SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
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 September 30, 1995, 20,275,820
shares of $.10 par value common stock.
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the Quarter Ended September 30, 1995
INDEX
PART I Financial Statements: Page Number
Unaudited Consolidated Condensed Balance Sheets
September 30, 1995 and December 31, 1994 . . . . . . . . . . . 3
Unaudited Consolidated Condensed Statements of Earnings for
the Three and Nine Months Ended September 30, 1995 and
October 1, 1994 . . . . . . . . . . . . . . . . . . . . . . . 4
Unaudited Consolidated Condensed Statements of Cash Flows
for the Nine Months Ended September 30, 1995 and
October 1, 1994 . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Unaudited Consolidated Condensed
Financial Statements . . . . . . . . . . . . . . . . . . . . 6-7
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 . . . . . . . . . . . 9
<PAGE>
PART I Item 1 - Financial Statements
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
September 30, December 31,
1995 1994
ASSETS
Current Assets
Cash $ 9,310 $ 370
Receivables 179,748 169,613
Inventories 76,752 67,797
Other current assets 10,301 10,644
------- -------
Total Current Assets 276,111 248,424
------- -------
Plant and Equipment 570,335 523,735
Less Accumulated Depreciation 266,044 230,073
------- -------
Plant and Equipment, net 304,291 293,662
------- -------
Other Assets 11,629 11,766
Cost in Excess of Net Assets of 28,686 23,911
------- -------
Businesses Acquired $ 620,717 $ 577,763
======= =======
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
Current Liabilities
Notes payable $ 26,220 $ 56,001
Accounts payable 34,457 41,529
Accrued salaries and wages 22,379 20,239
Other accrued liabilities 28,976 20,900
Current maturities of long-term debt 7,856 8,333
------- -------
Total Current Liabilities 119,888 147,002
------- -------
Long-term Debt 102,724 67,834
Deferred Income Taxes 18,831 19,218
Other Non-current Liabilities 13,974 12,122
Shareholders' Investment
Preferred stock - $10 par value;
authorized 300,000 shares, none
issued - -
Common stock - $.10 par value;
authorized 75,000,000 shares,
20,275,820 and 20,126,026 shares
issued, respectively 2,028 2,013
Amount in excess of par value of stock 59,718 56,780
Retained earnings 303,554 272,794
------- -------
Total Shareholders' Investment 365,300 331,587
------- -------
$ 620,717 $ 577,763
======= =======
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
<CAPTION>
(Dollars in Thousands, Except Per Share Amounts)
Three Months Ended Nine Months Ended
Sept. 30, 1995 Oct. 1, 1994 Sept. 30, 1995 Oct. 1, 1994
<S> <C> <C> <C> <C>
Net sales $249,267 $207,735 $717,567 $ 581,030
Cost of goods sold 193,524 160,140 559,030 446,305
------- ------- ------- -------
Gross earnings 55,743 47,595 158,537 134,725
Selling and
administrative expense 28,066 24,638 86,743 73,806
------- ------ ------- -------
Earnings from
operations 27,677 22,957 71,794 60,919
Interest expense (2,427) (1,386) (6,847) (3,751)
Other income, net 524 639 382 964
------- ------- ------- ------
Earnings before income
taxes 25,774 22,210 65,329 58,132
Provision for income
taxes 10,300 8,900 26,100 23,300
------- ------- ------- -------
Net earnings $ 15,474 $ 13,310 $ 39,229 $ 34,832
======= ======= ======= =======
Earnings per share of
common stock $ .76 $ .66 $ 1.93 $ 1.72
====== ====== ====== ======
Average common shares
outstanding 20,405,250 20,239,947 20,327,909 20,239,985
========== ========== ========== ==========
Cash dividends per share
of common stock $ .14 $ .13 $ .42 $ .39
======= ======= ======= ======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Nine Months Ended
September 30, October 1,
1995 1994
Cash Flow From Operating Activities
Net earnings $ 39,229 $34,832
Depreciation and amortization 35,691 29,657
Deferred income taxes (387) (654)
Change in assets and liabilities
Increase in receivables (10,071) (20,723)
Increase in inventories (8,955) (3,467)
Decrease in other current assets 373 220
Increase in accounts payable
and accrued liabilities 3,140 19,665
Decrease (increase) in other non
-current assets 137 (333)
Other, net 1,852 1,573
------ ------
Cash provided by operating
activities 61,009 60,770
------- ------
Cash Flow From Investing Activities
Capital expenditures, net (42,766) (67,162)
Acquisition of businesses (8,419) (29,831)
------- -------
Cash used for investing
activities (51,185) (96,993)
------ -------
Cash Flow From Financing Activities
(Repayment) issuance of notes
payable, net (29,781) 14,104
Issuance of long-term debt 40,000 25,000
Repayment of long-term debt (5,587) (4,700)
Dividends paid (8,469) (7,814)
Proceeds from exercise of stock
options 2,953 1,513
------ ------
Cash (used for) provided by
financing activities (884) 28,103
------ -------
Net increase (decrease) in cash 8,940 (8,120)
Cash at beginning of period 370 8,230
------ -------
Cash at end of period $ 9,310 $ 110
======= ======
Cash payments for:
Interest, net of amount capitalized $ 6,877 $3,891
Income taxes 23,476 24,057
See accompanying notes to consolidated financial statements.
<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) Inventories
The majority of the Corporation's inventories used in its printing
operations 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 September 30, 1995 and December 31, 1994 were as
follows:
(Dollars in Thousands)
September 30, December 31,
1995 1994
Raw Materials and Supplies $ 48,750 $ 37,106
Work-In-Process and Finished Goods 37,942 35,531
------- ------
FIFO value (current cost of all
inventories) 86,692 72,637
Excess of Current Cost over Carrying
Value of LIFO Inventories (9,940) (4,840)
------ ------
Net Inventories $ 76,752 $ 67,797
====== =======
3) Subsequent Event
On October 18, 1995, the Corporation completed its acquisition of
B.G. Turnkey Services Limited ("B.G. Turnkey"). B.G. Turnkey,
headquartered in Cork, Ireland, provides project management, product
assembly, fulfillment and product localization services to computer
software and hardware companies from facilities located in Ireland,
Scotland and The Netherlands, as well as from recently opened
facilities in the United States. B.G. Turnkey reported sales for its
most recent fiscal year of approximately IR Pounds 100 million ($160
million). The purchase price consisted of 236,765 shares of the
Corporation's common stock and approximately $21 million of the
Corporation debentures with a stated maturity of 5 years.
4) In March of 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of". The Corporation intends to adopt this statement during
the first quarter of 1996. The adoption of this standard is not
expected to have a material effect on the Corporation's financial
position or results of operations.
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 increased by approximately
$54.8 million during the first three quarters of 1995. This increase
was primarily due to the application of the proceeds from the
issuance of $40 million of long-term debt during the first nine
months of 1995 at interest rates ranging from 7.38% to 7.98% and to
cash provided from operating activities. The proceeds of the debt
issued were used primarily to repay short-term indebtedness. During
November 1995, the Corporation issued an additional $35 million of
long-term debt at an interest rate of 6.81%. After issuance of this
debt, the Corporation's ratio of long-term debt to total
capitalization was 27%.
During the third quarter the Corporation replaced its lines of
credit, which had been used exclusively to support commercial paper
borrowings, with a $65 credit agreement. The new credit agreement
supports both commercial paper borrowings and direct borrowings from
three participating banks.
RESULTS OF OPERATIONS
Net Sales
Sales for the third quarter of 1995 were $41.5 million (20%) higher
than the third quarter of 1994. Paper price increases had a
significant impact on sales since the Corporation supplies much of
its customers' paper. These price increases accounted for about one-
half of the sales increase for the quarter. The commercial, book and
magazine market classifications showed sales increases for the
quarter, which included the impact of higher paper prices. The
largest sales gains were in the commercial market which included
increased volume from the Banta Direct Marketing Group and from the
Banta Catalog Group resulting from a higher volume of work produced.
The book market classification showed increased sales strength due to
higher activity levels in trade and educational books. The magazine
market classification benefitted from new production capacity added
in the third quarter at both plants that serve this market. Although
net sales for the book market increased overall, the demand for
software documentation softened as electronic documentation delivery
is gaining wider acceptance. However, demand has increased for
project management services, which includes component procurement,
package assembly, order fulfillment and product distribution.
Sales for the first three quarters of 1995 increased by $137 million
(23%) over 1994 also due in significant part to the impact of
increased paper prices. The commercial, book and magazine market
classifications reported sales increases for the first three quarters
of 1995. The largest increases in sales were in the book
classification and the commercial classification, particularly in
consumer catalogs and direct marketing materials. Increases in both
market classifications were the result of higher activity levels,
increased paper prices and acquisitions. Acquisitions completed in
1994 and 1995 accounted for approximately one-fourth of the 1995
sales increase.
The acquisition of B.G. Turnkey completed in October is expected to
increase the Corporation's sales by approximately 15% in the fourth
quarter of 1995 compared to the fourth quarter of 1994. It is also
expected to moderately increase net earnings and earnings per share.
Cost of Goods Sold
Cost of goods sold as a percentage of sales increased from 77.1% for
the third quarter of 1994 to 77.6% for the third quarter of 1995.
This overall margin decline resulted from several factors. Since the
sale of paper generally has lower margins than manufacturing sales,
the increase in paper sales reduced average margin percentages. The
inclusion of the results of United Graphics (acquired in 1994) has
reduced margins as this company currently has margins below the
Corporation's average. Offsetting these factors were improved margins
primarily resulting from increased utilization at the plants in the
Banta Catalog Group and the Banta Direct Marketing Group, all of
which are included in the commercial market classification. Due to
the increase in paper prices, the Corporation recorded a $1.7 million
provision for last-in first-out (LIFO) inventory valuation during the
third quarter of 1995. This represents .7% of sales. This compares to
a provision of $1.0 million was provided in the third quarter of
1994. The Corporation expects relatively stable paper prices in the
fourth quarter of 1995.
Cost of goods sold as a percentage of sales increased from 76.8% for
the first three quarters of 1994 to 77.9% for the first three
quarters of 1995. The reduction in margins of the three quarters
resulted from the factors discussed above regarding the third
quarter. The Corporation has recorded a total $5.1 million provision
for LIFO during the first three quarters of 1995, representing .7% of
sales. A total of $1.3 million was provided for LIFO in the first
three quarters of 1994.
Selling and Administrative Expenses
Selling and administrative expenses were $3.4 million and $12.9
million higher for the third quarter and first three quarters of
1995, respectively, than for the same periods of 1994. The increase
is primarily due to higher levels of activity in general and the
inclusion of $1.0 million and $4.2 million for the third quarter and
nine-month period of 1995, respectively, of selling and
administrative expenses for the operations acquired during 1994 and
1995.
Interest Expense
Interest expense was approximately $1.0 million and $3.1 million
higher in the third quarter and first nine months of 1995,
respectively, than for the same periods of 1994. This is due to
increased levels of long-term borrowing which carry higher average
interest rates. The Corporation's average level of overall
indebtedness was approximately $45 million higher during the first
three quarters of 1995 compared with the same period in 1994.
The increase in indebtedness during 1995 resulted form the aggressive
capital expenditure commitments made in 1994 and 1995, as well as an
increase in $47 million in the average net investment in working
capital during 1995 compared with 1994.
Income Taxes
The Corporation's effective income tax rates were approximately the
same for the first three quarters of 1995 and 1994.
<PAGE>
PART II: OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
4(a) Note Purchase and Medium-Term Note Agreement Dated November
2, 1995
27 Financial Data Schedule [EDGAR filing only]
(b) No reports on Form 8-K were filed during the quarter for which
this report is filed.
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 November 13, 1995
<PAGE>
BANTA CORPORATION
EXHIBIT INDEX TO FORM 10-Q
For The Quarter Ended September 30, 1995
Exhibit Number
4(a) Note Purchase and Medium-Term Note Agreement Dated
November 2, 1995
27 Financial Data Schedule [EDGAR filing only]
_________________________________________________________________
_________________________________________________________________
BANTA CORPORATION
NOTE PURCHASE AND MEDIUM-TERM NOTE AGREEMENT
$35,000,000 6.81% SERIES A SENIOR PROMISSORY NOTES
DUE NOVEMBER 2, 2010
$40,000,000 MAXIMUM AGGREGATE PRINCIPAL AMOUNT
MEDIUM-TERM NOTE FACILITY
Dated as of November 2, 1995
_________________________________________________________________
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Section Page
1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . 1
1.1. Series A Notes . . . . . . . . . . . . . . . . 1
1.2. Medium-Term Notes. . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES. . . . . . . . . . . . . . 2
2.1. Series A Notes . . . . . . . . . . . . . . . . 2
2.2. Medium-Term Notes. . . . . . . . . . . . . . . 2
3. CLOSING . . . . . . . . . . . . . . . . . . . . . . . 8
4. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . 8
4.1. Representations and Warranties . . . . . . . . 8
4.2. Performance; No Default. . . . . . . . . . . . 8
4.3. Compliance Certificates . . . .. . . . . . . . 9
4.4. Opinions of Counsel . . . . . .. . . . . . . . 9
4.5. Purchase Permitted By Applicable Law, etc. . . 9
4.6. Payment of Processing Fee . . . . . . . . . . 9
4.7. Private Placement Number . . . . . . . . . . . 10
4.8. Changes in Corporate Structure . . . . . . . . 10
4.9. Proceedings and Documents. . . . . . . . . . . 10
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . 10
5.1. Organization; Power and Authority. . . . . . . 10
5.2. Authorization, etc. . . . . . . . . . . . . . 11
5.3. Disclosure . . . . . . . . . . . . . . . . . . 11
5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates . . . . . . . . . . 11
5.5. Financial Statements . . . . . . . . . . . . . 12
5.6. Compliance with Laws, Other
Instruments, etc. . . . . . . . . . . . . . . 12
5.7. Governmental Authorizations, etc.. . . . . . . 13
5.8. Litigation; Observance of Agreements,
Statutes and Orders. . . . . . . . . . . . . 13
5.9. Taxes. . . . . . . . . . . . . . . . . . . . . 13
5.10. Title to Property; Leases. . . . . . . . . . . 13
5.11. Licenses, Permits, etc.. . . . . . . . . . . . 14
5.12. Compliance with ERISA. . . . . . . . . . . . . 14
5.13. Private Offering by the Company. . . . . . . . 15
5.14. Use of Proceeds; Margin Regulations. . . . . . 15
5.15. Existing Indebtedness. . . . . . . . . . . . . 15
5.16. Foreign Assets Control Regulations, etc. . . . 16
5.17. Status under Certain Statutes. . . . . . . . . 16
5.18. Hostile Tender Offers. . . . . . . . . . . . . 16
6. REPRESENTATIONS OF THE PURCHASERS . . . . . . . . . . 16
6.1. Purchase for Investment. . . . . . . . . . . . 16
6.2. Source of Funds. . . . . . . . . . . . . . . . 17
7. INFORMATION AS TO COMPANY . . . . . . . . . . . . . . 18
7.1. Financial and Business Information . . . . . . 18
7.2. Officer's Certificate . . . . . . . . . . . . 20
7.3. Inspection . . . . . . . . . . . . . . . . . . 21
8. PREPAYMENT OF THE NOTES . . . . . . . . . . . . . . . 22
8.1. Required Prepayments . . . . . . . . . . . . . 22
8.2. Optional Prepayments with Make-Whole Amount. . 22
8.3. Allocation of Partial Prepayments. . . . . . . 23
8.4. Maturity; Surrender, etc. . . . . . . . . . . 23
8.5. Purchase of Notes . . . . . . . . . . . . . . 23
8.6. Make-Whole Amount. . . . . . . . . . . . . . . 24
9. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . 25
9.1. Compliance with Law . . . . . . . . . . . . . 25
9.2. Insurance . . . . . . . . . . . . . . . . . . 26
9.3. Maintenance of Properties . . . . . . . . . . 26
9.4. Payment of Taxes and Claims . . . . . . . . . 26
9.5. Corporate Existence, etc. . . . . . . . . . . 27
9.6. Covenant to Secure Notes Equally . . . . . . . 27
9.7. Information Required by Rule 144A. . . . . . . 27
10. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . 27
10.1. Debt . . . . . . . . . . . . . . . . . . . . . 27
10.2. Current Ratio Requirement . . . . . . . . . . 28
10.3. Liens . . . . . . . . . . . . . . . . . . . . 28
10.4. Loans, Advances and Investments. . . . . . . . 29
10.5. Merger, Consolidation, etc. . . . . . . . . . 30
10.6. Transfer of Assets . . . . . . . . . . . . . . 30
10.7. Sale of Stock and Debt of Subsidiaries . . . . 30
10.8. Transactions with Affiliates . . . . . . . . . 31
10.9. Sale or Discount of Receivables. . . . . . . . 31
10.10. Margin Securities. . . . . . . . . . . . . . . 31
11. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . 31
12. REMEDIES ON DEFAULT, ETC. . . . . . . . . . . . . . . 34
12.1. Acceleration . . . . . . . . . . . . . . . . . 34
12.2. Other Remedies . . . . . . . . . . . . . . . . 35
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES . . . . 35
13.1. Registration of Notes . . . . . . . . . . . . 35
13.2. Transfer and Exchange of Notes . . . . . . . . 35
13.3. Replacement of Notes . . . . . . . . . . . . . 36
14. PAYMENTS ON NOTES . . . . . . . . . . . . . . . . . . 37
14.1. Place of Payment . . . . . . . . . . . . . . . 37
14.2. Home Office Payment . . . . . . . . . . . . . 37
15. EXPENSES, ETC. . . . . . . . . . . . . . . . . . . . 37
15.1. Transaction Expenses . . . . . . . . . . . . . 37
15.2. Survival . . . . . . . . . . . . . . . . . . . 38
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 38
17. AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . 38
17.1. Requirements . . . . . . . . . . . . . . . . . 38
17.2. Solicitation of Holders of Notes . . . . . . . 38
17.3. Binding Effect, etc. . . . . . . . . . . . . . 39
17.4. Notes held by Company, etc. . . . . . . . . . 40
18. NOTICES . . . . . . . . . . . . . . . . . . . . . . . 40
19. REPRODUCTION OF DOCUMENTS . . . . . . . . . . . . . . 40
20. SUBSTITUTION OF PURCHASER . . . . . . . . . . . . . . 41
21. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 41
21.1. Successors and Assigns . . . . . . . . . . . . 41
21.2. Payments Due on Non-Business Days . . . . . . 41
21.3. Severability . . . . . . . . . . . . . . . . . 42
21.4. Construction . . . . . . . . . . . . . . . . . 42
21.5. Counterparts . . . . . . . . . . . . . . . . . 42
21.6. Governing Law . . . . . . . . . . . . . . . . 42
SCHEDULE A -- Purchaser Schedule
SCHEDULE B -- Defined Terms
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of
Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
EXHIBIT 1 -- Form of Senior Promissory Note
EXHIBIT 2.2(d) -- Form of Request for Purchase
EXHIBIT 2.2(e) -- Form of Confirmation of Acceptance
EXHIBIT 4.4 -- Form of Opinion of Special Counsel for the
Company
<PAGE>
BANTA CORPORATION
225 Main Street
Menasha, Wisconsin 54952-8003
Note Purchase and Medium-Term Note Agreement
As of November 2, 1995
TO: Metropolitan Life Insurance Company
("Metropolitan")
Metropolitan Property and Casualty
Insurance Company ("MPC")
Each Metropolitan Affiliate which
becomes bound by certain provisions
of this Agreement as hereinafter
provided
One Madison Avenue
New York, New York 10010
Attention: Treasurer
Ladies and Gentlemen:
The undersigned, BANTA CORPORATION, a Wisconsin corporation (the
"Company"), hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1.1. 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 $35,000,000 to be dated the date of issue
thereof, to mature on November 2, 2010, 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 6.81% per annum and on overdue
principal, premium and interest at the rate specified therein, and to be
substantially in the form of Exhibit 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. All capitalized terms used and not
otherwise defined in this Agreement shall have the meanings specified
therefor in Schedule B attached hereto.
1.2. Medium-Term Notes. The Company will authorize the issue, from
time to time, of (but, except as provided in Section 2.2(e) hereof, shall
not be obligated to issue) its additional senior promissory notes (herein
called the "Medium-Term Notes") in an aggregate principal amount not to
exceed $40,000,000. Each Medium-Term Note shall be dated the date of
issue thereof, shall have a maturity date of not more than 15 years from
the date of original issuance thereof and a weighted average life of not
more than 12 years, and shall bear interest on the unpaid balance thereof
at the rate per annum (and shall have such other particular terms) as
shall be set forth in the Confirmation of Acceptance described in Section
2.2(e) hereof. The Medium-Term Notes shall be substantially in the form
of Exhibit 1 attached hereto. The terms "Medium-Term Note" and "Medium-
Term Notes" as used herein shall include each Medium-Term Note delivered
pursuant to any provision of this Agreement and each Medium-Term Note
delivered in substitution or exchange for any such Medium-Term Note
pursuant to any such provision. The terms "Note" or "Notes" as used
herein shall include each Series A Note and each Medium-Term 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, (v) the same interest payment periods, and
(vi) which are otherwise designated a "Series" hereunder or in the Request
for Purchase or the Confirmation of Acceptance, whether or not the
foregoing conditions are satisfied, are herein called a "Series" of Notes.
2. PURCHASE AND SALE OF NOTES.
2.1. Series A Notes. The Company hereby agrees to sell to Metropolitan
and MPC (the "Series A Purchasers") and, subject to the terms and
conditions herein set forth, each Series A Purchaser agrees to purchase
from the Company, the aggregate principal amount of Series A Notes set
forth opposite its name in the Purchaser Schedule attached hereto as
Schedule A at 100% of such aggregate principal amount. The Company will
deliver to each Series A Purchaser at the offices of Metropolitan, one or
more Series A Notes registered in its name, evidencing the aggregate
principal amount of Series A Notes to be purchased by such Series A
Purchaser and in the denomination or denominations specified with respect
to such Series A Purchaser 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 bank account on the date of
closing, which shall be November 2, 1995 (herein called the "Series A
Closing Day").
2.2. Medium-Term Notes.
(a) Facility. Metropolitan is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by
Metropolitan and the Metropolitan Affiliates from time to time, the
purchase of Medium-Term Notes pursuant to this Agreement. The willingness
of Metropolitan to consider such purchase of Medium-Term Notes is herein
called the "Facility". At any time, the aggregate principal amount of
Medium-Term Notes stated in Section 1.2, minus the aggregate principal
amount of Medium-Term 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 Metropolitan to
consider purchases of Medium-Term Notes, this Agreement is entered into on
the express understanding that neither Metropolitan nor any Metropolitan
Affiliate shall be obligated to make or accept offers to purchase Medium-
Term Notes, or to quote rates, spreads or other terms with respect to
specific purchases of Medium-Term Notes, and the Facility shall in no way
be construed as a capital commitment by Metropolitan or any Metropolitan
Affiliate. Except as otherwise provided in Section 2.2(e), the Company
shall have no obligation to issue Medium-Term Notes hereunder.
(b) Issuance Period. Medium-Term Notes may be issued and sold
pursuant to this Agreement until the earlier of (i) November 2, 1998 and
(ii) the thirtieth day after Metropolitan shall have given to the Company,
or the Company shall have given to Metropolitan, a notice stating that it
elects to terminate the issuance and sale of Medium-Term 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
Medium-Term Notes may be issued and sold pursuant to this Agreement is
herein called the "Issuance Period".
(c) Periodic Spread Information. Not later than 10:00 A.M. (New
York City local time) on a Business Day during the Issuance Period if
there is an Available Facility Amount on such Business Day, the Company
may request a purchase of Notes by telecopier or telephone (along with the
Request for Purchase described in Section 2.2(d) below), and within a
reasonable time after such request, Metropolitan will, to the extent
reasonably practicable, provide to the Company information by telecopier
or telephone with respect to various spreads over treasuries at which
Metropolitan or Metropolitan Affiliates may in their discretion consider
purchasing Notes of various different average lives. The Company may not
make such requests more frequently than once in every five Business Days
or such other period as shall be mutually agreed to by the Company and
Metropolitan. The amount and content of information so provided shall be
in the sole discretion of Metropolitan, but it is the intent of
Metropolitan to provide information which will be of use to the Company in
determining whether to initiate procedures for use of the Facility.
Information so provided shall not constitute an offer to purchase Notes,
and neither Metropolitan nor any Metropolitan Affiliate shall be obligated
to purchase Notes at the spreads specified. Information so provided shall
be representative of potential interest only for the period of time
stipulated by Metropolitan, ending at such time as Metropolitan shall
reasonably determine. Metropolitan may suspend or terminate providing
information pursuant to this Section 2.2(c) if, in its sole discretion, it
determines that there has been an adverse change in the credit quality of
the Company after the date of this Agreement.
(d) Request for Purchase. Simultaneously with its request for
periodic spread information pursuant to Section 2.2(c) above, the Company
shall make a written request for purchases of Medium-Term Notes (each such
request being herein called a "Request for Purchase"). Each Request for
Purchase shall be made to Metropolitan by telecopier and confirmed by
nationwide overnight delivery service, and shall (i) specify the aggregate
principal amount of Medium-Term Notes covered thereby, which shall not be
less than $5,000,000 (or, if less, the then Available Facility Amount) and
shall not be greater than the Available Facility Amount at the time such
Request for Purchase is made, (ii) specify the final maturities, principal
prepayment dates and amounts, weighted average lives and interest payment
periods of the Medium-Term Notes covered thereby, (iii) specify the use of
proceeds of such Medium-Term Notes, (iv) specify the proposed day for the
closing of the purchase and sale of such Medium-Term Notes, which, unless
otherwise agreed to by the parties, shall be a Business Day during the
Issuance Period not less than five (5) days and not more than thirty (30)
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 Medium-Term Notes are to
be transferred on the Medium-Term Closing Day for such purchase and sale,
(vi) certify that the representations and warranties contained in Section
5 hereof 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 (and that no Event of Default or
Default shall arise as the result of the purchase and sale of such Medium-
Term Notes), and (vii) be substantially in the form of Exhibit 2.2(d)
attached hereto. Each Request for Purchase shall be in writing and shall
be deemed made when received by Metropolitan by telecopier or nationwide
overnight delivery service.
(e) Acceptance. As soon as practicable but in no event later than
one Business Day after Metropolitan has provided a periodic spread quote
pursuant to Section 2.2(c) (the "Acceptance Day"), the Company may elect
to accept such periodic spread quote as to not less than $5,000,000
aggregate principal amount of the Medium-Term Notes (or, if less, the then
Available Facility Amount) specified in the applicable Request for
Purchase. Such election shall be made by an Authorized Officer of the
Company notifying Metropolitan by telephone (the "Acceptance Call") that
the Company elects to accept such periodic spread quote, specifying the
Medium-Term Notes as to which such acceptance relates; provided, however,
that no such acceptance of a periodic spread quote shall obligate the
Company to issue, or Metropolitan to purchase, any Medium-Term Notes
unless and until an interest rate acceptable to both the Company and
Metropolitan is agreed upon as set forth below in this Section 2.2(e).
Metropolitan shall then provide on such Acceptance Call interest rate
quotes for the principal amount(s), maturit(ies), prepayment schedule(s)
and interest payment period(s) of such Medium-Term Notes (based upon the
respective spreads over treasuries provided by Metropolitan pursuant to
Section 2.2(c)). Each quote shall represent the interest rate per annum
payable on the outstanding principal amount of such Medium-Term Notes
(until such balance shall have become due and payable) at which
Metropolitan or a Metropolitan Affiliate would be willing to purchase such
Medium-Term Notes at 100% of the principal amount thereof. Any such
interest rate quote shall be valid only for the period of time stipulated
by Metropolitan during such Acceptance Call, and in no event shall such
interest rate quote survive the termination of such Acceptance Call. If
the Authorized Officer of the Company elects to accept such interest rate
quote, he will so notify Metropolitan on the Acceptance Call, specifying
the Medium-Term Notes (each such Medium-Term Note being herein called an
"Accepted Note") as to which such acceptance (herein called an
"Acceptance") relates. The Company hereby agrees to sell to Metropolitan
or a Metropolitan Affiliate, and Metropolitan hereby agrees to purchase,
or to cause the purchase by a Metropolitan Affiliate of, the Accepted
Notes. Prior to the close of business on the Business Day next following
the Acceptance Day, the Company, Metropolitan and each Metropolitan
Affiliate which is to purchase any such Accepted Notes will execute a
confirmation of such Acceptance substantially in the form of
Exhibit 2.2(e) attached hereto (herein called a "Confirmation of
Acceptance"). Any periodic spread quotes which are not accepted by the
Company as herein provided shall expire at the close of business on the
Acceptance Day, and no purchase or sale of Medium-Term Notes hereunder
shall be made based on such expired periodic spread quotes.
(f) Medium-Term Closing. Not later than 11:30 A.M. (New York City
local time) on the Medium-Term Closing Day for any Accepted Notes, the
Company will deliver to Metropolitan and each Metropolitan Affiliate
listed in the Confirmation of Acceptance (each, a "Term Purchaser", and
collectively, the "Term Purchasers") the Medium-Term Notes to be purchased
by each Term 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 of $100,000 or more as such Term
Purchaser may request) dated the Medium-Term Closing Day and registered in
each Term Purchaser's name (or in the name of its nominee), 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 Medium-Term Notes. If the Company fails to tender to any
Term Purchaser the Accepted Notes to be purchased by such Term Purchaser
on the scheduled Medium-Term Closing Day for such Accepted Notes as
provided above in this Section 2.2(f), or any of the conditions specified
in Section 4 shall not have been fulfilled by the time required on such
scheduled Medium-Term Closing Day, the Company shall, prior to 1:00 P.M.,
New York City local time, on such scheduled Medium-Term Closing Day notify
such Term 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 ten (10)
Business Days after such scheduled Medium-Term Closing Day (the
"Rescheduled Closing Day")) and certify to such Term Purchaser that the
Company reasonably believes that it will be able to comply with the
conditions set forth in Section 4 on such Rescheduled Closing Day, or (y)
such closing is to be cancelled as provided in Section 2.2(g). In the
event that the Company shall fail to give such notice referred to in the
preceding sentence, such Term Purchaser may at its election, at any time
after 1:00 P.M., New York City local time, on such scheduled Medium-Term
Closing Day, notify the Company in writing that such closing is to be
cancelled as provided in Section 2.2(g).
(g) Fees. Without the Company's prior approval, no fees other than
the fees set forth in this Section 2.2(g) shall be required in connection
with the closing of a draw under the Facility.
(i) Delayed Delivery Fee. If the closing of the purchase and
sale of any Accepted Note is delayed for any reason beyond the
original Medium-Term Closing Day for such Accepted Note, the Company
will pay to the Term Purchasers on the last Business Day of each
calendar month, commencing with the first such day to occur more than
twenty (20) 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 20 days
after the Acceptance Day for such Accepted Note), a fee (herein
called the "Delayed Delivery Fee") calculated as follows:
(BEY - MMY) X DTS/365 X Full Price
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 U.S. treasury security selected
by Metropolitan on the date Metropolitan 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 Metropolitan 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 immediately
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 "Full Price" means the principal amount, i.e.,
the principal amount of the Accepted Note for which such calculation
is being made. In no case shall the Delayed Delivery Fee be less
than zero. Nothing contained herein shall obligate any Term
Purchaser to purchase any Accepted Note on any day other than the
Medium-Term Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with Section 2.2(f).
(ii) Cancellation Fee. If the Company at any time notifies
Metropolitan in writing that the Company is cancelling the closing of
the purchase and sale of any Accepted Note, or if Metropolitan
notifies the Company in writing under the circumstances set forth in
the last sentence of Section 2.2(f) 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 Metropolitan in immediately available funds an amount (the
"Cancellation Fee") calculated as follows:
PI X Full Price
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 Metropolitan) of the United States Treasury Note or
Notes whose average life (as determined by Metropolitan) most closely
matches the average life for such Accepted Note (the "Hedge Treasury
Note(s)") on the Cancellation Date over the bid price (as determined
by Metropolitan) of the Hedge Treasury Note(s) on the Acceptance Day
for such Accepted Note by (b) such bid price; and "Full Price" means
the principal amount, i.e., the principal amount of the Accepted Note
for which such calculation is being made. The foregoing bid and ask
prices shall be as reported by Telerate Systems, Inc. (or, any
publicly available source of similar market data selected by
Metropolitan). 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. CLOSING.
The sale and purchase of the Series A Notes to be purchased by you
shall occur at the offices of Metropolitan, One Madison Avenue, New York,
New York 10010 at 10:00 a.m., New York time, at a closing (the "Closing")
on November 2, 1995 or on such other Business Day thereafter on or prior
to November 10, 1995 as may be agreed upon by the Company and you. At the
Closing the Company will deliver to you the Series A Notes to be purchased
by you in the form of a single Note (or such greater number of Notes in
denominations of at least $100,000 as you may request) dated the date of
the Closing and registered in your name (or in the name of your nominee),
against delivery by you to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
Account Number _________ at Firstar Bank Milwaukee, 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53201, ABA Number 075000022. If at the
Closing the Company shall fail to tender such Series A Notes to you as
provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you shall,
at your election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by reason of
such failure or such nonfulfillment. The purchase and sale of any Medium-
Term Notes under the Facility shall take place in accordance with Section
2 hereof.
4. CONDITIONS TO CLOSING.
The obligations of (i) the Series A Purchasers to purchase the Series
A Notes to be sold on the Series A Closing Day and (ii) any Term Purchaser
to purchase any Medium-Term Notes under the Facility on any Medium-Term
Closing Day, shall be subject to the fulfillment to their satisfaction,
prior thereto or concurrently therewith, of the following conditions:
4.1. Representations and Warranties.
The representations and warranties of the Company in this Agreement
shall be correct when made and on and as of such Closing Day.
4.2. Performance; No Default.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or
complied with by it prior to or simultaneously with such Closing Day, and
after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Schedule 5.14) no
Default or Event of Default shall have occurred and be continuing.
4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to each
such Purchaser, an Officer's Certificate, dated such Closing Day, certify-
ing that the conditions specified in Sections 4.1, 4.2 and 4.8 have been
fulfilled.
(b) Secretary's Certificate. With respect to the Series A Closing
Day, the Company shall have delivered to Series A Purchasers a certificate
certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of the
Notes and the Agreement.
4.4. Opinions of Counsel.
With respect to each Closing hereunder, each Purchaser then
purchasing Notes shall have received a favorable legal opinion addressed
to such Purchaser, dated the date of such Closing, and in form and
substance satisfactory to such Purchaser, from the General Counsel for the
Company, covering the matters set forth in Exhibit 4.4 and covering such
other matters incident to the transactions contemplated hereby as such
Purchaser or its counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinions to each Purchaser).
4.5. Purchase Permitted By Applicable Law, etc.
With respect to each Purchaser, the purchase of Notes on such Closing
Day shall (i) be permitted by the laws and regulations of each juris-
diction to which such Purchaser is subject, without recourse to provisions
(such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (ii) not violate any applicable
law or regulation (including, without limitation, Regulation G, T or X of
the Board of Governors of the Federal Reserve System) and (iii) not
subject such Purchaser to any tax, penalty or liability under or pursuant
to any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by any Purchaser, such Purchaser
shall have received an Officer's Certificate
certifying as to such matters of fact as such Purchaser may reasonably
specify to enable it to determine whether such purchase is so permitted.
4.6. Payment of Processing Fee.
With respect to the Series A Closing Day only, and without limiting
the provisions of Section 15.1, the Company shall have paid on or before
the Series A Closing Day a processing fee to Metropolitan in the amount of
$15,000.
4.7. Private Placement Number.
A Private Placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained
for the Notes.
4.8. Changes in Corporate Structure.
Except as permitted by Section 10.5, the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part
of the liabilities of any other entity, at any time following the date of
the most recent financial statements referred to in Schedule 5.5.
4.9. Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to each
Purchaser and its counsel, and such Purchaser and its counsel shall have
received all such counterpart originals or certified or other copies of
such documents as it or they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. Organization; Power and Authority.
The Company and each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction
of incorporation, and is duly qualified as a foreign corporation and is in
good standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company and
each Subsidiary has the corporate power and authority to own or hold under
lease the properties it purports to own or hold under lease, and to
transact the business it transacts and proposes to transact, and the
Company has the corporate power and authority to execute and deliver this
Agreement and the Notes and to perform the provisions hereof and thereof.
5.2. Authorization, etc.
This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will
constitute, a legal, valid and binding obligation of the Company enforce-
able against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
5.3. Disclosure.
Except as disclosed in Schedule 5.3, this Agreement, the documents,
certificates or other writings delivered to each Purchaser by or on behalf
of the Company in connection with the transactions contemplated hereby and
the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in
light of the circumstances under which they were made. Except as
expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since June 30, 1995, there has been no
change in the financial condition, operations, business or properties of
the Company or any Subsidiary except changes that individually or in the
aggregate would not reasonably be expected to have a Material Adverse
Effect.
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 is a complete and correct list of the Company's
Subsidiaries, showing, as to each Subsidiary, the correct name thereof,
the jurisdiction of its organization, and the percentage of shares of each
class of its capital stock or similar equity interests outstanding owned
by the Company and each other Subsidiary.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable (except as provided in Wis. Stats. Section 180.0622(2)(b))
and are owned by the Company or another Subsidiary free and clear of any
Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified
as a foreign corporation or other legal entity and is in good standing in
each jurisdiction in which such qualification is required by law, other
than those jurisdictions as to which the failure to be so qualified or in
good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary has the
corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
5.5. Financial Statements.
The Company has delivered to each Series A Purchaser and each Term
Purchaser copies of the financial statements of the Company and its Sub-
sidiaries listed on Schedule 5.5 and of all financial statements required
to be furnished pursuant to Section 7.1. All of said financial statements
(including in each case the related schedules and notes) fairly present in
all material respects the consolidated financial position of the Company
and its Subsidiaries as of the respective dates specified in such Schedule
and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with
GAAP consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach of,
or constitute a default under, or result in the creation of any Lien in
respect of any property of the Company or any Subsidiary under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease, corporate charter or by-laws, or any other agreement or instrument
to which the Company or any Subsidiary is bound or by which the Company or
any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to the Company or
any Subsidiary or (iii) violate any provision of any statute or other rule
or regulation of any Governmental Authority applicable to the Company or
any Subsidiary. Neither the Company nor any of its Subsidiaries is a
party to any contract or agreement, or subject to a charter or other
corporate restriction which materially and adversely affects the
business,property, assets or financial condition of the Company and its
Subsidiaries taken as a whole.
5.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection
with the execution, delivery or performance by the Company of this
Agreement or the Notes.
5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits
or proceedings pending or, to the knowledge of the Company, threatened
against or affecting the Company or any Subsidiary or any property of the
Company or any Subsidiary in any court or before any arbitrator of any
kind or before or by any Governmental Authority that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse
Effect.
(b) Neither the Company nor any Subsidiary is in default under any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
5.9. Taxes.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and
assessments payable by them, to the extent such taxes and assessments have
become due and payable and before they have become delinquent, except for
any taxes and assessments the amount, applicability or validity of which
is currently being contested in good faith by appropriate proceedings and
with respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Federal income
tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended December 31, 1990.
5.10. Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title to
their respective properties, including all such properties reflected in
the most recent audited balance sheet referred to in Section 5.5 or pur-
ported to have been acquired by the Company or any Subsidiary after said
date (except as sold or otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens prohibited by this
Agreement. All Material leases are valid and subsisting and are in full
force and effect.
5.11. Licenses, Permits, etc.
Except as disclosed in Schedule 5.11, the Company and its
Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and trade
names, or rights thereto, that are Material, without known conflict with
the rights of others.
5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and
no event, transaction or condition has occurred or exists that would
reasonably be expected to result in the incurrence of any such liability
by the Company or any ERISA Affiliate, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to Section 401(a)(29) or 412 of the
Code.
(b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the
end of such Plan's most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Plan's most
recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such Plan allocable to such benefit liabilities.
The term "benefit liabilities" has the meaning specified in section 4001
of ERISA and the terms "current value" and "present value" have the
meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multi-
employer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its Subsidiaries
is not Material.
(e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is
subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
Code. The representation by the Company in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to (i) the accuracy
of your representation in Section 6.2 as to the sources of the funds used
to pay the purchase price of the Notes to be purchased by you and (ii) the
assumption, made solely for the purpose of making such representation,
that Department of Labor Interpretive Bulletin 75-2 with respect to
prohibited transactions remains valid in the circumstances of the
transactions contemplated herein.
5.13. Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in respect
thereof with, any person other than Metropolitan, certain Metropolitan
Affiliates and not more than 100 other accredited investors (as defined in
Rule 501 promulgated under the Securities Act), each of which has been
offered the Notes at a private sale for investment. Neither the Company
nor anyone acting on its behalf has taken, or will take, any action that
would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14. No part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of
buying or carrying any margin stock within the meaning of Regulation G of
the Board of Governors of the Federal Reserve System (12 CFR 207), or for
the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of
said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). Margin stock does not consti-
tute any of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that
margin stock will constitute any of the value of such assets. As used in
this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation G.
5.15. Existing Indebtedness.
Except as described therein, Schedule 5.15 sets forth a complete and
correct list of all outstanding Indebtedness (in individual amounts of
$1,500,000 or more) of the Company and its Subsidiaries as of September
30, 1995, since which date there has been no Material change in the
amounts, interest rates, sinking funds, instalment payments or maturities
of the Indebtedness of the Company or its Subsidiaries. Neither the
Company nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Subsidiary and no event or condition
exists with respect to any Indebtedness of the Company or any Subsidiary
that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to become due
and payable before its stated maturity or before its regularly scheduled
dates of payment.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto.
5.17. Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended,
or the Federal Power Act, as amended.
5.18 Hostile Tender Offers.
None of the proceeds of the sale of any Notes will be used to finance
a Hostile Tender Offer.
6. REPRESENTATIONS OF THE PURCHASERS
6.1. Purchase for Investment.
Each Purchaser represents that it is purchasing the Notes for its own
account or for one or more separate accounts maintained by it and not with
a view to the distribution thereof, provided that the disposition of its
or their property shall at all times be within its or their control. Each
Purchaser understands that the Notes have not been registered under the
Securities Act and may be resold only if registered pursuant to the provi-
sions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor
such an exemption is required by law, and that the Company is not required
to register the Notes.
6.2. Source of Funds.
Each Purchaser represents that at least one of the following
statements is an accurate representation as to each source of funds (a
"Source") to be used by it to pay the purchase price of the Notes to be
purchased by it hereunder:
(a) if such Purchaser is an insurance company, the Source does
not include assets allocated to any separate account maintained by
such Purchaser in which any employee benefit plan (or its related
trust) has any interest, other than a separate account that is
maintained solely in connection with such Purchaser's fixed
contractual obligations under which the amounts payable, or credited,
to such plan and to any participant or beneficiary of such plan
(including any annuitant) are not affected in any manner by the
investment performance of the separate account; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of Prohibited Transaction Exemption
("PTE") 90-1 (issued January 29, 1990), or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 (issued July 12,
1991) and, except as such Purchaser has disclosed to the Company in
writing pursuant to this paragraph (b), no employee benefit plan or
group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated
to such pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V
of the QPAM Exemption), no employee benefit plan's assets that are
included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the
same employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same em-
ployee organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and
(g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company
in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have
the respective meanings assigned to such terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. Financial and Business Information.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- 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, changes in shareholders' equity 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
Senior Financial Officer of the Company, subject to changes resulting
from year-end adjustment; provided, however, that delivery pursuant
to Section 7.1(c) 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 Section 7.1(a);
(b) Annual Statements -- 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 Section 7.1(c) 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 Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice
or proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic
report (exclusive of filings on Form 11-K or any successor form),
each registration statement (without exhibits except as expressly
requested by such holder), other than registration statements on Form
S-8 or any successor form, and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities
and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange
Commission) and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public
concerning developments that are Material;
(d) Other Financial Data -- 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;
(e) Notice of Default or Event of Default -- promptly, and in any
event within five days after a Responsible Officer becoming aware of
the existence of any Default or Event of Default, a written notice
specifying the nature and period of existence thereof and what action
the Company is taking or proposes to take with respect thereto;
(f) ERISA Matters -- promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if
any, that the Company or an ERISA Affiliate proposes to take with re-
spect thereto:
(i) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under sec-
tion 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax pro-
visions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
or such penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse
Effect;
(g) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material
Adverse Effect; and
(h) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
Together with each delivery of financial statements required by
Section 7.1(b), the Company will deliver to each 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.
7.2. Officer's Certificate.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied
by a certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was
in compliance with the requirements of Sections 10.1, 10.4, 10.6,
10.7 and 10.10 hereof, inclusive, during the quarterly or annual
period covered by the statements then being furnished (including with
respect to each such Section, where applicable, the calculations of
the maximum or minimum amount, ratio or percentage, as the case may
be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence); and setting
forth the 60 consecutive day "clean down period" selected by the
Company as contemplated by clause (ii) of the definition of "Funded
Debt";
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be
made, under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition
or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without
limitation, any such event or condition resulting from the failure of
the Company or any Subsidiary to comply with any Environmental Law),
specifying the nature and period of existence thereof and what action
the Company shall have taken or proposes to take with respect
thereto.
7.3. Inspection.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists,
at the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to
examine the corporate books and records of the Company and its
Subsidiaries and make copies thereof and extracts therefrom, to dis-
cuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers and its independent public
accountants, and to visit the other offices and properties of the
Company and each Subsidiary, all at such reasonable times and as
often as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at
the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and
accounts of the Company and its Subsidiaries), all at such times and
as often as may be requested.
8. PREPAYMENT OF THE NOTES.
8.1. Required Prepayments.
(a) Series A Notes. Until the Series A Notes shall have been paid
in full, the Company shall apply to the prepayment of the Series A
Notes, without any Make-Whole Amount, the principal amount of
$5,000,000 on November 2 of each year, commencing November 2, 2004,
up to and including November 2, 2009, and such principal amounts of
the Series A 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 Section 8
shall not reduce or otherwise affect its obligation to make any
scheduled payment on the Series A Notes required by this Section
8.1(a). Any unpaid principal amount of the Series A Notes, together
with interest accrued thereon, shall become due on November 2, 2010.
(b) Medium-Term Notes. Until each respective Series of Medium-
Term Notes shall have been paid in full, each respective Series of
Medium-Term Notes shall be subject to such required prepayments, if
any, as are set forth in the Confirmation of Acceptance with respect
to such Series of Medium-Term Notes. Any prepayment made by the
Company pursuant to any other provisions of this Section 8 shall not
reduce or otherwise affect its obligation to make any prepayment as
specified in each Series of Medium-Term Notes.
8.2. Optional Prepayments With Make-Whole Amount.
The Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes of each
Series, in an amount not less than $1,000,000 and integral multiples of
$100,000 in excess thereof in the case of a partial prepayment, at 100% of
the principal amount so prepaid, plus the Make-Whole Amount determined for
the prepayment date with respect to such principal amount. The Company
will give each holder of Notes of such Series written notice of each
optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such
notice shall specify such date, the aggregate principal amount of the
Notes of such Series to be prepaid on such date, the principal amount of
each Note of such Series held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business
Days prior to such prepayment, the Company shall deliver to each holder of
Notes of each Series to be prepaid a certificate of a Senior Financial
Officer specifying the calculation of such Make-Whole Amount with respect
to each such Series as of the specified prepayment date.
8.3. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes of any Series,
the principal amount of such Notes to be prepaid shall be allocated among
all of the Notes of such Series at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof
not theretofore called for prepayment.
8.4. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 8,
the principal amount of each Note to be prepaid shall mature and become
due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any. From and after such date, unless the Company
shall fail to pay such principal amount when so due and payable, together
with the interest and Make-Whole Amount, if any, as aforesaid, interest on
such principal amount shall cease to accrue. Any Note paid or prepaid in
full shall be surrendered to the Company and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal
amount of any Note.
8.5. Purchase of Notes.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company
will promptly cancel all Notes acquired by it or any Affiliate pursuant to
any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for
any such Notes.
8.6. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note of a
Series, an amount equal to the excess, if any, of the Discounted Value of
the Remaining Scheduled Payments with respect to the Called Principal of
such Note over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such
Called Principal, in accordance with accepted financial practice and
at a discount factor (applied on the same periodic basis as that on
which interest on the Notes is payable) equal to the Reinvestment
Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal
of any Note, the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the Business Day
next preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page 500" on the Telerate
Access Service (or such other display as may replace Page 500 on
Telerate Access 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 (ii) if such yields are not
reported as of such time or the yields reported as of such time are
not ascertainable, the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so
reported as of the Business Day next preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of
such Settlement Date. Such implied yield will 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 (1) the actively traded U.S.
Treasury security with the duration closest to and greater than the
Remaining Average Life and (2) the actively traded U.S. Treasury
security with the duration closest to and less than the Remaining
Average Life.
"Remaining Average Life" means, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into
(ii) the sum of the products obtained by multiplying (a) the
principal component of each Remaining Scheduled Payment with respect
to such Called Principal by (b) the number of years (calculated to
the nearest one-twelfth year) that will elapse between the Settlement
Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with re-
spect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to
be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount
of interest accrued to such Settlement Date and required to be paid
on such Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context
requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that from the date hereof and so long as any of
the Notes are outstanding:
9.1. Compliance with Law.
The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which
each of them is subject, including, without limitation, Environmental
Laws, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their
respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations
would not, individually or in the aggregate, materially adversely affect
the business, condition (financial or other) or operations of the Company
and its Subsidiaries taken as a whole.
9.2. Insurance.
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to
their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities
of established reputations engaged in the same or a similar business and
similarly situated and, upon request of a holder, together with each
delivery of financial statements pursuant to Section 7.1(b), the Company
will deliver an Officers' Certificate specifying the details of such
insurance in effect.
9.3. Maintenance of Properties.
The Company will and will cause each of its Subsidiaries to maintain
and keep, or cause to be maintained and kept, their respective properties
in good repair, working order and condition (other than ordinary wear and
tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not
prevent the Company or any Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded
that such discontinuance would not, individually or in the aggregate,
materially adversely affect the business, operations, affairs, financial
condition, properties or assets of the Company and its Subsidiaries taken
as a whole.
9.4. Payment of Taxes and Claims.
The Company will and will cause each of its Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all
other taxes, assessments, governmental charges, or levies payable by them,
to the extent such taxes and assessments have become due and payable and
before they have become delinquent, provided that neither the Company nor
any Subsidiary need pay any such tax or assessment if (a) the amount,
applicability or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate proceedings,
and the Company or a Subsidiary has established adequate reserves therefor
in accordance with GAAP on the books of the Company or such Subsidiary or
(b) the nonpayment of all such taxes and assessments in the aggregate
would not reasonably be expected to materially adversely affect the
business, operations, affairs, financial condition, properties or assets
of the Company and its Subsidiaries taken as a whole.
9.5. Corporate Existence, etc.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.3 and 10.4, the
Company will at all times preserve and keep in full force and effect the
corporate existence of each of its Subsidiaries (unless merged into the
Company or a Subsidiary) and all rights and franchises of the Company and
its Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect
such corporate existence, right or franchise would not, individually or in
the aggregate, materially adversely affect the business, operations,
affairs, financial condition, properties or assets of the Company and its
Subsidiaries taken as a whole.
9.6. Covenant to Secure Notes Equally.
The Company covenants that, if it or any Subsidiary shall create or
assume any Lien upon any of its property or assets, whether now owned or
hereafter acquired, other than Liens permitted by the provisions of
Section 10.6 (unless prior written consent to the creation or assumption
thereof shall have been obtained pursuant to Section 17), it will make or
cause to be made effective provision (on documentation satisfactory to the
Required Holders) 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.
9.7. 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 Section 9.7, the
term "qualified institutional buyer" shall have the meaning specified in
Rule 144A under the Securities Act.
10. NEGATIVE COVENANTS.
The Company covenants that from the date hereof and so long as any of
the Notes are outstanding:
10.1. Debt.
The Company shall not, and shall not permit any Subsidiary to,
create, incur, assume or suffer to exist any Debt, except:
(a) Debt represented by the Notes;
(b) Debt of any Subsidiary to the Company or another Subsidiary;
and
(c) additional Debt of the Company (other than to a Subsidiary)
and of Subsidiaries; provided that (i) Consolidated Funded Debt shall
at no time exceed an amount equal to 50% of Tangible Capitalization
and (ii) Priority Debt shall at no time exceed the lesser of (A) 25%
of Consolidated Tangible Net Worth and (B) 10% of Consolidated
Tangible Net Worth plus Debt described in clause (d) of Section 10.3.
10.2. Current Ratio Requirement.
The Company will not permit the ratio of consolidated current assets
to consolidated current liabilities at any time to be less than 1.5 to
1.0.
10.3. Liens.
The Company shall not, and shall not permit any Subsidiary to,
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 Notes in accordance with
the provisions of Section 9.6) except:
(a) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings;
(b) 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;
(c) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another Subsidiary;
(d) 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 (i) such Lien shall not have been created,
incurred or assumed in contemplation of such purchase, merger,
consolidation or other event, (ii) each such Lien shall be confined
solely to the item(s) of property so acquired, (iii) the Debt secured
by such Lien shall not be renewed, extended or refunded and (iv) the
aggregate amount of Debt secured by all such Liens at no time exceeds
25% of Consolidated Tangible Net Worth; and
(e) other Liens securing Debt, provided that (i) the aggregate
amount of Debt secured by all such Liens shall at no time exceed 10%
of Consolidated Tangible Net Worth, and (ii)
Priority Debt shall at no time exceed the lesser of (A) 25% of
Consolidated Tangible Net Worth and (B) 10% of Consolidated Tangible
Net Worth plus Debt described in clause (d) above.
10.4. Loans, Advances and Investments.
The Company shall not, and shall not permit any Subsidiary to, 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:
(a) make or permit to remain outstanding loans or advances to
any Subsidiary;
(b) 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;
(c) 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;
(d) own, purchase or acquire (i) direct obligations of, or
obligations guaranteed by, the United States of America, (ii)
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 (iii) 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;
(e) 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.;
(f) 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
(g) make other loans, advances and investments not to exceed 5%
of Consolidated Tangible Net Worth at any time.
10.5. Merger, Consolidation, etc.
The Company shall not, and shall not permit any Subsidiary to, merge
or consolidate with or into any other Person, except that:
(a) any Subsidiary may merge or consolidate with or into the
Company, provided that the Company is the continuing or surviving
corporation;
(b) 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
(c) the Company may merge or consolidate with any other
corporation, provided that (i) the Company shall be the continuing or
surviving corporation, and (ii) no Default or Event of Default exists
or would exist immediately after giving effect thereto.
10.6. Transfer of Assets.
The Company shall not, and shall not permit any Subsidiary to,
Transfer any of its assets except that:
(a) any Subsidiary may Transfer assets to the Company;
(b) the Company or any Subsidiary may sell inventory in the
ordinary course of business; and
(c) the Company or any Subsidiary may otherwise Transfer assets,
provided that after giving effect thereto: (i) the Three Year
Percentage of Assets Transferred pursuant to this Section 10.6(c) and
Section 10.7 shall not exceed 10% and (ii) the Three Year Percentage
of Earnings Capacity Transferred pursuant to this Section 10.6(c) and
Section 10.7 shall not exceed 10%.
10.7. Sale of Stock and Debt of Subsidiaries.
The Company shall not, and shall not permit any Subsidiary to, 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 Section 10.6, 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 Section 10.7).
10.8. Transactions with Affiliates.
The Company shall not and shall not permit any Subsidiary to enter
into directly or indirectly any transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with
any Affiliate (other than the Company or another Subsidiary), except
pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
10.9. Sale or Discount of Receivables.
The Company shall not, and shall not permit any Subsidiary to, sell
with recourse, pledge, or discount or otherwise sell for less than the
face value thereof, any of its notes or accounts receivable.
10.10. Margin Securities.
The Company shall not, and shall not permit any Subsidiary to, permit
the aggregate market value of all "margin stock", as defined in Section
5.14, 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.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions
or events shall occur and be continuing (and whether such occurrence shall
be voluntary or involuntary or come about or be effected by operation of
law or otherwise):
(a) the Company defaults in the payment of any principal of or
Make-Whole Amount on any Note when the same shall become due, either
by the terms thereof or otherwise as herein provided; or
(b) the Company defaults in the payment of any interest on any
Note for more than 10 days after the date due; or
(c) 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 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
$1,000,000; or
(d) 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
(e) the Company fails to perform or observe any agreement
contained in Section 10 hereof; or
(f) 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
(g) 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
(h) 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 not or
hereafter in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(i) 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 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
(j) 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
(k) 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
(l) 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 GAAP) 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 GAAP) 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
(m) 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, 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
(n) the Company or any ERISA Affiliate, in its capacity as an
employer under a Multiemployer Plan, makes a complete or partial
withdrawal from such Multiemployer Plan resulting in the incurrence
by such withdrawing employer of a withdrawal liability in an amount
exceeding $1,000,000.
12. REMEDIES ON DEFAULT,ETC.
12.1. Acceleration.
If an Event of Default shall occur and be continuing (and whether
such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise), then:
(a) if such event is an Event of Default specified in clause (a)
or (b) of Section 11, 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 (h),
(i) or (j) of Section 11 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 Make-Whole 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 Make-Whole 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.
Whenever any Note shall be declared immediately due and payable pursuant
to this Section 12, the Company shall forthwith give written notice
thereof to the holder of each Note of each Series at the time outstanding.
The Company acknowledges, and the parties hereto agree, that each holder
of a Note has the right to maintain its investment in the Notes free from
repayment by the Company (except as herein specifically provided for) and
that the provision for the payment of a Make-Whole Amount by the Company
in the event that the Notes are prepaid or accelerated as a result of an
Event of Default, is intended to provide compensation for the deprivation
of such right under such circumstances.
12.2. 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. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment for registration of
transfer, the Person in whose name any Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge
to the contrary. The Company shall give to any holder of a Note that is
an Institutional Investor promptly upon request therefor, a complete and
correct copy of the names and addresses of all registered holders of
Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of
such Note or his attorney duly authorized in writing and accompanied by
the address for notices of each transferee of such Note or part thereof),
the Company shall execute and deliver, at the Company's expense (except as
provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note
shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated
and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Notes. Notes shall not be transferred in
denominations of less than $100,000, provided that if necessary to enable
the registration of transfer by a holder of its entire holding of Notes,
one Note may be in a denomination of less than $100,000. Any transferee,
by its acceptance of a Note registered in its name (or the name of its
nominee), shall be deemed to have made the representation set forth in
Section 6.2.
13.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any
Note (which evidence shall be, in the case of an Institutional Investor,
notice from such Institutional Investor of such ownership and such loss,
theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if you, your nominee or
another Institutional Investor is the holder of such Note, your or
such Person's own unsecured agreement of indemnity shall be deemed to
be satisfactory); or
(b) in the case of mutilation, upon surrender and cancellation
thereof;
the Company at its own expense shall execute and deliver, in lieu thereof,
a new Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or
dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made at
the principal office of The Chase Manhattan Bank, N.A. in New York, New
York. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment
shall be either the principal office of the Company in New York, New York
or the principal office of a bank or trust company in such jurisdiction.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by wire transfer of
immediately available funds to the account specified for such purpose in
Schedule A, or by such other method or at such other address as you shall
have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making
of any notation thereon, except that upon written request of the Company
made concurrently with or reasonably promptly after payment or prepayment
in full of any Note, you shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its prin-
cipal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other
disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and
the last date to which interest has been paid thereon or surrender such
Note to the Company in exchange for a new Note or Notes pursuant to
Section 13.2. The Company will afford the benefits of this Section 14.2
to any Institutional Investor that is the direct or indirect transferee of
any Note purchased by you under this Agreement and that has made the same
agreement relating to such Note as you have made in this Section 14.2.
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable
attorneys' fees of a special counsel and, if reasonably required, local or
other counsel) incurred by you and each other holder of a Note in
connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes
(whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or
defend) any rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative demand
issued in connection with this Agreement or the Notes, or by reason of
being a holder of any Note, and (b) the costs and expenses, including
financial advisors' fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Subsidiary or in connection with any
work-out or restructuring of the transactions contemplated hereby and by
the Notes. The Company will pay, and will save you and each other holder
of a Note harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained by
you).
15.2. Survival.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of
any provision of this Agreement or the Notes, and the termination of this
Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a
Note, regardless of any investigation made at any time by or on behalf of
you or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties
of the Company under this Agreement. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and understanding
between you and the Company and supersede all prior agreements and under-
standings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement and the Notes may be amended, and the observance of
any term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company
and the Required Holders, except that (a) no amendment or waiver of any of
the provisions of Section 1, 2, 3, 4, 5, 6 or 20 hereof, or any defined
term (as it is used therein), will be effective as to you unless consented
to by you in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment
or method of computation of interest or of the Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver,
or (iii) amend any of Sections 8, 11(a), 11(b), 12, or 17.
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a
decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes.
The Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of
this Section 17 to each holder of outstanding Notes promptly
following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes for any waiver or amendment of
any of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon
each future holder of any Note and upon the Company without regard to
whether such Note has been marked to indicate such amendment or waiver.
No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon. 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, the term "this Agree-
ment" and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.
17.4. Notes held by Company, etc.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to
be given under this Agreement or the Notes, or have directed the taking of
any action provided herein or in the Notes to be taken upon the direction
of the holders of a specified percentage of the aggregate principal amount
of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight
delivery service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing;
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing; or
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of the Secretary, or at such
other address as the Company shall have specified to the holder of
each Note in writing.
Notices under this Section 18 will be deemed given only when actually
received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other informa-
tion previously or hereafter furnished to you, may be reproduced by you by
any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that, to the
extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by you in the regular course of
business) and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest
the original, or from introducing evidence to demonstrate the inaccuracy
of any such reproduction.
20. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you
and such Affiliate, shall contain such Affiliate's agreement to be bound
by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in Sec-
tion 6. Upon receipt of such notice, wherever the word "you" is used in
this Agreement (other than in this Section 20), such word shall be deemed
to refer to such Affiliate in lieu of you. In the event that such
Affiliate is so substituted as a purchaser hereunder and such Affiliate
thereafter transfers to you all of the Notes then held by such Affiliate,
upon receipt by the Company of notice of such transfer, wherever the word
"you" is used in this Agreement (other than in this Section 20), such word
shall no longer be deemed to refer to such Affiliate, but shall refer to
you, and you shall have all the rights of an original holder of the Notes
under this Agreement.
21. MISCELLANEOUS.
21.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation,
any subsequent holder of a Note) whether so expressed or not.
21.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount 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 without including the
additional days elapsed in the computation of the interest payable on such
next succeeding Business Day except if the case of payment at the maturity
of the Notes.
21.3. Severability.
Any provision of this Agreement that 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 (to the full extent permitted by law) not
invalidate or render unenforceable such provision in any other jurisdic-
tion.
21.4. Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance
with any other covenant. Where any provision herein refers to action to
be taken by any Person, or which such Person is prohibited from taking,
such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
21.5. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof,
each signed by less than all, but together signed by all, of the parties
hereto.
21.6. Governing Law.
This Agreement shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State
of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other
than such State.
* * * * *
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it
to the Company, whereupon the foregoing shall become a binding agreement
between you and the Company.
Very truly yours,
BANTA CORPORATION
By: s/ Gerald A. Henseler
Gerald A. Henseler
Executive Vice President
and Chief Financial
Officer
The foregoing is hereby
agreed to as of the
date hereof.
METROPOLITAN LIFE INSURANCE COMPANY
By: s/ John Endres
John Endres
Assistant Vice President
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY
By: s/Brad Rhoads
Brad Rhoads
Vice President
<PAGE>
PURCHASER SCHEDULE
Amount of
Name of Purchaser Series A Notes
METROPOLITAN LIFE INSURANCE COMPANY $25,000,000
1. Payments:
(1) All payments by wire transfer of
immediately available funds to:
The Chase Manhattan Bank, N.A.
33 East 23rd Street
New York, New York 10010
ABA #021000021
Acct. of Metropolitan Life Insurance Company
Acct. # _____________
With reference to PPN # ___________
with sufficient information to
identify the source and application
of such funds.
2. Notices:
All notices and other communications:
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attention: Treasurer
With a copy to:
Metropolitan Life Insurance Company
One Lincoln Centre, Suite 800
Oakbrook Terrace, Illinois 60181
Attention: Vice-President
Telecopy #: (708) 916-2575
3. Taxpayer ID No.:
13-5581829
Amount of
Name of Purchaser Series A Notes
METROPOLITAN PROPERTY AND CASUALTY $10,000,000
INSURANCE COMPANY
1. Payments:
(1) All payments by wire transfer of
immediately available funds to:
The Chase Manhattan Bank, N.A.
33 East 23rd Street
New York, New York 10010
ABA #021000021
Acct. of Metropolitan Property and
Casualty Insurance Company
Acct. # ____________
With reference to PPN # ____________
with sufficient information to
identify the source and application
of such funds.
2. Notices:
All notices and other communications:
Metropolitan Life Insurance Company
700 Quaker Lane
Warwick, Rhode Island 02886
Attention: Treasurer
With a copy to:
Metropolitan Life Insurance Company
One Lincoln Centre, Suite 800
Oakbrook Terrace, Illinois 60181
Attention: Vice-President
Telecopy #: (708) 916-2575
3. Taxpayer ID No.:
13-2725441
<PAGE>
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the re-
spective meanings set forth below or set forth in the Section hereof
following such term:
"Acceptance" shall have the meaning specified in Section 2.2(e).
"Acceptance Call" shall have the meaning specified in Section 2.2(e).
"Acceptance Day" shall have the meaning specified in Section 2.2(e).
"Accepted Note" shall have the meaning specified in Section 2.2(e).
"Affiliate" means, at any time, and with respect to any Person, any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the
context otherwise clearly requires, any reference to an "Affiliate" is a
reference to an Affiliate of the Company.
"Agreement" means the Note Purchase and Medium-Term Note Agreement,
dated as of November 2, 1995, by and between the Company, Metropolitan and
MPC.
"Authorized Officer" shall mean (i) in the case of the Company, its
chief executive officer, its chief financial officer, its treasurer, or
its Secretary, and (ii) in the case of Metropolitan, any officer of
Metropolitan designated as its "Authorized officer" in the Information
Schedule or any officer of Metropolitan 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
Metropolitan 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
Metropolitan by any individual who on or after the date of this Agreement
shall have been an Authorized Officer of Metropolitan, and whom the
Company in good faith believes to be an Authorized Officer of Metropolitan
at the time of such action shall be binding on Metropolitan, even though
such individual shall have ceased to be an Authorized Officer of
Metropolitan.
"Available Facility Amount" shall have the meaning specified in
Section 2.2(a).
"Bankruptcy Law" shall have the meaning specified in Section 11(h).
"Business Day" means (a) for the purposes of Section 8.6 only, any
day other than a Saturday, a Sunday or a day on which commercial banks in
New York, New York are required or authorized to be closed, and (b) for
the purposes of any other provision of this Agreement, any day other than
a Saturday, a Sunday or a day on which commercial banks in New York, New
York or [Milwaukee, Wisconsin] are required or authorized to be closed.
"Cancellation Date" shall have the meaning specified in Section
2.2(g)(ii).
"Cancellation Fee" shall have the meaning specified in Section
2.2(g)(ii).
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset
and the incurrence of a liability in accordance with GAAP.
"Capitalized Lease Obligation" means any rental obligation which,
under GAAP, 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 GAAP.
"Closing" is defined in Section 3.
"Closing Day" means the Series A Closing Day or any Medium-Term
Closing Day, as the case may be.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to
time.
"Company" means Banta Corporation, a Wisconsin corporation.
"Confirmation of Acceptance" shall have the meaning specified in
Section 2.2(e).
"Consolidated Assets" means, as of any time of determination thereof,
the total assets of the Company and its Subsidiaries determined on a
consolidated basis.
"Consolidated Funded Debt" means, as of any time of determination
thereof, the Funded Debt of the Company and its Subsidiaries determined on
a consolidated basis.
"Consolidated Net Earnings" means, 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.
"Consolidated Tangible Net Worth" means, as of any time of any
determination thereof, the excess of (a) the sum of (i) 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) (ii) the amount of the consolidated surplus, whether capital or
earned, of the Company and its Subsidiaries, over (b) 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, 1995].
"Current Debt" means, 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" means Funded Debt and Current Debt.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both,
become an Event of Default.
"Default Rate" means that rate of interest that is the greater of
(i) 1% per annum above the rate of interest stated in clause (a) of the
first paragraph of the Notes and (ii) 1% over the rate of interest
publicly announced by The Chase Manhattan Bank, N.A. in New York, New York
as its "base" or "prime" rate.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment,
including but not limited to those related to hazardous substances or
wastes, air emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incor-
porated) that is treated as a single employer together with the Company
under section 414 of the Code.
"Event of Default" shall have the meaning specified in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Facility" shall have the meaning specified in paragraph 2.2(a).
"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.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary conducts
all or any part of its business, or which asserts jurisdiction over
any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guarantee" means, with respect to any Person, any direct of
indirect liability, contingent or otherwise, of such Person with respect
to any indebtedness, lease, dividend or other obligation or 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
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 maturity (as
determined by Metropolitan) most closely matches the maturity of such
Accepted Note.
"holder" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant
to Section 13.1.
"Hostile Tender Offer" means, 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" with respect to any Person means, at any time, without
duplication: (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with GAAP 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.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 10% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company,
savings and loan association or other financial institution, any pension
plan, any investment company, any insurance company, any broker or dealer,
or any other similar financial institution or entity, regardless of legal
form.
"Issuance Period" shall have the meaning specified in Section 2.2(b).
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person
under any conditional sale or other title retention agreement or Capital
Lease, upon or with respect to any property or asset of such Person
(including in the case of stock, stockholder agreements, voting trust
agreements and all similar arrangements).
"Make-Whole Amount" shall have the meaning specified in Section 8.6.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties
of the Company and its Subsidiaries taken as a whole, or (b) the ability
of the Company to perform its obligations under this Agreement and the
Notes, or (c) the validity or enforceability of this Agreement or the
Notes.
"Material Subsidiary" means, 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.
"Medium-Term Closing Day" for any Medium-Term Note that is an
Accepted Note, means the Business Day specified for the closing of the
purchase and sale of such Medium-Term Note in the Request for Purchase of
such Medium-Term 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 Medium-Term Note agree on an earlier Business
Day for such closing, the "Medium-Term Closing Day" for such Accepted Note
shall be such earlier Business Day, and (ii) if the closing of the
purchase and sale of such Medium-Term Note is rescheduled pursuant to
Section 2.2(f), the Medium-Term Closing Day for such Accepted Note, for
all purposes of this Agreement except Section 2.2(g)(ii), shall mean the
Rescheduled Closing Day with respect to such Closing.
"Medium-Term Notes" shall have the meaning specified in Section 1.2.
"Metropolitan" means Metropolitan Life Insurance Company.
"Metropolitan Affiliate" means any corporation of other entity all of
the Voting Stock (or equivalent voting securities or interests) of which
is owned by Metropolitan either directly or through Metropolitan
Affiliates.
"MPC" means Metropolitan Property and Casualty Insurance Company.
"Multiemployer Plan" means any Plan that is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
"Note" or "Notes" shall have the meaning specified in Section 1.2.
"Officer's Certificate" means a certificate of an Authorized Officer
of the Company whose responsibilities extend to the subject matter of such
certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Percentage of Assets Transferred" means, with respect to each asset
Transferred pursuant to Section 10.4, 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" means, with respect to
each asset Transferred pursuant to Section 10.4, 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" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3)
of ERISA) that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the
Company or any ERISA Affiliate or with respect to which the Company or any
ERISA Affiliate may have any liability.
"Priority Debt" means, 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.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible,
choate or inchoate.
"Purchaser(s)" means the Series A Purchasers and the Term Purchasers,
or any of them.
"Purchaser Schedule" means the schedule attached as Schedule A to the
Agreement, setting forth, among other things, the names of each Series A
Purchaser and the principal amount of Series A Notes to be purchased by
each of them.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Request for Purchase" shall have the meaning specified in paragraph
2.2(c).
"Required Holders" means, at any time, the holders of at least 66
2/3% in principal amount of the Notes at the time outstanding (exclusive
of Notes then owned by the Company or any of its Affiliates).
"Rescheduled Closing Day" shall have the meaning specified in
Section 2.2(f).
"Responsible Officer" means any Authorized Officer or Senior
Financial Officer of the Company and any other officer of the Company with
responsibility for the administration of the relevant portion of this
agreement.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"Series A Closing Day" shall have the meaning specified in Section
2.1.
"Series A Notes" shall have the meaning specified in Section 1.1.
"Series A Purchaser(s)" means Metropolitan and MPC.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and
any partnership or joint venture if more than a 50% interest in the
profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless
such partnership can and does ordinarily take major business actions
without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"Tangible Capitalization" means, as of any time of determination
thereof, the sum of Consolidated Tangible Net Worth and Consolidated
Funded Debt.
"Term Purchaser(s)" means Metropolitan and each Metropolitan
Affiliate as purchaser of any Medium-Term Note.
"Three Year Percentage of Assets Transferred" means, 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" means, 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" means, with respect to any item, the sale, exchange,
conveyance, lease, transfer or other disposition of such item.
"Transferee" means any direct or indirect transferee of all or any
part of any Note purchased under this Agreement.
"Voting Stock" means, 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).
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or
more of the Company and the Company's other Wholly-Owned Subsidiaries at
such time.
<PAGE>
EXHIBIT 1
[FORM OF SENIOR PROMISSORY NOTE]
BANTA CORPORATION
SERIES __ SENIOR PROMISSORY NOTE DUE [__________, ____]
No. [_____] [Date]
$[_______] PPN[______________]
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 [ , ], with interest (computed on the basis
of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of [____]% per annum from the date hereof, payable
[semiannually], on the [___] day of [__________] and [_________] in each
year, commencing with the [_________] or [_________] next succeeding the
date hereof, until the principal hereof shall have become due and payable,
and (b) to the extent permitted by law on any overdue payment (including
any overdue prepayment) of principal, any overdue payment of interest and
any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable [semiannually] as afore-
said (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) [ ]% or
(ii) 1% over the rate of interest publicly announced by The Chase
Manhattan Bank, N.A. in New York, New York from time to time as its "base"
or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States
of America at the principal office of The Chase Manhattan Bank, N.A. in
New York, New York, or at such other place as the Company shall have des-
ignated by written notice to the holder of this Note as provided in the
Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant the Note Purchase and Medium-Term Note Agreement,
dated as of November 2, 1995 (as from time to time amended, the "Note
Purchase Agreement"), between the Company and Metropolitan Life Insurance
Company and Metropolitan Property and Casualty Insurance Company, and is
entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, to have made the representation set
forth in Section 6.2 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
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 a like 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 will not
be affected by any notice to the contrary.
[The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement.] [This Note
is [also] subject to [optional] prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.] [This Note is not subject to prepayment.]
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including
any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than
such State.
BANTA CORPORATION
By_________________________
Name:
Title:
<PAGE>
EXHIBIT 2.2(d)
[FORM OF REQUEST FOR PURCHASE]
BANTA CORPORATION
_______ __, 199_
Reference is hereby made to the Note Purchase and Medium-Term Note
Agreement (the "Agreement"), dated as of November 2, 1995, by and between
Banta Corporation (the "Company"), Metropolitan Life Insurance Company,
Metropolitan Property and Casualty Insurance Company and each Metropolitan
Affiliate which becomes a party thereto. Capitalized terms used herein,
to the extent not otherwise defined herein, shall have the respective
meanings assigned to them in the Agreement, as such Agreement may be
amended from time to time.
Pursuant to Section 2.2(d) of the Agreement, the Company hereby makes the
following Request for Purchase:
1. Aggregate principal amount of Medium-Term Notes requested hereby (the
"Notes"): $ ___________________.
2. Individual specifications of the Notes:
Principal
Final Prepayment Weighted Interest
Principal Maturity Dates and Average Payment
Amount/1 Date Amounts Life Period
____________
1/ Minimum principal amount of [$5,000,000].
3. Use of proceeds of the Notes:
4. Proposed Medium-Term Closing Day:
5. The purchase price of the Notes 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 hereby certifies that: (i) the representations and
warranties of the Company contained in Section 5 of the Agreement are
true and correct on and as of the date of this Request for Purchase,
to the same extent as though made on and as of the date hereof,
except to the extent of changes caused by the transactions
contemplated in the Agreement; (ii) as of the date of this Request
for Purchase, no Event of Default or Default has occurred and is
continuing under the Agreement and, after giving effect to the
issuance and sale of the Notes on the Medium-Term Closing Day, no
Event of Default or Default shall occur under the Agreement; and
(iii) the principal amount of the proposed issuance of Notes will not
cause the cumulative aggregate principal amount of all Medium-Term
Notes issued under the Agreement to exceed $40,000,000.
BANTA CORPORATION
By: _____________________
Authorized Officer
<PAGE>
EXHIBIT 2.2(e)
[FORM OF CONFIRMATION OF ACCEPTANCE]
BANTA CORPORATION
Reference is hereby made to the Note Purchase and Medium-Term Note
Agreement (the "Agreement"), dated as of November 2, 1995, by and between
Banta Corporation (the "Company") and Metropolitan Life Insurance Company
and each Metropolitan Affiliate which becomes a party thereto.
Capitalized terms used herein, to the extent not otherwise defined herein,
shall have the respective meanings assigned to them in the Agreement, as
such Agreement may be amended from time to time.
Metropolitan or the Metropolitan Affiliate which is named below as a
Purchaser of Notes hereby confirms the representations as to such Notes
set forth in Section 6 of the Agreement, and agrees to be bound by the
provisions of Sections 2.2(e) and 2.2(f) of the Agreement relating to the
purchase and sale of such Notes.
Pursuant to Section 2.2(e) of the Agreement, an Acceptance with respect to
the following Accepted Notes is hereby confirmed:
1. Accepted Notes: Aggregate Principal Amount of $ ________________.
(A) (i) Name of Purchaser:
(ii) Principal Amount:
(iii) Final maturity date:
(iv) Principal prepayment dates and amounts:
(v) Interest rate:
(vi) Interest payment period:
(vii) Payment and notice instructions: As set
forth on the attached Purchaser Schedule
(B) (i) Name of Purchaser:
(ii) Principal Amount:
(iii) Final maturity date:
(iv) Principal prepayment dates and amounts:
(v) Interest rate:
(vi) Interest payment period:
(vii) Payment and notice instructions: As set forth on the
attached Purchaser Schedule
[(C) and (D)... same information as above]
2. Medium-Term Closing Day: ____________.
[In connection with the purchase of Notes by Metropolitan pursuant to
this Confirmation of Acceptance, Metropolitan hereby advises the Company
that $__________ of the Notes so to be issued to Metropolitan are being
acquired for ___ separate accounts maintained by Metropolitan and
identified on Schedule I hereto. Also set forth on Schedule I hereto are
those "employee benefit plans" (as defined in ERISA) whose assets in such
separate accounts constitute more than 10% of the total assets of such
separate accounts on the date hereof. The Company by its execution of
this Confirmation of Acceptance, agrees and acknowledges that neither the
Company nor any ERISA Affiliate is a "party in interest" (as defined in
ERISA) with respect to such employee benefit plans.]/1
1/ This paragraph to be inserted in the event the Purchaser is a Separate
Account of Metropolitan.
METROPOLITAN LIFE INSURANCE COMPANY
By:________________________________
Name:
Title:
BANTA CORPORATION
hereby accepts, agrees to and
confirms the foregoing Confirmation
of Acceptance as of the date set forth
above, and hereby certifies that neither
BANTA CORPORATION nor any ERISA
Affiliate is a "party in interest"
(as above defined) with respect to the
"employee benefit plans" (as above
defined) set forth on Schedule I
hereto.
BANTA CORPORATION
By:________________________
Name:
Title:
<PAGE>
SCHEDULE I
Employee Benefit Plans
Metropolitan Separate Having Greater Than Amount of Notes
Accounts Acquiring 10% Interest in the to be Purchased
Notes Separate Account by Separate Account
<PAGE>
EXHIBIT 4.4
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY
Matters To Be Covered In
Opinion of Special Counsel To the Company
1.Each of the Company and its Subsidiaries being
duly incorporated, validly existing and in good standing and having
requisite corporate power and authority to issue and sell the Notes and to
execute and deliver the documents.
2.Each of the Company and its Subsidiaries being
duly qualified and in good standing as a foreign corporation in
appropriate jurisdictions.
3.Due authorization and execution of the
documents and such documents being legal, valid, binding and enforceable.
4.No conflicts with charter documents, laws or
other agreements.
5.All consents required to issue and sell the
Notes and to execute and deliver the documents having been obtained.
6.No litigation questioning validity of
documents.
7.The Notes not requiring registration under the
Securities Act of 1933, as amended; no need to qualify an indenture under
the Trust Indenture Act of 1939, as amended.
8.No violation of Regulations G, T or X of the
Federal Reserve Board.
9.Company not an "investment company", or a
company "controlled" by an "investment company", under the Investment
Company Act of 1940, as amended.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF BANTA CORPORATION AS OF AND FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 9,310
<SECURITIES> 0
<RECEIVABLES> 179,748
<ALLOWANCES> 4,313
<INVENTORY> 76,752
<CURRENT-ASSETS> 276,111
<PP&E> 570,335
<DEPRECIATION> 266,044
<TOTAL-ASSETS> 620,717
<CURRENT-LIABILITIES> 119,888
<BONDS> 102,724
<COMMON> 2,028
0
0
<OTHER-SE> 301,526
<TOTAL-LIABILITY-AND-EQUITY> 620,717
<SALES> 717,567
<TOTAL-REVENUES> 717,567
<CGS> 559,030
<TOTAL-COSTS> 559,030
<OTHER-EXPENSES> 86,743
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,847
<INCOME-PRETAX> 65,329
<INCOME-TAX> 26,100
<INCOME-CONTINUING> 39,229
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,229
<EPS-PRIMARY> 1.93
<EPS-DILUTED> 1.93
</TABLE>
