Notes Payable $ 3,015 $ 20,800
Accounts Payable 39,892 27,364
Accrued Salaries and Wages 17,347 16,903
Other Accrued Liabilities 19,021 19,807
Current Maturities of Long-term Debt 7,026 6,861
--------- ---------
Total Current Liabilities 86,301 91,735
--------- ---------
Long-term Debt 68,849 45,603
Deferred Income Taxes 17,434 18,257
Other Non-current Liabilities 10,144 9,410
Shareholders' Investment
Preferred Stock - $10 par value; authorized 300,000 shares;
none issued - -
Common Stock - $.10 par value; authorized 75,000,000 shares;
20,058,795 and 19,996,532 shares issued, respectively 2,006 2,000
Amount in Excess of Par Value of Stock 55,525 54,436
Retained Earnings 252,308 235,992
--------- ---------
309,839 292,428
--------- ---------
$ 492,567 $ 457,433
========= =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Dollars in Thousands, Except Per Share Amounts)
<CAPTION>
Three Months Ended Six Months Ended
JULY 2, 1994 JULY 3, 1993 JULY 2, 1994 JULY 3, 1993
<S> <C> <C> <C> <C>
Net sales $ 185,831 $165,928 $373,295 $327,955
Cost of goods sold 139,765 125,361 286,165 251,181
--------- -------- -------- --------
Gross earnings 46,066 40,567 87,130 76,774
Selling and administrative expense 25,122 22,625 49,168 44,144
--------- -------- -------- --------
Earnings from operations 20,944 17,942 37,962 32,630
Other income (expense):
Interest expense (1,251) (1,052) (2,364) (2,414)
Other, net 264 388 324 634
--------- -------- -------- --------
Earnings before income taxes 19,957 17,278 35,922 30,850
Provision for income taxes 8,000 6,800 14,400 12,100
--------- -------- -------- --------
Net earnings $ 11,957 $ 10,478 $ 21,522 $ 18,750
========= ======== ======== ========
Earnings per share of common stock $ .59 $ .52 $ 1.06 $ .93
========= ======== ======== ========
Average common shares outstanding 20,237,006 20,125,582 20,240,005 20,115,938
========== ========== ========== ==========
Cash dividends per common share $ .13 $ .12 $ .26 $ .23
========= ======== ======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<CAPTION>
Six Months Ended
July 2, 1994 July 3, 1993
<S> <C> <C>
Cash Flow From Operating Activities
Net earnings $ 21,522 $ 18,750
Depreciation and amortization 19,538 16,185
Deferred income taxes (1,154) (589)
Change in assets and liabilities
Decrease (increase) in receivables 2,216 (3,938)
Decrease (increase) in inventories 5,204 (9,958)
Increase in other current assets (409) (915)
Increase in accounts payable
and accrued liabilities 7,619 3,512
Decrease in other non-current assets 1,067 1,937
Other, net 734 1,352
-------- --------
Cash provided from operating activities 56,337 26,336
-------- --------
Cash Flow From Investing Activities
Capital expenditures, net (46,935) (29,646)
Acquisition of business (16,331) --
-------- --------
Cash used for investing activities (63,266) (29,646)
-------- --------
Cash Flow From Financing Activities
Repayment of notes payable, net (17,785) --
Isuance of long-term debt 25,000 --
Repayment of long-term debt (4,296) (5,271)
Dividends paid (5,206) (4,511)
Proceeds from exercise of stock options 1,095 1,197
-------- --------
Cash used for financing activities (1,192) (8,585)
-------- --------
Net decrease in cash (8,121) (11,895)
Cash at beginning of period 8,230 13,305
-------- --------
Cash at end of period $ 109 $ 1,410
======== ========
Cash payments for:
Interest, net of amount capitalized $ 3,326 $ 3,632
Income taxes 15,457 10,825
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1) Basis of Presentation
The condensed financial statements included herein have been prepared by
the Corporation, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Corporation believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the notes thereto included in the Corporation's latest
annual report on Form 10-K.
In the opinion of Management, the aforementioned statements reflect all
adjustments (consisting only of normal recurring adjustments) necessary
for a fair presentation of the results for the interim periods.
2) Acquisition of Danbury Printing & Litho, Inc.
On March 8, 1994, the Corporation purchased substantially all of the
assets of Danbury Printing & Litho, Inc. ("Danbury") for approximately
$16.3 million in cash and assumed selected liabilities. Danbury, which
reported sales of approximately $35 million in 1993, has become part of
the Corporation's Direct Marketing Group, which is classified in the
commercial market. This acquisition was accounted for as a purchase and,
accordingly, the accompanying financial statements of the Corporation
include Danbury's results beginning with the acquisition date.
3) Inventories
The majority of the Corporation's inventories are accounted for at cost
determined on a last-in, first-out (LIFO) basis, which is not in excess
of market. The remaining inventories are stated at the lower of cost or
market using the first-in, first-out (FIFO) method. Inventories include
material, labor and manufacturing overhead.
Inventory amounts at July 2, 1994 and January 1, 1994 are as follows:
<TABLE>
<CAPTION>
Dollars in Thousands
July 2, 1994 January 1, 1994
<S> <C> <C>
Raw Materials and Supplies $24,874 $25,502
Work-In-Process and Finished Goods 28,271 30,941
------- -------
FIFO value (current cost of all inventories) 53,145 56,443
Excess of current cost over carrying value
of LIFO inventories (4,296) (3,996)
------- -------
Net Inventories $48,849 $52,447
======= =======
</TABLE>
4) Subsequent Event
On August 8, 1994, the Corporation completed its acquisition of United
Graphics Inc. ("UGI"). UGI, which reported sales of its most recent
fiscal year of approximately $28 million, has become part of the
Corporation's Information Services Group, which is classified in the book
market. This acquisition will be accounted for as a purchase and
accordingly the Corporation's financial statements will include UGI's
results beginning with the acquisition date.
<PAGE>
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have influenced the Corporation's financial position and results
of operations from the close of the latest fiscal year-end in comparison to
the corresponding interim period in the preceding year included in the
Unaudited Consolidated Condensed Balance Sheets, Statements of Earnings and
Statements of Cash Flows.
FINANCIAL CONDITION
Liquidity and Capital Resources
The Corporation's net working capital did not change significantly during
the first half of 1994. During the second quarter the Corporation sold
$25 million of long-term debt at an interest rate of 7.62%. The proceeds
from this debt placement were used to repay short-term indebtedness,
which had been issued earlier in the year primarily to finance capital
expenditures and the acquisition of Danbury.
RESULTS OF OPERATIONS
Net Sales
Sales for the second quarter of 1994 were $19.9 million (12%) higher than
the second quarter of 1993. Danbury, which was acquired during the first
quarter of 1994, accounted for approximately $9 million of the sales
gain. The markets which recorded the largest sales increase were direct
marketing materials (including Danbury) and catalogs (particularly
business-to-business), both of which are included in the commercial
classification.
Sales for the first half of 1994 increased $45.3 million (14%) over 1993.
All market classifications reported sales increases for the first half of
1994. The largest increase in sales was in the commercial
classification, particularly in catalogs and direct marketing materials
(including Danbury).
Cost of Goods Sold
Cost of goods sold as a percentage of sales decreased from 75.6% for the
second quarter of 1993 to 75.2% for the second quarter of 1994.
Increased plant utilization lead to improved margins in most of the
Corporation's operations. Margins in direct marketing materials were
down, primarily due to the margins of Danbury being added to the mix.
KCS Industries continued to experience lower margins due to less than
expected sales volume.
Cost of goods sold as a percentage of sales increased from 76.6% for the
first six months of 1993 to 76.7% for the first six months of 1994. This
slight reduction in margins for the six month period resulted from lower
first quarter margins in the book market and at KCS Industries which
offset the second quarter margin increases discussed above.
<PAGE>
Selling and Administrative Expenses
Selling and administrative expenses were $2.5 million and $5.0 million
higher for the second quarter and first six months of 1994, respectively,
than for the same periods of 1993. The increase is primarily due to
higher levels of activity and the inclusion of $1.0 million and $1.3 of
costs for Danbury for the quarter and six month periods respectively.
Interest Expense
Interest expense was $199,000 higher in the second quarter of 1994 than
in the second quarter of 1993. This increase was due to higher average
borrowing levels and higher average interest rates during 1994. Interest
expense was $50,000 lower for the first half of 1994 than for the first
half of 1993. This reduction is due to a smaller increase in average
borrowings during the first quarter of 1994 compared with the first
quarter of 1993 and an increase of $290,000 in the amount of interest
which was capitalized in 1994. The increased capitalized interest is due
to several large capital projects that are being installed in 1994.
Income Taxes
The Corporation's effective income tax rate increased approximately one
percentage point in 1994 as a result of the Federal tax increase that was
enacted in the third quarter of 1993.
PART II: OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4 (a) Note Purchase and Private Shelf Agreement dated May 12, 1994.
4 (b) Amendment to Note Purchase Agreements dated December 9, 1986.
4 (c) Amendment to Agreement dated July 17, 1990.
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BANTA CORPORATION
/S/ GERALD A. HENSELER
Gerald A. Henseler
Executive Vice President and Chief Financial Officer
Date August 10, 1994
<PAGE>
BANTA CORPORATION
EXHIBIT INDEX TO FORM 10-Q
For The Quarter Ended July 2, 1994
Page Number in Sequential
Exhibit Number Numbering System
4 (a) Note Purchase and Private Shelf Agreement dated May 12, 1994. . 11-67
(b) Amendment to Note Purchase Agreements dated December 9, 1986. . 68-83
(c) Amendment to Agreement dated July 17, 1990. . . . . . . . . . . . .84
BANTA CORPORATION EXHIBIT 4 (a)
225 Main Street
Menasha, Wisconsin 54952-8003
As of May 12, 1994
The Prudential Insurance Company
of America ("Prudential")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential, the
"Purchasers")
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Gentlemen:
The undersigned, Banta Corporation (herein called the
"Company"), hereby agrees with you as follows:
1A. AUTHORIZATION OF ISSUE OF SERIES A NOTES. The Company
will authorize the issue of its senior promissory notes (herein
called the "Series A Notes") in the aggregate principal amount of
$25,000,000, to be dated the date of issue thereof, to mature May
13, 2009, to bear interest on the unpaid balance thereof from the
date thereof until the principal thereof shall have become due
and payable at the rate of 7.62% per annum and on overdue
principal, Yield-Maintenance Amount and interest at the rate
specified therein, and to be substantially in the form of Exhibit
A-1 attached hereto. The terms "Series A Note" and "Series A
Notes" as used herein shall include each Series A Note delivered
pursuant to any provision of this Agreement and each Series A
Note delivered in substitution or exchange for any such Series A
Note pursuant to any such provision.
1B. AUTHORIZATION OF ISSUE OF PRIVATE SHELF NOTES. The
Company will authorize the issue of its additional senior
promissory notes (herein called the "Private Shelf Notes") in the
aggregate principal amount of $40,000,000, to be dated the date
of issue thereof, to mature, in the case of each Note so issued,
no less than five years and no more than twenty years after the
date of original issuance thereof, to have a weighted average
life of no more than fifteen years, to bear interest on the <PAGE>
<PAGE>
unpaid balance thereof from the date thereof at the rate per
annum with respect to such Private Shelf Note, and to have such
other particular terms, as shall be set forth in the Confirmation
of Acceptance delivered pursuant to paragraph 2B(5), and to be
substantially in the form of Exhibit A-2 attached hereto. The
terms "Private Shelf Note" and "Private Shelf Notes" as used
herein shall include each Private Shelf Note delivered pursuant
to any provision of this Agreement and each Private Shelf Note
delivered in substitution or exchange for any such Private Shelf
Note pursuant to any such provision. The terms "Note" or "Notes"
as used herein shall include each Series A Note and each Private
Shelf Note delivered pursuant to any provision of this Agreement
and each Note delivered in substitution or exchange for any such
Note pursuant to any such provision. Notes which have (i) the
same final maturity, (ii) the same principal prepayment dates,
(iii) the same principal prepayment amounts (as a percentage of
the original principal amount of each Note), (iv) the same
interest rate, and (v) the same interest payment periods, are
herein called a "Series" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. Purchase and Sale of Series A Notes. The Company
hereby agrees to sell to Prudential and, subject to the terms and
conditions herein set forth, Prudential agrees to purchase from
the Company $25,000,000 aggregate principal amount of Series A
Notes at 100% of such aggregate principal amount. On May 12,
1994, or any other date prior to May 14, 1994 upon which the
Company and Prudential may mutually agree (herein called the
"Series A Closing Day"), the Company will deliver to Prudential
at the offices of Prudential Capital Group, Two Prudential Plaza,
Suite 5600, Chicago, Illinois 60601, one or more Series A Notes
registered in its name, evidencing the aggregate principal amount
of Series A Notes to be purchased by Prudential and in the
denomination or denominations specified with respect to
Prudential in the Purchaser Schedule attached hereto, against
payment of the purchase price thereof by transfer of immediately
available funds for credit to the Company's account #112009499 at
Firstar Bank Milwaukee, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53201, ABA Routing Number 075000022.
2B. Purchase and Sale of Private Shelf Notes.
2B(1). Facility. Prudential is willing to consider, in its
sole discretion and within limits which may be authorized for
purchase by Prudential and Prudential Affiliates from time to
time, the purchase of Private Shelf Notes pursuant to this
Agreement. The willingness of Prudential to consider such
purchase of Private Shelf Notes is herein called the "Facility".
At any time, the aggregate principal amount of Private Shelf
Notes stated in paragraph 1B, minus the aggregate principal
<PAGE>
<PAGE>
amount of Private Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal
amount of Accepted Notes (as hereinafter defined) which have not
yet been purchased and sold hereunder prior to such time is
herein called the "Available Facility Amount" at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER
PURCHASES OF PRIVATE SHELF NOTES, THIS AGREEMENT IS ENTERED INTO
ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY
PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS
TO PURCHASE PRIVATE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR
OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF PRIVATE SHELF
NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A
COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B(2). Issuance Period. Private Shelf Notes may be issued
and sold pursuant to this Agreement until the earlier of (i) the
third anniversary of the date of this Agreement and (ii) the
thirtieth day after Prudential shall have given to the Company,
or the Company shall have given to Prudential, a notice stating
that it elects to terminate the issuance and sale of Private
Shelf Notes pursuant to this Agreement (or if such thirtieth day
is not a Business Day, the Business Day next preceding such
thirtieth day). The period during which Private Shelf Notes may
be issued and sold pursuant to this Agreement is herein called
the "Issuance Period".
2B(3). Request for Purchase. The Company may from time to
time during the Issuance Period make requests for purchases of
Private Shelf Notes (each such request being herein called a
"Request for Purchase"). Each Request for Purchase shall be made
to Prudential by telecopier and confirmed by nationwide overnight
delivery service, and shall (i) specify the aggregate principal
amount of Private Shelf Notes covered thereby, which shall not be
less than $5,000,000 and not be greater than the Available
Facility Amount at the time such Request for Purchase is made,
(ii) specify the principal amounts, final maturities and
principal payment dates and amounts, (iii) specify the use of
proceeds of such Private Shelf Notes, (iv) specify the proposed
day for the closing of the purchase and sale of such Private
Shelf Notes, which shall be a Business Day during the Issuance
Period not less than 10 Business Days and not more than 25
Business Days after the making of such Request for Purchase, (v)
specify the number of the account and the name and address of the
depository institution to which the purchase prices of such
Private Shelf Notes are to be transferred on the Private Shelf
Closing Day for such purchase and sale, (vi) certify that the
representations and warranties contained in paragraph 8 are true
on and as of the date of such Request for Purchase except to the
extent of changes caused by the transactions herein contemplated
and that there exists on the date of such Request for Purchase no
Event of Default or Default, (vii) specify whether the fee to be
<PAGE>
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due pursuant to paragraph 2B(8)(i) should be included in the rate
quotes Prudential may provide pursuant to paragraph 2B(4) or will
be paid separately by the Company on the Private Shelf Closing
Day for such purchase and sale, and (viii) be substantially in
the form of Exhibit B attached hereto. Each Request for Purchase
shall be in writing and shall be deemed made when received by
Prudential.
2B(4). Rate Quotes. Not later than five Business Days
after the Company shall have given Prudential a Request for
Purchase pursuant to paragraph 2B(3), Prudential may provide (by
telephone promptly thereafter confirmed by telecopier, in each
case no earlier than 9:30 A.M. and no later than 1:30 P.M. New
York City local time) interest rate quotes for the several
principal amounts, maturities, prepayment schedules and interest
payment periods of Private Shelf Notes specified in such Request
for Purchase. Each quote pursuant to this paragraph 2B(4) shall
represent the fixed interest rate per annum payable on the
outstanding principal balance of such Private Shelf Notes until
such balance shall have become due and payable, at which
Prudential or a Prudential Affiliate would be willing to purchase
such Private Shelf Notes at 100% of the principal amount thereof.
2B(5). Acceptance. Within 30 minutes after Prudential
shall have provided any interest rate quotes pursuant to
paragraph 2B(4) or such shorter period as Prudential may specify
to the Company (such period herein called the "Acceptance
Window"), the Company may, subject to paragraph 2B(6), elect to
accept such interest rate quotes. Such election shall be made by
an Authorized Officer of the Company notifying Prudential by
telephone or telecopier within the Acceptance Window (but not
earlier than 9:30 A.M. or later than 2:00 P.M., New York City
local time) that the Company elects to accept such interest rate
quotes, specifying the Private Shelf Note (each such Private
Shelf Note being herein called an "Accepted Note") as to which
such acceptance (herein called an "Acceptance") relates. The day
the Company notifies Prudential of an Acceptance with respect to
any Accepted Notes is herein called the "Acceptance Day" for such
Accepted Notes. Any interest rate quotes as to which Prudential
does not receive an Acceptance within the Acceptance Window shall
expire, and no purchase or sale of Private Shelf Notes hereunder
shall be made based on such expired interest rate quotes.
Subject to paragraph 2B(6) and the other terms and conditions
hereof, the Company agrees to sell to Prudential or a Prudential
Affiliate, and Prudential agrees to purchase, or to cause the
purchase by a Prudential Affiliate of, the Accepted Notes. As
soon as practicable following the Acceptance Day, the Company,
Prudential and each Prudential Affiliate which is to purchase any
such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit C attached hereto
(herein called a "Confirmation of Acceptance").
<PAGE>
<PAGE>
2B(6). Market Disruption. Notwithstanding the provisions
of paragraph 2B(5), if Prudential shall have provided interest
rate quotes pursuant to paragraph 2B(5) and thereafter, prior to
the time an Acceptance with respect to such quotes shall have
been notified to Prudential in accordance with paragraph 2B(5),
there shall occur a general suspension, material limitation, or
significant disruption of trading in securities generally on the
New York Stock Exchange or in the market for U.S. Treasury
securities or derivatives, then such interest rate quotes shall
expire, and no purchase or sale of Private Shelf Notes hereunder
shall be made based on such expired interest rate quotes. If the
Company thereafter notifies Prudential of the Acceptance of any
such interest rate quotes, such Acceptance shall be ineffective
for all purposes of this Agreement, and Prudential shall promptly
notify the Company that the provisions of this paragraph 2B(6)
are applicable with respect to such Acceptance.
2B(7). Private Shelf Closing. Not later than 11:30 A.M.
(New York City local time) on the Private Shelf Closing Day for
any Accepted Notes, the Company will deliver to Prudential or the
Prudential Affiliate listed in the Confirmation of Acceptance
relating thereto at the offices of Prudential Capital Group, Two
Prudential Plaza, Suite 5600, Chicago, Illinois 60601, the
Private Shelf Notes to be purchased by such Purchaser in the form
of a single Accepted Note for the Accepted Notes which have
exactly the same terms (or such greater number of Notes in
authorized denominations as such Purchaser may request) dated the
Private Shelf Closing Day and registered in such Purchaser's
name, against payment of the purchase price thereof by transfer
of immediately available funds for credit to the Company's
account specified in the Request for Purchase of such Private
Shelf Notes. If the Company fails to tender to any Purchaser the
Accepted Notes to be purchased by such Purchaser on the scheduled
Private Shelf Closing Day for such Accepted Notes as provided
above in this paragraph 2B(7), or any of the conditions specified
in paragraph 3 shall not have been fulfilled by the time required
on such scheduled Private Shelf Closing Day, the Company shall,
prior to 1:00 P.M., New York City local time, on such scheduled
Private Shelf Closing Day notify such Purchaser in writing
whether (x) such closing is to be rescheduled (such rescheduled
date to be a Business Day during the Issuance Period not less
than one Business Day and not more than 10 Business Days after
such scheduled Private Shelf Closing Day (the "Rescheduled
Closing Day") and certify to such Purchaser that the Company
reasonably believes that it will be able to comply with the
conditions set forth in paragraph 3 on such Rescheduled Closing
Day and that the Company will pay the Delayed Delivery Fee in
accordance with paragraph 2B(8)(ii) or (y) such closing is to be
cancelled as provided in paragraph 2B(8)(iii). In the event that
the Company shall fail to give such notice referred to in the
preceding sentence, Prudential (on behalf of each Purchaser) may
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at its election, at any time after 1:00 P.M., New York City local
time, on such scheduled Private Shelf Closing Day, notify the
Company in writing that such closing is to be cancelled as
provided in paragraph 2B(8)(iii).
2B(8). Fees.
2B(8)(i) Facility Fee. The Company will pay to Prudential
in immediately available funds a fee (herein called the "Facility
Fee") on each Private Shelf Closing Day in an amount equal to the
lesser of (a) $25,000 and (b) 0.15% of the aggregate principal
amount of Notes sold on such Closing Day, unless the Company
shall have requested pursuant to its Request for Purchase that
such fee be included in the rate quotes Prudential may provide
pursuant to paragraph 2B(4).
2B(8)(ii) Delayed Delivery Fee. If the closing of the
purchase and sale of any Accepted Note is delayed for any reason
(other than bad faith on the part of a Purchaser) beyond the
original Private Shelf Closing Day for such Accepted Note, the
Company will pay to Prudential (for the benefit of the
Purchasers) on the last Business Day of each calendar month,
commencing with the first such day to occur more than 30 days
after the Acceptance Day for such Accepted Note and ending with
the last such day to occur prior to the Cancellation Date or the
actual closing date of such purchase and sale, and on the
Cancellation Date or actual closing date of such purchase and
sale (if such Cancellation Date or closing date occurs more than
30 days after the Acceptance Day for such Accepted Note), a fee
(herein called the "Delayed Delivery Fee") calculated as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond
equivalent yield per annum of such Accepted Note; "MMY" means
Money Market Yield, i.e., the yield per annum on a commercial
paper investment of the highest quality selected by Prudential on
the date Prudential receives notice of the delay in the closing
for such Accepted Notes having a maturity date or dates the same
as, or closest to, the Rescheduled Closing Day or Rescheduled
Closing Days (a new alternative investment being selected by
Prudential each time such closing is delayed); "DTS" means Days
to Settlement, i.e., the number of actual days elapsed from and
including the originally scheduled Closing Day with respect to
such Accepted Note (in the case of the first such payment with
respect to such Accepted Note) or from and including the date of
the next preceding payment (in the case of any subsequent delayed
delivery fee payment with respect to such Accepted Note) to but
excluding the date of such payment; and "PA" means Principal
Amount, i.e., the principal amount of the Accepted Note for which
such calculation is being made. In no case shall the Delayed
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<PAGE>
Delivery Fee be less than zero. Nothing contained herein shall
obligate any Purchaser to purchase any Accepted Note on any day
other than the Private Shelf Closing Day for such Accepted Note,
as the same may be rescheduled from time to time in compliance
with paragraph 2B(7).
2B(8)(iii) Cancellation Fee. If the Company at any time
notifies Prudential in writing that the Company is cancelling the
closing of the purchase and sale of such Accepted Note, or if
Prudential notifies the Company in writing under the
circumstances set forth in the last sentence of paragraph 2B(7)
that the closing of the purchase and sale of such Accepted Note
is to be cancelled, or if the closing of the purchase and sale of
such Accepted Note is not consummated on or prior to the last day
of the Issuance Period (the date of any such notification, or the
last day of the Issuance Period, as the case may be, being herein
called the "Cancellation Date"), the Company will pay to
Prudential (for the benefit of the Purchasers) in immediately
available funds an amount (the "Cancellation Fee") calculated as
follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in
decimals) obtained by dividing (a) the excess of the ask price
(as determined by Prudential) of the Hedge Treasury Note(s) on
the Cancellation Date over the bid price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Acceptance Day
for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2B(8)(ii). The foregoing bid
and ask prices shall be as reported by Telerate Systems, Inc.
(or, if such data for any reason ceases to be available through
Telerate Systems, Inc., any publicly available source of similar
market data). Each price shall be based on a U.S. Treasury
security having a par value of $100.00 and shall be rounded to
the second decimal place. In no case shall the Cancellation Fee
be less than zero.
3. CONDITIONS OF CLOSING. Prudential's obligation to
purchase the Series A Notes, and the obligation of any Purchaser
to purchase any Private Shelf Notes, is subject in each case to
the satisfaction, on or before the applicable Closing Day for
such Notes, of the following conditions:
3A(1). Opinion of Company's Counsel. On the Series A
Closing Day, Prudential shall have received from Ronald D.
Kneezel, general counsel of the Company, a favorable opinion
satisfactory to Prudential and substantially in the form of
Exhibit D-1 attached hereto. The Company hereby directs such
counsel to deliver such opinion, and agrees that the issuance and <PAGE>
<PAGE>
sale of the Series A Notes will constitute a reconfirmation of
such direction.
3A(2). Opinion of Company's Counsel. On each Private Shelf
Closing Day, such Purchaser shall have received from Ronald D.
Kneezel, general counsel of the Company, or other counsel
designated by the Company and acceptable to such Purchaser, a
favorable opinion satisfactory to the Purchaser and substantially
in the form of Exhibit D-2 attached hereto and as to such other
matters as such Purchaser may reasonably request. The Company
hereby directs such counsel to deliver such opinion, and agrees
that the issuance and sale of any Private Shelf Notes will
constitute a reconfirmation of such direction.
3B. Opinion of Purchaser's Special Counsel. Such Purchaser
shall have received from James F. Evert, Assistant General
Counsel of Prudential, or such other counsel who is acting as
special counsel for it 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.
3C. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 shall be
true on and as of the applicable Closing Day, except to the
extent of changes caused by the transactions herein contemplated;
there shall exist on the applicable Closing Day no Default or
Event of Default; and the Company shall have delivered to each
Purchaser an Officer's Certificate, dated the applicable Closing
Day, to both such effects.
3D(1). Structuring Fee. On or before the Series A Closing
Day, the Company shall have paid to Prudential a structuring fee
in the amount of $25,000.
3D(2). Fees. On or before each Private Shelf Closing Day,
the Company shall have paid to Prudential any fee required by
paragraphs 2B(8)(i) and 2B(8)(ii).
3E. Purchase Permitted By Applicable Laws. The purchase of
and payment for the Notes to be purchased on the applicable
Closing Day 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 any 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 <PAGE>
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as such Purchaser may request to establish compliance with this
condition.
3F. 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 each Purchaser, and each Purchaser shall
have received all such counterpart originals or certified or
other copies of such documents as it may reasonably request.
4. PREPAYMENTS. The Notes shall be subject to prepayment
with respect to the required prepayments specified in paragraphs
4A and 4B and also under the circumstances set forth in paragraph
4C.
4A. Required Prepayments of Series A Notes. Until the
Series A Notes shall be paid in full, the Company shall apply to
the prepayment of the Series A Notes, without Yield-Maintenance
Amount, the sum of $1,190,476.19 on May 13 and November 13 of
each year, commencing May 13, 1999 and to and including November
13, 2008, and such principal amounts of the Notes, together with
interest thereon to the prepayment dates, shall become due on
such prepayment dates. Any prepayment made by the Company
pursuant to any other provision of this paragraph 4 shall not
reduce or otherwise affect its obligation to make any scheduled
prepayment required by this paragraph 4A. The remaining unpaid
principal amount of the Series A Notes, together with interest
accrued thereon, shall become due on May 13, 2009.
4B. Required Prepayment of Private Shelf Notes. Until each
respective Series of Private Shelf Notes shall be paid in full,
each respective Series of Private Shelf Notes shall be subject to
such required prepayments, if any, as are set forth in such
Series of Private Shelf Notes. Any prepayment made by the
Company pursuant to any other provision of this paragraph 4 shall
not reduce or otherwise affect its obligation to make any
prepayment as specified in each Series of Private Shelf Notes.
4C. Optional Prepayment With Yield-Maintenance Amount. The
Notes of each Series shall be subject to optional prepayment, in
whole or in part, in increments of $100,000, and in a minimum
amount of $5,000,000, at the option of the Company, at 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 such Note. Any partial prepayment of a Series of
Notes pursuant to this paragraph 4C shall be applied in
satisfaction of required payments of principal in inverse order
of their scheduled due dates.
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4D. Notice of Optional Prepayment. The Company shall give
notice to the holder of each Note of a Series irrevocable written
notice of any optional prepayment to be made pursuant to
paragraph 4C with respect to such Series not less than 10
Business Days prior to the prepayment date, specifying (i) such
prepayment date, (ii) the aggregate principal amount of the Notes
of such Series to be prepaid on such date, (iii) the principal
amount of the Notes of such holder to be prepaid on that date,
and (iv) stating that such optional prepayment is to be made
pursuant to paragraph 4C. Notice of optional prepayment having
been given as aforesaid, the principal amount of the Notes
specified in such notice, together with interest thereon to the
prepayment date and together with the Yield-Maintenance Amount,
if any, herein provided, shall become due and payable on such
prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to
paragraph 4B, give telephonic notice of the principal amount of
the Notes to be prepaid and the prepayment date to each
Significant Holder which shall have designated a recipient for
such notices in the Purchaser Schedule attached hereto or by
notice in writing to the Company.
4E. Application of Prepayments. In the case of each
prepayment pursuant to paragraphs 4A, 4B or 4C of less than the
entire unpaid principal amount of all outstanding Notes of any
Series, the amount to be prepaid shall be applied pro rata to all
outstanding Notes of such Series (including, for the purpose of
this paragraph 4E only, all Notes of such Series prepaid or
otherwise retired or purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates other than by
prepayment pursuant to paragraph 4A, 4B or 4C) according to the
respective unpaid principal amounts thereof.
4F. Retirement of Notes. The Company shall not, and shall
not permit any of its Subsidiaries or Affiliates to, prepay or
otherwise retire in whole or in part prior to their stated final
maturity (other than by prepayment pursuant to paragraphs 4A, 4B
or 4C or upon acceleration of such final maturity pursuant to
paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, any Notes 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 holder of Notes at the time outstanding upon the same terms
and conditions. Any Notes prepaid or otherwise retired or
purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates shall not be deemed to be outstanding
for any purpose under this Agreement, except as provided in
paragraph 4E.
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5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants that it
will deliver to each Significant Holder in triplicate:
(i) as soon as practicable and in any event within 45
days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, consolidated
statements of income and cash flows of the Company and its
Subsidiaries 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 its
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, all in
reasonable detail and certified by an authorized financial
officer of the Company, subject to changes resulting from
year-end adjustments; provided, however, that 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);
(ii) as soon as practicable and in any event within 90
days after the end of each fiscal year, consolidated
statements of income, stockholders' equity and cash flows of
the Company and its Subsidiaries for such year, and a
consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year, setting forth in
each case in comparative form corresponding consolidated
figures from the preceding annual audit, all in reasonable
detail and satisfactory in form to the Required Holder(s),
and reported on by independent public accountants of
recognized national standing selected by the Company whose
report shall be without limitation as to scope of the audit
and satisfactory in substance to the Required Holder(s);
provided, however, that 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);
(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),
other than registration statements on Form S-8 or any
successor form, and all reports which it files (exclusive of
filings on Form 11-K or any successor form) with the <PAGE>
<PAGE>
Securities and Exchange Commission (or any governmental body
or agency succeeding to the functions of the Securities and
Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each
other report submitted to the Company or any Subsidiary by
independent accountants in connection with any annual,
interim or special audit made by them of the financial
statements or records of the Company or any Subsidiary; and
(v) 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) compliance by the
Company and its Subsidiaries with the provisions of paragraphs
6C(1), 6C(2), 6C(3), 6C(4) and 6C(6), (b) setting forth the 60
consecutive day "clean down period" selected by the Company as
contemplated by clause (ii) of the definition of "Funded Debt"
appearing in paragraph 10B and (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. 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 to the certification of such
financial statements, they have obtained no knowledge of any
Event of Default or Default, or, if they have obtained knowledge
of any Event of Default or Default, specifying the nature and
period of existence thereof. Such accountants, however, shall
not be liable to anyone by reason of their failure to obtain
knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards.
The Company also covenants that forthwith upon any
Responsible Officer obtaining 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.
5B. Inspection of Property. The Company covenants that it
will permit any Person designated by any Significant Holder in
writing, at such Significant Holder's expense, to visit and
inspect any of the properties of the Company and its <PAGE>
<PAGE>
Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and 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.
5C. 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 or assets, whether now owned or
hereafter acquired, other than Liens permitted by the provisions
of paragraph 6C(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to
paragraph 11C), it will make or cause to be made effective
provision 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.
5D. Information Required by Rule 144A. The Company
covenants that it will, upon the request of the holder of any
Note, provide such holder, and any qualified institutional buyer
designated by such holder, such financial and other information
as such 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 section 13 or 15(d) of the Exchange
Act. For the purpose of this paragraph 5D, the term "qualified
institutional buyer" shall have the meaning specified in Rule
144A under the Securities Act.
5E. Compliance With Environmental Laws. The Company will,
and will cause each of its Subsidiaries to, comply in a timely
fashion with, or operate pursuant to valid waivers of the
provisions of, all Environmental Laws, except where noncompliance
would not adversely affect the business, condition (financial or
other) or operations of the Company and its Subsidiaries taken as
a whole.
5F. Maintenance of Insurance. The Company covenants that
it and each of its Subsidiaries will maintain insurance in such
amounts and against such casualties, liabilities, risks,
contingencies and hazards as is customarily maintained by other
similarly situated companies operating similar businesses and,
upon request of a Significant Holder, together with each delivery
of financial statements under clause (ii) of paragraph 5A it will
deliver an Officers' Certificate specifying the details of such
insurance in effect.
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6. NEGATIVE COVENANTS.
6A. Current Ratio Requirement. The Company covenants that
it will not permit the ratio of consolidated current assets to
consolidated current liabilities at any time to be less than l.5
to 1.0.
6B. [Intentionally left blank.]
6C. Lien, Debt and Other Restrictions. The Company
covenants that it will not and will not permit any Subsidiary to:
6C(1). Liens. Create, assume or suffer to exist any Lien
upon any of its property or assets, whether now owned or
hereafter acquired (whether or not provision is made for the
equal and ratable securing of the Note in accordance with the
provisions of paragraph 5C), except
(i) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings,
(ii) other Liens incidental to the conduct of its
business or the ownership of its property and assets which
were not incurred in connection with the borrowing of money
or the obtaining of advances or credit, and which do not in
the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in
the operation of its business,
(iii) Liens on property or assets of a Subsidiary to
secure obligations of such Subsidiary to the Company or
another Subsidiary,
(iv) Liens securing Debt and existing on any property
of any corporation at the time it becomes a Subsidiary, or
existing prior to the time of acquisition upon any property
acquired by the Company or any Subsidiary through purchase,
merger or consolidation or otherwise, whether or not
expressly assumed by the Company or such Subsidiary,
provided that (a) such Lien shall not have been created,
incurred or assumed in contemplation of such purchase,
merger, consolidation or other event, (b) each such Lien
shall be confined solely to the item(s) of property so
acquired, (c) the Debt secured by such Lien shall not be
renewed, extended or refunded and (d) the aggregate amount
of Debt secured by all such Liens at no time exceeds 25% of
Consolidated Tangible Net Worth, and
(v) other Liens securing Debt, provided that the
aggregate amount of Debt secured by all such Liens shall at
no time exceed 10% of Consolidated Tangible Net Worth,
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provided that Priority Debt shall at no time exceed the lesser of
(1) 25% of Consolidated Tangible Net Worth and (2) 10% of
Consolidated Tangible Net Worth plus Debt described in clause
(iv), above;
6C(2). Debt. Create, incur, assume or suffer to exist any
Debt, except
(i) Debt represented by the Notes,
(ii) Debt of any Subsidiary to the Company or another
Subsidiary, and
(iii) additional Debt of the Company (other than to a
Subsidiary) and of Subsidiaries,
provided that (a) Consolidated Funded Debt shall at no time
exceed an amount equal to 50% of Tangible Capitalization and (b)
Priority Debt shall at no time exceed the lesser of (1) 25% of
Consolidated Tangible Net Worth and (2) 10% of Consolidated
Tangible Net Worth plus Debt described in clause (iv) of
paragraph 6C(1);
6C(3). Loans, Advances and Investments. Make or permit to
remain outstanding any loan or advance to, or own, purchase or
acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person,
except:
(i) make or permit to remain outstanding loans or
advances to any Subsidiary,
(ii) own, purchase or acquire stock obligations or
securities of a Subsidiary or of a Person which immediately
after such purchase or acquisition will be a Subsidiary,
(iii) acquire and own stock, obligations or securities
received in settlement of debts (created in the ordinary
course of business) owing to the Company or any Subsidiary,
(iv) own, purchase or acquire (a) direct obligations
of, or obligations guaranteed by, the United States of
America, (b) banker's acceptances, certificates of deposit
and repurchase agreements with respect to same, in each case
due within one year from the date of purchase issued by a
commercial bank located and incorporated in the United
States or Canada with capital and surplus of at least $100
million (U.S.) and (c) commercial paper rated P-1 by Moody's
Investors Service, Inc. or A-1 by Standard & Poor's
Corporation and maturing not more than one year from the
date of purchase thereof,
<PAGE>
<PAGE>
(v) own, purchase or acquire other obligations
maturing not more than 90 days from the date of purchase
thereof rated "AAA" by Standard and Poor's Corporation or
"Aaa" by Moody's Investors Service, Inc.,
(vi) make or permit to remain outstanding travel and
other like advances to officers and employees of the Company
or a Subsidiary in the ordinary course of business, and
(vii) make other loans, advances and investments not to
exceed 5% of Consolidated Tangible Net Worth at any time;
6C(4). Sale of Stock and Debt of Subsidiaries. Sell or
otherwise dispose of, or part with control of, any shares of
stock or Debt of any Subsidiary, except to the Company or another
Subsidiary, and except that all shares of stock and Debt of any
Subsidiary at the time owned by or owed to the Company and all
Subsidiaries may be sold as an entirety for a consideration which
represents the fair value (as determined in good faith by the
Board of Directors of the Company) at the time of sale of the
shares of stock and Debt so sold; provided that (a) such sale or
other disposition is treated as a Transfer of assets of such
Subsidiary and is permitted by paragraph 6C(6) and (b) at the
time of such sale, such Subsidiary shall not own, directly or
indirectly, any shares of stock or Debt of any other Subsidiary
(unless all of the shares of stock and Debt of such other
Subsidiary owned, directly or indirectly, by the Company and all
Subsidiaries are simultaneously being sold as permitted by this
paragraph 6C(4));
6C(5). Merger and Consolidation. Merge or consolidate with
or into any other Person, except that:
(i) any Subsidiary may merge or consolidate with or
into the Company, provided that the Company is the
continuing or surviving corporation,
(ii) any Subsidiary may merge or consolidate with or
into another Subsidiary provided that no Default or Event of
Default exists or would exist immediately after giving
effect thereto, and
(iii) the Company may merge or consolidate with any
other corporation, provided that (a) the Company shall be
the continuing or surviving corporation, and (b) no Default
or Event of Default exists or would exist immediately after
giving effect thereto;
6C(6). Transfer of Assets. Transfer any of its assets
except that:
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(i) any Subsidiary may Transfer assets to the Company,
(ii) the Company or any Subsidiary may sell inventory
in the ordinary course of business, and
(iii) the Company or any Subsidiary may otherwise
Transfer assets, provided that after giving effect thereto
(a) the Three Year Percentage of Assets Transferred pursuant
to this clause (iii) and paragraph 6C(4) shall not exceed
10% and (b) the Three Year Percentage of Earnings Capacity
Transferred pursuant to this clause (iii) and paragraph
6C(4) shall not exceed 10%;
6C(7). Sale or Discount of Receivables. Sell with
recourse, pledge, or discount or otherwise sell for less than the
face value thereof, any of its notes or accounts receivable;
6C(8). Related Party Transactions. Directly or indirectly,
purchase, acquire or lease any property from, or sell, transfer
or lease any property to, or otherwise deal with, in the ordinary
course of business or otherwise any Related Party; provided that
the foregoing shall not prohibit any transaction in the ordinary
course of business on terms no less favorable to the Company or a
Subsidiary than if no such relationship existed; or
6C(9). Margin Securities. Permit the aggregate market
value of all "margin securities", as defined in paragraph 8I,
owned by the Company and its Subsidiaries at any time to be
greater than 25% of the value of the consolidated assets of the
Company and its Subsidiaries, as determined by any reasonable
method.
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 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 10 days after the date
due; or
(iii) the Company or any Subsidiary defaults in any
payment of principal of or interest on any other obligation
for money borrowed (or any Capitalized Lease Obligation, any
<PAGE>
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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
(or to be repurchased by the Company or any Subsidiary) prior to
any stated maturity, 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 permitting
acceleration (or sale to the Company or any Subsidiary) shall
occur and be continuing exceeds $1,500,000; or
(iv) any representation or warranty made by the Company
herein or in any writing furnished in connection with or
pursuant to this Agreement shall be false in any material
respect on the date as of which made; or
(v) the Company fails to perform or observe any
agreement contained in paragraph 6 hereof; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such
failure shall not be remedied within 30 days after any
Responsible Officer receives written notice thereof; or
(vii) the Company or any Material Subsidiary makes an
assignment for the benefit of creditors or is generally not
paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Material 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 Material Subsidiary petitions
or applies to any tribunal for, or consents to, the
appointment of, or taking possession by, a trustee,
receiver, custodian, liquidator or similar official of the
Company or any Material Subsidiary, or of any substantial
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part of the assets of the Company or any Material 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 Material 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
Material Subsidiary and the Company or such Material
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 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 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 which requires
the divestiture of assets representing a substantial part,
or the divestiture of the stock of a Subsidiary whose assets
represent a substantial part, of the consolidated assets of
the Company and its Subsidiaries (determined in accordance
with generally accepted accounting principles) or which
requires the divestiture of assets, or stock of a
Subsidiary, which shall have contributed a substantial part
of the consolidated net income of the Company and its
Subsidiaries (determined in accordance with generally
accepted accounting principles) for any of the three fiscal
years then most recently ended, and such order, judgment or
decree remains unstayed and in effect for more than 60 days;
or
(xiii) one or more final judgments in an aggregate amount
in excess of $1,000,000 is rendered against the Company or
any Subsidiary and, within 60 days after entry thereof, any
such judgment is not discharged or execution thereof stayed
pending appeal, or within 60 days after the expiration of
any such stay, such judgment is not discharged; or
(xiv) 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
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resulting in the incurrence by such withdrawing employer of a
withdrawal liability in an amount exceeding $1,000,000;
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 its Subsidiaries or Affiliates) may at
its option, by notice in writing to the Company, declare such
Note to be, and such Note shall thereupon be and become,
immediately due and payable at par together with interest accrued
thereon, without presentment, demand, protest or additional
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 (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 together with
interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment,
demand, protest or notice of any kind, all of which are hereby
waived by the Company, and (c) with respect to any event
constituting an Event of Default hereunder, the Required
Holder(s) of the Notes of any Series may at its or their option,
by notice in writing to the Company, declare all of the Notes of
such Series to be, and all of such 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 such Note, without presentment,
demand, protest or additional notice of any kind, all of which
are hereby waived by the Company.
7B. Notice of Acceleration. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A the
Company shall forthwith give written notice thereof to the holder
of each Note of each Series at the time outstanding.
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.
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8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. Organization. The Company is a corporation duly
organized and existing in good standing under the laws of the
State of Wisconsin, each Subsidiary is duly organized and
existing in good standing under the laws of the jurisdiction in
which it is incorporated, and the Company has and each Subsidiary
has the corporate power to own its respective property and to
carry on its respective business as now being conducted. The
Company and each Subsidiary is duly qualified as a foreign
corporation to do business and in good standing in every
jurisdiction in which the nature of the respective business
conducted by it makes such qualification necessary, and the
failure to so qualify would have a material adverse effect on the
Company and such Subsidiaries taken as a whole.
8B. Financial Statements. The Company has furnished each
Purchaser of the Series A Notes and any Accepted Notes with the
following financial statements, identified by a principal
financial officer of the Company: (i) consolidated balance sheets
of the Company and its Subsidiaries as at the last day in each of
the five fiscal years of the Company most recently completed
prior to the date as of which this representation is made or
repeated to such Purchaser (other than fiscal years completed
within 90 days prior to such date for which audited financial
statements have not been released) and consolidated statements of
income, stockholders' equity and cash flows of the Company and
its Subsidiaries for each such year, reported on by Arthur
Andersen & Co. (or, with respect to years subsequent to 1993, by
Arthur Andersen & Co. or other independent public accountants of
recognized national standing); and (ii) consolidated balance
sheets of the Company and its Subsidiaries as at the end of the
quarterly period (if any) most recently completed prior to such
date and after the end of such fiscal year (other than quarterly
periods completed within 45 days prior to such date for which
financial statements have not been released) and the comparable
quarterly period in the preceding fiscal year and consolidated
statements of income and cash flows for the periods from the
beginning of the fiscal years in which such quarterly periods are
included to the end of such quarterly periods, 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 normal year-end adjustments), have been prepared
in accordance with generally accepted accounting principles
consistently followed throughout the periods involved 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
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statements of income, stockholders' equity and cash flows fairly
present the results of the operations of the Company and its
Subsidiaries for the periods indicated. There has been no
material adverse change in the business, condition or operations
(financial or otherwise) of the Company and its Subsidiaries
taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished.
8C. Actions Pending. There is no action, suit,
investigation or proceeding pending or, to the knowledge of the
elected officers of the Company, threatened against the Company
or any of its Subsidiaries, or any properties or rights of the
Company or any of its Subsidiaries, by or before any court,
arbitrator or administrative or governmental body which might
result in any material adverse change in the business, condition
or operations of the Company and its Subsidiaries taken as a
whole.
8D. Outstanding Debt. Neither the Company nor any of its
Subsidiaries has outstanding any Debt except as permitted by
paragraph 6C(2). There exists no default under the provisions of
any instrument evidencing such Debt or of any agreement relating
thereto.
8E. Title to Properties. The Company has and each of its
Subsidiaries has good and marketable title to its respective real
properties (other than properties which it leases) and good title
to all of its other respective properties and assets, including
the properties and assets reflected in the most recent audited
balance sheet referred to in paragraph 8B (other than properties
and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Liens permitted by
paragraph 6C(1). All leases necessary in any material respect
for the conduct of the business of the Company and its
Subsidiaries taken as a whole are valid and subsisting and are in
full force and effect.
8F. Taxes. The Company has and each of its Subsidiaries
has filed all Federal, State and other income tax returns which,
to the best knowledge of the elected 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 for which
adequate reserves have been established in accordance with
generally accepted accounting principles.
8G. Conflicting Agreements and Other Matters. Neither the
Company nor any of its Subsidiaries is a party to any contract or
agreement or subject to any charter or other corporate
restriction which materially and adversely affects the business,
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property, assets or financial condition of the Company and its
Subsidiaries taken as a whole. Upon execution and delivery of
that certain amendment letter of even date herewith between the
Company and Prudential pertaining to financings closed in 1986
and 1988, neither the execution nor delivery of this Agreement or
the Notes, nor the offering, issuance and sale of the Notes, nor
fulfillment of nor 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 or assets of the
Company or any of its Subsidiaries pursuant to, the charter or
by-laws of the Company or any of its Subsidiaries, 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 its
Subsidiaries is subject. Neither the Company nor any of its
Subsidiaries is a party to, or otherwise subject to any provision
contained in, any instrument evidencing Indebtedness of the
Company or any Subsidiary, any agreement relating thereto or any
other contract or agreement (including its charter) which 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 (i) as of the date of this Agreement, as set forth in the
agreements listed in Exhibit E attached hereto and (ii) as of any
date subsequent to the date of this Agreement, as set forth in
the agreements listed in Exhibit E or as theretofore disclosed to
Prudential in writing.
8H. 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 or will take any action which 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 of Blue
Sky law of any applicable jurisdiction.
8I. Regulation G, etc. Neither the Company nor any
Subsidiary will, directly or indirectly, use any of the proceeds
of the sale of the Notes for the purpose, whether immediate,
incidental or ultimate, of buying a "margin stock" or of
maintaining, reducing or retiring any indebtedness originally
incurred to purchase a stock that is currently a "margin stock",
or for any other purpose which might constitute any purchase and
sale of Notes hereunder a "purpose credit", in each case within
the meaning of Regulation G of the Board of Governors of the
Federal Reserve System (12 C.F.R. 207, as amended). The
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aggregate market value of all "margin securities" owned by the
Company and its Subsidiaries does not exceed 25% of the value of
the consolidated assets thereof, as determined by any reasonable
method. 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 Securities Exchange Act of 1934,
as amended, in each case as in effect now or as the same may
hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined
in section 302 of ERISA and section 412 of the Code), 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 expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan
(other than a Multiemployer Plan) by the Company or any
Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the Company and its Subsidiaries taken as a whole.
Neither the Company, any Subsidiary nor any ERISA Affiliate has
incurred or presently expects to incur any withdrawal liability
under Title IV of ERISA with respect to any Multiemployer Plan
which is or would be materially adverse to the Company and its
Subsidiaries taken as a whole. The execution and delivery of
this Agreement and the issuance and sale of the Notes will not
involve any transaction which is subject to the prohibitions of
section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975 of the Code. The representation
by the Company in the next preceding sentence is made in reliance
upon and subject to the accuracy of the representation in
paragraph 9B as to the source of the funds to be used to pay the
purchase price of the Notes to be purchased.
8K. 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 date of closing with the
Securities and Exchange Commission and/or 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.
8L. Environmental Compliance. The Company and its
Subsidiaries and all of their respective properties and
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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 its Subsidiaries
taken as a whole.
8M. Investment Company Status. Neither the Company nor any
Subsidiary is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended or an "investment adviser" within
the meaning of the Investment Advisers Act of 1940, as amended.
8N. 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 its Subsidiaries which materially adversely
affects or in the future may (so far as the Company can now
foresee) materially adversely affect the business, property,
assets or financial condition of the Company and its Subsidiaries
taken as a whole and which has not been set forth in this
Agreement or in the other documents, certificates and statements
furnished to any Purchaser by or on behalf of the Company prior
to the date hereof in connection with the transactions
contemplated hereby.
8O. Hostile Tender Offers. None of the proceeds of the
sale of any Notes will be used to finance a Hostile Tender Offer.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. Nature of Purchase. Such Purchaser is not acquiring
the Notes purchased by it hereunder with a view to or for sale in
connection with any distribution thereof within the meaning of
the Securities Act, provided that the disposition of such
Purchaser's property shall at all times be and remain within its
control.
9B. Source of Funds. No part of the funds used by such
Purchaser to pay the purchase price of the Notes 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
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to the Company, participates to the extent of 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 text of any paragraph shall have the
respective meanings specified therein, and the following terms
shall have the meanings specified with respect thereto below:
10A. Yield-Maintenance Terms.
"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.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to
paragraph 4C (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, 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 (as converted to reflect the periodic basis on which
interest on such Note is payable, if interest is payable other
than on a semi-annual basis) 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 local 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
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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.
"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 pursuant to paragraph 4C or is declared to be
immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Yield-Maintenance Amount" shall mean, with respect to any
Note, 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.
"Acceptance" shall have the meaning specified in paragraph
2B(5).
"Acceptance Day" shall have the meaning specified in
paragraph 2B(5).
"Acceptance Window" shall have the meaning specified in
paragraph 2B(5).
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"Accepted Note" shall have the meaning specified in
paragraph 2B(5).
"Affiliate" shall mean, with respect to any Person, any
other Person directly or indirectly controlling, controlled by,
or under direct or indirect common control with such first Person
(excluding, in the case of the Company, any (i) Subsidiary and
(ii) any officer or director of the Company or a Subsidiary,
solely in his or her capacity as such). A Person shall be deemed
to control another Person if such first Person possesses,
directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person,
whether through the ownership of voting securities, by contract
or otherwise.
"Authorized Officer" shall mean (i) in the case of the
Company, its chief executive officer, its chief financial
officer, its treasurer, any vice president of the Company
designated as an "Authorized Officer" of the Company in the
Information Schedule attached hereto or any vice president of the
Company designated as an "Authorized Officer" of the Company for
the purpose of this Agreement in an Officer's Certificate
executed by the Company's chief executive officer or chief
financial officer and delivered to Prudential, and (ii) in the
case of Prudential, any officer of Prudential designated as its
"Authorized Officer" in the Information Schedule or any officer
of Prudential designated as its "Authorized Officer" for the
purpose of this Agreement in a certificate executed by one of its
Authorized Officers. Any action taken under this Agreement on
behalf of the Company by any individual who on or after the date
of this Agreement shall have been an Authorized Officer of the
Company and whom Prudential in good faith believes to be an
Authorized Officer of the Company at the time of such action
shall be binding on the Company even though such individual shall
have ceased to be an Authorized Officer of the Company, and any
action taken under this Agreement on behalf of Prudential by any
individual who on or after the date of this Agreement shall have
been an Authorized Officer of Prudential, and whom the Company in
good faith believes to be an Authorized Officer of Prudential at
the time of such action shall be binding on Prudential even
though such individual shall have ceased to be an Authorized
Officer of Prudential.
"Available Facility Amount" shall have the meaning specified
in paragraph 2B(1).
"Bankruptcy Law" shall have the meaning specified in clause
(viii) of paragraph 7A.
"Cancellation Date" shall have the meaning specified in
paragraph 2B(8)(iii).
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"Cancellation Fee" shall have the meaning specified in
paragraph 2B(8)(iii).
"Capitalized Lease Obligation" shall mean any rental
obligation which, under generally accepted accounting principles,
is or will 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 Day" shall mean the Series A Closing Day or a
Private Shelf Closing Day, as the case may be.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Confirmation of Acceptance" shall have the meaning
specified in paragraph 2B(5).
"Consolidated Assets" shall mean, as of any time of
determination thereof, the total assets of the Company and
Subsidiaries determined on a consolidated basis.
"Consolidated Funded Debt" shall mean, as of any time of
determination thereof, the Funded Debt of the Company and
Subsidiaries determined on a consolidated basis.
"Consolidated Net Earnings" shall mean, for any period, the
consolidated gross revenues of the Company and its Subsidiaries
less all operating and non-operating expenses of the Company and
its Subsidiaries including all charges of a proper character
(including current and deferred taxes on income, provision for
taxes on unremitted foreign earnings which are included in gross
revenues, and current additions to reserves), but not including
in gross revenues any gains (net of expenses and taxes applicable
thereto) in excess of losses resulting from the sale, conversion
or other disposition of capital assets (i.e., assets other than
current assets), any gains resulting from the write-up of assets,
any amounts attributable to minority interests, any equity of the
Company or any Subsidiary in the unremitted earnings of any
corporation which is not a Subsidiary, any earnings of any Person
acquired by the Company or any Subsidiary through purchase,
merger or consolidation or otherwise for any period prior to
acquisition, undistributed earnings of any Subsidiary to the
extent such Subsidiary is not at the time permitted to make or
pay dividends, repay intercompany indebtedness or otherwise
transfer property or assets to the Company, or any deferred
credit representing the excess of equity in any Subsidiary at the
date of acquisition over the cost of the investment in such
Subsidiary.
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"Consolidated Tangible Net Worth" shall mean, as of any time
of any determination thereof, the excess of (i) the sum of (a)
the par value (or value stated on the books of the Company) of
the outstanding capital stock of all classes of the Company, plus
(or minus in the case of a surplus deficit) (b) the amount of the
consolidated surplus, whether capital or earned, of the Company
and its Subsidiaries, over (ii) the sum of treasury stock,
minority interests, any other contra-equity accounts, unamortized
debt discount and expense, goodwill, trademarks, trade names,
patents, deferred charges and other intangible assets and any
write-up of the value of any assets after January 1, 1994.
"Current Debt" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money which by its terms
or by the terms of any instrument or agreement relating thereto
matures on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or
extendible at the option of the debtor to a date more than one
year from the date of the creation thereof, provided that
Indebtedness for borrowed money outstanding under a revolving
credit or similar agreement which obligates the lender or lenders
to extend credit over a period of more than one year shall
constitute Funded Debt and not Current Debt, even though such
Indebtedness by its terms matures on demand or within one year
from the date of the creation thereof.
"Debt" shall mean Funded Debt and Current Debt.
"Delayed Delivery Fee" shall have the meaning specified in
paragraph 2B(8)(ii).
"Environmental Laws" shall mean all federal, state, local
and foreign laws relating to pollution or protection of the
environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation ambient air,
surface water, ground water, or land), or otherwise relating to
the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes, and any and all regulations, codes, plans,
orders, decrees, judgments, injunctions, notices or demand
letters issued, entered, promulgated or approved thereunder.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a
member of the same controlled group of corporations as the
Company within the meaning of section 414(b) of the Code, or any
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trade or business which is under common control with the Company
within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any
requirement in connection with such event for the giving of
notice, or the lapse of time, or the happening of any further
condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Facility" shall have the meanings specified in paragraph
2B(1).
"Facility Fee" shall have the meaning specified in paragraph
2B(8)(i).
"Funded Debt" shall mean (i) with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of
any instrument or agreement relating thereto matures, or which is
otherwise payable or unpaid, more than one year from, or is
directly or indirectly renewable or extendible at the option of
the debtor to a date more than one year (including an option of
the debtor under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period
of more than one year) from, the date of the creation thereof and
(ii) Current Debt of the Company and Subsidiaries if during the
most recently completed period of four consecutive fiscal
quarters the aggregate principal balance of all such Current Debt
has not been reduced to zero for a period of sixty consecutive
days selected by the Company as a clean down period, in an amount
equal to the maximum amount hereof outstanding at any time during
such clean down period.
"Guarantee" shall mean, with respect to any Person, any
direct or indirect liability, contingent or otherwise, of such
Person with respect to any indebtedness, lease, dividend or other
obligation of another, including, without limitation, any such
obligation directly or indirectly guaranteed, endorsed (otherwise
than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or
in respect of which such Person is otherwise directly or
indirectly liable, including, without limitation, any such
obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain the solvency or any
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balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or
supplies or for any transportation or service, regardless of the
non-delivery or non-furnishing thereof, in any such case if the
purpose or intent of such agreement is to provide assurance that
such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the
holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee shall be equal to
the outstanding principal amount of the obligation guaranteed or
such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
"Hedge Treasury Note(s)" shall mean, with respect to any
Accepted Note, the United States Treasury Note or Notes whose
duration (as determined by Prudential) most closely matches the
duration of such Accepted Note.
"Hostile Tender Offer" shall mean, with respect to the use
of proceeds of any Note, any offer to purchase, or any purchase
of, shares of capital stock of any corporation or equity
interests in any other entity, or securities convertible into or
representing the beneficial ownership of, or rights to acquire,
any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly
traded on any securities exchange or in any over-the-counter
market, other than purchases of such shares, equity interests,
securities or rights representing less than 5% of the equity
interests or beneficial ownership of such corporation or other
entity for portfolio investment purposes, and such offer or
purchase has not been duly approved by the board of directors of
such corporation or the equivalent governing body of such other
entity prior to the date on which the Company makes the Request
for Purchase of such Note.
"Indebtedness" shall mean, with respect to any Person,
without duplication, (i) all items (excluding items of
contingency reserves or of reserves for deferred income taxes)
which in accordance with generally accepted accounting principles
would be included in determining total liabilities as shown on
the liability side of a balance sheet of such Person as of the
date on which Indebtedness is to be determined, (ii) all
indebtedness secured by any Lien on any property or asset owned
or held by such Person subject thereto, whether or not the
indebtedness secured thereby shall have been assumed, and (iii)
all indebtedness of others with respect to which such Person has
become liable by way of Guarantee.
"Issuance Period" shall have the meaning specified in
paragraph 2B(2).
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"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction) or any other type of
preferential arrangement for the purpose, or having the effect,
of protecting a creditor against loss or securing the payment or
performance of an obligation.
"Material Subsidiary" shall mean, as of any time of
determination thereof, any Subsidiary (i) whose assets or
liabilities constitute five percent or more of the consolidated
assets or consolidated liabilities, respectively, of the Company
and Subsidiaries or (ii) whose net earnings constituted five
percent or more of Consolidated Net Earnings for the then most
recently completed fiscal year of the Company.
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section
4001(a)(3) of ERISA).
"Note" and "Notes" shall have the meaning specified in
paragraph 1B.
"Officer's Certificate" shall mean a certificate signed in
the name of the Company by an Authorized Officer of the Company.
"Percentage of Assets Transferred" shall mean, with respect
to each asset Transferred pursuant to paragraph 6C(6), the ratio
(expressed as a percentage) of (i) the value of such asset
(determined as the higher of net book value or market value of
such asset on the date of such Transfer) to (ii) Consolidated
Assets (determined as of the last day of the fiscal quarter
immediately preceding the date of such Transfer).
"Percentage of Earnings Capacity Transferred" shall mean,
with respect to each asset Transferred pursuant to paragraph
6C(6), the ratio (expressed as a percentage) of (i) the net
earnings produced by, or attributable to, such asset during the
four fiscal quarter period most recently ended prior to the
effective date of such Transfer to (ii) Consolidated Net Earnings
for such four fiscal quarter period.
"Person" shall mean and include 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 any "employee pension benefit plan" (as
such term is defined in section 3 of ERISA) which is or has been
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established or maintained, or to which contributions are or have
been made, by the Company or by any trade or business, whether or
not incorporated which, together with the Company, is under
common control, as described in section 414(b) or (c) of the
Code.
"Priority Debt" shall mean, as of any time of determination
thereof, (i) Debt of any Subsidiary, other than Debt owed to the
Company or another Subsidiary and (ii) Debt of the Company
secured by any Lien.
"Private Shelf Closing Day" for any Accepted Note shall mean
the Business Day specified for the closing of the purchase and
sale of such Private Shelf Note in the Request for Purchase of
such Private Shelf Note, provided that (i) if the Acceptance Day
for such Accepted Note is less than five Business Days after the
Company shall have made such Request for Purchase and the Company
and the Purchaser which is obligated to purchase such Private
Shelf Note agree on an earlier Business Day for such closing, the
"Private Shelf Closing Day" for such Accepted Note shall be such
earlier Business Day, and (ii) if the closing of the purchase and
sale of such Accepted Note is rescheduled pursuant to paragraph
2B(7), the Private Shelf Closing Day for such Accepted Note, for
all purposes of this Agreement except paragraph 2B(8)(iii), shall
mean the Rescheduled Closing Day with respect to such Closing.
"Private Shelf Note" and "Private Shelf Notes" shall have
the meaning specified in paragraph 1B.
"Prudential" shall mean The Prudential Insurance Company of
America.
"Prudential Affiliate" shall mean any corporation or other
entity all of the Voting Stock (or equivalent voting securities
or interests) of which is owned by Prudential either directly or
through Prudential Affiliates.
"Purchaser(s)" shall mean Prudential as purchaser of the
Series A Notes, and Prudential and each Prudential Affiliate as
purchaser of any Private Shelf Note.
"Related Party" shall mean (i) any Person owning 10% or more
of the Company's or (with the exception of the Company) any
Subsidiary's Voting Stock, (ii) any Affiliate of the Company, and
(iii) all persons to whom Persons described in clause (i) or (ii)
are related by blood, adoption or marriage.
"Request for Purchase" shall have the meaning specified in
paragraph 2B(3).
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"Required Holder(s)" shall mean the holder or holders of at
least 51% of the aggregate principal amount of the Notes or of a
Series of Notes, as the context may require, from time to time
outstanding.
"Rescheduled Closing Day" shall have the meaning specified
in paragraph 2B(7).
"Responsible Officer" shall mean the chief executive
officer, chief operating officer, treasurer, chief financial
officer or chief accounting officer of the Company, general
counsel of the Company or any other officer of the Company
involved principally in its financial administration or its
controllership function.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series" shall have the meaning specified in paragraph 1B.
"Series A Closing Day" shall have the meaning specified in
paragraph 2A.
"Series A Note" and "Series A Notes" shall have the meaning
specified in paragraph 1A.
"Significant Holder" shall mean (i) Prudential and any other
Purchaser, so long as Prudential or such Purchaser shall hold (or
be committed under this Agreement to purchase) any Note, or (ii)
any other holder of at least 5% of the aggregate principal amount
of any Series of Notes from time to time outstanding.
"Subsidiary" shall mean any corporation of which greater
than 50% of the stock of every class of which, except directors'
qualifying shares, shall, at the time of which any determination
is being made, be owned by the Company directly or through
Subsidiaries.
"Tangible Capitalization" shall mean, as of any time of
determination thereof, the sum of Consolidated Tangible Net Worth
and Consolidated Funded Debt.
"Three Year Percentage of Assets Transferred" shall mean,
with respect to any twelve consecutive fiscal quarter period, the
sum of the Percentages of Assets Transferred for each asset of
the Company and its Subsidiaries that is Transferred during such
period.
"Three Year Percentage of Earnings Capacity Transferred"
shall mean, with respect to any twelve consecutive fiscal quarter
period, the sum of the Percentages of Earnings Transferred for
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each asset of the Company and its Subsidiaries that is
Transferred during such period.
"Transfer" shall mean, with respect to any item, the sale,
exchange, conveyance, lease, transfer or other disposition of
such item.
"Transferee" shall mean any direct or indirect transferee of
all or any part of any Note purchased 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).
10C. Accounting Principles, Terms and Determinations. All
references in this Agreement to "general accepted accounting
principles" shall be deemed to refer to generally accepted
accounting principles in effect in the United States at the time
of application thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall
be made, and all unaudited financial statements and certificates
and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally
accepted accounting principles applied on a basis consistent with
the most recent audited consolidated financial statements of the
Company and its Subsidiaries delivered pursuant to clause (ii) of
paragraph 5A or, if no such statements have been so delivered,
the most recent audited financial statements referred to in
clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as
any Purchaser shall hold any Note, it will make payments of
principal thereof and Yield-Maintenance Amount, if any, and
interest thereon, which comply with the terms of this Agreement,
by wire transfer of immediately available funds for credit to (i)
the account or accounts as specified in the Purchaser Schedule
attached hereto (in the case of the Series A Notes), (ii) the
account or accounts specified in the applicable Confirmation of
Acceptance (in the case of any Private Shelf Note), or (iii) such
other account or accounts in the United States as any 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, it will make
a notation thereon (or on a schedule attached thereto) of all
principal payments previously made thereon and of the date to
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<PAGE>
which interest thereon has been paid. The Company agrees to
afford the benefits of this paragraph 11A to any Transferee which
shall have made the same agreement as you have 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 the Purchasers or any 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 each Purchaser or any Transferee in enforcing (or in
determining whether or in what manner to enforce) 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
any Purchaser's or any Transferee's having acquired any Note,
including without limitation costs and expenses incurred in any
bankruptcy case. The obligations of the Company under this
paragraph 11B shall survive the transfer of any Note or portion
thereof or interest therein by any Purchaser or any Transferee
and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended,
and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the
Company shall obtain the written consent to such amendment,
action or omission to act, of the Required Holder(s) of the Notes
of each Series except that, (i) with the written consent of the
holders of all Notes of a particular Series, and if an Event of
Default shall have occurred and be continuing, of the holders of
all Notes of all Series, at the time outstanding (and not without
such written consents), the Notes of such Series may be amended
or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect
the rate or time of payment of interest or Yield-Maintenance
Amount payable with respect to the Notes of such Series, (ii)
without the written consent of the holder or holders of all Notes
at the time outstanding, no amendment to or waiver of the
provisions of this Agreement shall change or affect the
provisions of paragraph 7A or this paragraph 11C insofar as such
provisions relate to proportions of the principal amount of the
Notes of any Series, or the rights of any individual holder of
Notes, required with respect to any declaration of Notes to be
due and payable or with respect to any consent, (iii) with the
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written consent of Prudential (and not without the written
consent of Prudential) the provisions of paragraph 2 may be
amended or waived (except insofar as any such amendment or waiver
would affect any rights or obligations with respect to the
purchase and sale of Notes which shall have become Accepted Notes
prior to such amendment or waiver) and (iv) with the written
consent of all of the Purchasers which shall have become
obligated to purchase Accepted Notes of any Series (and not
without the written consent of all such Purchasers), any of the
provisions of paragraphs 2 and 3 may be amended or waived insofar
as such amendment or waiver would affect only rights or
obligations with respect to the purchase and sale of the Accepted
Notes of such Series or the terms and provisions of such Accepted
Notes. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to
indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing
between the Company and the holder of any Note nor any delay in
exercising any rights hereunder or under any Note shall operate
as a waiver of any rights of any holder of such Note. As used
herein and in the Notes, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
11D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes. The Notes are issuable as registered notes without
coupons in denominations of at least $1,000,000, except as may be
necessary to reflect any principal amount not evenly divisible by
$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 such
transferee or transferees. At the option of the holder of any
Note, such Note may be exchanged for other Notes of like tenor
and of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Note to be exchanged at
the principal office of the Company. Whenever any Notes are so
surrendered for exchange, the Company shall, at its expense,
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
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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 Yield-Maintenance Amount, 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 Person on
such terms and conditions as may be determined by such holder in
its sole and absolute discretion.
11F. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained herein
or made in writing by or on behalf of the Company in connection
herewith shall survive the execution and delivery of this
Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of
any investigation made at any time by or on behalf of any
Purchaser or any Transferee. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and
understandings relating to the subject matter hereof.
11G. Successors and Assigns. All covenants and other
agreements in this Agreement contained by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto
(including, without limitation, any Transferee) whether so
expressed or not.
11H. Notices. All written communications provided for
hereunder (other than communications provided for under paragraph
2) shall be sent by first class mail or nationwide overnight
delivery service (with charges prepaid) and (i) if to any
Purchaser, addressed as specified for such communications in the
Purchaser Schedule attached hereto (in the case of the Series A
Notes) or the Purchaser Schedule attached to the applicable
Confirmation of Acceptance (in the case of any Private Shelf
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Notes), or at such other address as any 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 Banta Corporation, 225 Main Street, Menasha,
Wisconsin 54952-8003, Attention: Secretary, or at such other
address as the Company shall have specified to the holder of each
Note in writing. Any communication pursuant to paragraph 2 shall
be made by the method specified for such communication in
paragraph 2, and shall be effective to create any rights or
obligations under this Agreement only if, in the case of a
telephone communication, an Authorized Officer of the party
conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of
a telecopier communication, the communication is signed by an
Authorized Officer of the party conveying the information,
addressed to the attention of an Authorized Officer of the party
receiving the information, and in fact received at the telecopier
terminal the number of which is set forth on the Information
Schedule attached hereto or at such other telecopier terminal as
the party receiving the information shall have specified in
writing to the party sending such information.
11I. 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.
11J. Satisfaction Requirement. If any agreement,
certificate or other writing, or any action taken or to be taken,
is by the terms of this Agreement required to be satisfactory to
any Purchaser, to any holder of Notes or to the Required
Holder(s), the determination of such satisfaction shall be made
by such Purchaser, such holder or the Required Holder(s), as the
case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11K. 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.
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11L. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11M. 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 Illinois.
11N. 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.
11O. Binding Agreement. When this Agreement is executed
and delivered by the Company and Prudential, it shall become a
binding agreement between the Company and Prudential. This
Agreement shall also inure to the benefit of each other Purchaser
which shall have executed and delivered a Confirmation
of Acceptance, and each such other Purchaser shall be bound by
this Agreement to the extent provided in such Confirmation of
Acceptance.
Very truly yours,
BANTA CORPORATION
By: _____________________________
Its: Executive Vice President
and Chief Financial Officer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: ____________________________
Title: Vice President<PAGE>
<PAGE>
Series A Notes
PURCHASER SCHEDULE
BANTA CORPORATION
Aggregate
Principal
Amount of
Notes to be
Note Denom- Purchased
ination(s)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $25,000,000 $25,000,000
(1) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No. 050-54-526
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set forth the name of
the Company, a reference to "7.62% Series A Senior
Notes due May 13, 2009, Security No. !INV4772!",
and the due date and application (as among principal,
interest and Yield-Maintenance Amount) of the payment
being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Attention: Investment Administration Unit
Telecopy: (201) 802-7551
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Attention: Managing Director
Telecopy: (312) 540-4222
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(4) Recipient of telephonic prepayment notices:
Manager, Asset Management Unit
Telephone: (201) 802-6429
Telecopy: (201) 802-7551
(5) Tax Identification No.: 22-1211670
2<PAGE>
<PAGE>
INFORMATION SCHEDULE
Authorized Officers for Prudential
Allen A. Weaver P. Scott von Fischer
Managing Director Senior Vice President
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza Two Prudential Plaza
Suite 5600 Suite 5600
Chicago, Illinois 60601 Chicago, Illinois 60601
Telephone: (312) 540-4211 Telephone: (312) 540-4225
Facsimile: (312) 540-4222 Facsimile: (312) 540-4222
Mark A. Hoffmeister Leonard H. Lillard IV
Vice President Vice President
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza Two Prudential Plaza
Suite 5600 Suite 5600
Chicago, Illinois 60601 Chicago, Illinois 60601
Telephone: (312) 540-4215 Telephone: (312) 540-4216
Facsimile: (312) 540-4222 Facsimile: (312) 540-4222
Jeffrey L. Dickson Senior Vice President
Vice President Central Credit
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza Four Gateway Center
Suite 5600 100 Mulberry Street
Chicago, Illinois 60601 Newark, New Jersey 07102
Telephone: (312) 540-4214 Telephone: (201) 802-6429
Facsimile: (312) 540-4222 Facsimile: (201) 624-6432
Authorized Officers for the Company
Each of the officers listed in the definition of "Authorized
Officer".
Banta Corporation
225 Main Street
Menasha, Wisconsin 54952-8003
Telephone: (414) 751-7777
Facsimile: (414) 751-7792<PAGE>
<PAGE>
EXHIBIT A-1
[FORM OF SERIES A NOTE]
BANTA CORPORATION
7.62% SENIOR SERIES A NOTE DUE MAY 13, 2009
No. A-__ [Date]
$
FOR VALUE RECEIVED, the undersigned, Banta Corporation
(herein called the "Company"), a corporation organized and
existing under the laws of the State of Wisconsin, hereby
promises to pay to _____________________________________, or
registered assigns, the principal sum of _______________________
DOLLARS on May 13, 2009, with interest (computed on the basis of
a 360-day year--30-day month) (a) on the unpaid balance thereof
at the rate of 7.62% per annum from the date hereof, payable
quarterly on the thirteenth day of February, May, August and
November in each year, commencing with the February 13, May 13,
August 13 or November 13 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b)
on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of Yield Maintenance Amount (as
defined in the Agreement) and any overdue payment of interest,
payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) 9.62% or (ii) the rate
of interest publicly announced by Morgan Guaranty Trust Company
of New York from time to time in New York City as its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and
interest are to be made at the main office of Morgan Guaranty
Trust Company of New York in New York City or at such other place
as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to a Note Purchase and Private Shelf
Agreement, dated as of May 12, 1994 (herein called the
"Agreement"), between the Company, on the one hand, and The
Prudential Insurance Company of America and each Prudential
Affiliate (as defined in the Agreement) which becomes party
thereto, on the other hand, and is entitled to the benefits
thereof. As provided in the Agreement, this Note is subject to
prepayment, in whole or from time to time in part, in certain
cases without Yield Maintenance Amount and in other cases with
Yield Maintenance Amount as specified in the Agreement.
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This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument
of transfer duly executed, by the registered holder hereof or
such holder's attorney duly authorized in writing, a new Note for
the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to
the contrary.
The Company agrees to make prepayments of principal of this
Note on the dates and in the amounts specified in the Agreement.
This Note is subject to optional prepayment, in whole or from
time to time in part, on the terms specified in the Agreement.
In case an Event of Default, as defined in the Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and
with the effect provided in the Agreement.
This Note is intended to be performed in the State of
Illinois and shall be construed and enforced in accordance with
the internal law of such State.
BANTA CORPORATION
By: _____________________
Title: ___________________
<PAGE>
<PAGE>
EXHIBIT A-2
[FORM OF PRIVATE SHELF NOTE]
BANTA CORPORATION
SENIOR NOTE
SERIES ____
No.
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, Banta Corporation
(herein called the "Company"), a corporation organized and
existing under the laws of the State of Wisconsin, hereby
promises to pay to ________________________, or registered
assigns, the principal sum of _________________________________
DOLLARS [on the Final Maturity Date specified above] [, payable
on the Principal Prepayment Dates in the amounts specified above,
and on the Final Maturity Date specified above in an amount equal
to the unpaid balance of the principal hereof,] with interest
(computed on the basis of a 360-day year--30-day month) (a) on
the unpaid balance thereof at the Interest Rate per annum
specified above, payable on each Interest Payment Date specified
above and on the Final Maturity Date specified above, commencing
with the Interest Payment Date next succeeding the date hereof,
until the principal hereof shall have become due and payable, and
(b) on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of Yield Maintenance Amount (as
defined in the Agreement) and any overdue payment of interest,
payable on each Interest Payment Date as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per
annum from time to time equal to the greater of (i) 2% plus the
Interest Rate specified above or (ii) the rate of interest
publicly announced by Morgan Guaranty Trust Company of New York
from time to time in New York City as its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and
interest are to be made at the main office of Morgan Guaranty
Trust Company of New York in New York City or at such other place
as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
<PAGE>
<PAGE>
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to a Note Purchase and Private Shelf
Agreement, dated as of May 12, 1994 (herein called the
"Agreement"), between the Company, on the one hand, and The
Prudential Insurance Company of America and each Prudential
Affiliate (as defined in the Agreement) which becomes party
thereto, on the other hand, and is entitled to the benefits
thereof.
This Note is subject to optional prepayment, in whole or
from time to time in part, on the terms specified in the
Agreement.
This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument
of transfer duly executed, by the registered holder hereof or
such holder's attorney duly authorized in writing, a new Note for
the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to
the contrary.
In case an Event of Default, as defined in the Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and
with the effect provided in the Agreement.
This Note is intended to be performed in the State of
Illinois and shall be construed and enforced in accordance with
the internal law of such State.
BANTA CORPORATION
By: _____________________
Title: __________________
<PAGE>
<PAGE>
EXHIBIT B
[FORM OF REQUEST FOR PURCHASE]
Banta Corporation
Reference is made to the Note Purchase and Private Shelf
Agreement (the "Agreement"), dated as of May 12, 1994 between
Banta Corporation (the "Company"), on the one hand, and The
Prudential Insurance Company of America ("Prudential") and each
Prudential Affiliate which becomes party thereto, on the other
hand. All terms used herein that are defined in the Agreement
have the respective meanings specified in the Agreement.
Pursuant to Paragraph 2B(3) of the Agreement, the Company
hereby makes the following Request for Purchase:
1. Aggregate principal amount of
the Notes covered hereby
(the "Notes") ................... $
2. Individual specifications of the Notes:
Principal
Final Prepayment Interest
Principal Maturity Dates and Payment
Amount * Date ** Amounts ** Period
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and
sale of the Notes:
________________________
* Minimum principal amount of $5,000,000
** See paragraph 1B of the Agreement for maturity and average
life parameters.
<PAGE>
<PAGE>
5. The purchase price of the Notes is to be transferred
to:
Name, Address Name and
and ABA Routing Number of Telephone No.
Number of Bank Account of Bank Officer
6. The Company certifies (a) that the representations and
warranties contained in paragraph 8 of the Agreement
are true on and as of the date of this Request for
Purchase except to the extent of changes caused by the
transactions contemplated in the Agreement and (b) that
there exists on the date of this Request for Purchase
no Event of Default or Default.
7. The fee to be paid pursuant to paragraph 2B(8)(i) of
the Agreement [should be included in the rate quotes
which may be provided by Prudential] [will be paid by
the Company on the closing date].
Dated: Banta Corporation
By:
Authorized Officer
<PAGE>
<PAGE>
EXHIBIT C
[FORM OF CONFIRMATION OF ACCEPTANCE]
BANTA CORPORATION
Reference is made to the Note Purchase and Private Shelf
Agreement (the "Agreement"), dated as of May 12, 1994 between
Banta Corporation (the "Company"), on the one hand, and The
Prudential Insurance Company of America ("Prudential") and each
Prudential Affiliate which becomes party thereto, on the other
hand. All terms used herein that are defined in the Agreement
have the respective meanings specified in the Agreement.
Prudential or the Prudential Affiliate which is named below
as a Purchaser of Notes hereby confirms the representations as to
such Notes set forth in paragraph 9 of the Agreement, and agrees
to be bound by the provisions of paragraphs 2B(5) and 2B(7) of
the Agreement relating to the purchase and sale of such Notes and
by the provisions of the penultimate sentence of paragraph 11A of
the Agreement.
Pursuant to paragraph 2B(5) of the Agreement, an Acceptance
with respect to the following Accepted Notes is hereby confirmed:
I. Accepted Notes: Aggregate principal
amount $__________________
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth
on attached Purchaser Schedule
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth
on attached Purchaser Schedule
[(C), (D)..... same information as above with respect to any
additional Purchasers.]
<PAGE>
<PAGE>
II. Closing Day:
Dated: BANTA CORPORATION
By:
Title:
[THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA]
By:
Vice President
[PRUDENTIAL AFFILIATE]
By:
Vice President
<PAGE>
EXHIBIT D-1
<PAGE>
[FORM OF OPINION OF COMPANY'S COUNSEL]
May 12, 1994
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Dear Sirs:
As general counsel of Banta Corporation (the "Company"), I
am familiar with the Note Purchase and Private Shelf Agreement,
dated as of May 12, 1994 between the Company, on the one hand,
and The Prudential Insurance Company of America and each
Prudential Affiliate which becomes party thereto, on the other
hand, (the "Agreement"), pursuant to which the Company has issued
to you today its 7.62% Senior Series A Notes in the aggregate
principal amount of $25,000,000 (the "Notes"). Terms used and
not otherwise defined herein have the respective meanings
specified in the Agreement. This letter is being delivered to
you in satisfaction of the condition set forth in paragraph 3A(1)
of the Agreement and with the understanding you are purchasing
the Notes in reliance on the opinions expressed herein.
In this connection, I have examined such certificates of
public officials, certificates of officers of the Company and
copies certified to my satisfaction of corporate documents and
records of the Company and of other papers, and have made such
other investigations, as I have deemed relevant and necessary as
a basis for my opinion hereinafter set forth. I have relied upon
such certificates of public officials and of officers of the
Company with respect to the accuracy of material factual matters
contained therein which were not independently established. With
respect to the opinion expressed in paragraph 3 below, I have
also relied upon the representation made by you in paragraph 9A
of the Agreement.
Based on the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of
Wisconsin. Each Material Subsidiary is a corporation duly
organized and validly existing under the laws of its jurisdiction
of incorporation. The Company has, and each Material Subsidiary
has, the corporate power to carry on its business as now being
conducted.
<PAGE>
<PAGE>
2. The Agreement and the Notes have been duly authorized by
all requisite corporate action and duly executed and delivered by
authorized officers of the Company, and are valid obligations of
the Company, legally binding upon and enforceable against the
Company in accordance with their respective terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3. It is not necessary in connection with the offering,
issuance, sale and delivery of the Notes under the circumstances
contemplated by the Agreement to register the Notes under the
Securities Act or to qualify an indenture in respect of the Notes
under the Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit
represented by the Notes do not result in any violation of
regulation G, T or X of the Board of Governors of the Federal
Reserve System.
5. The execution and delivery of the Agreement and the
Notes, the offering, issuance and sale of the Notes and
fulfillment of and compliance with the respective provisions of
the Agreement and the Notes do not conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the
Company pursuant to, or require any authorization, consent,
approval, exemption, or other action by or notice to or filing
with any court, administrative or governmental body or other
Person (other than routine filings after the date hereof with the
Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the articles of incorporation or by-
laws of the Company, any agreement listed in Exhibit E to the
Agreement or which the Company has filed with the Securities and
Exchange Commission, any applicable law (including any securities
or Blue Sky law), statute, rule or regulation or any instrument,
order, judgment or decree to which the Company or any of its
Subsidiaries is a party or otherwise subject.
Very truly yours,
<PAGE>
<PAGE>
EXHIBIT D-2
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Date of Closing]
[Name(s) and address(es) of
purchaser(s)]
Dear Sirs:
As general counsel of Banta Corporation (the "Company"), I
am familiar with the Note Purchase and Private Shelf Agreement,
dated as of May 12, 1994 between the Company, on the one hand,
and The Prudential Insurance Company of America and each
Prudential Affiliate which becomes party thereto, on the other
hand, (the "Agreement"), pursuant to which the Company has issued
to you today Series ___ Private Shelf Notes of the Company in the
aggregate principal amount of $____________ (the "Notes"). Terms
used and not otherwise defined herein have the respective
meanings specified in the Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in
paragraph 3A(2) of the Agreement and with the understanding you
are purchasing the Notes in reliance on the opinions expressed
herein.
In this connection, I have examined such certificates of
public officials, certificates of officers of the Company and
copies certified to my satisfaction of corporate documents and
records of the Company and of other papers, and have made such
other investigations, as I have deemed relevant and necessary as
a basis for my opinion hereinafter set forth. I have relied upon
such certificates of public officials and of officers of the
Company with respect to the accuracy of material factual matters
contained therein which were not independently established. With
respect to the opinion expressed in paragraph 3 below, I have
also relied upon the representation made by you in paragraph 9A
of the Agreement.
Based on the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of
Wisconsin. Each Subsidiary is a corporation duly organized and
validly existing in good standing under the laws of its
jurisdiction of incorporation. The Company has, and each
Subsidiary has, the corporate power to carry on its business as
now being conducted.
<PAGE>
<PAGE>
2. The Agreement and the Notes have been duly authorized by
all requisite corporate action and duly executed and delivered by
authorized officers of the Company, and are valid obligations of
the Company, legally binding upon and enforceable against the
Company in accordance with their respective terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3. It is not necessary in connection with the offering,
issuance, sale and delivery of the Notes under the circumstances
contemplated by the Agreement to register the Notes under the
Securities Act or to qualify an indenture in respect of the Notes
under the Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit
represented by the Notes do not result in any violation of
regulation G, T or X of the Board of Governors of the Federal
Reserve System.
5. The execution and delivery of the Agreement and the
Notes, the offering, issuance and sale of the Notes and
fulfillment of and compliance with the respective provisions of
the Agreement and the Notes do not conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the
Company pursuant to, or require any authorization, consent,
approval, exemption, or other action by or notice to or filing
with any court, administrative or governmental body or other
Person (other than routine filings after the date hereof with the
Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the articles of incorporation or by-
laws of the Company, any agreement listed in Exhibit E to the
Agreement or which the Company has filed with the Securities and
Exchange Commission, any applicable law (including any securities
or Blue Sky law), statute, rule or regulation or any instrument,
order, judgment or decree to which the Company or any of its
Subsidiaries is a party or otherwise subject.
Very truly yours,
<PAGE>
<PAGE>
EXHIBIT E
BANTA CORPORATION
LIST OF AGREEMENTS LIMITING DEBT
Guaranty of Banta Harrisonburg Industrial Development Revenue Bond Series of
1973, as amended
Agreement dated December 9, 1986, as amended, related to the issuance of
8.58% Promissory Notes which were purchased by Prudential Insurance
Company of America and Aid Association for Lutherans
Agreement dated June 24, 1988, as amended, related to the issuance of 10.11%
Promissory Note which was purchased by Prudential Insurance Company of
America
Agreement dated July 17, 1990, as amended, related to the issuance of 9.53%
Promissory Note which was purchased by Aid Association for Lutherans
Exhibit 4 (b)
May 12, 1994
Banta Corporation
225 Main Street
Menasha, Wisconsin 54952-8003
Gentlemen:
Reference is made to the agreement between George Banta Company, Inc. (now
known as Banta Corporation and herein called the "Company") and The Prudential
Insurance Company of America (herein called "Prudential"), dated December 9,
1986, as amended (herein called the "1986 Agreement"), pursuant to which the
Company issued and sold and Prudential purchased the Company's 8.58%
promissory note in the principal amount of $10,000,000, due November 15, 1996
(herein called the "1986 Note").
Further reference is made to the agreement between the Company and Prudential
dated as of June 24, 1988 (herein called the "1988 Agreement" and together
with the 1986 Agreement, the "Agreements"), pursuant to which the Company
issued and sold and Prudential purchased the Company's 10.11% promissory note
in the principal amount of $15,000,000, due July 1, 1999 (herein called the
"1988 Note").
Pursuant to the request of the Company and the provisions of paragraph 11C of
each of the Agreements, Prudential hereby consents that each of the Agreements
shall be amended as follows subject to the satisfaction of the condition set
forth below:
1. Paragraphs 5 and 6 of each of the Agreements shall be amended and
restated in their entirety, as follows:
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants
that it will deliver to each Significant Holder in
triplicate:
(i) as soon as practicable and in any event
within 45 days after the end of each quarterly
period (other than the last quarterly period) in
each fiscal year, consolidated statements of
income and cash flows of the Company and its
Subsidiaries for the period from the beginning of
<PAGE>
<PAGE>
Banta Corporation
May 12, 1994
Page 2
the current fiscal year to the end of such
quarterly period, and a consolidated balance sheet
of the Company and its 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,
all in reasonable detail and certified by an
authorized financial officer of the Company,
subject to changes resulting from year-end
adjustments; provided, however, that 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);
(ii) as soon as practicable and in any event
within 90 days after the end of each fiscal year,
consolidated statements of income, stockholders'
equity and cash flows of the Company and its
Subsidiaries for such year, and a consolidated
balance sheet of the Company and its Subsidiaries
as at the end of such year, setting forth in each
case in comparative form corresponding
consolidated figures from the preceding annual
audit, all in reasonable detail and satisfactory
in form to the holder(s) of the Notes, and
reported on by independent public accountants of
recognized national standing selected by the
Company whose report shall be without limitation
as to scope of the audit and satisfactory in
substance to the holder(s) of the Notes; provided,
however, that 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);
(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), other
than registration statements on Form S-8 or any
successor form, and all reports which it files
(exclusive of filings on Form 11-K or any
successor form) with the Securities and Exchange
Commission (or any governmental body or agency
succeeding to the functions of the Securities and
Exchange Commission);
<PAGE>
<PAGE>
Banta Corporation
May 12, 1994
Page 3
(iv) promptly upon receipt thereof, a copy
of each other report submitted to the Company or
any Subsidiary by independent accountants in
connection with any annual, interim or special
audit made by them of the financial statements or
records of the Company or any Subsidiary; and
(v) 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) compliance by the Company and its
Subsidiaries with the provisions of paragraphs 6C(1),
6C(2), 6C(3), 6C(4) and 6C(6), (b) setting forth the 60
consecutive day "clean down period" selected by the
Company as contemplated by clause (ii) of the
definition of "Funded Debt" appearing in paragraph 10B
and (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. 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 to the certification of such
financial statements, they have obtained no knowledge
of any Event of Default or Default, or, if they have
obtained knowledge of any Event of Default or Default,
specifying the nature and period of existence thereof.
Such accountants, however, shall not be liable to
anyone by reason of their failure to obtain knowledge
of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards.
The Company also covenants that forthwith upon any
Responsible Officer obtaining 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.
5B. Inspection of Property. The Company
covenants that it will permit any Person designated by
any Significant Holder in writing, at such Significant
Holder's expense, to visit and inspect any of the
properties of the Company and its Subsidiaries, to
<PAGE>
<PAGE>
Banta Corporation
May 12, 1994
Page 4
examine the corporate books and financial records of
the Company and its Subsidiaries and make copies
thereof or extracts therefrom and 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.
5C. 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 or assets,
whether now owned or hereafter acquired, other than
Liens permitted by the provisions of paragraph 6C(1)
(unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to
paragraph 11C), it will make or cause to be made
effective provision 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.
5D. Information Required by Rule 144A. The
Company covenants that it will, upon the request of the
holder of any Note, provide such holder, and any
qualified institutional buyer designated by such
holder, such financial and other information as such
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 section 13 or 15(d) of the Exchange
Act. For the purpose of this paragraph 5D, the term
"qualified institutional buyer" shall have the meaning
specified in Rule 144A under the Securities Act.
5E. Compliance With Environmental Laws. The
Company will, and will cause each of its Subsidiaries
to, comply in a timely fashion with, or operate
pursuant to valid waivers of the provisions of, all
Environmental Laws, except where noncompliance would
not adversely affect the business, condition (financial
or other) or operations of the Company and its
Subsidiaries taken as a whole.
5F. Maintenance of Insurance. The Company
covenants that it and each of its Subsidiaries will
maintain insurance in such amounts and against such
casualties, liabilities, risks, contingencies and
hazards as is customarily maintained by other similarly
<PAGE>
<PAGE>
Banta Corporation
May 12, 1994
Page 5
situated companies operating similar businesses and,
upon request of a Significant Holder, together with
each delivery of financial statements under clause (ii)
of paragraph 5A it will deliver an Officers'
Certificate specifying the details of such insurance in
effect.
6. NEGATIVE COVENANTS.
6A. Current Ratio Requirement. The Company
covenants that it will not permit the ratio of
consolidated current assets to consolidated current
liabilities at any time to be less than l.5 to 1.0.
6B. [Intentionally left blank.]
6C. Lien, Debt and Other Restrictions. The
Company covenants that it will not and will not permit
any Subsidiary to:
6C(1). Liens. Create, assume or suffer to exist
any Lien upon any of its property or assets, whether
now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of
the Note in accordance with the provisions of paragraph
5C), except
(i) Liens for taxes not yet due or which are
being actively contested in good faith by
appropriate proceedings,
(ii) other Liens incidental to the conduct of
its business or the ownership of its property and
assets which were not incurred in connection with
the borrowing of money or the obtaining of
advances or credit, and which do not in the
aggregate materially detract from the value of its
property or assets or materially impair the use
thereof in the operation of its business,
(iii) Liens on property or assets of a
Subsidiary to secure obligations of such
Subsidiary to the Company or another Subsidiary,
(iv) Liens securing Debt and existing on any
property of any corporation at the time it becomes
a Subsidiary, or existing prior to the time of
acquisition upon any property acquired by the
Company or any Subsidiary through purchase, merger
or consolidation or otherwise, whether or not
expressly assumed by the Company or such
<PAGE>
<PAGE>
Banta Corporation
May 12, 1994
Page 6
Subsidiary, provided that (a) such Lien shall not
have been created, incurred or assumed in
contemplation of such purchase, merger,
consolidation or other event, (b) each such Lien
shall be confined solely to the item(s) of
property so acquired, (c) the Debt secured by such
Lien shall not be renewed, extended or refunded
and (d) the aggregate amount of Debt secured by
all such Liens at no time exceeds 25% of
Consolidated Tangible Net Worth, and
(v) other Liens securing Debt, provided that
the aggregate amount of Debt secured by all such
Liens shall at no time exceed 10% of Consolidated
Tangible Net Worth,
provided that Priority Debt shall at no time exceed the
lesser of (1) 25% of Consolidated Tangible Net Worth
and (2) 10% of Consolidated Tangible Net Worth plus
Debt described in clause (iv), above;
6C(2). Debt. Create, incur, assume or suffer to
exist any Debt, except
(i) Debt represented by the Notes,
(ii) Debt of any Subsidiary to the Company or
another Subsidiary, and
(iii) additional Debt of the Company (other
than to a Subsidiary) and of Subsidiaries,
provided that (a) Consolidated Funded Debt shall at no
time exceed an amount equal to 50% of Tangible
Capitalization and (b) Priority Debt shall at no time
exceed the lesser of (1) 25% of Consolidated Tangible
Net Worth and (2) 10% of Consolidated Tangible Net
Worth plus Debt described in clause (iv) of paragraph
6C(1);
6C(3). Loans, Advances and Investments. Make or
permit to remain outstanding any loan or advance to, or
own, purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any
capital contribution to, any Person, except:
(i) make or permit to remain outstanding
loans or advances to any Subsidiary,
<PAGE>
<PAGE>
Banta Corporation
May 12, 1994
Page 7
(ii) own, purchase or acquire stock
obligations or securities of a Subsidiary or of a
Person which immediately after such purchase or
acquisition will be a Subsidiary,
(iii) acquire and own stock, obligations or
securities received in settlement of debts
(created in the ordinary course of business) owing
to the Company or any Subsidiary,
(iv) own, purchase or acquire (a) direct
obligations of, or obligations guaranteed by, the
United States of America, (b) banker's
acceptances, certificates of deposit and
repurchase agreements with respect to same, in
each case due within one year from the date of
purchase issued by a commercial bank located and
incorporated in the United States or Canada with
capital and surplus of at least $100 million
(U.S.) and (c) commercial paper rated P-1 by
Moody's Investors Service, Inc. or A-1 by Standard
& Poor's Corporation and maturing not more than
one year from the date of purchase thereof,
(v) own, purchase or acquire other
obligations maturing not more than 90 days from
the date of purchase thereof rated "AAA" by
Standard and Poor's Corporation or "Aaa" by
Moody's Investors Service, Inc.,
(vi) make or permit to remain outstanding
travel and other like advances to officers and
employees of the Company or a Subsidiary in the
ordinary course of business, and
(vii) make other loans, advances and
investments not to exceed 5% of Consolidated
Tangible Net Worth at any time;
6C(4). Sale of Stock and Debt of Subsidiaries.
Sell or otherwise dispose of, or part with control of,
any shares of stock or Debt of any Subsidiary, except
to the Company or another Subsidiary, and except that
all shares of stock and Debt of any Subsidiary at the
time owned by or owed to the Company and all
Subsidiaries may be sold as an entirety for a
consideration which represents the fair value (as
determined in good faith by the Board of Directors of
the Company) at the time of sale of the shares of stock
and Debt so sold; provided that (a) such sale or other
disposition is treated as a Transfer of assets of such
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Banta Corporation
May 12, 1994
Page 8
Subsidiary and is permitted by paragraph 6C(6) and (b)
at the time of such sale, such Subsidiary shall not
own, directly or indirectly, any shares of stock or
Debt of any other Subsidiary (unless all of the shares
of stock and Debt of such other Subsidiary owned,
directly or indirectly, by the Company and all
Subsidiaries are simultaneously being sold as permitted
by this paragraph 6C(4));
6C(5). Merger and Consolidation. Merge or
consolidate with or into any other Person, except that:
(i) any Subsidiary may merge or consolidate
with or into the Company, provided that the
Company is the continuing or surviving
corporation,
(ii) any Subsidiary may merge or consolidate
with or into another Subsidiary provided that no
Default or Event of Default exists or would exist
immediately after giving effect thereto, and
(iii) the Company may merge or consolidate
with any other corporation, provided that (a) the
Company shall be the continuing or surviving
corporation, and (b) no Default or Event of
Default exists or would exist immediately after
giving effect thereto;
6C(6). Transfer of Assets. Transfer any of its
assets except that:
(i) any Subsidiary may Transfer assets to
the Company,
(ii) the Company or any Subsidiary may sell
inventory in the ordinary course of business, and
(iii) the Company or any Subsidiary may
otherwise Transfer assets, provided that after
giving effect thereto (a) the Three Year
Percentage of Assets Transferred pursuant to this
clause (iii) and paragraph 6C(4) shall not exceed
10% and (b) the Three Year Percentage of Earnings
Capacity Transferred pursuant to this clause (iii)
and paragraph 6C(4) shall not exceed 10%;
6C(7). Sale or Discount of Receivables. Sell
with recourse, pledge, or discount or otherwise sell
for less than the face value thereof, any of its notes
or accounts receivable;
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Banta Corporation
May 12, 1994
Page 9
6C(8). Related Party Transactions. Directly or
indirectly, purchase, acquire or lease any property
from, or sell, transfer or lease any property to, or
otherwise deal with, in the ordinary course of business
or otherwise any Related Party; provided that the
foregoing shall not prohibit any transaction in the
ordinary course of business on terms no less favorable
to the Company or a Subsidiary than if no such
relationship existed; or
6C(9). Margin Securities. Permit the aggregate
market value of all "margin securities", as defined in
paragraph 8I, owned by the Company and its Subsidiaries
at any time to be greater than 25% of the value of the
consolidated assets of the Company and its
Subsidiaries, as determined by any reasonable method.
2. Paragraph 10 of each of the Agreements shall be amended by
(i) adding thereto the following defined terms and (ii)
deleting any defined term presently appearing therein if a
new definition therefor is provided below:
"Affiliate" shall mean, with respect to any
Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect
common control with such first Person (excluding, in
the case of the Company, any (i) Subsidiary and (ii)
any officer or director of the Company or a Subsidiary,
solely in his or her capacity as such). A Person shall
be deemed to control another Person if such first
Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and
policies of such other Person, whether through the
ownership of voting securities, by contract or
otherwise.
"Authorized Officer" shall mean (i) in the case of
the Company, its chief executive officer, its chief
financial officer, its treasurer, any vice president of
the Company designated as an "Authorized Officer" of
the Company in the Information Schedule attached hereto
or any vice president of the Company designated as an
"Authorized Officer" of the Company for the purpose of
this Agreement in an Officer's Certificate executed by
the Company's chief executive officer or chief
financial officer and delivered to Prudential, and (ii)
in the case of Prudential, any officer of Prudential
designated as its "Authorized Officer" in the
Information Schedule or any officer of Prudential
designated as its "Authorized Officer" for the purpose
of this Agreement in a certificate executed by one of
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Banta Corporation
May 12, 1994
Page 10
its Authorized Officers. Any action taken under this
Agreement on behalf of the Company by any individual
who on or after the date of this Agreement shall have
been an Authorized Officer of the Company and whom
Prudential in good faith believes to be an Authorized
Officer of the Company at the time of such action shall
be binding on the Company even though such individual
shall have ceased to be an Authorized Officer of the
Company, and any action taken under this Agreement on
behalf of Prudential by any individual who on or after
the date of this Agreement shall have been an
Authorized Officer of Prudential, and whom the Company
in good faith believes to be an Authorized Officer of
Prudential at the time of such action shall be binding
on Prudential even though such individual shall have
ceased to be an Authorized Officer of Prudential.
"Consolidated Assets" shall mean, as of any time
of determination thereof, the total assets of the
Company and Subsidiaries determined on a consolidated
basis.
"Consolidated Funded Debt" shall mean, as of any
time of determination thereof, the Funded Debt of the
Company and Subsidiaries determined on a consolidated
basis.
"Consolidated Net Earnings" shall mean, for any
period, the consolidated gross revenues of the Company
and its Subsidiaries less all operating and non-
operating expenses of the Company and its Subsidiaries
including all charges of a proper character (including
current and deferred taxes on income, provision for
taxes on unremitted foreign earnings which are included
in gross revenues, and current additions to reserves),
but not including in gross revenues any gains (net of
expenses and taxes applicable thereto) in excess of
losses resulting from the sale, conversion or other
disposition of capital assets (i.e., assets other than
current assets), any gains resulting from the write-up
of assets, any amounts attributable to minority
interests, any equity of the Company or any Subsidiary
in the unremitted earnings of any corporation which is
not a Subsidiary, any earnings of any Person acquired
by the Company or any Subsidiary through purchase,
merger or consolidation or otherwise for any period
prior to acquisition, undistributed earnings of any
Subsidiary to the extent such Subsidiary is not at the
time permitted to make or pay dividends, repay
intercompany indebtedness or otherwise transfer
property or assets to the Company, or any deferred
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Banta Corporation
May 12, 1994
Page 11
credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost of
the investment in such Subsidiary.
"Consolidated Tangible Net Worth" shall mean, as
of any time of any determination thereof, the excess of
(i) the sum of (a) the par value (or value stated on
the books of the Company) of the outstanding capital
stock of all classes of the Company, plus (or minus in
the case of a surplus deficit) (b) the amount of the
consolidated surplus, whether capital or earned, of the
Company and its Subsidiaries, over (ii) the sum of
treasury stock, minority interests, any other contra-
equity accounts, unamortized debt discount and expense,
goodwill, trademarks, trade names, patents, deferred
charges and other intangible assets and any write-up of
the value of any assets after January 1, 1994.
"Current Debt" shall mean, with respect to any
Person, all Indebtedness of such Person for borrowed
money which by its terms or by the terms of any
instrument or agreement relating thereto matures on
demand or within one year from the date of the creation
thereof and is not directly or indirectly renewable or
extendible at the option of the debtor to a date more
than one year from the date of the creation thereof,
provided that Indebtedness for borrowed money
outstanding under a revolving credit or similar
agreement which obligates the lender or lenders to
extend credit over a period of more than one year shall
constitute Funded Debt and not Current Debt, even
though such Indebtedness by its terms matures on demand
or within one year from the date of the creation
thereof.
"Debt" shall mean Funded Debt and Current Debt.
"Environmental Laws" shall mean all federal,
state, local and foreign laws relating to pollution or
protection of the environment, including laws relating
to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes
into the environment (including without limitation
ambient air, surface water, ground water, or land), or
otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances
or wastes, and any and all regulations, codes, plans,
orders, decrees, judgments, injunctions, notices or
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Banta Corporation
May 12, 1994
Page 12
demand letters issued, entered, promulgated or approved
thereunder.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
"Funded Debt" shall mean (i) with respect to any
Person, all Indebtedness of such Person which by its
terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable
or unpaid, more than one year from, or is directly or
indirectly renewable or extendible at the option of the
debtor to a date more than one year (including an
option of the debtor under a revolving credit or
similar agreement obligating the lender or lenders to
extend credit over a period of more than one year)
from, the date of the creation thereof and (ii) Current
Debt of the Company and Subsidiaries if during the most
recently completed period of four consecutive fiscal
quarters the aggregate principal balance of all such
Current Debt has not been reduced to zero for a period
of sixty consecutive days selected by the Company as a
clean down period, in an amount equal to the maximum
amount hereof outstanding at any time during such clean
down period.
"Guarantee" shall mean, with respect to any
Person, any direct or indirect liability, contingent or
otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of
another, including, without limitation, any such
obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the
ordinary course of business) or discounted or sold with
recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation in
effect guaranteed by such Person through any agreement
(contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions
or otherwise), or to maintain the solvency or any
balance sheet or other financial condition of the
obligor of such obligation, or to make payment for any
products, materials or supplies or for any
transportation or service, regardless of the non-
delivery or non-furnishing thereof, in any such case if
the purpose or intent of such agreement is to provide
assurance that such obligation will be paid or
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Banta Corporation
May 12, 1994
Page 13
discharged, or that any agreements relating thereto
will be complied with, or that the holders of such
obligation will be protected against loss in respect
thereof. The amount of any Guarantee shall be equal to
the outstanding principal amount of the obligation
guaranteed or such lesser amount to which the maximum
exposure of the guarantor shall have been specifically
limited.
"Indebtedness" shall mean, with respect to any
Person, without duplication, (i) all items (excluding
items of contingency reserves or of reserves for
deferred income taxes) which in accordance with
generally accepted accounting principles would be
included in determining total liabilities as shown on
the liability side of a balance sheet of such Person as
of the date on which Indebtedness is to be determined,
(ii) all indebtedness secured by any Lien on any
property or asset owned or held by such Person subject
thereto, whether or not the indebtedness secured
thereby shall have been assumed, and (iii) all
indebtedness of others with respect to which such
Person has become liable by way of Guarantee.
"Lien" shall mean any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing,
any conditional sale or other title retention
agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction)
or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of
an obligation.
"Officer's Certificate" shall mean a certificate
signed in the name of the Company by an Authorized
Officer of the Company.
"Percentage of Assets Transferred" shall mean,
with respect to each asset Transferred pursuant to
paragraph 6C(6), the ratio (expressed as a percentage)
of (i) the value of such asset (determined as the
higher of net book value or market value of such asset
on the date of such Transfer) to (ii) Consolidated
Assets (determined as of the last day of the fiscal
quarter immediately preceding the date of such
Transfer).
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Banta Corporation
May 12, 1994
Page 14
"Percentage of Earnings Capacity Transferred"
shall mean, with respect to each asset Transferred
pursuant to paragraph 6C(6), the ratio (expressed as a
percentage) of (i) the net earnings produced by, or
attributable to, such asset during the four fiscal
quarter period most recently ended prior to the
effective date of such Transfer to (ii) Consolidated
Net Earnings for such four fiscal quarter period.
"Priority Debt" shall mean, as of any time of
determination thereof, (i) Debt of any Subsidiary,
other than Debt owed to the Company or another
Subsidiary and (ii) Debt of the Company secured by any
Lien.
"Related Party" shall mean (i) any Person owning
5% or more of the Company's or (with the exception of
the Company) any Subsidiary's Voting Stock, (ii) any
Affiliate of the Company, and (iii) all persons to whom
Persons described in clause (i) or (ii) are related by
blood, adoption or marriage.
"Responsible Officer" shall mean the chief
executive officer, chief operating officer, treasurer,
chief financial officer or chief accounting officer of
the Company, general counsel of the Company or any
other officer of the Company involved principally in
its financial administration or its controllership
function.
"Securities Act" shall mean the Securities Act of
1933, as amended.
"Significant Holder" shall mean any holder of at
least 5% of the aggregate principal amount of the Notes
from time to time outstanding.
"Subsidiary" shall mean any corporation of which
greater than 50% of the stock of every class of which,
except directors' qualifying shares, shall, at the time
of which any determination is being made, be owned by
the Company directly or through Subsidiaries.
"Tangible Capitalization" shall mean, as of any
time of determination thereof, the sum of Consolidated
Tangible Net Worth and Consolidated Funded Debt.
"Three Year Percentage of Assets Transferred"
shall mean, with respect to any twelve consecutive
fiscal quarter period, the sum of the Percentages of
Assets Transferred for each asset of the Company and
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Banta Corporation
May 12, 1994
Page 15
its Subsidiaries that is Transferred during such
period.
"Three Year Percentage of Earnings Capacity
Transferred" shall mean, with respect to any twelve
consecutive fiscal quarter period, the sum of the
Percentages of Earnings Transferred for each asset of
the Company and its Subsidiaries that is Transferred
during such period.
"Transfer" shall mean, with respect to any item,
the sale, exchange, conveyance, lease, transfer or
other disposition of such item.
"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).
Each of the Agreements is further amended by adding thereto a new
paragraph 10A as follows:
"10A. Accounting Principles, Terms and
Determinations. All references in this Agreement to
"generally accepted accounting principles" shall be
deemed to refer to generally accepted accounting
principles in effect in the United States at the time
of application thereof. Unless otherwise specified
herein, all accounting terms used herein shall be
interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all
unaudited financial statements and certificates and
reports as to financial matters required to be
furnished hereunder shall be prepared in accordance
with generally accepted accounting principles applied
on a basis consistent with the most recent audited
consolidated financial statements of the Company and
its Subsidiaries delivered pursuant to clause (ii) of
paragraph 5A."
The effectiveness of the foregoing amendments is subject to the
closing of the purchase and sale of the Series A Notes of the
Company pursuant to the Note Purchase and Private Shelf Agreement
between the Company and Prudential dated of even date herewith.
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Banta Corporation
May 12, 1994
Page 16
If you are in agreement with the foregoing, please sign the
enclosed counterpart of this letter and return it to the
undersigned at the following address: Two Prudential Plaza, Suite
5600, Chicago, Illinois 60601, Attention: James F. Evert,
whereupon this letter shall become a binding agreement between
the Company and Prudential.
Sincerely,
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: ____________________________
Vice President
Accepted and Agreed:
BANTA CORPORATION
By: ________________________
Title: _____________________
<PAGE>
EXHIBIT 4 (c)
May 11, 1994
AMENDMENT TO AGREEMENT DATED JULY 17, 1990
Reference is made to the agreement between Banta Corporation ("Banta") and Aid
Association for Lutherans ("AAL") dated July 17, 1990 ("the Agreement").
Pursuant to a request by Banta, AAL and Banta hereby agree to amend the
Agreement as follows:
Clause (iv) of paragraph 6C.10 is hereby amended
by inserting ", except that the Company may have
outstanding at any time contracts totalling
$5,000,000 which are subordinated to indebtedness
owed by any Person" immediately after "owed to
any Person".
BANTA CORPORATION AID ASSOCIATION FOR LUTHERANS
_____________________ _______________________________________
Name Name
______________________ ________________________________________
Title Title
