CONNER PERIPHERALS, INC.
Note Agreement
Dated as of March 29, 1991
$80,000,000 Series A Senior Notes due March 30, 1996
$25,000,000 Series B Senior Notes due March 30, 1998
FIFTH AMENDMENT TO NOTE AGREEMENT
Dated as of December 22, 1993
To Each of the Persons Signatory
Hereto as Holders of Notes
Ladies and Gentlemen:
CONNER PERIPHERALS, INC. (together with its successors and assigns, the
"Company"), a Delaware corporation, hereby agrees with you as follows:
1. PRELIMINARY STATEMENT.
1.1 The Company entered into those certain separate Note Agreements, each
dated as of March 29, 1991 (collectively, as in effect immediately prior to the
Effective Date, the "Existing Note Agreement," and, as amended hereby, the
"Amended Note Agreement"), with each of The Prudential Insurance Company of
America, Principal Mutual Life Insurance Company, Connecticut Mutual Life
Insurance Company, CIGNA Property and Casualty Insurance Company, Connecticut
General Life Insurance Company, New England Mutual Life Insurance Company, AID
Association for Lutherans, and General American Life Insurance Company
(individually, a "Purchaser," and collectively, the "Purchasers"), pursuant to
which the Company issued and sold to the Purchasers, and the Purchasers
purchased from the Company, an aggregate principal amount of Eighty Million
Dollars ($80,000,000) of the Company's Series A Senior Notes due March 30, 1996
and Twenty Five Million Dollars ($25,000,000) of the Company's Series B Senior
Notes due March 30, 1998 (collectively, as in effect immediately prior to the
Effective Date, the "Existing Notes," and as amended hereby, the "Amended
Notes").
1.2 The Existing Note Agreement has been, prior to the Effective Date, and
by agreement by the parties thereto, amended pursuant to that certain Waiver and
First Amendment to Note Agreement, dated as of February 5, 1992, that certain
Second Amendment to Note Agreement, dated as of July 29, 1992, that certain
Third Amendment to Note Agreement, dated as of December 18, 1992, that certain
Fourth Amendment to Note Agreement, dated as of June 25, 1993, and that certain
Assumption Agreement, dated as of August 31, 1992.
1.3 As of the date hereof, The Prudential Insurance Company of America
holds Thirty-Five Million Dollars ($35,000,000) in principal amount of the
Existing Notes, Principal Mutual Life Insurance Company holds Twenty-Five
Million Dollars ($25,000,000) in principal amount of the Existing Notes,
Connecticut General Life Insurance Company holds Forty Million
Dollars ($40,000,000) in principal amount of the Existing Notes, and General
American Life Insurance Company holds Five Million Dollars ($5,000,000) in
principal amount of the Existing Notes. The Persons signatory hereto as
holders of the Notes (the "Holders") are the holders of one hundred percent
(100%) of the Existing Notes outstanding as of the Effective Date.
1.4 The Company and each of the Holders desire to amend and restate in
full the Existing Note Agreement and the Existing Notes, and to execute this
Amendment (the "Amendment") to effect such amendment and restatement.
1.5 The terms used herein and not defined herein have the meanings
specified in the Amended Note Agreement.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
2. AMENDMENTS TO THE EXISTING NOTE AGREEMENTS.
2.1 Amendment to Existing Note Agreement.
The Existing Note Agreement (including Exhibit A1 and Exhibit A2 thereto,
but not including Exhibit B1, Exhibit B2, Exhibit C, Exhibit D, Annex 1, Annex
2, Annex 3 and Annex 4 thereto) is hereby amended and restated in full in the
form attached hereto as Exhibit A.
2.2 Amendment of Existing Notes.
(a) The form of 8.84% Senior Note due March 30, 1996 attached to the
Existing Note Agreement as Exhibit A1 is hereby amended and restated in
full in the form attached as Exhibit A1 to the Amended Note Agreement.
(b) The form of 9.08% Senior Note due March 30, 1998 attached to the
Existing Note Agreement as Exhibit A2 is hereby amended and restated in
full in the form attached as Exhibit A2 to the Amended Note Agreement.
(c) All Existing Notes outstanding on the Effective Date are hereby,
without any further action being required on the part of the holders
thereof or on the part of any other Person, deemed to be conformed to the
form of, and have the terms provided in, the Amended Notes attached to the
Amended Note Agreement as Exhibit A1 or Exhibit A2, as the case may be.
The outstanding Amended Notes shall be and are entitled to all of the
rights and benefits provided therefor in the Amended Note Agreement. Upon
the request of any holder of Notes, made in accordance with paragraph 11D
of the Amended Note Agreement, the Company shall deliver, pursuant to
paragraph 11D of the Amended Note Agreement, a new Note or Notes, in the
form of Exhibit A1 or Exhibit A2 attached to the Amended Note Agreement, as
the case may be.
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2.3 Waiver Letter.
That certain waiver agreement (the "Waiver") among the Company and the
Holders, dated as of November 12, 1993, as extended to the date hereof, pursuant
to which the Holders waived compliance with certain provisions of the Existing
Note Agreement, is hereby made permanent.
2.4 Understanding Re Definition of Liens.
The parties hereto agree and acknowledge that Section 4C of those certain
separate Note Agreements, dated as of June 1, 1989, in respect of the Company's
Series B Senior Notes due 1994, does not constitute or create a "Lien" under and
as defined in the Amended Note Agreement.
3. WARRANTIES AND REPRESENTATIONS.
To induce the Holders to enter into this Amendment, the Company warrants
and represents to the Holders that as of the Effective Date:
3.1 Organization, Existence and Authority.
Each of the Company and the Restricted Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation. The Company has all requisite power and authority to execute and
deliver this Amendment and the Amended Notes.
3.2 Authorization, Execution and Enforceability.
The execution and delivery by the Company of this Amendment and the
performance by the Company of its obligations hereunder and under the Amended
Note Agreement and the Amended Notes have been duly authorized by all necessary
corporate action on the part of the Company. This Amendment has been duly
executed and delivered by the Company and this Amendment, the Amended Note
Agreement and the Amended Notes (the "Transaction Documents"), are valid and
binding obligations of the Company, enforceable in accordance with their
respective terms.
3.3 No Conflicts or Defaults.
Neither the execution and delivery by the Company of this Amendment, nor
the performance by the Company of its obligations under the Transaction
Documents, conflicts with, results in any breach in any of the provisions of,
constitutes a default under, violates or results in the creation of any Lien
upon any Property of the Company or any Subsidiary under the provisions of:
(a) any charter document or the bylaws of the Company or any of the
Subsidiaries;
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(b) any agreement, instrument or conveyance to which the Company or
any of the Subsidiaries or any of their respective Properties may be bound
or affected; or
(c) any statute, rule or regulation or any order, judgment or award
of any court, tribunal or arbitrator by which the Company or any of the
Subsidiaries or any of their respective Properties may be bound or
affected.
3.4 Governmental Consent.
Neither the execution and delivery by the Company of this Amendment or the
Amended Notes, nor the performance by the Company of its obligations under the
Transaction Documents, is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
governmental authority on the part of any one or more of the Company and the
Subsidiaries as a condition thereto under the circumstances and conditions
contemplated by this Amendment.
3.5 Disclosure of Defaults under Existing Note Agreement.
After giving effect to the Waiver, no event has occurred and no condition
exists that would constitute a Default or an Event of Default under the Existing
Note Agreement, and no event has occurred and no condition exists that would
constitute a Default or an Event of Default under the Amended Note Agreement.
4. CONDITIONS PRECEDENT TO THIS AMENDMENT.
The amendment of the Existing Note Agreement and the Existing Notes
provided for in Section 2 hereof shall not become effective until a counterpart
of the certificate attached hereto as Exhibit B shall have been executed and
delivered by each of the Holders to the Company, on or prior to December 22,
1993 (the date of such satisfaction being herein referred to as the "Effective
Date"). The Holders shall not deliver such certificate until the following
conditions precedent have been satisfied in the opinion of the Holders.
4.1 No Default; Representations And Warranties True.
No Default or Event of Default under the Amended Note Agreement shall exist
and the warranties and representations set forth in Section 3 hereof shall be
true and correct on the Effective Date.
4.2 Authorization of Transactions.
The Company shall have authorized, by all necessary corporate action, the
execution and delivery of this Amendment and each of the other documents and
instruments executed and delivered in connection herewith and the performance of
all obligations of, and the satisfaction of all conditions precedent pursuant to
this Section 4 by, and the consummation of all transactions contemplated by
this Amendment by, the Company. The Holders shall have received a certificate,
in form and substance satisfactory to the Holders certifying the adoption of
resolutions of the board of directors of the Company authorizing such execution,
delivery, performance, satisfaction and consummation, which resolutions shall be
attached
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to such certificate and shall be in full force and effect. The certificate
shall indicate that there has been no resolution passed by the board of
directors of the Company which conflicts with, amends or rescinds such
resolutions.
4.3 Payment of Restructuring Fee.
The Company shall have paid to the Holders on the Effective Date, by wire
transfer of immediately available funds, an aggregate amount of One Hundred Five
Thousand Dollars ($105,000) as a restructuring fee in respect of the
transactions contemplated by this Amendment. Such payment shall be divided
among and paid to each of the Holders in proportion, as nearly as practicable,
to the respective unpaid principal amount of Existing Notes held by each Holder
at such time, in the manner provided in the Existing Note Agreement for the
payment of principal.
4.4 Execution of Documents and Agreements.
The Company shall have entered into a binding commitment (the "Commitment")
with Bank of America whereby the Bank of America has agreed to arrange a
revolving loan facility (the "Revolving Loan") for the Company for a period of
not less than two (2) years from the Effective Date and in an amount of not less
than Fifty Million Dollars ($50,000,000). The Company shall have delivered to
each Holder a true and correct copy of the executed commitment with respect to
such revolving loan facility as in effect on the Effective Date, which shall be
in form and substance satisfactory to the Holders.
4.5 Arcada Holdings, Inc.
The Company shall have provided you with a true and correct copy of that
certain Letter of Intent dated as of December 13, 1993, as in effect on the
Effective Date, which Letter of Intent correctly describes the transactions
related to the acquisition of Quest Development Corporation by Arcada Holdings,
Inc., the formation and capitalization of Arcada Holdings, Inc. and the related
material transactions.
4.6 Expenses.
The Company shall have paid all costs and expenses of the Holders relating
to this Amendment and the Waiver, in accordance with paragraph 11B of the
Existing Note Agreement.
4.7 Proceedings Satisfactory.
All proceedings taken in connection with this Amendment and all documents
and papers relating thereto shall be satisfactory to the Holders and their
special counsel. The Holders and their special counsel shall have received
copies of such documents and papers as they may reasonably request in connection
therewith, in form and substance satisfactory to them.
5. CONDITION SUBSEQUENT.
5
The amendment of the Existing Note Agreement and the Existing Notes
provided for in Section 2 hereof shall terminate and be of no force or effect
on and after January 31, 1994, unless on or prior to such date, the Revolving
Loan shall have become effective on substantially the same terms as provided in
the Commitment, and the Company shall have delivered to each Holder a true and
correct copy of the agreement constituting the Revolving Loan as in effect at
the time of such delivery.
6. WAIVER AND AFFIRMATION OF OBLIGATIONS.
The terms of this Amendment shall not operate as a waiver by the Holders
of, or otherwise prejudice the Holders' rights, remedies or powers under, the
Existing Note Agreement, the Existing Notes or under applicable law, except to
the extent provided herein. Except as expressly provided herein and in the
Amended Note Agreement and the Amended Notes:
(a) no terms and provisions of any agreement (including, without
limitation, the Existing Note Agreement and the Existing Notes) are
modified or changed by this Amendment; and
(b) the terms and provisions of the Existing Note Agreement and the
Existing Notes shall continue in full force and effect.
The Company hereby acknowledges and affirms all of its obligations and duties
under the Amended Note Agreement and the Amended Notes.
7. MISCELLANEOUS.
7.1 Section Headings, etc.
The titles of the Sections appear as a matter of convenience only, do not
constitute a part hereof and shall not affect the construction hereof. The
words "herein," "hereof," "hereunder" and "hereto" refer to this Amendment as a
whole and not to any particular Section or other subdivision.
7.2 Governing Law.
THIS AMENDMENT AND THE AMENDED NOTES SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.
7.3 Duplicate Originals; Execution in Counterpart.
Two or more duplicate originals of this Amendment may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument. This Amendment may be executed in one
or more counterparts and shall be effective when at least one counterpart shall
have been executed by each party hereto, and each set of counterparts which,
collectively, show execution by each party hereto shall constitute one duplicate
original.
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7.4 Waivers and Amendments.
Neither this Amendment nor any term hereof may be changed, waived,
discharged or terminated orally, or by any action or inaction, but only by an
instrument in writing signed by each of the parties signatory hereto. The terms
and provisions of the Amended Note Agreement and the Amended Notes may be
further amended or modified in accordance with the provisions of the Amended
Note Agreement.
7.5 Successors and Assigns.
This Amendment shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Notes, and
shall be enforceable by any such holder, whether or not an express assignment to
such holder of rights hereunder shall have been made by you or your successor or
assign.
7.6 Entire Agreement.
This Amendment constitutes the final written expression of all of the terms
hereof and is a complete and exclusive statement of those terms.
[Remainder of Page Intentionally Blank. Next Page is Signature Page]
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If this Amendment is satisfactory to you, please so indicate by signing the
acceptance at the foot of a counterpart hereof and returning such counterpart to
the Company, whereupon this Amendment shall become binding between us in
accordance with its terms.
CONNER PERIPHERALS, INC.
By: /s/ P. Jackson Bell
---------------------------------------
Name:
Title:
Agreed and Accepted by the Holders of the Notes:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ The Prudential Insurance Company of America
---------------------------------------
Name:
Title:
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By: /s/ Principal Mutual Life Insurance Company
---------------------------------------
Name:
Title:
By: /s/ Principal Mutual Life Insurance Company
---------------------------------------
Name:
Title:
[SIGNATURE PAGE to AMENDMENT NO. 5, dated as of DECEMBER 22, 1993, to CONNER
PERIPHERALS, INC.'S NOTE AGREEMENT dated as of MARCH 29, 1991].
8
CIG & CO.
c/o CIGNA Investments, Inc.
By: /s/ CIG & CO
---------------------------------------
Name:
Title:
GENERAL AMERICAN LIFE INSURANCE COMPANY
By: /s/ General American Life Insurance Company
---------------------------------------
Name:
Title:
[SIGNATURE PAGE to AMENDMENT NO. 5, dated as of DECEMBER 22, 1993, to CONNER
PERIPHERALS, INC.'S NOTE AGREEMENT dated as of MARCH 29, 1991].
9
EXHIBIT A
TO AMENDMENT NO. 5
AMENDED AND RESTATED NOTE AGREEMENT
[Exhibit A begins on the next page]
Exhibit A-1
================================================================================
CONNER PERIPHERALS, INC.
------------------------
NOTE AGREEMENT
------------------------
Dated as of March 29, 1991
as amended by
Waiver and First Amendment to Note Agreement, dated as of February 5, 1992
Second Amendment to Note Agreement, dated as of July 29, 1992
Third Amendment to Note Agreement, dated as of December 18, 1992
Fourth Amendment to Note Agreement, dated as of June 25, 1993
Fifth Amendment to Note Agreement, dated as of December 22, 1993
Assumption Agreement, dated as of August 31, 1992
$80,000,000 Series A Senior Notes Due March 30, 1996
$25,000,000 Series B Senior Notes Due March 30, 1998
================================================================================
Exhibit A-2
TABLE OF CONTENTS
(Not Part of Agreement)
PAGE
1. AUTHORIZATION OF ISSUE OF NOTES...................................... 1
2. PURCHASE AND SALE OF NOTES........................................... 2
3. CONDITIONS OF CLOSING................................................ 2
3A. Opinion of Purchaser's Special Counsel........................ 2
3B. Opinion of Company's Counsel.................................. 2
3C. Representations and Warranties; No Default.................... 2
3D. Sale of Notes to Other Purchasers............................. 2
3E. Purchase Permitted by Applicable Laws......................... 3
3F. Private Placement Number...................................... 3
3G. Closing Expenses.............................................. 3
3H. Proceedings................................................... 3
4. PREPAYMENTS.......................................................... 3
4A. Required Prepayments.......................................... 3
4B. Optional Prepayment With Yield-Maintenance Amount............. 4
4C. Notice of Optional Prepayment................................. 4
4D. Partial Payments Pro Rata..................................... 4
4E. Required Prepayments Upon Change in Control................... 4
4F. Retirement of Notes........................................... 5
5. AFFIRMATIVE COVENANTS................................................ 5
5A. Financial Statements.......................................... 5
5B. Inspection of Property........................................ 10
5C. Covenant to Secure Note Equally............................... 11
5D. ERISA Compliance.............................................. 11
5E. Payment of Taxes and Claims................................... 11
5F. Maintenance of Properties and Corporate Existence............. 12
5G. Payment of Notes and Maintenance of Office.................... 13
6. NEGATIVE COVENANTS................................................... 13
6A. Consolidated Tangible Net Worth............................... 13
6B. Consolidated Debt............................................. 14
6C. Consolidated Fixed Charges; Consolidated Net Income........... 16
6D. Liens......................................................... 16
6E. Sale/Leaseback Transactions................................... 19
6F. Restricted Subsidiary Debt and Preferred Stock................ 20
6G. Merger and Consolidation; Sale of Assets...................... 20
6H. Permitted Investments......................................... 24
6I. Transactions with Affiliates.................................. 29
6J. Line of Business.............................................. 29
6K. Designation of Subsidiaries................................... 29
6L. Private Offering.............................................. 29
6M. Subordinated Debt............................................. 29
Exhibit A-ii
TABLE OF CONTENTS (Cont.)
(Not Part of Agreement)
PAGE
6N. Liquidity Coverage............................................ 31
6O. Restricted Payments........................................... 31
6P. Accounting Period............................................. 31
7. EVENTS OF DEFAULT.................................................... 31
7A. Acceleration.................................................. 31
7B. Other Remedies................................................ 34
7C. Annulment of Acceleration of Notes............................ 34
8. REPRESENTATIONS AND WARRANTIES....................................... 35
8A. Corporate Organization and Authority; Compliance with Law..... 35
8B. Conflicting Agreements and Other Matters...................... 36
8C. Sale is Legal and Authorized; Notes are Enforceable........... 36
8D. Financial Statements.......................................... 36
8E. Material Adverse Change....................................... 37
8F. Actions Pending............................................... 37
8G. Outstanding Debt.............................................. 37
8H. Taxes......................................................... 37
8I. Title to Properties; Patents and Copyrights................... 37
8J. Environmental Compliance...................................... 38
8K. ERISA......................................................... 38
8L. No Defaults................................................... 39
8M. Regulation G, etc............................................. 39
8N. Offering of Notes............................................. 39
8O. Governmental Consent.......................................... 39
8P Certain Laws.................................................. 40
8Q. Disclosure.................................................... 40
8R. No Unrestricted Subsidiaries.................................. 41
9. REPRESENTATIONS OF THE PURCHASER..................................... 41
10. DEFINITIONS.......................................................... 41
10A. Yield-Maintenance Terms....................................... 41
10B. Other Terms................................................... 43
11. MISCELLANEOUS........................................................ 61
11A. Note Payments................................................. 61
11B. Expenses...................................................... 61
11C. Consent to Amendments......................................... 61
11D. Form, Registration, Transfer and Exchange of
Notes; Lost Notes............................................. 62
11E. Persons Deemed Owners; Participations......................... 63
11F. Survival of Representations and Warranties; Entire
Agreement..................................................... 63
11G. Successors and Assigns........................................ 63
11H. Disclosure to Other Persons................................... 63
Exhibit A-iii
Table of Contents (Cont.)
(Not Part of Agreement)
PAGE
11I. Notices....................................................... 64
11J. Descriptive Headings.......................................... 65
11K. Governing Law................................................. 65
11L. Counterparts.................................................. 65
Annex 1 -- Purchaser Schedule
Annex 2 -- Information as to Company
Annex 3 -- Payment Instructions at Closing
Annex 4 -- Subordination Provisions
Exhibit A1 -- Form of Series A Senior Note Due March 30, 1996
Exhibit A2 -- Form of Series B Senior Note Due March 30, 1998
Exhibit B1 -- Form of Special Counsel Opinion
Exhibit B2 -- Form of Company Opinion
Exhibit C -- Form of Officers' Certificate
Exhibit D -- Form of Secretary's Certificate
Exhibit A-iv
CONNER PERIPHERALS, INC.
Note Agreement
$80,000,000 Senior Notes Due March 30, 1996
$25,000,000 Senior Notes Due March 30, 1998
Dated as of March 29, 1991
as amended through December 22, 1993
[Separately addressed to each of the
Purchasers listed on Annex 1 attached hereto]
Ladies and Gentlemen:
The undersigned, CONNER PERIPHERALS, INC., a California corporation
(together with its successors and assigns, including, as of August 31, 1992,
Conner Peripherals, Inc. a Delaware corporation as successor by merger to Conner
Peripherals, Inc. a California corporation, the "Company"), hereby agrees with
you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
(i) Authorization of Notes. The Company will authorize the issue of:
(a) Eighty Million Dollars ($80,000,000) in aggregate principal
amount of its and Series A Senior Notes due March 30, 1996 (the "Series A
Notes"); and
(b) Twenty-Five Million Dollars ($25,000,000) in aggregate principal
amount of its Series B Senior Notes due March 30, 1998 (the "Series B
Notes") (the Series A Notes and the Series B Notes are referred to in this
Agreement collectively as the "Notes").
(ii) Provisions.
(a) Each Series A Note shall bear interest as provided therein,
mature on March 30, 1996; and be in the form of the Note set out in Exhibit
A1 to this Agreement.
Exhibit A-1
(b) Each Series B Note shall bear interest as provided therein,
mature on March 30, 1998 and be in the form of the Note set out in Exhibit
A2 to this Agreement.
The term "Notes" as used in this Agreement shall include each Note delivered
pursuant to any provision of this Agreement or the Other Note Agreements
referred to in paragraph 2 of this Agreement and each Note delivered in
substitution or exchange for any such Note pursuant to any such provision.
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to you
and, subject to the terms and conditions set forth in this Agreement, you agree
to purchase from the Company the aggregate principal amount of Notes set forth
opposite your name in the Purchaser Schedule attached to this Agreement as Annex
1, at 100% of such aggregate principal amount. The Company will deliver to you,
at the offices of Hebb & Gitlin, a professional corporation, One State Street,
Hartford, Connecticut 06103, one or more Notes registered in your name,
evidencing the aggregate principal amount of Notes to be purchased by you and in
the denomination or denominations specified with respect to you in Annex 1 to
this Agreement, against payment of the purchase price thereof by transfer of
immediately available funds as directed by the Company on Annex 3 to this
Agreement on the date of closing, which shall be April 1, 1991 (the "Closing
Date"). Concurrently with the execution and delivery of this Agreement, the
Company is entering into other Note Agreements (the "Other Note Agreements")
identical with this Agreement (except as to the identity of the purchaser and
the principal amount of Notes to be purchased) with the other purchasers (the
"Other Purchasers") named in Annex 1 to this Agreement. The sale to you and the
sales to the Other Purchasers are to be separate and several sales.
3. CONDITIONS OF CLOSING. Your obligation to purchase and pay for the
Notes to be purchased by you hereunder is subject to the satisfaction, on or
before the Closing Date, of the following conditions:
3A. Opinion of Purchaser's Special Counsel. You shall have received from
Hebb & Gitlin, a professional corporation, which is acting as special counsel
for you in connection with this transaction, a favorable opinion satisfactory to
you and substantially in the form of Exhibit B1 to this Agreement.
3B. Opinion of Company's Counsel. You shall have received from Wilson,
Sonsini, Goodrich & Rosati, special counsel for the Company, a favorable opinion
satisfactory to you and substantially in the form of Exhibit B2 to this
Agreement.
3C. Representations and Warranties; No Default. The representations and
warranties contained in paragraph 8 of this Agreement shall be true on and as
of the Closing Date, except to the extent of changes caused by the transactions
contemplated in this Agreement; there shall exist on the Closing Date no Event
of Default or Default; and you shall have received a certificate dated the
Closing Date and signed by the President, a Vice-President or the Treasurer of
the Company, substantially in the form of Exhibit C to this Agreement,
certifying to both such effects, and a certificate dated the Closing Date and
signed by the Secretary or an Assistant Secretary of the Company, substantially
in the form of Exhibit D to this Agreement, with respect to the matters therein
set forth.
Exhibit A-2
3D. Sale of Notes to Other Purchasers. The Company shall have sold to the
Other Purchasers the Notes to be purchased by them on the Closing Date and shall
have received payment in full therefor.
3E. Purchase Permitted by Applicable Laws. The offer, purchase and sale
of, and payment for, the Notes to be purchased by you on the Closing Date on the
terms and conditions provided in this Agreement (including the use of the
proceeds of such Notes by the Company) shall not violate any applicable law or
governmental regulation (including, without limitation, Section 5 of the
Securities Act or Regulation G, T or X of the Board of Governors of the Federal
Reserve System) and shall not subject you to any tax, penalty, liability or
other onerous condition under or pursuant to any applicable law or governmental
regulation, and you shall have received such certificates or other evidence as
you may request to establish compliance with this condition.
3F. Private Placement Number. The Company shall have obtained a private
placement number for each series of the Notes from the CUSIP Division of
Standard & Poor's Corporation.
3G. Closing Expenses. The Company shall have paid the statement for fees
and disbursements of the special counsel to you and the Other Purchasers
presented on the Closing Date.
3H. Proceedings. All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated hereby and all documents
incident to this Agreement shall be satisfactory in substance and form to you,
and you shall have received all such counterpart originals or certified or other
copies of such documents as you may reasonably request.
4. PREPAYMENTS. The Notes shall be subject to prepayment with respect to
the required prepayments specified in paragraph 4A of this Agreement and also
under the circumstances set forth in paragraph 4B and paragraph 4E of this
Agreement.
4A. Required Prepayments.
(i) Series A Notes. Until the Notes shall be paid in full, the
Company shall apply to the prepayment of the Series A Notes, without
premium, the sum of $26,667,000 on March 30 in each of 1994 and 1995, and
such principal amounts of the Notes, together with interest thereon to the
prepayment dates, shall become due on such prepayment dates. The remaining
$26,666,000 principal amount of the Series A Notes, together with interest
accrued thereon, shall become due on the maturity date of the Series A
Notes.
(ii) Series B Notes. Until the Notes shall be paid in full, the
Company shall apply to the prepayment of the Series B Notes, without
premium, the sum of $5,000,000 on March 30 in each of the years 1994
through 1997, inclusive, and such principal amounts of the Notes, together
with interest thereon to the prepayment dates, shall become due on such
prepayment dates. The remaining $5,000,000
Exhibit A-3
principal amount of the Series B Notes, together with interest accrued
thereon, shall become due on the maturity date of the Series B Notes.
(iii) Application of Other Prepayments. Each prepayment of any Note
pursuant to paragraph 4E of this Agreement shall reduce pro rata the
prepayments becoming due after such prepayment and payments at maturity
required by paragraph 4A(i) and paragraph 4A(ii) of this Agreement in
respect of all Notes of the same series as such Note, such pro rata
reduction to be determined by multiplying any such prepayment or payment
by the quotient of the principal amount of the Note so prepaid divided by
the principal amount of Notes of the same series outstanding immediately
prior to such prepayment. Any prepayment of Notes pursuant to paragraph
4B of this Agreement shall be applied first, to the amount due on the
maturity date of the Notes and second, to the mandatory prepayments
applicable to the Notes, as set forth in this paragraph 4A, in the
inverse order of the maturity thereof.
4B. Optional Prepayment With Yield-Maintenance Amount. The Notes shall be
subject to prepayment, in whole at any time or from time to time in part (in a
minimum aggregate principal amount of $1,000,000 or integral multiples of
$100,000 in excess thereof, or if the aggregate principal amount of Notes
outstanding is less than $1,000,000, then such lesser aggregate principal
amount), at the option of the Company, at 100% of the principal amount so to be
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note.
4C. Notice of Optional Prepayment. The Company shall give the holder of
each Note irrevocable written notice of any prepayment to be made pursuant to
paragraph 4 of this Agreement not less than 10 Business Days prior to the
prepayment date, specifying such prepayment date and the principal amount of the
Notes, and of the Notes held by such holder, to be prepaid on such date and
stating that such prepayment is to be made pursuant to paragraph 4B of this
Agreement. Notice of prepayment having been given as aforesaid, the principal
amount of the Notes specified in such notice, together with interest thereon to
the prepayment date and together with the premium, if any, provided in this
Agreement, shall become due and payable on such prepayment date.
4D. Partial Payments Pro Rata. Upon any partial prepayment of Notes, the
principal amount so prepaid shall be allocated to all Notes at the time
outstanding in proportion to the respective aggregate principal amounts of Notes
then outstanding.
4E. Required Prepayments Upon Change in Control.
(i) Notice. In the event that the Company obtains actual knowledge
of a Change in Control, the Company shall, within 5 Business Days of
obtaining such knowledge, give written notice of such Change in Control to
each holder of Notes and, simultaneously with the sending of such notice,
use reasonable efforts to give telephonic advice of such Change in Control
to the investment officer of each such holder specified in Annex 1 to this
Agreement (as supplemented by written notice from each such holder). Each
such notice shall contain a description, in reasonable detail, of such
Change in Control.
Exhibit A-4
(ii) Consolidated Debt. If on any day during the period of twelve
complete consecutive calendar months commencing immediately after a
Change in Control, Consolidated Debt, determined as of such day, shall
exceed 125% of Consolidated Tangible Net Worth, determined as of such
day, the Company shall, within 5 Business Days after such day, give
written notice of such fact to each holder of Notes and, simultaneously
with the sending of such notice, use reasonable efforts to give
telephonic advice of such fact to the investment officer of each such
holder specified in Annex 1 to this Agreement (as supplemented by written
notice from each such holder). Such written notice (the "Offer Notice")
shall contain and constitute an irrevocable offer to prepay all, but not
less than all, the Notes held by such holder.
(iii) Offer to Purchase. To accept such offered prepayment, a holder
of Notes shall cause a written notice of such acceptance with respect to
all, but not less than all, the Notes held by such holder (which acceptance
will be irrevocable) to be delivered to the Company not later than the 90th
day following its receipt of the Offer Notice whereupon such offered
prepayment shall be due and payable on the 10th Business Day following
delivery of such acceptance to the Company (the date of such prepayment
being referred to as the "Control Prepayment Date"). Such offered
prepayment shall be made at 100% of the principal amount of Notes so to be
prepaid, plus interest thereon to the Control Prepayment Date and the
Yield-Maintenance Amount, if any, with respect to such Notes.
4F. Retirement of Notes. The Company shall not, and shall not permit any
of the Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in
part prior to their respective stated final maturities (other than by prepayment
pursuant to paragraph 4A, paragraph 4B or paragraph 4E of this Agreement or the
Other Note Agreements or upon acceleration of such final maturity pursuant to
paragraph 7A of this Agreement or the Other Note Agreements), or purchase, or
otherwise acquire, directly or indirectly, Notes held by any Person. Any Notes
so prepaid or otherwise retired by the Company shall not be deemed to be
outstanding for any purpose under this Agreement (including, without limitation,
any determination of the "Required Holders").
5. AFFIRMATIVE COVENANTS.
5A. Financial Statements. The Company covenants that it will deliver to
each holder of Notes (except with respect to the information referred to in
clause (viii) below which shall only be delivered to Significant Holders of
Notes) in duplicate:
(i) as soon as available and in any event within 90 days after the
end of each fiscal year (except in the case of subclause (c), as to which
the period shall be 120 days after the end of such fiscal year),
(a) consolidated statements of income and cash flows of the
Company and the Subsidiaries for such year, and a consolidated balance
sheet of the Company and the Subsidiaries as at the end of such year,
setting forth in each case in comparative form corresponding
consolidated figures from the preceding fiscal year, all in reasonable
detail and accompanied by the unqualified opinion
Exhibit A-5
of independent certified public accountants of recognized national standing
selected by the Company,
(b) consolidating statements of income and cash flows of the
Company and the Subsidiaries for such year, and consolidating
balance sheets of the Company and the Subsidiaries as at the end of
such year, all in reasonable detail; provided that such financial
statements shall not be required to be delivered if financial
statements for the same dates and periods are delivered pursuant to
subclause (c) of this clause (i), and
(c) consolidated statements of income and cash flows of the
Company and the Restricted Subsidiaries for such year, and a
consolidated balance sheet of the Company and the Restricted
Subsidiaries as at the end of such year, setting forth in each case in
comparative form corresponding consolidated figures from the preceding
fiscal year, all in reasonable detail and reviewed in accordance with
generally accepted auditing standards by independent public
accountants of recognized national standing selected by the Company
whose report on such review shall state that such accountants are not
aware of any material modifications that should be made to such
financial statements in order for them to be in conformity with
generally accepted accounting principles; provided that such financial
statements shall not be required to be delivered if no Material
Unrestricted Subsidiaries exist as of the end of the period covered by
such financial statements;
(ii) as soon as available and in any event within 45 days after the
end of each quarterly period (other than the last quarterly period) in each
fiscal year,
(a) consolidated statements of income and cash flows of the
Company and the Subsidiaries for such quarterly period and for the
period from the beginning of the current fiscal year to the end of
such quarterly period, and a consolidated balance sheet of the Company
and the Subsidiaries as at the end of such quarterly period, setting
forth in each case in comparative form figures for the corresponding
periods in the preceding fiscal year, all in reasonable detail,
subject to changes resulting from year-end adjustments,
(b) consolidating statements of income and cash flows of the
Company and the Subsidiaries for such quarterly period and for the
period from the beginning of the current fiscal year to the end of
such quarterly period, and consolidating balance sheets of the Company
and the Subsidiaries as at the end of such quarterly period, subject
to changes resulting from year-end adjustments, all in reasonable
detail; provided that such financial statements shall not be required
to be delivered if financial statements for the same dates and periods
are delivered pursuant to subclause (c) of this clause (ii), and
(c) consolidated statements of income and cash flows of the
Company and the Restricted Subsidiaries for such quarterly period and
for the period from the beginning of the current fiscal year to the
end of such quarterly period, and a consolidated balance sheet of the
Company and the Restricted Subsidiaries
Exhibit A-6
as at the end of such quarterly period, setting forth in each case
in comparative form figures for the corresponding periods in the
preceding fiscal year, all in reasonable detail, subject to changes
resulting from year-end adjustments; provided that such financial
statements shall not be required to be delivered if no Material
Unrestricted Subsidiaries exist as of the end of the period covered
by such financial statements;
(iii) together with each set of financial statements delivered
pursuant to clause (i) and clause (ii) of this paragraph 5A, a certificate
of a Responsible Officer,
(a) stating that (I) the accompanying financial statements
described in clause (a) of clause (i) or clause (ii), as the case may
be, of this paragraph 5A, present fairly the financial position and
results of operations of the companies being reported on, in
accordance with generally accepted accounting principles subject, in
the case of interim financial statements, to the absence of footnotes
and changes resulting from year-end adjustments, and (II) with
respect to the accompanying financial statements described in clause
(c) of clause (i) or clause (ii), as the case may be, of this
paragraph 5A (if such financial statements are required to be
delivered), such officer is not aware of any material modifications
that should be made to such financial statements in order for them to
be in conformity with generally accepted accounting principles
subject, in the case of interim financial statements, to the absence
of footnotes and changes resulting from year-end adjustments,
(b) stating that no Default or Event of Default then exists, or
if a Default or Event of Default exists, disclosing the nature and
period of existence of each such Default or Event of Default, and
describing all actions the Company has taken and intends to take in
respect to each such Default and Event of Default,
(c) certifying compliance, as of the last day of the period to
which such financial statements relate, with paragraph 6A, paragraph
6B, paragraph 6C, paragraph 6D(xv), paragraph 6E, paragraph 6F,
paragraph 6G(ii), and paragraph 6H(xx) of this Agreement, and setting
forth in reasonable detail the calculations necessary to demonstrate
such compliance, in a form reasonably acceptable to the Required
Holders,
(d) either
(I) stating that, during the period of eight consecutive
fiscal quarters of the Company most recently ended as of the date
of such certificate (the "Two Year Period"), the Company and the
Restricted Subsidiaries have not consummated any Transfer subject
to paragraph 6G(ii)(d) which requires any deduction pursuant to
subclause (cc) of paragraph 6G(ii)(d)(I) or paragraph
6G(ii)(d)(II) in order for such Transfer to be in compliance with
paragraph 6G(ii) or
(II) (aa) containing a brief description of all Transfers
consummated during the Two Year Period as to which such
Exhibit A-7
deduction was necessary in order for such compliance to be
achieved,
(bb) setting forth the respective dates on which such
Transfers were consummated,
(cc) setting forth the respective amounts required to
be so deducted in respect of such Transfers, and
(dd) setting forth a brief description of the
application of any of the amounts referred to in the
foregoing subclause (cc) to the purposes identified in
subclause (cc) of paragraph 6G(ii)(d)(I) and paragraph
6G(ii)(d)(II); and
(e) the notice, if any, required by paragraph 6B(iii);
(iv) within five days of a Responsible Officer obtaining knowledge of
an Event of Default or Default, a certificate of a Responsible Officer
specifying the nature and period of existence thereof and what action the
Company has taken and proposes to take with respect to such Default or
Event of Default;
(v) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as it sends to its public
stockholders generally, copies of all final registration statements on Form
S-1 or Form S-3 (without exhibits) or their successor forms relating to
offerings of debt or equity Securities on behalf of the Company, and copies
of all Form 10-Ks, Form 10-Qs, and Form 8-Ks or their successor forms, and
all amendments to such forms, that the Company files with the Securities
and Exchange Commission (or any governmental body or agency succeeding to
the functions of the Securities and Exchange Commission);
(vi) promptly upon receipt thereof by the Company, a copy of the
final management letter, if any, submitted by the Company's independent
accountants in connection with any annual audit made by them of the books
of the Company and the Subsidiaries;
(vii) promptly upon the request of any holder of Notes, any
information required to be delivered (to the extent not already delivered
to such holder pursuant to the other requirements of this paragraph 5A) to
any transferee of Notes by Rule 144A (17 C.F.R. (S) 230.144A) under the
Securities Act (or any successor provision) as a condition to the transfer
of any Note pursuant to such Rule;
(viii) subject to the second and third provisos to paragraph 5B of
this Agreement, with reasonable promptness, such other financial data as
any Significant Holder of Notes may reasonably request (including, without
limitation, a copy of each report, in addition to those referred to in
clauses (i) and (vi) of this paragraph 5B, submitted to the Company or any
Subsidiary by independent accountants in connection with any annual,
interim or special audit made by them of the books of the Company or any
Subsidiary);
Exhibit A-8
(ix) immediately upon becoming aware of the occurrence of any
(a) material "reportable event" (as such term is defined in
Section 4043 of ERISA), or
(b) "prohibited transactions" (as such term is defined in Section
406 or Section 4975 of the IRC)
in connection with any Pension Plan or any trust created thereunder, a
certificate of the a Responsible Officer specifying the nature thereof,
what action the Company is taking or proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(x) prompt written notice and a description of
(a) any failure to make a contribution to a Pension Plan if such
failure has given rise to a Lien pursuant to Section 302(f)(1) of
ERISA, or
(b) any request pursuant to Section 303 of ERISA or Section 412
of the IRC for, or notice of the granting pursuant to said Section 303
or Section 412 of, a waiver in respect of all or part of the minimum
funding standard set forth in ERISA or the IRC, as the case may be, of
any Pension Plan, and, in connection with the granting of any such
waiver, the amount of any waived funding deficiency (as such term is
defined in said Section 303 or said Section 412) and the terms of such
waiver; and
(xi) prompt written notice of and, where applicable, a description of
(a) any notice from the PBGC in respect of the commencement of
any proceedings pursuant to Section 4042 of ERISA to terminate any
Pension Plan or for the appointment of a trustee to administer any
Pension Plan,
(b) any distress termination notice delivered to the PBGC under
Section 4041 of ERISA in respect of any Pension Plan, and any
determination of the PBGC in respect thereof,
(c) the placement of any Multiemployer Plan in reorganization
status under Title IV of ERISA,
(d) any Multiemployer Plan becoming "insolvent" (as such term is
defined in Section 4245 of ERISA under Title IV of ERISA),
(e) the whole or partial withdrawal of the Company or any ERISA
Affiliate from any Multiemployer Plan and the withdrawal liability
incurred in connection therewith, and
Exhibit A-9
(f) the withdrawal of the Company or any ERISA Affiliate from any
Pension Plan with respect to which it is a "substantial employer"
under, and as defined in, ERISA and the withdrawal liability under
ERISA incurred in connection therewith.
Together with each delivery of financial statements required by clause (i)
(a) above, the Company will deliver to each holder of Notes a statement
by such accountants certifying that, in making the examination upon which
such opinion was based, no information came to their attention which, to
their knowledge, indicated that an Event of Default existed as the result
of the failure of the Company to comply with the covenants specified
below or a statement specifying such failure (it being understood that
such accountants' audit will not be directed toward obtaining knowledge
of any such failure):
(1) paragraph 6A, as of the Company's fiscal year end,
(2) paragraph 6B, as of the Company's fiscal year end, based solely
on amounts included in the consolidated financial statements or disclosed
in the notes thereto,
(3) paragraph 6C, for the Company's fiscal year, based solely on
amounts included in the consolidated financial statements or disclosed in
the notes thereto,
(4) paragraph 6D(xv), as of the Company's fiscal year end, based
solely on amounts included in the consolidated financial statements or
disclosed in the notes thereto,
(5) paragraph 6E, but only as to individual transactions in excess of
$5,000,000, and
(6) paragraph 6F, as of the Company's fiscal year end, based solely
on the amounts included in the consolidating balance sheets of the
Restricted Subsidiaries.
Such accountants, however, shall not be liable to anyone by reason of their
failure to obtain knowledge of any Event of Default or Default that would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards.
5B. Inspection of Property. The Company covenants that it will permit any
employee of, or any financial, legal, environmental or other professional
consultant or advisor to, any Significant Holder that is designated by such
Significant Holder in writing, at such Significant Holder's expense or, so long
as an Event of Default shall exist, at the expense of the Company, upon
reasonable notice to the Company, to visit and inspect any of the properties of
the Company and the Subsidiaries, to examine the corporate books and financial
records of the Company and the Subsidiaries and make copies thereof or extracts
therefrom and to discuss the affairs, finances and accounts of any of such
corporations with the principal officers of the Company and its independent
public accountants (the "Inspection Rights") and by this paragraph the Company
authorizes such officers and accountants to discuss such affairs, finances and
accounts, all at such reasonable times and as often as such
Exhibit A-10
holder may reasonably request, provided that, in the event that the Company
reasonably objects to any Significant Holder within two Business Days of such
notice that any Person so designated by such Significant Holder is a
Competitor or an employee thereof, the Company shall not be required to afford
such Person any of the foregoing Inspection Rights, provided, further, that
the Company and the Restricted Subsidiaries will not be required to disclose,
permit the inspection, examination, copying or making extracts of, or discuss,
any portion of, any document, or any information,
(i) that constitutes non-financial trade secrets, non-financial
proprietary information or product-by-product information relating to
production, pricing, profitability or failure rates, or
(ii) in respect of which disclosure to such Significant Holder is
then prohibited by
(a) law, or
(b) an agreement binding on the Company or any Subsidiary that
was not entered into by the Company or such Subsidiary for the primary
purpose of concealing information from such Significant Holder,
and in respect of which a Responsible Officer has provided a certificate to
such holder setting forth a brief description of the law or agreement
(including, in the case of an agreement, without limitation, the nature and
purpose of the agreement, the parties to the agreement, and the provision
of the agreement that prohibits such disclosure), provided, however, that
if disclosure of the existence of any agreement is prohibited by the
provisions thereof, such certificate may state generally, with respect to
such agreement, that there are agreements pertaining to the matter as to
which information was requested which are binding on the Company or a
Subsidiary and which prohibit disclosure of the existence thereof.
5C. Covenant to Secure Note Equally. The Company will, if it or any
Restricted Subsidiary creates or assumes any Lien upon any of its Property,
whether now owned or hereafter acquired, other than Liens permitted by the
provisions of paragraph 6D of this Agreement (unless prior written consent to
the creation or assumption thereof shall have been obtained pursuant to
paragraph 11C of this Agreement), make or cause to be made, pursuant to such
agreements and instruments as shall be approved by the Required Holders,
effective provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Debt thereby secured so long as any such other
Debt shall be so secured.
5D. ERISA Compliance. The Company covenants that it will, and will cause
each ERISA Affiliate to, at all times
(i) with respect to each Pension Plan, make timely payments of
contributions required to meet the minimum funding standard set forth in
ERISA or the IRC with respect thereto and, with respect to each
Multiemployer Plan, make timely payment of contributions required to be
paid thereto as provided by Section 515 of ERISA and
Exhibit A-11
(ii) comply with all other provisions of ERISA,
except for such failures to make contributions and failures to comply as would
not have a material adverse effect on the business, prospects, Properties or
financial condition of the Company and the Subsidiaries taken as a whole.
5E. Payment of Taxes and Claims. The Company will, and will cause each
Subsidiary to, pay before they become delinquent, all material taxes,
assessments and governmental charges or levies imposed upon it or its
Property, provided that items of the foregoing description need not be paid
while being contested in good faith and by appropriate proceedings as long as
adequate reserves, to the extent required by generally accepted accounting
principles, have been established and maintained and exist with respect
thereto and, provided, further, that the contesting Person's right to use any
material Property is not materially adversely affected thereby.
5F. Maintenance of Properties and Corporate Existence. The Company will,
and will cause each Restricted Subsidiary to,
(i) Property -- maintain in good working order and condition all of
its Property which is material to the continued conduct of the business of
the Company and the Restricted Subsidiaries taken as a whole;
(ii) Insurance -- maintain, with financially sound and reputable
insurers, insurance with respect to its Property and business against such
casualties and contingencies, of such types (including, without limitation,
loss or damage, public liability, business interruption, larceny,
embezzlement or other criminal misappropriation) and in such amounts as is
customary in the case of corporations of established reputations engaged in
the same or a similar business and similarly situated;
(iii) Financial Records -- maintain sound accounting policies and an
adequate and effective system of accounts and internal accounting control
that will safeguard assets, properly record income, expenses and
liabilities, and assure the production of proper financial statements in
accordance with generally accepted accounting principles;
(iv) Corporate Existence and Rights -- do or cause to be done all
things necessary to preserve and keep in full force and effect its
existence, rights and franchises, except as otherwise permitted by
paragraph 6G or paragraph 6K of this Agreement and except, in each case,
where the failure to take any such action would not have a material adverse
effect on the business, prospects, Properties or condition (financial or
otherwise) of the Company and the Restricted Subsidiaries taken as a whole
or the ability of the Company to perform its obligations set forth in this
Agreement and in the Notes; provided that the corporate existence of any
Restricted Subsidiary may be terminated, and any rights and franchises may
be terminated or permitted to lapse, if, in the good faith judgment of the
Company, such determination or lapse is in the best interests of the
Company and is not disadvantageous to the holders of the Notes; and
Exhibit A-12
(v) Compliance with Law -- (a) comply with all applicable laws,
rules, regulations, orders, judgments and decrees of any governmental
authority, except where any failure to comply would not have a material
adverse effect on the business, prospects, Properties or condition
(financial or otherwise) of the Company and the Restricted Subsidiaries
taken as a whole or the ability of the Company to perform its obligations
set forth in this Agreement and in the Notes and (b) obtain all licenses,
permits, franchises and other governmental authorizations necessary to the
ownership of its Properties or to the conduct of its business, except where
any failure to so obtain would not have a material adverse effect on the
business, Properties or condition (financial or otherwise) of the Company
and the Restricted Subsidiaries taken as a whole or the ability of the
Company to perform its obligations set forth in this Agreement and in the
Notes.
5G. Payment of Notes and Maintenance of Office. The Company will
punctually pay, or cause to be paid, the principal and interest (and premium, if
any) to become due in respect of the Notes according to the terms thereof and
will maintain an office in compliance with paragraph 11I of this Agreement (or
such other address which the Company shall have specified in writing in
accordance with paragraph 11I) where notices, presentations and demands in
respect of this Agreement or the Notes may be made upon it. Such office will be
maintained at such address until such time as the Company will notify the
holders of the Notes of any change of location of such office, which will in any
event be located in the United States of America.
6. NEGATIVE COVENANTS.
6A. Consolidated Tangible Net Worth. The Company will not permit
Consolidated Tangible Net Worth, determined as of any Determination Date, to be,
(i) if such Determination Date is prior to December 22, 1993, then
less than the sum of
(a) $525,000,000, plus
(b) 45% of Consolidated Net Income for each fiscal year ended
during the period beginning on January 1, 1991 and ending on or prior
to such Determination Date (unless Consolidated Net Income shall be a
loss in any fiscal year, in which event the amount determined pursuant
to this clause (b) for such fiscal year shall be zero), plus
(c) the net proceeds to the Company from the sale of any capital
stock of the Company made during the period beginning on January 1,
1991 and ending on such Determination Date, plus
(d) without duplication with clauses (i)(b) or (i)(c) above, an
amount equal to the aggregate principal amount of any Debt Security of
the Company (other than Debt Securities held by Restricted
Subsidiaries), minus the costs and fees incurred upon the original
issuance of such Debt Security, any unamortized original issue
discount with respect to any such Debt Security and
Exhibit A-13
any costs and expenses of conversion, which has been converted into
or exchanged for capital stock during the period beginning on
January 1, 1991 and ending on such Determination Date, but only to
the extent such conversion or exchange increases Consolidated
Tangible Net Worth, and
(ii) if such Determination Date is on or after December 22, 1993,
then less than the sum of
(a) $125,000,000, plus
(b) 50% of Consolidated Net Income for each fiscal quarter
ended during the period beginning on October 3, 1993 and ending on
or prior to such Determination Date (unless Consolidated Net Income
shall be a loss in any fiscal quarter, in which event the amount
determined pursuant to this clause (b) for such fiscal quarter shall
be zero), plus
(c) the net proceeds to the Company from the sale of any capital
stock of the Company made during the period beginning on October 3,
1993 and ending on such Determination Date, plus
(d) without duplication with clauses (ii)(b) or (ii)(c) above,
an amount equal to the aggregate principal amount of any Debt Security
of the Company (other than Debt Securities held by Restricted
Subsidiaries), minus the costs and fees incurred upon the original
issuance of such Debt Security, any unamortized original issue
discount with respect to any such Debt Security and any costs and
expenses of conversion, which has been converted into or exchanged for
capital stock during the period beginning on October 3, 1993 and
ending on such Determination Date, but only to the extent such
conversion or exchange increases Consolidated Tangible Net Worth.
6B. Consolidated Debt.
(i) Consolidated Senior Debt. The Company will not permit, on any
Determination Date, Consolidated Senior Debt, to exceed the percentage of
Consolidated Tangible Net Worth set forth in the following table opposite
such Determination Date, in each case determined as of such Determination
Date:
================================================================================
Determination Date Percentage
- --------------------------------------------------------------------------------
All Determination Dates occurring between March 29, 1991 to and 75%
including the Determination Date occurring nearest to September
30, 1993
- --------------------------------------------------------------------------------
Determination Date occurring nearest to December 31, 1993 115%
- --------------------------------------------------------------------------------
Determination Date occurring nearest to March 31, 1994 90%
- --------------------------------------------------------------------------------
Exhibit A-14
Determination Date
All Determination Dates occurring after the Determination Date 75%
occurring nearest to March 31, 1994
(ii) Consolidated Debt. The Company will not permit, on any
Determination Date, Consolidated Debt to exceed the percentage of
Consolidated Tangible Net Worth set forth in the following table opposite
such Determination Date, in each case determined as of such Determination
Date:
Determination Date Percentage
All Determination Dates 125%
occurring between March
29, 1991 to and including
the Determination Date
occurring nearest to
September 30, 1993
Determination Date 515%
occurring nearest to
December 31, 1993
Determination Date 455%
occurring nearest to
March 31, 1994
Determination Date 405%
occurring nearest to June
30, 1994
Determination Date 365%
occurring nearest to
September 30, 1994
Determination Date 335%
occurring nearest to
December 31, 1994
Determination Date 295%
occurring nearest to
March 31, 1995
Determination Date 275%
occurring nearest to June
30, 1995
Determination Date 255%
occurring nearest to
September 30, 1995
Determination Date 240%
occurring nearest to
December 31, 1995
Determination Date 220%
occurring nearest to
March 31, 1996
All Determination Dates 200%
occurring after the
Determination Date
occurring nearest to
March 31, 1996
(iii) Adjustments to Consolidated Debt Percentages. The percentages set
forth in the table in paragraph 6B(ii) hereof shall be adjusted as of each
Determination Date to be equal to the Adjusted Consolidated Debt Percentage
calculated in respect thereof if
(a) during the fiscal quarter ended on such Determination Date
the Company issues capital stock, other than issuances of capital stock
pursuant to (or pursuant to options, warrants or other securities issued
pursuant to) employee stock option plans, director stock options plans,
employee stock purchase plans or any similar arrangements intended to
provide incentives for employee and directors, and
Exhibit A-15
(b) the percentage set forth in such table in respect of such
Determination Date, as then previously adjusted as provided in this
subparagraph (iii), is greater than 125%.
The Company shall provide a notice with respect to each Determination Date
as to which an adjustment in such percentage is required by this
subparagraph (iii), together with the certificate required by paragraph
5A(iii) delivered in respect of such fiscal quarter, to all holders of
Notes, providing in detail the calculation of the Adjusted Consolidated
Debt Percentages determined in respect of such fiscal quarter and all
subsequent fiscal quarters. The Adjusted Consolidated Debt Percentages
specified in such notice shall apply to such fiscal quarter and to all
subsequent fiscal quarters and such table shall be deemed to be amended in
accordance with such notice. Such notice shall be satisfactory in all
respects to the Required Holders.
6C. Consolidated Fixed Charges; Consolidated Net Income.
(i) Consolidated Fixed Charges. The Company will not permit the
ratio of (i) the sum of Consolidated Net Income plus Consolidated Fixed
Charges plus taxes deducted from revenues in the computation of such
Consolidated Net Income, to (ii) Consolidated Fixed Charges to be less for
any period of two consecutive fiscal quarters of the Company than the ratio
set forth opposite the relevant period in the table below:
Two Fiscal Quarter Period Ending Ratio
On the Determination Date occurring nearest to March 31, 1994 1.0 : 1.0
On the Determination Date occurring nearest to June 30, 1994 1.85 : 1.0
On the Determination Date occurring nearest to September 30, 1994 2.0 : 1.0
On the Determination Date occurring nearest to December 31, 1994 2.0 : 1.0
The Company will not permit, at any time on or after the Determination Date
occurring nearest to March 31, 1995, the ratio of (i) the sum of
Consolidated Net Income plus Consolidated Fixed Charges plus taxes deducted
from revenues in the computation of such Consolidated Net Income, to (ii)
Consolidated Fixed Charges to be less for any period of four consecutive
fiscal quarters of the Company than 2.0 to 1.0.
(ii) Consolidated Net Income. The Company will not permit
Consolidated Net Income for the three-month period ending on the
Determination Date occurring nearest to December 31, 1993 to be less than a
deficit of $12,000,000.
6D. Liens. The Company will not, and will not permit any Restricted
Subsidiary to, create, assume or suffer to exist any Lien upon any of its
Property, 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 paragraph 5C of this Agreement), except
Exhibit A-16
(i) Liens in existence on the Closing Date and described on Annex 2
to this Agreement;
(ii) Liens for taxes that are not yet due or that are being actively
contested in good faith by appropriate proceedings, and in respect of which
adequate reserves are being maintained to the extent required by generally
accepted accounting principles;
(iii) Liens incurred or deposits made in the ordinary course of
business,
(a) in respect of leases, statutory obligations or claims or
demands of materialmen, mechanics, carriers, warehousemen, landlords
and other like Persons that are not yet due or that are being actively
contested in good faith by appropriate proceedings, and in respect of
which adequate reserves are carried on the books of the Person liable
therefor to the extent required by generally accepted accounting
principles,
(b) in connection with workers' compensation, unemployment
insurance, social security and other like laws,
(c) to secure the performance of letters of credit, bids,
leases, tenders, sales contracts, statutory obligations, government
contracts, surety and performance bonds and other similar obligations
not incurred in connection with the borrowing of money, the obtaining
of advances or the payment of the deferred purchase price of Property,
(d) incidental to the conduct of its business or ownership of
its Property, provided that,
(I) such obligations shall not have arisen in connection
with the borrowing of money, the obtaining of advances or credit
or the payment of the deferred purchase price of Property, and
(II) such Liens shall not in the aggregate materially
detract from the value of the Property encumbered thereby or
materially interfere with the use of such Property in the
ordinary conduct of the owning Person's business,
(e) which constitute purchase money security interests with
respect to advances or the payment of deferred purchase price in
connection with the purchase of goods and services in the ordinary
course of business, provided that, at the time any such security
interest is created, the Company or such Restricted Subsidiary intends
to pay the amount secured thereby within 180 days after such creation,
provided further that any such security interest runs in favor of the
provider of such goods or services and is not part of a floor plan
financing arrangement or any other arrangement with any Person that is
primarily in the business of making loans or extending other financial
accommodations, or
Exhibit A-17
(f) which constitute Liens with respect to conditional sale or
other title retention agreements and any lease in the nature thereof,
provided that any such Lien with respect to conditional sales or other
title retention agreements encumbers only Property and accretions
thereto (and proceeds arising from the disposition thereof) which are
subject to such conditional sale or other title retention agreement or
lease in the nature thereof and, provided, further, that the aggregate
amount secured by all such conditional sale or other title retention
agreements and leases in the nature thereof shall not be more than
$5,000,000 (it being understood that additional amounts may be so
secured if permissible under any other provision of this paragraph 6D
including, without limitation, clause (xv) of this paragraph 6D);
(iv) reservations, exceptions, encroachments, easements, rights-of-
way, covenants, conditions, restrictions and other similar title exceptions
or encumbrances affecting real Property, provided such Liens do not
interfere with the use of such Property in the ordinary conduct of the
business of the Company and the Restricted Subsidiaries, taken as a whole;
(v) Liens on Property of a Restricted Subsidiary to secure
obligations of such Restricted Subsidiary to the Company or another
Restricted Subsidiary;
(vi) Liens with respect to Capitalized Lease Obligations (together
with any related interest), provided, that such Liens encumber only
Property and accretions thereto (and proceeds arising from the disposition
thereof) acquired with the proceeds of the indebtedness secured thereby;
(vii) leases and subleases of, and licenses and sub-licenses with
respect to, Property where the Company or a Restricted Subsidiary is the
lessor or licensor (or sublessor or sublicensor), provided that such
leases, subleases, licenses and sublicenses do not in the aggregate
materially interfere with the business of the Company and the Restricted
Subsidiaries taken as a whole;
(viii) (a) Liens to secure appeal bonds, supersedeas bonds and other
similar Liens arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit) or any other
instrument serving a similar purpose, provided that the aggregate
amount so secured, together with the aggregate amount secured pursuant
to paragraph 6D(viii)(b), shall not at any time exceed $5,000,000 (it
being understood that additional amounts may be so secured if
permissible under any other provision of this paragraph 6D including,
without limitation, clause (xv) of this paragraph 6D),
(b) attachments, judgments and other similar Liens arising in
connection with court proceedings, provided that the execution or
other enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and by
appropriate proceedings and provided further, that the aggregate
amount so secured, together with the aggregate amount secured pursuant
to paragraph 6D(viii)(a) of this Agreement, shall not exceed
$5,000,000 (it being understood that additional amounts may be so
Exhibit A-18
secured if permissible under any other provision of this paragraph 6D
including, without limitation, clause (xv) of this paragraph 6D),
(ix) Liens on the Property of any corporation at the time such
corporation becomes a Restricted Subsidiary, or such corporation is
acquired by, consolidated with or merged into the Company or a Restricted
Subsidiary, and Liens on any Property at the time acquired by the Company
or a Restricted Subsidiary, provided, in each case, that such Lien was not
incurred in contemplation of such transaction;
(x) any Lien permitted by this paragraph 6D securing Debt that is
being renewed, extended or refunded, provided that the principal amount of
such Debt outstanding at the time of such renewal, extension or refunding
is not increased and such Lien is not extended to any other Property (other
than pursuant to its original terms);
(xi) Purchase Money Mortgages, provided that each such Purchase Money
Mortgage secures an amount not exceeding 100% of the lesser of the cost
(including liabilities assumed) or the Fair Market Value at the time of
acquisition or construction of the Property to which it relates (as
determined in good faith by the Board of Directors);
(xii) Liens consisting of an agreement to file or give a financing
statement set forth in operating leases (it being understood that, upon the
filing of any such financing statement, the Lien created thereby must be
permissible under any other provision of this paragraph 6D including,
without limitation, clause (iii)(f) and clause (xv) of this paragraph 6D);
(xiii) Liens which constitute rights of set-off of a customary nature
or bankers' Liens with respect to amounts on deposit, whether arising by
operation of law or by contract, in connection with working capital
facilities, lines of credit, term loans, or other credit facilities and
similar arrangements entered into with banks in the ordinary course of
business;
(xiv) Liens in the nature of rights of first refusal and restrictions
on transfer on the capital stock of Arcada Holdings, Inc. arising in
connection with the purchase of Quest Development Corporation and described
in that certain Letter of Intent dated as of December 13, 1993, related
thereto; and
(xv) Liens not otherwise permitted by this paragraph 6 on Property
of the Company or any Restricted Subsidiary, provided that, as of each
Determination Date, the amount of
(a) all Debt secured by Liens permitted only by this paragraph
6D(xv), plus
(b) all Debt of Restricted Subsidiaries (other than Debt owed by
a Restricted Subsidiary to the Company or another Restricted
Subsidiary) and all Preferred Stock of Restricted Subsidiaries (other
than Preferred Stock of a
Exhibit A-19
Restricted Subsidiary owned by the Company or another Restricted
Subsidiary), plus
(c) the Sale/Leaseback Transaction Amount,
(without duplication) does not exceed 20% of Consolidated Tangible Net
Worth, in each case determined as of such Determination Date.
6E. Sale/Leaseback Transactions.
The Company will not, nor will it permit any Restricted Subsidiary to,
enter into any Sale/Leaseback Transaction at any time, unless after giving
effect thereto, the sum of
(i) the Sale/Leaseback Transaction Amount, plus
(ii) the amount of all Debt secured only by Liens permitted by
paragraph 6(xv) of this Agreement, plus
(iii) all Debt of Restricted Subsidiaries (other than Debt owed by a
Restricted Subsidiary to the Company or another Restricted Subsidiary) and
all Preferred Stock of Restricted Subsidiaries (other than Preferred Stock
of a Restricted Subsidiary owned by the Company or another Restricted
Subsidiary),
(without duplication) does not exceed 20% of Consolidated Tangible Net Worth, in
each case determined as of such time.
6F. Restricted Subsidiary Debt and Preferred Stock. The Company will not,
at any time, permit any Restricted Subsidiary to create, incur or assume any
Debt, or to issue any Preferred Stock, unless, immediately after the creation,
incurrence or assumption of such Debt, or the issuance of such Preferred Stock,
and after giving effect thereto, the sum of
(i) the Sale/Leaseback Transaction Amount, plus
(ii) the amount of all Debt secured by Liens permitted only by
paragraph 6(xv) of this Agreement, plus
(iii) all Debt of Restricted Subsidiaries (other than Debt owed by a
Restricted Subsidiary to the Company or another Restricted Subsidiary) and
all Preferred Stock of Restricted Subsidiaries (other than Preferred Stock
of a Restricted Subsidiary owned by the Company or another Restricted
Subsidiary),
(without duplication) does not exceed 20% of Consolidated Tangible Net Worth, in
each case determined as of such time. Notwithstanding the foregoing, the
prepayment of the 8 7/8% Convertible Subordinated Debentures issued by Archive
pursuant to the Convertible Subordinated Debenture Agreement dated as of May 11,
1990, as heretofore amended, and outstanding on the Merger Date, not to exceed
in aggregate amount $10,000,000 shall be permitted.
Exhibit A-20
6G. Merger and Consolidation; Sale of Assets.
(i) Merger and Consolidation.
(a) The Company will not permit any other Person to consolidate
with or merge into it (except that a Restricted Subsidiary may
consolidate with or merge into the Company); provided that the
foregoing restriction does not apply to the merger or consolidation of
the Company with another corporation, if:
(I) either (aa) the Company shall be the continuing or
surviving corporation or (bb) the successor corporation that
results from such merger or consolidation (the "Surviving
Corporation") is organized under the laws of any State of the
United States (or the District of Columbia), and the due and
punctual payment of the principal of and premium, if any, and
interest on all of the Notes, according to their tenor, and the
due and punctual performance and observance of all the covenants
in the Notes and this Agreement to be performed or observed by
the Company, are expressly assumed in writing by the Surviving
Corporation; and
(II) immediately prior to, and immediately after the
consummation of the transaction, and after giving effect thereto,
no Default or Event of Default exists or would exist under any
provision of this Agreement.
(b) The Company will not permit any Restricted Subsidiary to
consolidate with or merge into any other Person or permit any other
Person to consolidate with or merge into it (except that a Restricted
Subsidiary may consolidate with or merge into the Company as
contemplated by paragraph 6G(i)(a) and a Restricted Subsidiary may
consolidate with or merge into another Restricted Subsidiary);
provided that a Restricted Subsidiary may merge or consolidate with
another Person if
(I) such transaction would be permitted under the
provisions of paragraph 6G(ii) (deeming such transaction to be a
Transfer of all of the assets and liabilities of such Restricted
Subsidiary, in the case of any such merger or consolidation which
results in a surviving entity which is not a Restricted
Subsidiary); or
(II) the surviving corporation is the Company or a
Restricted Subsidiary.
(ii) Sale of Assets. The Company will not, nor will it permit any
Restricted Subsidiary to, sell, lease as lessor, transfer or otherwise
dispose of Property (collectively, "Transfers"), except
(a) Transfers in the ordinary course of business,
Exhibit A-21
(b) Transfers to the Company or a Restricted Subsidiary other
than an Arcada Restricted Subsidiary;
(c) Transfers which (I) constitute dispositions of cash or cash
equivalents not prohibited by this Agreement, (II) constitute
Investments which are Permitted Investments or (III) constitute the
liquidation of any Permitted Investment; and
(d) any other Transfer if all of the following conditions shall
have been satisfied:
(I) the sum (without duplication) of
(aa) the net book value of such Property on the date
of the Transfer (the "Asset Disposition Date"), expressed as
a percentage of Consolidated Total Assets on the
Determination Date most recently preceding the Asset
Disposition Date, plus
(bb) the net book value of each other item of Property
of the Company and the Restricted Subsidiaries that was
Transferred pursuant to this paragraph 6G(ii)(d) (including,
without limitation, a Transfer by merger or consolidation,
as contemplated by paragraph 6G(i)) during the period ending
on the Asset Disposition Date and commencing on the first
day of the period of 12 consecutive calendar months most
recently ended as of the Asset Disposition Date (the
"Annual Disposition Measurement Period") (Subsidiary Stock
being deemed to have a net book value equal to the net
book value of all assets of the issuer of such Subsidiary
Stock at such time, or the appropriate portion thereof if
less than all Subsidiary Stock of such issuer is the
subject of such Transfer), expressed in each case as a
percentage of Consolidated Total Assets on the
Determination Date most recently preceding the date of
each such Transfer, minus
(cc) the aggregate net book value of all Property
Transferred pursuant to this paragraph 6G(ii)(d) during the
Annual Disposition Measurement Period to the extent that the
net proceeds arising therefrom have been either reinvested
in the business of the Company and the Restricted
Subsidiaries or applied to, or irrevocably committed to
make, Senior Debt Prepayments within the period of 12
consecutive months after the respective Transfers of such
Property pursuant to this paragraph 6G(ii)(d), such
aggregate net book value (or the portion thereof
corresponding to the portion of such net proceeds so applied
or to be so applied) being expressed as a percentage of
Consolidated Total Assets determined on the Determination
Date most recently preceding the date of each such Transfer;
Exhibit A-22
provided, that any such net proceeds spent for operating
expenses or principal, premium or interest in respect of
Debt or held in deposit accounts or otherwise as short term
investments shall not be deemed to have been reinvested in
the business of the Company and the Restricted Subsidiaries,
provided, further, that such percentage shall not, in any
event, exceed 10%;
will not exceed 15%;
(II) the sum (without duplication) of
(aa) the Cash Flow Contribution of such Property
during the period of four consecutive fiscal quarters of the
Company most recently ended prior to the Asset Disposition
Date (the "Four Quarter Period"), plus
(bb) the Cash Flow Contribution of each other item of
Property of the Company and the Restricted Subsidiaries that
was Transferred pursuant to this paragraph 6G(ii)(d)
(including, without limitation, a Transfer by merger or
consolidation, as contemplated by paragraph 6G(i)) during
the Annual Disposition Measurement Period, such Cash Flow
Contribution for any particular Property being measured for
the period of four consecutive fiscal quarters of the
Company most recently ended prior to the Transfer of such
Property, minus
(cc) the Cash Flow Contribution of all Property
Transferred by the Company and the Restricted Subsidiaries
during the Annual Disposition Measurement Period to the
extent that the net proceeds arising therefrom have been
either reinvested in the business of the Company and the
Restricted Subsidiaries or applied to, or irrevocably
committed to make, Senior Debt Prepayments within the period
of 12 consecutive months after the respective Transfers of
such Property pursuant to this paragraph 6G(ii)(d), such
Cash Flow Contribution (or the portion thereof corresponding
to the portion of such net proceeds so applied or to be so
applied) for any particular Property being measured for the
period of four consecutive fiscal quarters of the Company
most recently ended prior to the disposition of such
Property, provided, that any such net proceeds spent for
operating expenses or principal, premium or interest in
respect of Debt or held in deposit accounts or otherwise as
short term investments shall not be deemed to have been
reinvested in the business of the Company and the Restricted
Subsidiaries, provided, further, that the Cash Flow
Contribution of all such Property shall not, in any event,
exceed 10% of Consolidated Operating Cash Flow during the
Four Quarter Period,
Exhibit A-23
will not exceed 15%;
(III) the sum (without duplication) of
(aa) the net book value of such Property on the Asset
Disposition Date, expressed as a percentage of Consolidated
Total Assets on the Determination Date most recently
preceding the Asset Disposition Date, plus
(bb) the net book value of each other item of Property
of the Company and the Restricted Subsidiaries that was
Transferred pursuant to this paragraph 6(ii)(d) (including,
without limitation, a Transfer by merger or consolidation,
as contemplated by paragraph 6(i)) during the period ending
on the Asset Disposition Date and commencing on the first
day of the period of 36 consecutive calendar months most
recently ended as of the Asset Disposition Date (the "Three
Year Disposition Measurement Period") (Subsidiary Stock
being deemed to have a net book value equal to the net book
value of all assets of the issuer of such Subsidiary Stock,
or the appropriate portion thereof if less than all
Subsidiary Stock of such issuer is the subject of such
Transfer), expressed in each case as a percentage of
Consolidated Total Assets on the Determination Date most
recently preceding the date of each such Transfer,
will not exceed 40%;
(IV) the sum (without duplication) of
(aa) the Cash Flow Contribution of such Property
during the Four Quarter Period, plus
(bb) the Cash Flow Contribution of all other Property
of the Company and the Restricted Subsidiaries that was
Transferred pursuant to this paragraph 6(ii)(d) (including,
without limitation, a Transfer by merger or consolidation,
as contemplated by paragraph 6(i)) during such Three Year
Disposition Measurement Period, such Cash Flow Contribution
for any particular Property being measured for the period of
four consecutive fiscal quarters of the Company most
recently ended prior to the disposition of such Property,
will not exceed 40%;
(V) with respect to any Transfer, or series of related
Transfers, of Property pursuant to this paragraph 6(ii)(d) for
consideration in an amount which is at least equal to the sum of
$25,000,000 plus 5% of the amount, if any, by which Consolidated
Total Assets, determined as
Exhibit A-24
of the most recent Determination Date at the time of such
Transfer, exceeds Consolidated Total Assets, determined as of
December 31, 1990, in the opinion of the Board of Directors,
the sale is for Fair Market Value and is in the best interests
of the Company and the Restricted Subsidiaries; and
(VI) immediately prior to, and immediately after the
consummation of the transaction, and after giving effect thereto,
no Default or Event of Default exists or would exist under any
provision of this Agreement.
If the Company shall make any Transfer which would be prohibited by this
paragraph 6G but for the deduction provided for in subclause (cc) of either
or both of paragraph 6G(ii)(d)(I) or paragraph 6G(ii)(d)(II), the Company
shall be deemed to have covenanted that the net proceeds from such Transfer
shall be reinvested in the business of the Company and the Restricted
Subsidiaries (subject to the limitations of the first proviso to such
subclause) or applied to, or irrevocably committed to make, Senior Debt
Prepayments within the period of 12 consecutive months after such Transfer.
6H. Permitted Investments. The Company will not and will not permit any
Restricted Subsidiary to purchase or make investments in, purchase stock or
Securities of, or make loans or advances to, or make other investments in, or
guarantee the obligations of, any other Person (including investments in or
loans or advances to any corporation proposed to be acquired or created as a
Subsidiary) (all of the foregoing referred to as "Investments," and all of the
below-listed Investments referred to as "Permitted Investments") except:
(i) obligations of, or obligations guaranteed by, the United States
government, its agencies, or any public instrumentality thereof with
maturities not to exceed (or an unconditional right to compel purchase
within) seven years from the date of acquisition;
(ii) Investments in or to the Company or Restricted Subsidiaries and
Investments in or to companies which simultaneously with such Investments
become Restricted Subsidiaries, and guarantees by the Company of the
obligations of the Restricted Subsidiaries and guarantees by Restricted
Subsidiaries of obligations of the Company or other Restricted
Subsidiaries;
(iii) commercial paper or loan participations maturing within seven
years of the date of acquisition issued by a Person organized under the
laws of the United States, Canada, a country that is a member of the
European Community, Singapore, Taiwan, Malaysia or Japan, rated at the time
of acquisition (or issued by Persons organized under the laws of such
jurisdiction with other outstanding unsecured and unsupported debt
securities ranking pari passu with such commercial paper or loan
participations and rated at the time of acquisition) in the top rating
classification by Moody's Investors Service, Inc., Standard & Poor's
Corporation, Duff & Phelps Inc. or any other rating agency nationally
recognized in the United States, Japan or any country which is a member of
the European Community at the time of acquisition thereof;
Exhibit A-25
(iv) Investments arising from transactions by the Company or the
Restricted Subsidiaries with customers or suppliers (including Investments
received in settlement of trade receivables which trade receivables are
fully reserved against on the books of the Company or such Restricted
Subsidiary or are less than one year overdue) in the ordinary course of
business;
(v) Investments consisting of
(a) travel advances, employee relocation loans, and other
employee loans and advances in the ordinary course of business,
(b) loans to employees, officers or directors relating to the
purchase of equity securities of the Company or the Restricted
Subsidiaries, or
(c) other loans to officers and employees approved by the Board
of Directors in an aggregate amount not in excess of $10,000,000
outstanding at any time;
(vi) operating deposit accounts maintained in the ordinary course of
business for operating fund purposes including Investments therein
denominated in French francs, Deutsche marks, Chinese renminbi and
otherwise with Permitted Banks, consistent with past practice;
(vii) Securities issued by any state of the United States or any
political subdivision of any such state or any public instrumentality
thereof with maturities not to exceed (or an unconditional right to compel
purchase within) seven years of the date of acquisition, that are rated in
one of the highest two rating classifications by Moody's Investors Service,
Inc., Standard & Poor's Corporation, Duff & Phelps Inc. or any other rating
agency nationally recognized in the United States;
(viii) demand and time deposits with, Eurodollar deposits with,
certificates of deposit issued by, or obligations or securities fully
backed by letters of credit issued by
(a) any bank organized under the laws of the United States, any
state thereof, the District of Columbia or Canada having combined
capital and surplus aggregating at least $100,000,000, and outstanding
unsecured and unsupported Debt rated "A" or better at the time of
acquisition thereof by Standard and Poor's Corporation, Moody's
Investor Service, Inc., Duff & Phelps Inc. or any other rating agency
nationally recognized in the United States, Japan or any country which
is a member of the European Community,
(b) the banks listed on Annex 2 to this Agreement, and
(c) any other bank organized under the laws of a country that is
a member of the European Community (or any political subdivision of
any such country), Japan, Singapore, Taiwan, Malaysia, the Cayman
Islands, the British West Indies or the Bahamas, having combined
capital and surplus of not less
Exhibit A-26
than $500,000,000 or the equivalent thereof in a currency other than
United States dollars,
(the banks described in the foregoing subclauses (a) to (c), inclusive,
being referred to in this Agreement as "Permitted Banks");
(ix) bankers' acceptances accepted by a Permitted Bank and eligible
for rediscount under the requirements of the Board of Governors of the
Federal Reserve System;
(x) repurchase agreements with any of
(a) the Permitted Banks,
(b) Alex. Brown & Sons Incorporated, Bear, Stearns & Co., Dean
Witter Reynolds Inc., The First Boston Corporation, Goldman Sachs &
Co., J.P. Morgan Securities, Inc., Kidder, Peabody & Co.,
Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated, Paine Webber Incorporated, Salomon
Brothers, Inc., Shearson Lehman Hutton, Inc., Smith Barney, Harris
Upham & Co., Incorporated, or
(c) any other bank or securities dealer of a similar quality
approved by a Responsible Officer, or
(d) any affiliate of the foregoing,
such repurchase agreements to be (at the time entered into) fully
collateralized by securities of a type described in clause (i), clause
(iii), clause (vii) or clause (viii) above, in each case made in accordance
with the Company's internal investment policy in effect at such time;
(xi) Investments in money market programs that would be classified on
the balance sheet of the investing Person as a current asset in accordance
with generally accepted accounting principles, which money market programs
have total invested assets in excess of $1,000,000,000;
(xii) Investments in money market preferred stocks or other
equivalent Dutch-auction preferred stock of any corporation maturing within
seven years of the date of acquisition thereof and with a credit rating at
the time of acquisition thereof of "AA+" or "aa1" or better (or a
comparable rating) by Moody's Investors Service, Inc., Standard & Poor's
Corporation, Duff & Phelps Inc. or any other rating agency nationally
recognized in the United States, Japan or any country which is a member of
the European Community;
(xiii) notes receivable of, or prepaid royalties and other credit
extensions to, customers and suppliers in the ordinary course of business
so long as such notes, prepaid royalties or other credit extensions are due
within one year of the date of
Exhibit A-27
acquisition thereof or cover no more than a reasonable estimate of one
year's obligations to such customers or suppliers, as the case may be;
(xiv) foreign currency swaps and hedging arrangements entered into in
the ordinary course of business to protect against currency losses, and
interest rate swaps and caps entered into in the ordinary course of
business to protect against interest rate exposure on Debt of the Company
and the Restricted Subsidiaries bearing interest at a variable or adjusting
rate so long as, at the time any such transaction shall be entered into,
the counterparty in such transaction has outstanding Debt Securities rated
(a) "A1" or better, or "A+" or better (or a comparable rating),
or
(b) "A2" or "A-" (or a comparable rating) provided that the term
of each such swap or arrangement is less than 2 years,
by Moody's Investors Service, Inc., Standard & Poor's Corporation, Duff &
Phelps Inc. or any other rating agency nationally recognized in the United
States, Japan or any country which is a member of the European Community;
(xv) (a) guarantees by the Company and Restricted Subsidiaries of
the obligations of Unrestricted Subsidiaries and of vendors and
suppliers of Unrestricted Subsidiaries, in each case in respect of
transactions of such Unrestricted Subsidiaries entered into in the
ordinary course of business of such Unrestricted Subsidiaries and such
vendors and suppliers and directly related to the business conducted
by such vendors and suppliers with such Unrestricted Subsidiaries,
provided that such guarantees shall not at any time exceed 5% of
Consolidated Tangible Net Worth, and
(b) guarantees by the Company and Restricted Subsidiaries of the
obligations of Restricted Subsidiaries and of vendors and suppliers of
Restricted Subsidiaries, in each case in respect of transactions of
such Restricted Subsidiaries entered into in the ordinary course of
business of such Restricted Subsidiaries and such vendors and
suppliers and directly related to the business conducted by such
vendors and suppliers with such Restricted Subsidiaries;
(xvi) Investments existing on the Closing Date not in excess, in the
aggregate, of $20,000,000;
(xvii) regardless of the occurrence or non-occurrence of the Merger
Date, and in any event, prior to the occurrence of the Merger Date,
investments in (a) the stock of Archive and its subsidiaries as
contemplated by the Archive Tender Offer, and (b) Investments to enable
Archive to repay its outstanding obligations for borrowed money not to
exceed in the aggregate $150,000,000;
(xviii) Investments made by any corporation at the time it becomes a
Restricted Subsidiary, or such corporation is acquired by, consolidated
with or merged into the Company or a Restricted Subsidiary, provided that
such Investments were not made in contemplation of such transaction;
Exhibit A-28
(xix) Investments consisting of repurchases of Subordinated Debt
permitted by paragraph 6M; and
(xx) Investments not otherwise permitted by the other provisions of
this paragraph 6H, if, on the date of the making of any such Investment,
and after giving effect to such Investment,
(a) the aggregate cost of all Investments outstanding on such
date made pursuant to this paragraph 6H(xx), minus
(b) the net return of capital received by the Company and the
Restricted Subsidiaries on or prior to such date from all Investments
made pursuant to this paragraph 6H(xx) during the period commencing on
January 1, 1991 and ending on such date,
does not exceed 15% of Consolidated Tangible Net Worth on such date.
No Investments can be made pursuant to the provisions of paragraph 6H(xx) of
this Agreement during any period when a Default or Event of Default has occurred
and is then continuing. Notwithstanding any provision herein to the contrary,
none of the following shall constitute Investments for purposes of this
Agreement: (a) any dividends or other distributions paid or made in respect of
the stock of the Company or any Restricted Subsidiary (whether in cash,
Property, or stock of the Company or any Restricted Subsidiary), or (b) any
payments (whether in cash, Property or stock of the Company or any Restricted
Subsidiary) to redeem, purchase or otherwise acquire, directly or indirectly,
any stock of the Company or any Restricted Subsidiary. For purposes of the
preceding sentence, the term "stock" shall include warrants, options and rights
to purchase stock. For purposes of calculations required by this paragraph 6H,
Investments denominated in currencies other than U.S. dollars shall be
translated into U.S dollars in accordance with generally accepted accounting
principles applicable to such types of Investments.
6I. Transactions with Affiliates. The Company will not, nor will it
permit any Restricted Subsidiary to, enter into any transaction, including,
without limitation, the purchase, sale or exchange of Property or the rendering
of any service, with any Affiliate unless
(i) such transaction, when taken in the light of a series of
transactions of which such transaction is a part (if any), is upon fair and
reasonable terms no less favorable to the Company or such Restricted
Subsidiary than could be obtained in a comparable arm's-length transaction
with a Person not an Affiliate, or
(ii) if, at the time of such transaction, such Affiliate is an
officer, director or employee of the Company or such Restricted Subsidiary
and such transaction relates to such Person's compensation, (a) such
transaction is in the best interests of the Company and the Restricted
Subsidiaries, taken as a whole, and has been approved by the Board of
Directors or the board of directors of such Restricted Subsidiary, as the
case may be, and (b) at the time of such transaction, the Company is
required to file reports pursuant to Section 13 of the Exchange Act.
Exhibit A-29
It is acknowledged that the Archive Tender Offer, the merger of Archive into
Conner Acquisition Corp., and the repayment by the Company of the debt of
Archive and its subsidiaries outstanding on the Acquisition Date in an amount
not to exceed in the aggregate $150,000,000 shall be deemed permitted
transactions hereunder. The purchase by the Company or any Restricted
Subsidiaries of shares of outstanding capital stock of the Company's Subsidiary
formed under the laws of China shall be deemed to comply with this paragraph 6I
so long as the Company or such Restricted Subsidiary pays fair value for such
shares, as determined by the Board of Directors of the Company. The
transactions described in the Arcada Letter of Intent shall be deemed to comply
with this paragraph 6I.
6J. Line of Business. The Company will not, nor will it permit any
Restricted Subsidiary to, engage in any business other than the businesses
currently engaged in by the Company and the Subsidiaries and any business
substantially similar or substantially related thereto.
6K. Designation of Subsidiaries. The Board of Directors may at any time
designate any Restricted Subsidiary as an Unrestricted Subsidiary provided that
no Default or Event of Default shall exist immediately after, and after giving
effect to, any such designation (whether or not caused by such designation), but
it may not thereafter redesignate such Subsidiary as a Restricted Subsidiary.
6L. Private Offering. The Company will not, nor will it permit anyone
acting on its behalf to, offer the Notes or any part thereof or any similar
Securities for issue or sale to, or solicit any offer to acquire any of the same
from, anyone so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act.
6M. Subordinated Debt. The Company will not, and will not permit any
Restricted Subsidiary to, make any payment or redemption of Subordinated Debt,
other than mandatory prepayments or mandatory redemptions scheduled at the time
of issuance of such Subordinated Debt, or otherwise purchase or acquire any
Subordinated Debt, directly or indirectly, or give any notice that irrevocably
binds it to take any such action, unless:
(i) no Default or Event of Default shall exist immediately prior to, or
immediately after, the consummation of any such action or the giving of
such notice, whichever shall first occur, and the Company has delivered a
certificate to such effect to each holder of Notes prior to, but not more
than 30 days prior to, taking such action or giving such notice, whichever
shall first occur, together with a brief description of such action or the
action contemplated by such notice; and
(ii) at the time it shall become irrevocably bound to take such
action, or the time it shall take such action, whichever shall first occur,
one of the following conditions shall be satisfied:
(a) the Company or such Restricted Subsidiary, as the case may
be, could incur Senior Debt in an amount equal to the amount of
Subordinated Debt to be so prepaid, redeemed or otherwise purchased or
acquired;
Exhibit A-30
(b) the Subordinated Debt to be so prepaid, redeemed or
otherwise purchased or acquired is convertible into a number of shares
of capital stock of the Company having a Fair Market Value at the time
that the Company or such Restricted Subsidiary becomes obligated to
take such action which is at least 25% in excess of the principal
amount of such Subordinated Debt; or
(c) the Subordinated Debt to be so prepaid, redeemed or
otherwise purchased or acquired is convertible into a number of shares
of capital stock of the Company having a Fair Market Value at the time
that the Company or such Restricted Subsidiary becomes obligated to
take such action which is a least 15% in excess of the principal
amount of such Subordinated Debt, and the Company has entered into a
firm commitment underwriting agreement with one or more underwriters,
which agreement contains terms and conditions no less favorable to the
Company than those generally included in comparable agreements for
similarly situated issuers at such time (as determined by the Company
in its reasonable judgment), and pursuant to which such underwriters
have agreed to purchase capital stock of the Company for an amount
sufficient to prepay, redeem or otherwise purchase or acquire all or
any part of such Subordinated Debt that is not so converted into such
capital stock prior to such prepayment, redemption, purchase or
acquisition;
provided that no such action shall be taken and no such notice given during the
period beginning on October 3, 1993 and ending on the Determination Date
occurring nearest to March 31, 1995, inclusive.
Nothing set forth in this paragraph 6M shall prevent the Company or any
Restricted Subsidiary from purchasing or acquiring any Subordinated Debt in
privately negotiated transactions or in open-market transactions if
(1) the price paid is less than par plus accrued interest;
(2) no Default or Event of Default shall exist immediately prior to,
or immediately after, such purchase or acquisition; and
(3) the aggregate amount paid by the Company for all such purchases or
acquisitions in any period of twelve consecutive months, which purchases or
acquisitions are not otherwise permitted pursuant to this paragraph 6M,
shall not exceed $25 million;
provided that the Company will not enter into, or agree to enter into, any such
transactions during the period beginning on October 3, 1993 and ending on the
Determination Date occurring nearest to March 31, 1995, inclusive.
6N. Liquidity Coverage. The Company will not permit, on any Determination
Date, the Liquidity Coverage to be less than the percentage set forth in the
following table opposite such Determination Date, in each case determined as of
such Determination Date:
Exhibit A-31
==================================================================================================
Determination Date Percentage
- --------------------------------------------------------------------------------------------------
All Determination Dates occurring during the period beginning with 200%
the Determination Date occurring nearest to June 30, 1993 to and including
the Determination Date occurring nearest to September 30, 1993
All Determination Dates occurring during the period beginning with the 125%
Determination Date occurring nearest to December 31, 1993 to and including the
Determination Date occurring nearest to March 31, 1995
==================================================================================================
6O. Restricted Payments. The Company shall not make any
Restricted Payments during the period beginning of October 3, 1993 and
ending on the Determination Date occurring nearest to March 31, 1995,
inclusive.
6P. Accounting Period. The Company shall not change the
method in which it determines its fiscal year or its fiscal
quarters.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall
occur and be continuing for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise):
(i) the Company defaults in the payment of any
principal of or premium on any Note when the same shall become
due, either by the terms thereof or otherwise as provided in
this Agreement; or
(ii) the Company defaults in the payment of any
interest on any Note for more than 5 Business Days after the
date due; or
(iii) the Company fails to perform or observe any
agreement contained in paragraph 6 or paragraph 5C of this
Agreement; or
(iv) the Company fails to perform or observe any other
agreement contained in this Agreement and such failure shall not
be remedied within thirty (30) days after any Responsible
Officer obtains actual knowledge thereof; or
(v) any representation or warranty made by the Company
in this Agreement 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
(vi) the Company or any Restricted Subsidiary,
(a) 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, but not any
Exhibit A-32
obligation in respect of trade credit incurred in the
ordinary course of business) beyond any period of grace
in effect prior to the occurrence of such default, or
(b) fails to perform or observe any other
agreement, term or condition contained in any agreement
under which any such obligation is created (or if any
other event thereunder or under any such agreement shall
occur and be continuing)
and the effect of such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such holder
or holders) to cause, such obligation to become due prior to any originally
stated maturity, or to require that such obligation be repurchased by the
Company or any Subsidiary, provided that the aggregate amount of all
obligations as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration or repurchase shall occur and be continuing exceeds
$10,000,000 and provided further that this paragraph 7A(vi) shall not apply
to the Specified Debt, so long as the Specified Debt is paid in full within
30 days after it becomes due; or
(vii) the Company or any Restricted Subsidiary makes an
assignment for the benefit of creditors or is generally not paying
its debts as such debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Restricted Subsidiary is entered under any
bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law,
whether now or hereafter in effect (herein called the "Bankruptcy
Law"), of any jurisdiction; or
(ix) the Company or any Restricted Subsidiary
(a) petitions or applies to any tribunal for, or
consents to, the appointment of, or the taking of possession
by, a trustee, receiver, custodian, liquidator or similar
official of the Company or any Restricted Subsidiary, or of
any substantial part of the Property of the Company or any
Restricted Subsidiary, or
(b) 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 Restricted Subsidiary) relating to the Company or any
Restricted Subsidiary under the Bankruptcy Law of any other
jurisdiction; or
(x) any petition or application referred to in paragraph
7A(ix) is filed, or any such proceedings are commenced, against the
Company or any Restricted Subsidiary, and the Company or such
Restricted 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
Exhibit A-33
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Restricted Subsidiary
decreeing a split-up of the Company or such Restricted Subsidiary
that requires the divestiture of assets representing a Substantial
Part, or the divestiture of the stock of a Restricted Subsidiary
whose assets represent a Substantial Part, of the consolidated
assets of the Company and the Restricted Subsidiaries (determined
in accordance with generally accepted accounting principles) or
that requires the divestiture of assets, or stock of a Restricted
Subsidiary, that shall have contributed a Substantial Part of the
Consolidated Net Income for any of the three fiscal years then most
recently ended, and such order, judgment or decree remains unstayed
and in effect for more than 60 days; or
(xiii) a final judgment for the payment of money or the
transfer of Property in an amount in excess of $5,000,000
(excluding that portion of any such judgment covered by insurance
in respect of which coverage is undisputed) is rendered against the
Company or any Restricted 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 execution thereof
stayed pending further appeal;
then
(a) if such event is an Event of Default specified in
clause (viii), (ix) or (x) of this paragraph 7A with respect to the
Company, all of the Notes at the time outstanding shall
automatically become immediately due and payable at par together
with interest accrued thereon, without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the
Company,
(b) if such event is any other Event of Default, the
Required Holders may at their option, by notice in writing to the
Company, declare all of the Notes to be, and all of the Notes shall
thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by the Company, provided that the Yield-Maintenance
Amount, if any, with respect to each Note shall be due and payable
upon such declaration only if
(I) such event is an Event of Default specified in
any of clause (i) to clause (vi), inclusive, or clause
(xiii) of this paragraph 7A,
(II) the Required Holders shall have given to the
Company, at least 10 Business Days before such declaration,
written notice stating its or their intention so to declare
the Notes to be immediately due and payable and identifying
one or more such Events of Default whose occurrence on or
before the date of such notice permits such declaration and
Exhibit A-34
(III) one or more of the Events of Default so
identified shall be continuing at the time of such
declaration, and
(c) if such event is an Event of Default specified in
clause (i) or clause (ii) of this paragraph 7A and irrespective
of whether the Required Holders shall have declared the Notes to
be due and payable pursuant to the foregoing clause (b), any
holder of Notes may at its option, by notice in writing to the
Company, declare all of the Notes held by such holder to be, and
all of such Notes shall thereupon be and become, immediately due
and payable together with interest accrued thereon and together
with the Yield-Maintenance Amount, if any, with respect to each
such Note, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company.
7B. 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 in this Agreement or now or hereafter existing at
law or in equity or by statute or otherwise.
7C. Annulment of Acceleration of Notes. If a declaration is
made pursuant to paragraph 7A(b) of this Agreement by the Required Holders
or paragraph 7A(c) of this Agreement by any holder of Notes, then and in
every such case, the Required Holders may, by written instrument filed
with the Company, rescind and annul such declaration within 90 days
thereafter, and the consequences thereof, provided that at the time such
declaration is annulled and rescinded:
(i) no judgment or decree shall have been entered for the
payment of any moneys due on or pursuant to the Notes or this
Agreement;
(ii) all arrears of interest upon all the Notes and all
other sums payable under the Notes and under this Agreement
(except any principal of, or interest or premium on, the Notes
which shall have become due and payable by reason of such
declaration under paragraph 7A(b) or paragraph 7A(c) of this
Agreement) shall have been duly paid; and
(iii) each and every other Default and Event of Default
shall have been waived pursuant to paragraph 11C of this Agreement
or otherwise made good or cured,
and provided further that no such rescission and annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereon.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants:
Exhibit A-35
8A. Corporate Organization and Authority; Compliance with Law.
Each of the Company and the Restricted Subsidiaries
(i) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of
incorporation,
(ii) has all legal and corporate power and authority to own
and operate its Properties and to carry on its business as now
conducted and as presently proposed to be conducted,
(iii) has all necessary licenses, certificates and permits
to own and operate its Properties and to carry on its business as
now conducted and as presently proposed to be conducted, except
where the failure to have such licenses, certificates and
permits, in the aggregate, would not have a material adverse
effect on the business, prospects, Properties or condition
(financial or otherwise) of the Company and the Restricted
Subsidiaries taken as a whole, or the ability of the Company to
perform its obligations set forth in this Agreement and in the
Notes,
(iv) has duly qualified or has been duly licensed, and is
authorized to do business and is in good standing, as a foreign
corporation in each jurisdiction where such qualification or
authorization is required, except where the failure to be so
qualified or licensed and authorized and in good standing, in the
aggregate, would not have a material adverse effect on the
business, prospects, Properties or condition (financial or
otherwise) of the Company and the Restricted Subsidiaries taken
as a whole, or the ability of the Company to perform its
obligations set forth in this Agreement and in the Notes, and
(v) is in compliance with all of its contractual obligations
and all laws, ordinances, and governmental rules and regulations
to which it is subject, except where the failure so to be in
compliance would not have a material adverse effect on the
business, prospects, Properties or condition (financial or
otherwise) of the Company and the Restricted Subsidiaries taken
as a whole, or the ability of the Company to perform its
obligations set forth in this Agreement and in the Notes.
8B. Conflicting Agreements and Other Matters.
(i) Conflict with Notes. Neither the execution nor delivery
of this Agreement or the Notes, nor the offering, issuance and
sale of the Notes, nor fulfillment of nor compliance with the
terms and provisions of this Agreement and of the Notes will
conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of
the Properties of the Company or any of the Restricted
Subsidiaries pursuant to, the charter or by-laws of the Company
or any of the Restricted Subsidiaries, any award of any
arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Company or any of the
Restricted Subsidiaries is subject.
Exhibit A-36
(ii) Restrictions on Debt. Neither the Company nor any of
the Restricted Subsidiaries is a party to, or otherwise subject
to any provision contained in, any instrument evidencing
indebtedness of the Company or such Restricted Subsidiary, any
agreement relating to this Agreement or any other contract or
agreement (including its charter), in each case relating to Debt
in an outstanding aggregate principal amount in excess of
$1,000,000, that limits the amount of, or otherwise imposes
restrictions on the incurring of, Debt of the Company of the
type to be evidenced by the Notes except as set forth in the
agreements listed in Annex 2 to this Agreement.
8C. Sale is Legal and Authorized; Notes are Enforceable.
(i) Sale Is Authorized. Each of the sale of the Notes by
the Company and compliance by the Company with all of the
provisions of this Agreement and of the Notes is within the
corporate powers of the Company.
(ii) Notes are Enforceable. The obligations of the Company
under this Agreement and the Notes are valid, binding and
enforceable in accordance with the terms of this Agreement and
the Notes, except that the enforceability of this Agreement and
the Notes may be:
(a) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or similar laws affecting
the enforcement of creditors' rights generally; and
(b) subject to the availability of equitable remedies.
8D. Financial Statements. The Company has furnished you with
the following financial statements, identified by a principal financial
officer of the Company: a consolidated balance sheet of the Company and
the Subsidiaries as at December 31 in each of the years 1987 to 1990,
inclusive, all certified by Price, Waterhouse & Co.; and consolidated
statements of income and cash flows of the Company and the Subsidiaries
for each such year, all certified by Price, Waterhouse & Co. Such
financial statements (including any related schedules and notes) are
true and correct in all material respects (subject, as to interim
statements, to changes resulting from audits and year-end adjustments),
have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of the Company and the
Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present the condition of the Company and the
Subsidiaries as at the dates thereof, and the statements of income and
statements of cash flows fairly present the results of the operations of
the Company and the Subsidiaries for the periods indicated.
8E. Material Adverse Change. Except as set forth in the
Supplemental Disclosure Letter, since December 31, 1990, there has been
no material adverse change in the business, prospects, Properties or
condition (financial or otherwise) of the Company and the Subsidiaries
taken as a whole, or in the ability of the Company to perform its
obligations set forth in this Agreement and in the Notes.
Exhibit A-37
8F. Actions Pending. Except as set forth in the Supplemental
Disclosure Letter or the SEC Documents, there is no action, suit,
investigation or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of the Restricted Subsidiaries, or
any Properties or rights of the Company or any of the Restricted
Subsidiaries, by or before any court, arbitrator or administrative or
governmental body that, in the aggregate, if adversely determined, would
result in a materially adverse effect on the business, prospects,
Properties or condition (financial or otherwise) of the Company and the
Restricted Subsidiaries taken as a whole, or the ability of the Company
to perform its obligations set forth in this Agreement and in the Notes.
8G. Outstanding Debt. Neither the Company nor any of the
Subsidiaries has outstanding any Debt except as permitted by paragraph
6 of this Agreement. All Debt with an outstanding principal amount in
excess of $1 million is described on Annex 2 to this Agreement. The
aggregate principal amount of all other Debt does not exceed $5,000,000.
8H. Taxes. Each of the Company and the Subsidiaries has filed
all Federal, State and other income tax returns and other material tax
returns that, to the best knowledge of the officers of the Company, are
required to be filed, and each has paid all taxes as shown on such
returns and on all assessments received by it to the extent that such
taxes have become due, except such taxes as are being contested in good
faith by appropriate proceedings for which adequate reserves (to the
extent required) have been established in accordance with generally
accepted accounting principles.
8I. Title to Properties; Patents and Copyrights.
(i) Title to Properties. Each of the Company and the
Restricted Subsidiaries has good and indefeasible title to its
respective real Properties (other than Properties that it leases)
and good title to all of its other respective Properties (other
than Intellectual Property Rights), including the Properties
reflected in the balance sheet as at December 31, 1990 referred to
in paragraph 8D of this Agreement (other than Properties disposed
of in the ordinary course of business), subject to no Lien of any
kind except Liens permitted by paragraph 6D of this Agreement. All
leases necessary in any material respect for the conduct of the
respective businesses of the Company and the Subsidiaries are
valid and subsisting and are in full force and effect.
Notwithstanding the foregoing, no representation or warranty is
made by the Company in this paragraph 8I(i) with respect to
Intellectual Property Rights.
(ii) Patents and Copyrights. Except as disclosed in the SEC
Documents or the Supplemental Disclosure Letter, each of the
Company and the Restricted Subsidiaries owns or possesses, or
could obtain ownership or possession on terms not materially
adverse to the financial condition of the Person so obtaining
ownership or possession of, all of the patents, trademarks,
service marks, trade names, copyrights, licenses, and rights with
respect thereto ("Intellectual Property Rights") necessary for the
present and presently planned future conduct of its business,
without any known conflict with the rights of others, except where
such conflicts, in the aggregate, would not have a material
adverse effect on the business, prospects, Properties or condition
(financial or otherwise) of the Company and the Restricted
Subsidiaries taken as a whole,
Exhibit A-38
or the ability of the Company to perform its obligations set forth
in this Agreement and the Notes.
8J. Environmental Compliance.
(i) Compliance. Each of the Company and the Subsidiaries has
been, since its incorporation, complying with, and, on the Closing
Date will be in compliance with, all Environmental Protection Laws
in effect in each jurisdiction where it is presently doing
business and in which the failure so to comply would have a
material adverse effect on the business, prospects, Properties or
condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole, or the ability of the Company to
perform its obligations under this Agreement and the Notes; and
(ii) Liability.Neither the Company nor any of the
Subsidiaries is subject to any liability under any Environmental
Protection Laws that, in the aggregate, would have a material
adverse effect on the business, prospects, Properties or condition
(financial or otherwise) of the Company and the Subsidiaries taken
as a whole, or the ability of the Company to perform its
obligations under this Agreement and the Notes.
8K. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the IRC), whether or not waived,
exists with respect to any Pension Plan (other than a Multiemployer Plan).
No liability to the PBGC has been or is expected by the Company or any
other ERISA Affiliate to be incurred with respect to any Pension Plan
(other than a Multiemployer Plan) by the Company or any other ERISA
Affiliate that is or would be materially adverse to the business,
prospects, Properties or condition (financial or otherwise) of the Company
and the Subsidiaries taken as a whole, or the ability of the Company to
perform its obligations under this Agreement and the Notes. Neither the
Company nor any ERISA Affiliates have incurred or presently expect to
incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan that is or would have a materially adverse effect on
the business, prospects, Properties or condition (financial or otherwise)
of the Company and the Subsidiaries taken as a whole, or the ability of
the Company to perform its obligations under the this Agreement and the
Notes. The execution and delivery of this Agreement and the issuance and
sale of the Notes 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 of the IRC. The representation
by the Company in the next preceding sentence is made in reliance upon and
subject to the accuracy of your representation in paragraph 9 of this
Agreement as to the source of the funds to be used to pay the purchase
price of the Notes to be purchased by you.
8L. No Defaults. No event has occurred and no condition exists
that, upon the issue of the Notes, would constitute a Default or an Event
of Default. Neither the Company nor any Subsidiary is in violation in any
respect of any term of any charter instrument or bylaw and neither the
Company nor any Subsidiary is in violation in any material respect of any
term in any agreement or other instrument to which it is a party or by
which it or any of its Property may be bound, except for violations that,
in the aggregate, could not have a materially adverse effect on the
business, prospects, Properties or condition (financial or otherwise) of
the Company and the Subsidiaries taken as a whole, or the ability of the
Company to perform its obligations set forth in this Agreement and in the
Notes.
Exhibit A-39
8M. Regulation G, etc. Neither the Company nor any Subsidiary
owns or has any present intention of acquiring any "margin stock" as
defined in Regulation G (12 CFR Part 207) of the Board of Governors of the
Federal Reserve System ("Margin Stock"), other than incidental amounts
thereof which would, in no event, exceed a value of (based on the higher
of purchase price or current fair market value) of $5,000,000 and would
not cause the Notes to be "indirectly secured" by margin stock, as such
term is used in Regulation G. The proceeds of sale of the Notes will be
used to fund capital expenditures and for general corporate purposes. None
of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any
Margin Stock or for the purpose of maintaining, reducing or retiring any
indebtedness that was originally incurred to purchase or carry any stock
that is currently a Margin Stock or for any other purpose that might
constitute this transaction a "purpose credit" within the meaning of such
Regulation G. Neither the Company nor any agent acting on its behalf has
taken or will take any action that might cause this Agreement or the Notes
to violate Regulation G, Regulation T or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Exchange Act,
in each case as in effect now or as the same may hereafter be in effect.
8N. Offering of Notes. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the Notes or any
similar Security of the Company for sale to, or solicited any offers to
buy the Notes or any similar Security of the Company from, or otherwise
approached or negotiated with respect to this Agreement with, any Person
other than you, the Other Purchasers, and 59 other institutional
investors, and neither the Company nor any agent acting on its behalf has
taken or will take any action that would subject the issuance or sale of
the Notes to the provisions of section 5 of the Securities Act or to the
provisions of any securities or Blue Sky law of any applicable
jurisdiction.
8O. Governmental Consent. Neither the nature of the Company or
of any Subsidiary, nor any of their respective businesses or Properties,
nor any relationship between the Company or any Subsidiary and any other
Person, nor any circumstance in connection with the offering, issuance,
sale or delivery of the Notes is such as to require any authorization,
consent, approval, exemption or other action by or notice to or filing
with any court or administrative or governmental body (other than routine
filings after the date of closing with the Securities and Exchange
Commission and state Blue Sky authorities) in connection with the
execution and delivery of this Agreement, the offering, issuance, sale or
delivery of the Notes or fulfillment of or compliance with the terms and
provisions of this Agreement or of the Notes (other than any of the
foregoing required after the date hereof to comply with the covenants set
forth herein but otherwise unrelated to this Agreement or the transactions
contemplated hereby).
8P Certain Laws.
(i) Investment Company Act. The Company is not, and is not
directly or indirectly controlled by, or acting on behalf of any
Person which is, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(ii) Absence of Foreign or Enemy Status. The Company is not
Exhibit A-40
(a) an "enemy" or an "ally of the enemy" within the meaning
of Section 2 of the Trading with the Enemy Act, as amended, or any
executive orders or regulations issued or promulgated pursuant
thereto, or
(b) a "national" of any "designated enemy country" as
such terms are defined in Executive Order No. 9095, as amended, of
the President of the United States of America.
Neither the issue and sale of the Notes by the Company nor its use of the
proceeds thereof as contemplated by this Agreement will violate the
Foreign Assets Control Regulations, the Transaction Control Regulations,
the Cuban Assets Control Regulations, the Foreign Fund Control
Regulations, the Iranian Assets Control Regulations, the Nicaraguan Trade
Control Regulations, the South African Transactions Regulations, the
Libyan Sanctions Regulations, the Soviet Gold Coin Regulations or the
Panamanian Transactions Regulations, of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended) or Executive
Orders 12722 and 12724 (transactions with Iraq and Executive Orders 12723
and 12725 (transactions with Kuwait).
(iii) Holding Company Status. The Company is not a "holding
company" or an "affiliate" of a "holding company," or a "subsidiary
company" of a "holding company," or a "public utility" within the
meaning of the Public Utilities Holding Company Act of 1935, as
amended.
(iv) South African Investments Prohibited. None of the
transactions contemplated in this Agreement (including without
limitation, the use of the proceeds from the sale of the Notes) will
violate the Comprehensive Anti-Apartheid Act of 1986, or any rules or
regulations promulgated thereunder.
8Q. Disclosure. The Private Placement Memorandum with respect to the
Company, dated January 1991, prepared by J.P. Morgan Securities, Inc., for
use in connection with the Company's private placement of the Notes, taken
together with the SEC Documents and the Supplemental Disclosure Letter,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein
and therein not misleading. There is no fact peculiar to the Company or any
of the Subsidiaries that materially adversely affects the business,
Properties or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole, and that has not been set forth in this
Agreement or in the other documents, certificates and written statements
furnished to you by or on behalf of the Company prior to the date of this
Agreement in connection with the transactions contemplated hereby.
8R. No Unrestricted Subsidiaries. The Company has no Subsidiaries
other than Restricted Subsidiaries.
9. REPRESENTATIONS OF THE PURCHASER. You represent, and in making
this sale to you it is specifically understood and agreed, that you are not
acquiring the Notes to be purchased by you hereunder with a view to or for
sale in connection with any distribution thereof within the meaning of the
Securities Act, provided that the disposition of your Property shall at all
times be and remain within your control. You also represent that no part
Exhibit A-41
of the funds being used by you to pay the purchase price of the Notes being
purchased by you under this Agreement constitutes assets allocated to any
separate account maintained by you in which any employee benefit plan,
other than employee benefit plans identified on a list that has been
furnished by you to the Company, participates to the extent of 10% or more.
For the purpose of this paragraph 9, the terms "separate account" and
"employee benefit plan" have the respective meanings specified in Section 3
of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the following
terms shall have the meanings specified with respect to this Agreement
below:
10A. Yield-Maintenance Terms.
"Adjusted Reinvestment Yield" means, with respect to any Settlement
Date, the Reinvestment Yield for such Settlement Date, plus
(a) zero (0) if such Settlement Date is prior to March 30, 1994,
and
(b) twenty five one-hundredths percent (0.25%) per annum if such
Settlement Date is on or after March 30, 1994.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which commercial banks in New York City are required or
authorized to be closed.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that
(i) is to be prepaid pursuant to paragraph 4B of this
Agreement (any prepayment of less than all the Notes being
applied to required payments of principal as provided in
paragraph 4A(iii) of this Agreement),
(ii) is to be prepaid pursuant to paragraph 4E of this
Agreement (any prepayment of less than all the Notes being
applied to required payments of principal as provided in
paragraph 4A(iii) of this Agreement), or
(iii) is declared to be immediately due and payable
pursuant to paragraph 7A of this Agreement, as the context
requires.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal
from their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted
financial practice and at a discount factor (applied on a semiannual
basis) equal to the Adjusted Reinvestment Yield with respect to such
Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by either,
Exhibit A-42
(i) the yields reported, as of 10:00 A.M. (New York City
time) on the Business Day next preceding the Settlement Date with
respect to such Called Principal, on the display designated as
"Page 678" on the Telerate Service (or such other display as may
replace Page 678 on the Telerate Service) for actively traded
U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date,
or if such yields shall not be reported as of such time or the
yields reported as of such time shall not be ascertainable, then
(ii) the Treasury Constant Maturity Series yields reported,
for the latest day for which such yields shall have been so
reported as of the Business Day next preceding the Settlement
Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having
a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield
shall be determined, if necessary, by
(a) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial
practice, and
(b) interpolating linearly between reported yields.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing
(i) such Called Principal into
(ii) the sum of the products obtained by multiplying
(a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by
(b) the number of years (calculated to the nearest
one-twelfth (1/12) 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" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, assuming, for purposes of
calculation, that the rate of interest on the Series A Senior Notes was
8.84% per annum at all times, and that the rate of interest on the
Series B Senior Notes was 9.08% per annum at all times
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be
prepaid pursuant to paragraph 4B or
Exhibit A-43
paragraph 4E of this Agreement or is declared to be immediately due and
payable pursuant to paragraph 7A of this Agreement, as the context
requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note,
an amount equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of
(a) such Called Principal plus
(b) interest accrued thereon as of (including interest
due on) the Settlement Date with respect to such Called
Principal.
The Yield-Maintenance Amount shall in no event be less than zero.
10B. Other Terms.
"Acquisition Date" means the date on which the Archive Tender
Offer is consummated.
"Adjusted Consolidated Debt Percentage" means, with respect to
any sale of capital stock to which paragraph 6B(iii) applies, the
greater of
(a) the lesser of
(I) the percentage in effect in accordance with
paragraph 6B(ii) in respect of the Determination Date
immediately preceding such sale of capital stock, or
(II) the percentage determined by dividing the
Adjusted Consolidated Debt Amount by the Adjusted
Consolidated Tangible Net Worth Amount, in each case
determined after giving effect to such sale, or
(b) 125%.
The Adjusted Consolidated Debt Percentage determined by the foregoing
calculation shall apply to the first period, as set forth in the table
in paragraph 6B(ii) hereof, immediately following the date of the sale
of such capital stock. If the Adjusted Consolidated Debt Percentage for
such first period is greater than 125%, then the Adjusted Consolidated
Debt Percentage in each period succeeding such first period shall be
determined by deducting 20 percentage points from the Adjusted
Consolidated Debt Percentage determined as herein provided for the
immediately preceding period until a period is reached where the
Adjusted Consolidated Debt Percentage is reduced to, but not below 125%
(the last deduction to arrive at 125% being 20 percentage points or
such lesser number of percentage points as is necessary to arrive at
125%). Thereafter, the Adjusted Consolidated Debt Percentage shall be
125%. As used in this definition,
Exhibit A-44
"Adjusted Consolidated Debt Amount" means, with respect to
any sale of capital stock to which paragraph 6B(iii) hereof
applies, the Existing Consolidated Debt Amount with respect
thereto plus 50% of the Net Cash Proceeds of such sale of capital
stock.
"Adjusted Consolidated Tangible Net Worth Amount" means,
with respect to any sale of capital stock to which paragraph
6B(iii) hereof applies, the Existing Consolidated Tangible Net
Worth Amount with respect thereto plus 100% of the Net Cash
Proceeds of such sale of capital stock.
"Existing Consolidated Debt Amount" means, with respect to
any sale of capital stock to which paragraph 6B(iii) hereof
applies, the amount of Consolidated Debt outstanding on the
Determination Date immediately preceding such sale.
"Existing Consolidated Tangible Net Worth Amount" means,
with respect to any sale of capital stock to which paragraph
6B(iii) hereof applies, the amount of Consolidated Tangible Net
Worth determined on the Determination Date immediately preceding
such sale.
"Net Cash Proceeds" means, with respect to any sale of
capital stock to which paragraph 6B(iii) hereof applies, the net
cash proceeds of the sale of such stock of the Company, net of all
costs related to the sale thereof, and net of the Fair Market
Value of any contingent obligations the Company has assumed with
respect to any Person in connection with such sale.
"Affiliate" means any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the
Company, except a Restricted Subsidiary. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Annual Disposition Measurement Period" has the meaning assigned
to such term in paragraph 6G(ii)(d)(l) of this Agreement.
"Arcada Holdings, Inc." means that certain corporation formed, or
to be formed, pursuant the Arcada Letter of Intent to act as the
holding company for the Company's software disk backup, data
management, hierarchical storage management an related applications
business.
"Arcada Letter of Intent" means that certain Letter of Intent,
entered into as of December 13, 1993, between Archive, the Company and
Quest Development Corporation.
"Arcada Restricted Subsidiary" means, at any time,
(i) Arcada Holdings, Inc., provided that
Exhibit A-45
(a) at least
(I) 65% of the Voting Stock of which, except
directors qualifying shares and any shares issued to
comply with local ownership legal requirements
(provided that such directors qualifying shares and
other shares shall not represent in excess of 3% of
the outstanding shares of the stock of any class of
such Restricted Subsidiary and, after taking such
shares into account, the Company shall, directly or
indirectly, own a majority of the Voting Stock of
such Subsidiary), and
(II) 65% of all non-voting stock of every other
class of which,
is, at such time, owned by the Company either directly or
through Restricted Subsidiaries other than Restricted
Subsidiaries that qualify as such solely by virtue of this
definition of "Arcada Restricted Subsidiary,"
(b) Arcada Holdings, Inc. has at such time never
been designated an Unrestricted Subsidiary by the Board of
Directors pursuant to paragraph 6K of this Agreement, and
(c) Arcada Holdings, Inc. qualifies at such time as
a Subsidiary, and
(ii) any other Subsidiary of the Company provided that
(a) (I) 100% of the Voting Stock of which, except
directors qualifying shares and any shares issued to comply
with local ownership legal requirements (provided that such
directors qualifying shares and other shares shall not
represent in excess of 3% of the outstanding shares of the
stock of any class of such Restricted Subsidiary and, after
taking such shares into account, the Company shall, directly
or indirectly, own a majority of the Voting Stock of such
Subsidiary), and
(II) 100% of all non-voting stock of every other
class of which,
is, at such time, owned by Arcada Holdings, Inc. either directly
or through other Restricted Subsidiaries,
(b) such Subsidiary has at such time never been
designated an Unrestricted Subsidiary by the Board of
Directors pursuant to paragraph 6K of this Agreement, and
(c) Arcada Holdings, Inc. qualifies at such time as
a Restricted Subsidiary.
Exhibit A-46
Any Subsidiary that qualifies as a Restricted Subsidiary under the
definition of "Restricted Subsidiary" in this paragraph 10B without
reference to this definition of "Arcada Restricted Subsidiary" shall
be deemed to be a Restricted Subsidiary but not an Arcada Restricted
Subsidiary.
"Archive" means Archive Corporation, a Delaware corporation.
"Archive Tender Offer" means the offer by the Company for all
of the shares of the outstanding capital stock of Archive pursuant to
an Offer to Purchase dated November 24, 1992.
"Asset Disposition Date" has the meaning assigned to such term
in paragraph 6G(ii)(d)(l) of this Agreement.
"Bankruptcy Law" has the meaning assigned to it in paragraph
7A(viii) of this Agreement.
"Board of Directors" means, at any time, the board of directors
of the Company or any committee thereof which, in the instance, shall
have the lawful power to exercise the power and authority of such
board of directors.
"Capital Lease" means a lease with respect to which the rental
obligation thereunder is a Capitalized Lease Obligation.
"Capitalized Lease Obligation" means, with respect to any
Person, any rental obligation that, under generally accepted
accounting principles, is required to be capitalized on the books of
such Person, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with such
principles.
"Cash Equivalents" means
(a) cash,
(b) all Investments permitted by subparagraph 6H (i),
(iii), (vi), (vii), (viii), (ix), (x), (xi) and (xii), and
(c) any other Investments which would properly be
classified as "cash equivalents" in accordance with generally
accepted accounting principles.
"Cash Flow Contribution" means, for any period, in respect of
any Property of the Company or a Restricted Subsidiary, the amount of
Consolidated Operating Cash Flow fairly attributable to such Property
during such period, expressed as a percentage of such Consolidated
Operating Cash Flow.
"Change in Control" means the direct or indirect acquisition by
any person (as such term is used in Section 13(d) and Section
14(d)(2) of the Exchange Act), or related persons constituting a
group (as such term is used in Rule 13d-5 under the Exchange Act), of
Exhibit A-47
(i) beneficial ownership of issued and outstanding shares of
Voting Stock of the Company, the result of which acquisition is
that such person or such group possesses in excess of 50% of the
combined voting power of all then issued and outstanding Voting
Stock of the Company, or
(ii) the power to elect, appoint, or cause the election or
appointment of at least a majority of the members of the Board of
Directors.
"Closing Date" has the meaning assigned to such term in
paragraph 2 of this Agreement.
"Company" has the meaning assigned to such term in the
introductory sentence of this Agreement.
"Competitor" means any Person who, at the time of
determination, is commonly known to have a portion of its business in
the same line of business as the Company or the Subsidiaries, or is
commonly known to be an affiliate of such Person provided, that
neither you, any of your affiliates, any Purchaser, any affiliate of
any Purchaser, nor any Financial Institution (other than a finance
company or a pension plan) shall be deemed to be Competitors.
"Consolidated Debt" means, at any time, without duplication,
the amount of Debt of the Company and the Restricted Subsidiaries
outstanding at such time, determined on a consolidated basis.
"Consolidated Fixed Charges" means, with respect to any period,
the greater of zero and the amount of all expenses of the Company and
the Restricted Subsidiaries during such period of the following
types:
(i) interest due on, or with respect to, Consolidated
Debt (including, without limitation, interest due on the
Notes), amortization of debt discount and expense with respect
to Consolidated Debt, and imputed interest on Capitalized Lease
Obligations, plus
(ii) Rentals with respect to all leases,
determined on a consolidated basis in accordance with generally
accepted accounting principles; provided that, if the net earnings
(or loss) of any Person shall not be taken into account pursuant to
clauses (f) or (h) of the definition of "Consolidated Net Income" in
determining Consolidated Net Income for any period in respect of
which Consolidated Fixed Charges is being determined, all of the
foregoing items attributable to such Person for such period shall
only be taken into account to the extent that, in the aggregate,
they exceed the net earnings of such Person, provided further that,
if the net earnings (or loss) of any Person shall not be taken into
account pursuant to clauses (c), (d) or (g) of the definition of
"Consolidated Net Income" in determining Consolidated Net Income for
any period in respect of which Consolidated Fixed Charges is being
determined, all of the foregoing items attributable to such Person
for such period shall be excluded from Consolidated Fixed Charges
for such period.
Exhibit A-48
As used in this definition,
"Rentals" means, with respect to any period, all fixed
payments which the lessee is required to make during such period by
the terms of any lease of one year or more, but shall not include
amounts required to be paid in respect of Capital Leases.
"Consolidated Net Income" -- for any fiscal period means
net earnings (or loss) after income taxes of the Company and the
Restricted Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles, but
excluding:
(a) any gain or loss arising from the sale of
capital assets (other than any gain or loss of less than
$100,000 from any such sale);
(b) any gain or loss arising from any write-up of
assets subsequent to December 31, 1990 (other than as a
consequence of a physical review of inventory or other
assets), any gain arising from the acquisition of any
Securities of the Company or any Restricted Subsidiary, or
any other extraordinary item;
(c) earnings of any Restricted Subsidiary accrued
prior to the date it became a Restricted Subsidiary;
(d) earnings of any Person, substantially all the
assets of which have been acquired in any manner, realized
by such other Person prior to the date of such
acquisition;
(e) net earnings of any Person (other than a
Restricted Subsidiary) in which the Company or any
Restricted Subsidiary shall have an ownership interest
unless such net earnings shall have actually been received
by the Company or such Restricted Subsidiary in the form
of cash distributions or cancellation of Debt;
(f) any portion of the net earnings of any
Restricted Subsidiary that for any reason is unavailable,
by law or pursuant to any contractual restriction, for
payment of dividends to the Company or any other Restricted
Subsidiary;
(g) the earnings of any Person to which assets of
the Company shall have been sold, transferred or disposed
of, or into which the Company shall have merged, prior to
the date of such transaction; and
(h) any portion of the net earnings of the Company
that cannot be converted into United States dollars;
all determined in accordance with generally accepted accounting
principles.
"Consolidated Operating Cash Flow" means, for any period,
Exhibit A-49
(a) Consolidated Net Income for such period, plus
(b) the aggregate amount of depreciation and
amortization accrued for such period by the Company and the
Restricted Subsidiaries (to the extent, but only to the
extent, each component of such aggregate amount was
reflected in the computation of Consolidated Net Income for
such period), determined on a consolidated basis.
"Consolidated Senior Debt" means, at any time, without
duplication, the amount of Senior Debt outstanding at such time,
determined on a consolidated basis.
"Consolidated Tangible Net Worth" means at any time:
(a) the net book value (after deducting related
depreciation, obsolescence, amortization, valuation and
other proper reserves relating to such assets) at which
the Tangible Assets of the Company and all Restricted
Subsidiaries would be shown on a consolidated balance
sheet at such time prepared in accordance with generally
accepted accounting principles (subject to any
modification required by the definition of "Tangible
Assets" below), but excluding any amount on account of
write-ups of assets after December 31, 1990 (other than as
a consequence of a physical review of inventory or other
assets), at such time, minus
(b) the amount at which the liabilities of the
Company and the Restricted Subsidiaries would be shown on
such balance sheet, and including as liabilities all
reserves for contingencies and other potential liabilities
(specifically including therein, without limitation,
actuarially determined unfunded vested pension liabilities
and liabilities in respect of other post-retirement
benefits) and all minority interests in Restricted
Subsidiaries at such time, all determined in accordance
with generally accepted accounting principles (subject to
any modification required by the preceding parenthetical
expression in this clause (b)), plus
(c) if such time is on or after the Determination
Date occurring nearest to December 31, 1993, $0, and if
such time is prior to such Determination Date,
(i) the aggregate amount paid by the Company to
Compaq Computer Corporation during the Company's
fiscal quarter ended October 3, 1992 for the purchase
of outstanding shares of the Company 's common stock
owned by Compaq Computer Corporation subject to an
aggregate limit of $150 million, plus
(ii) following the Acquisition Date, an amount
representing intangibles, including goodwill, in an
aggregate amount equal, on the relevant date of
reference thereto, to the amount specified in the
table below opposite the period during which such
date occurs:
Exhibit A-50
Period Amount
===============================================================================
Acquisition Date to the Determination Date occurring nearest to $245,000,000
June 30, 1993, inclusive
===============================================================================
From the date immediately following the Determination Date $215,000,000
occurring nearest to June 30, 1993 to the day immediately
preceding the Determination Date occurring nearest to December
31, 1993, inclusive
===============================================================================
As used in this definition,
"Tangible Assets" means all assets (including, without
duplication, the capitalized value of any leasehold interest under any
Capitalized Lease Obligation) except:
(i) the aggregate amount of deferred assets, other than
prepaid insurance and prepaid taxes, in excess of $10,000,000;
(ii) patents, copyrights, trademarks, trade names,
franchises, goodwill and other similar intangible assets;
(iii) all Investments made pursuant to paragraph 6H(xx) and
any other Investments not permitted by any other provision of
paragraph 6H of this Agreement (except that "Tangible Assets"
shall include outstanding Investments made pursuant to paragraph
6H(xx) at any time when "Consolidated Tangible Net Worth" is
being determined for purposes of determining the amount of
Investments which may be made pursuant to such paragraph); and
(iv) unamortized debt discount and expense (other than not
more than $6,500,000 of unamortized debt expense attributable to
the issuance of Debt prior to the date hereof (which expense
shall be included in "Tangible Assets").
"Consolidated Total Assets" means, at any time of determination,
the net book value of all assets of the Company and the Restricted
Subsidiaries that would be shown on a consolidated balance sheet of the
Company and the Restricted Subsidiaries prepared at such time of
determination in accordance with generally accepted accounting
principles, excluding changes in the net book value of assets resulting
from write-ups of assets subsequent to December 31, 1990 (other than as
a consequence of a physical review of inventory or other assets).
"Control Prepayment Date" has the meaning assigned to such term in
paragraph 4E(iii) of this Agreement.
Exhibit A-51
"Debentures" means the 6-3/4% Convertible Subordinated Debentures
Due 2001 of the Company issued pursuant to that certain Indenture,
dated as of March 1, 1991, between the Company and The First National
Bank of Boston, as trustee, and the 6-1/2% Convertible Subordinated
Debentures Due 2002 of the Company issued pursuant to that certain
Indenture, dated as of March 1, 1992, between the Company and The First
National Bank of Boston, as trustee.
"Debt" of any Person, at any time, means
(i) indebtedness for money borrowed of such Person;
(ii) indebtedness that is secured by any Lien on Property
owned by such Person, whether or not the indebtedness secured
thereby shall have been assumed by such Person;
(iii) Capitalized Lease Obligations of such Person;
(iv) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of
business) and other contingent liabilities (whether direct or
indirect) of such Person in connection with the obligations,
stock or dividends of any other Person, provided that guarantees
by such Person of contingent obligations of other Persons shall
be excluded from this clause (iv);
(v) obligations of such Person under any contract
providing for the making of loans, advances or capital
contributions to any other Person, or for the purchase of any
Property from any other Person, in each case primarily in order
to enable such other Person to maintain working capital, net
worth or any other balance sheet condition or to pay debts,
dividends or expenses, to the extent that such other Person is
obligated to maintain such condition or make such payments and
has failed to do so;
(vi) obligations of such Person under any contract for the
purchase of materials, supplies or other Property or services if
such contract (or any related document) requires that payment for
such materials, supplies or other Property or services shall be
made regardless of whether or not delivery of such materials,
supplies or other Property or services is ever made or tendered;
and
(vii) obligations under any other contract which, in legal
effect, is substantially equivalent to a guarantee, provided that
guarantees by such Person of contingent obligations of other
Persons shall be excluded from this clause (vii),
all as determined in accordance with generally accepted accounting
principles, provided that such items shall only constitute Debt to the
extent that, in accordance with generally accepted accounting
principles, such items would be (and only to the extent such items
would be) included in determining total liabilities as shown on the
liability side of the balance sheet of such Person (assuming that such
Person were the primary
Exhibit A-52
obligor in respect of the underlying obligation with respect to any
guarantee or other contingent obligation, as contemplated by the next
succeeding sentence), provided further that, notwithstanding the
foregoing, "Debt" shall not include
(a) accrued compensation,
(b) taxes payable and deferred taxes,
(c) trade payables, including intercompany payables in the
nature of trade payables,
(d) any obligations payable, at the option of the obligor, in
equity Securities of the obligor,
(e) any guarantee or contingent liability or obligation with
respect to any of the items set forth in the foregoing clauses (a) to
(d), inclusive or
(f) obligations of Archive and its Subsidiaries which would
otherwise constituting "Debt" hereunder, to the extent that such
obligations are repaid in full within 60 days following the
Acquisition Date.
For purposes of computing the amount of any obligation specified in either
of the foregoing clauses (iv) and (vii), it shall be assumed that the
indebtedness or other obligations which are the subject of such guarantee,
endorsement or other contingent liability are direct obligations of the
obligor on such guarantee, endorsement or contingent liability (but not in
an amount in excess of the maximum liability of such obligor) and,
therefore, are of the nature and type of, and bear interest at the rate
applicable to, such indebtedness or other obligations.
"Default" means any of the events specified in paragraph 7 of this
Agreement, whether or not there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time,
or the happening of any further condition, event or act.
"Determination Date" means the last day of each fiscal quarter of the
Company.
"Environmental Protection Law" means any federal, state, county,
regional or local law, statute, or regulation (including, without
limitation, CERCLA, RCRA and SARA) enacted in connection with or relating
to the protection or regulation of the environment, including, without
limitation, those laws, statutes, and regulations regulating the
disposal, removal, production, storing, refining, handling, transferring,
processing, or transporting of Hazardous Substances, and any regulations,
issued or promulgated in connection with such statutes by any
Governmental Authority and any orders, decrees or judgments issued by any
court of competent jurisdiction in connection with any of the foregoing.
As used in this definition,
Exhibit A-53
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time
(by SARA or otherwise), and all rules and regulations promulgated in
connection therewith;
"Governmental Authority" means the government of the United
States of America, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to any such government.
"Hazardous Substances" has the meaning assigned to such term in
42 U.S.C. Section 9601(14), as amended from time to time.
"RCRA" means the Resource Conservation and Recovery Act of 1976,
as amended, and any rules and regulations issued in connection
therewith; and
"SARA" means the Superfund Amendments and Reauthorization Act of
1986, as amended from time to time, and all rules and regulations
promulgated in connection therewith.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any corporation or trade or business that
(a) is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the IRC) as the Company or
(b) is under common control (within the meaning of Section
414(c) of the IRC) with the Company.
"Event of Default" means any of the events specified in paragraph 7
of this Agreement, provided that there has been satisfied any requirement
in connection with such event for the giving of notice, or the lapse of
time, or the happening of any further condition, event or act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time, with respect to any Property,
the sale value of such Property that would be realized in an arm's-length
sale at such time between an informed and willing buyer, and an informed
and willing seller, under no compulsion to buy or sell, respectively.
"Financial Institution" means (i) any bank, savings bank, savings and
loan association or insurance company, (ii) any pension plan or portfolio
or investment fund managed or administered by any bank, savings bank,
savings and loan association or insurance company, (iii) any investment
company owned by any bank, savings bank, savings and loan association or
insurance company, or the majority of the shares of
Exhibit A-54
the capital stock of which are traded on a national securities exchange
or in the National Association of Securities Dealers automated quotation
system, (iv) any investment banking company, or (v) any finance company.
"Four Quarter Period" has the meaning assigned to such term in
paragraph 6G(ii)(d)(II).
"Inspection Rights" has the meaning assigned to such term in paragraph
5B of this Agreement.
"Intellectual Property Rights" has the meaning assigned to such term
in paragraph 8I(ii) of this Agreement.
"Investment" has the meaning assigned to such term in paragraph 6H of
this Agreement.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time, and all rules and regulations promulgated thereunder.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction).
"Liquidity Coverage" means the ratio (expressed as a percentage) of
(i) Cash Equivalents, to (ii) Senior Debt of the Company and the Restricted
Subsidiaries, in each case determined on a consolidated basis.
"Margin Stock" has the meaning assigned to such term in paragraph 8M
of this Agreement.
"Material Unrestricted Subsidiaries" shall be deemed to exist with
respect to any consolidated financial statement of the Company and the
Subsidiaries if the amounts of either revenue or total assets (as the case
may be), reflected on such consolidated financial statement vary by more
than 10% from the amount of the same item reflected on the same type of
consolidated financial statement of the Company and the Restricted
Subsidiaries, prepared as of the same date, or covering the same period, as
the case may be.
"Merger Date" means the date on which Archive is merged into Conner
Acquisition Corp., a Delaware corporation and a wholly owned Subsidiary of
the Company.
"Multiemployer Plan" means any "multiemployer plan" (as such term is
defined in ERISA) in respect of which the Company or any ERISA Affiliate is
an "employer" (as such term is defined in ERISA).
Exhibit A-55
"Multiple Employer Pension Plan" means any "employee pension benefit
plan" (as such term is defined in ERISA) other than a Multiemployer Plan to
which the Company or any ERISA Affiliate and an "employer" (as such term is
defined in ERISA) other than an ERISA Affiliate or the Company contribute.
"Notes" has the meaning assigned to such term in paragraph 1 of this
Agreement.
"Offer Notice" has the meaning assigned to such term in paragraph
4E(ii) of this Agreement.
"Other Note Agreements" has the meaning assigned to such term in
paragraph 2 of this Agreement.
"Other Purchasers" has the meaning assigned to such term in paragraph
2 of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, and its
successors and assigns.
"Pension Plans" means any "employee pension benefit plan" (as such
term is defined in ERISA) maintained by the Company or any ERISA Affiliate
for employees of the Company or such ERISA Affiliate, excluding any
Multiemployer Plan, but including, without limitation, any Multiple
Employer Pension Plan.
"Permitted Banks" has the meaning assigned to such term in paragraph
6H(viii)(c) of this Agreement.
"Permitted Investment" has the meaning assigned to such term in
paragraph 6H of this Agreement.
"Permitted Transferee" means (i) any Financial Institution which is
not a Competitor and (ii) any other proposed Transferee consented to in
writing by the Company, which consent shall not be unreasonably withheld.
"Person" means any of an individual, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or
any department or agency thereof.
"Preferred Stock" means, at any time, with respect to any Person,
capital stock of such Person that is preferred as to the payment of
dividends, or as to the distribution of Property on any voluntary or
involuntary liquidation or dissolution of such Person, over any other
class of capital stock of such Person (in each case, taken at the greater
of its voluntary or involuntary liquidation preference at the time of
calculation thereof, but exclusive of accrued dividends) provided that
the term "Preferred Stock" shall not include preferred stock issued by
Arcada Holdings, Inc. so long as Arcada Holdings, Inc. is a Restricted
Subsidiary.
Exhibit A-56
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"Purchase Money Mortgages" means a Lien held by any Person (whether
or not the seller of such assets) on tangible Property (other than assets
acquired to replace, repair, upgrade or alter tangible Property owned by
the Company or any Restricted Subsidiary on the date of this Agreement),
provided that such Lien
(a) secures all or a portion of the related purchase price or
construction costs of such assets,
(b) encumbers only tangible Property, accretions and accessions
thereto and any theretofore unimproved real property on which such
Property is located (and the proceeds of the disposition thereof)
acquired or constructed with the proceeds of the indebtedness secured
thereby, and
(c) is created concurrently with or within one year of the
acquisition or substantial completion of construction of such tangible
Property.
"Purchaser" means you and the Other Purchasers.
"Required Holders" means the holder or holders of more than 50% of the
aggregate principal amount of the Notes from time to time outstanding.
"Responsible Officer" means each of the Chairman of the Board of
Directors, the President, any Vice President and the Treasurer of the
Company.
"Restricted Payments" means, in respect of any corporation,
(a) dividends or other distributions on capital stock of the
corporation (except distributions in such capital stock); and
(b) the redemption or acquisition made by or on behalf of such
corporation of such capital stock or of warrants, rights, other
options to purchase such stock or securities convertible into or
exchangeable for such capital stock (except when solely in exchange
for such capital stock) unless made, contemporaneously, from the net
proceeds of a sale of such capital stock.
"Restricted Subsidiary" means, at any time, any of a Subsidiary that
is an Arcada Restricted Subsidiary and a Subsidiary
(i) at least
(a) 80% (a majority in the case of Conner Peripherals
Europe or any Subsidiary organized under the laws of Japan,
Taiwan or Singapore) of the Voting Stock of which, except
directors qualifying shares and any shares issued to comply
with local ownership legal
Exhibit A-57
requirements (provided that such directors qualifying shares
and other shares shall not represent in excess of 3% of the
outstanding shares of the stock of any class of such Restricted
Subsidiary and, after taking such shares into account, the
Company shall, directly or indirectly, own a majority of the
Voting Stock of such Subsidiary), and
(b) 80% of all non-voting stock of every other class,
except Preferred Stock, of which,
is, at such time, owned by the Company either directly or through
other Subsidiaries meeting the requirements of clause (i) and clause
(ii) of this definition, and
(ii) that has never been designated an Unrestricted Subsidiary
by the Board of Directors pursuant to paragraph 6K of this Agreement.
"Sale/Leaseback Transaction" means any transaction or series of
related transactions in which the Company or a Restricted Subsidiary sells
or transfers any of its assets to any Person (other than to the Company or
to a Restricted Subsidiary) and within one year thereafter rents or leases
such transferred Property or substantially similar Property from any
Person.
"Sale/Leaseback Transaction Amount" means, on any date, after giving
effect to all Sale/Leaseback Transactions occurring on such date, the
greater of
(a) the present value, discounted at 9% per annum, of all unpaid
payment obligations of the Company and the Restricted Subsidiaries in
respect of all Sale/Leaseback Transactions in effect on such date, or
(b) the depreciated purchase price of all Property subject to
Sale/Leaseback Transactions at such time, on such date,
"SEC Documents" means (i) the Company's Annual Report to Shareholders
for the fiscal year ended December 31, 1990, (ii) the Company's Annual
Report on Form 10-K for such fiscal year, as filed with the Securities and
Exchange Commission, and (iii) the Company's Registration Statement on Form
S-1 filed with the Securities and Exchange Commission in connection with
the issuance and sale of the Debentures.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security" has the meaning specified in Section 2(1) of the
Securities Act.
"Senior Debt" means, at any time, Debt of the Company outstanding at
such time that is not Subordinated Debt, except for Subordinated Debt
that the Company has become obligated to prepay, redeem or otherwise
purchase or acquire (other than obligations to make mandatory prepayments
or mandatory redemptions scheduled at the time of issuance of such
Subordinated Debt), and all Debt and Preferred Stock of Restricted
Subsidiaries.
Exhibit A-58
"Senior Debt Prepayments" means, at any time, an optional principal
prepayment of Senior Prepayment Debt made in accordance with the following
procedure:
(a) such offer shall be made in writing by the Company, pro
rata, to all holders of Senior Prepayment Debt with an outstanding
principal amount at such time of at least $1 million, such pro rata
portion to be determined on the basis of the principal amount of such
Senior Prepayment Debt;
(b) such offer shall be deemed to be rejected by a holder if not
accepted within 30 days of the receipt of such offer by such holder;
and
(c) in the case of the holders of Notes who accept such offer,
the prepayment shall be made in conformity with the terms of paragraph
4B of this Agreement, provided that those holders of Senior Prepayment
Debt who have accepted such offer shall also be offered promptly in
writing a pro rata portion of the amounts in respect of which such
offer of prepayment was not accepted, such pro rata portion to be
determined on the basis of the principal amount of the Senior
Prepayment Debt held by all such accepting holders and provided
further that such offer shall be deemed to be rejected by a holder if
not accepted within 30 days of the receipt of such offer by such
holder.
Required prepayments of Senior Debt shall not be "Senior Debt Prepayments."
As used in this definition
"Senior Prepayment Debt" means, at any time, all Debt for money
borrowed owed directly by the Company that is not at such time
Subordinated Debt and which, at such time, can be prepaid in whole or
in substantial part by the Company.
"Series A Notes" has the meaning assigned to such term in paragraph
1 of this Agreement.
"Series B Notes" has the meaning assigned to such term in paragraph
1 of this Agreement.
"Significant Holder" means
(i) you or any of your affiliates, so long as you or such
affiliate shall hold (or shall be committed under this Agreement to
purchase) any Note,
(ii) during the period on or prior to March 30, 1996 (or such
later date as of which all of the Series A Notes shall have been
paid in full), any other holder of at least 2% of the aggregate
principal amount of the Notes from time to time outstanding which is
an immediate transferee of a Purchaser, and any other holder of at
least 5% of the aggregate principal amount of the Notes from time to
time outstanding and
Exhibit A-59
(iii) at any time after March 30, 1996 (or such later date as of
which the Series A Notes shall have been paid in full), any other
holder of at least 5% of the aggregate principal amount of the Notes
from time to time outstanding which is an immediate transferee of a
Purchaser, and any other holder of at least 10% of the aggregate
principal amount of the Notes from time to time outstanding.
"Specified Debt" means that certain Indebtedness incurred by Conner
Peripherals Europe S.p.A., in an aggregate principal amount (expressed in
Italian Lire) equivalent to approximately $16,800,000 as of December 22,
1993, and not to exceed such principal amount except as a result of
currency fluctuations, plus accrued interest in respect thereof, arising
under the following agreements:
(i) the agreement dated as of December 10, 1991, entered into
with Finaosta S.p.A. in the original principal amount of Lire
9,000,000,000,
(ii) the agreement dated as of December 29, 1992, entered into
with Finaosta S.p.A., in the original principal amount of Lire
4,500,000,000,
(iii) agreement dated as of June 25, 1991, entered into with
Finaosta S.p.A., in the original principal amount of Lire
10,000,000,000,
(iv) agreement dated as of October 31, 1989, entered into with
I.M.I. Instituto Mobiliare Italiano and Olivetti System & Network
S.r.l., in the original principal amount of Lire 10,350,000,000, and
(v) agreement dated as of April 30, 1991, entered into with
I.M.I. Instituto Mobiliare Italiano and Olivetti System & Network
S.r.l., in the original principal amount of Lire 6,400,000,000.
"Subordinated Debt" means the Debentures and any Debt of the Company
that
(a) is subject to subordination provisions no less favorable to
the holders of the Notes than those set forth in the form attached to
this Agreement as Annex 4 or other subordination provisions consented
to by the Required Holders,
(b) has a maturity date of later than March 30, 1998, and
(c) has a Weighted Average Life to Maturity at any time greater
than the Weighted Average Life to Maturity of both of the Series A
Notes and the Series B Notes at such time.
As used in this definition,
"Weighted Average Life to Maturity" at any time with respect to
any indebtedness for borrowed money means the number of years obtained
by
Exhibit A-60
dividing the then Remaining Dollar-Years of such indebtedness by the
then outstanding principal amount of such indebtedness.
"Remaining Dollar-Years" at any time with respect to any
indebtedness for borrowed money means the result obtained by
(a) multiplying
(i) the amount of each then remaining required principal
payment (including repayment of principal at final maturity) of
such borrowing unpaid immediately prior to such time, by
(ii) the number of years (calculated to the nearest one-
twelfth) that will elapse between such time and the date each
such required principal payment is due, and
(b) calculating the sum of the products obtained in the
preceding subsection (a).
"Subsidiary" means, at any time, any corporation that would be
included in the consolidated financial statements of the Company prepared
at such time in accordance with generally accepted accounting principles.
"Subsidiary Stock" means common stock, preferred stock, warrants,
stock rights and other securities convertible into common stock and
preferred stock, in each case issued by a Subsidiary.
"Substantial Part" means, when used with respect to assets at any
time, more than 10% of consolidated assets of the Company and the
Restricted Subsidiaries at such time, and, when used with respect to
Consolidated Net Income in respect of any period, more than 10% of
Consolidated Net Income for such period.
"Supplemental Disclosure Letter" means that certain letter addressed
to each of the Purchasers, dated as of the Closing Date, executed by the
Company and delivered on the Closing Date to each of the Purchasers.
"Surviving Corporation" has the meaning assigned to such term in
paragraph 6G(i)(a)(l) of this Agreement.
"Three Year Disposition Measurement Period" has the meaning assigned
to such term in paragraph 6G(ii)(d)(lll) of this Agreement.
"Transfer" has the meaning assigned to such term in paragraph 6G(ii)
of this Agreement.
"Transferee" means any direct or indirect transferee of all or any
part of any Note purchased by you under this Agreement.
Exhibit A-61
"Two Year Period" has the meaning assigned to such term in paragraph
5A(iii)(d) of this Agreement.
"Unrestricted Subsidiary" at any time means a Subsidiary other than a
Restricted Subsidiary.
"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
has or might have such voting power by reason of the happening of any
contingency).
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as you shall
hold any Note, it will make payments of principal thereof and Yield-Maintenance
Amount, if any, and interest thereon, that comply with the terms of this
Agreement, by wire transfer of immediately available funds for credit to your
account or accounts as specified in Annex 1 to this Agreement, or such other
account or accounts in the United States as you may designate in writing,
notwithstanding any contrary provision in this Agreement or in any Note with
respect to the place of payment. You agree that, before disposing of any Note,
you will make a notation thereon (or on a schedule attached to this Agreement)
of all principal payments previously made thereon and of the date to which
interest thereon has been paid. The Company agrees to afford the benefits of
this paragraph 11A to any Permitted Transferee that shall have made the same
agreement as you have made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save you and any Permitted
Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and
expenses of any special counsel engaged by you or any Permitted Transferee
in connection with this Agreement, the transactions contemplated hereby and
any subsequent proposed modification of, or proposed consent under, this
Agreement, whether or not such proposed modification shall be effected or
proposed consent granted, and
(ii) the costs and expenses, including attorneys' fees, incurred by
you or any Permitted Transferee in enforcing any rights under this
Agreement or the Notes or in responding to any subpoena or other legal
process issued in connection with this Agreement or the transactions
contemplated hereby or by reason of your or any Permitted Transferee's
having acquired any Note, including without limitation costs and expenses
incurred in any bankruptcy case,
but excluding any of the foregoing (including transfer taxes) incurred in
connection with the transfer of a Note to a Transferee, except as otherwise
provided in paragraph 11D. The
Exhibit A-62
obligations of the Company under this paragraph 11B shall survive the transfer
of any Note or portion thereof or interest therein by you or any Transferee and
the payment of any Note.
11C. Consent to Amendments. This Agreement may only be amended, and the
Company may only take any action prohibited in this Agreement, or omit to
perform any act required in this Agreement to be performed by it, if the Company
shall obtain the written consent of the Required Holders to such amendment,
action or omission to act except that, without the written consent of the holder
or holders of all Notes at the time outstanding, no amendment to this Agreement
shall change the maturity of any Note, or change the principal of, or the rate
or time of payment of interest or any Yield-Maintenance Amount payable with
respect to any Note, or affect the time, amount or allocation of any required
prepayments, reduce the proportion of the principal amount of the Notes required
with respect to any consent, or otherwise modify paragraph 4 of this Agreement.
Each holder of any Note at the time or thereafter outstanding shall be bound by
any consent authorized by this paragraph 11C, whether or not such Note shall
have been marked to indicate such consent, but any Notes issued thereafter may
bear a notation referring to any such consent. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used in this Agreement and in the Notes, the term "this
Agreement" and references to this Agreement shall mean this Agreement as it may
from time to time be amended or supplemented.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes.
(i) Form, Registration, Transfer and Exchange of Notes. The Notes
are issuable as registered notes without coupons in denominations of at
least Five Hundred Thousand Dollars ($500,000), except as may be necessary
to reflect any principal amount not evenly divisible by Five Hundred
Thousand Dollars ($500,000). The Company shall keep at its principal
office a register in which the Company shall provide for the registration
of Notes and of transfers of Notes. Upon surrender for registration of
transfer of any Note at the principal office of the Company, the Company
shall, at its expense, execute and deliver one or more new Notes of like
tenor and of a like aggregate principal amount, registered in the name of
such transferee or transferees. At the option of the holder of any Note,
such Note may be exchanged for other Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon
surrender of the Note to be exchanged at the principal office of the
Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes that the holder making
the exchange is entitled to receive. Every Note surrendered for
registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the
holder of such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon transfer thereof
shall carry the rights to unpaid interest and interest to accrue that were
carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange.
(ii) Lost Notes. Upon receipt of written notice from the holder of
any Note of the loss, theft, destruction or mutilation of such Note and, in
the case of any such
Exhibit A-63
loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement (provided that the Company may require security in
the case of a holder which is not a Financial Institution), or in the
case of any such mutilation upon surrender and cancellation of such Note,
the Company will make and deliver a new Note, of like tenor, in lieu of
the lost, stolen, destroyed or mutilated Note at the expense of such
holder.
(iii) Limitation on Transfer. No holder of Notes shall assign, sell,
transfer, negotiate, or otherwise dispose of all or any of its Notes, or
any part thereof, unless
(a) the principal amount of Notes so assigned, sold,
transferred, negotiated or disposed of is not less than the lesser of
One Million Dollars or an amount equal to such holder's entire holding
of Notes, and
(b) the Transferee is a Permitted Transferee.
11E. Persons Deemed Owners; Participations. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and Yield-Maintenance Amount, if any, and
interest on such Note and for all other purposes whatsoever, whether or not such
Note shall be overdue, and the Company shall not be affected by notice to the
contrary. Subject to the preceding sentence, the holder of any Note may from
time to time grant participations in all or any part of such Note to any Person
on such terms and conditions as may be determined by such holder in its sole and
absolute discretion, provided, that the Company shall have no obligations to any
such participant by virtue of its having acquired a participation in all or part
of any Note.
11F. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained in this Agreement or made in writing by
or on behalf of the Company in connection herewith shall survive the execution
and delivery of this Agreement and the Notes, the transfer by you of any Note or
portion thereof or interest therein and the payment of any Note, and may be
relied upon by any Permitted Transferee, regardless of any investigation made at
any time by or on behalf of you or any Permitted Transferee. Subject to the
preceding sentence, this Agreement (together with the Annexes and Exhibits
hereto and the Supplemental Disclosure Letter) and the Notes embody the entire
agreement and understanding between you and the Company and supersede all prior
agreements and understandings relating to the subject matter of this Agreement.
11G. Successors and Assigns. All covenants and other agreements in this
Agreement contained by or on behalf of either of the parties to this Agreement
shall bind and inure to the benefit of the respective successors and permitted
assigns of the parties to this Agreement (including, without limitation, any
Permitted Transferee) whether so expressed or not.
11H. Disclosure to Other Persons. The Company acknowledges that the holder
of any Note may deliver copies of any financial statements and other documents
delivered to such holder, and disclose any other information disclosed to such
holder, by or on behalf of the Company or any Subsidiary in connection with or
pursuant to this Agreement to
Exhibit A-64
(i) such holder's directors, officers, employees, agents and
professional consultants,
(ii) any other holder of any Note,
(iii) any Permitted Transferee to which such holder offers to sell
such Note or any part thereof,
(iv) any Permitted Transferee to which such holder sells or offers to
sell a participation in all or any part of such Note,
(v) any federal or state regulatory authority having jurisdiction
over such holder,
(vi) the National Association of Insurance Commissioners or any
similar organization, or
(vii) any other Person to which such delivery or disclosure may be
necessary
(a) to comply with any law, rule, regulation or order applicable
to such holder,
(b) to respond to any subpoena or other legal process,
(c) in connection with any litigation to which such holder is a
party, or
(d) in order to protect such holder's investment in such Note.
You agree, and each Permitted Transferee by purchasing a Note agrees, that any
information concerning the Company or the Subsidiaries that has been supplied to
you or to such Permitted Transferee, as the case may be, by the Company or the
Subsidiaries and identified in writing by the Company as confidential which is
not, at the time supplied to you or to such Permitted Transferee, as the case
may be, information available to the public, shall be treated as confidential by
you or such Permitted Transferee, as the case may be, in accordance with the
procedures and standards that you or such Permitted Transferee, as the case may
be, generally apply to information of a confidential nature.
11I. Notices. All written communications provided for under this Agreement
shall be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and
(i) if to you, addressed to you at the address specified for such
communications in the Purchaser Schedule to this Agreement, or at such
other address as you shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to such other
holder at such address as such other holder shall have specified to the
Company in writing or, if any such other holder shall not have so specified
an address to the Company, then addressed to such other holder in care of
the last holder of such Note that shall have so specified an address to the
Company, and
Exhibit A-65
(iii) if to the Company, addressed to it at 3081 Zanker Road, San
Jose, California 95134, Attention: Treasurer, or at such other address as
the Company shall have specified to the holder of each Note in writing so
long as such office is located in the United States of America; provided
that any such communication to the Company may also, at the option of the
holder of any Note, be delivered by hand to the Senior Vice President,
Financial or Treasurer (or an equivalent officer) of the Company. Any
notice described in this paragraph 11I shall be deemed given only upon
receipt.
11J. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11K. 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.
11L. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, and it shall not
be necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
[Remainder of page intentionally blank. Next page is signature page.]
Exhibit A-66
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
Company, whereupon this letter shall become a binding agreement between you and
the Company.
Very truly yours,
CONNER PERIPHERALS, INC.
By
----------------------------
Name:
Title:
The foregoing Agreement is hereby
accepted as of the date first above written.
[NAME OF PURCHASER]
By
--------------------------
Name:
Title:
[Signature page of the NOTE AGREEMENT dated as of March 29, 1991 of CONNER
PERIPHERALS, INC. in respect of $80,000,000 in aggregate principal amount of
its Series A Senior Notes Due March 30, 1996, and $25,000,000 in aggregate
principal amount of its Series B Senior Notes Due March 30, 1998].
EXHIBIT A1
TO AMENDMENT NO. 5
AMENDED AND RESTATED SERIES A SENIOR NOTE
CONNER PERIPHERALS, INC.
Series A Senior Note Due March 30, 1996
No. RA- [Closing Date]
$________ PPN: 208108 A@ 9
FOR VALUE RECEIVED, the undersigned, CONNER PERIPHERALS, INC. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to ______ or registered assigns,
the principal sum of ______ DOLLARS ($______) on March 30, 1996 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 eight and eighty-four one-hundredths
percent (8.84%) per annum from April 1, 1991 until September 30, 1993,
inclusive, nine and thirty-four one-hundredths percent (9.34%) per annum from
October 1, 1993 until March 31, 1995, inclusive, and eight and eighty-four one-
hundredths percent (8.84%) per annum on and after April 1, 1995 and to pay, as
additional interest, over and above the foregoing rates of interest, interest at
a rate of forty one-hundredths percent (0.40%) per annum at any time on and
after October 1, 1993 when this Note does not have at such time an Acceptable
Rating, in each case payable semi-annually on the thirtieth (30th) day of March
and September in each year commencing with the later of September 30, 1991 or
the interest payment date next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of Yield-
Maintenance Amount (as defined in the Note Agreement referred to below) and, to
the extent permitted by applicable law, any overdue payment of interest, payable
semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) the
per annum rate of interest that is payable at such time on this Note as provided
above (including any additional interest payable as provided above) plus two
percent (2%) per annum, or (ii) the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York from time to time in New York City as
its Prime Rate.
Payments of principal, Yield-Maintenance Amount, if any, and interest
are to be made as provided in the Purchaser Schedule attached as Annex 1 to the
Note Agreement referred to below or at such other place as the holder hereof
shall designate to the Company, in writing, in lawful money of the United States
of America.
This Note is one of a series of Series A Senior Notes (herein called
the "Notes") issued pursuant to separate identical Note Agreements, each dated
as of March 29, 1991 (collectively, as amended from time to time, the "Note
Agreement"), between the Company
EXHIBIT A1-1
and the respective original purchasers of the Notes named in the Purchaser
Schedule attached thereto as Annex 1, and the holder hereof is entitled to the
benefits and subject to the provisions thereof. As provided in the Note
Agreement, this Note is subject to prepayment in whole or from time to time in
part, in certain cases without a Yield-Maintenance Amount and in other cases
with a Yield-Maintenance Amount, as specified in the Note Agreement.
This Note is a registered Note and, as provided in the Note 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 shall not be affected by any notice to the contrary.
The Company agrees to make prepayments of principal on the dates and
in the amounts specified in the Note Agreement.
In case an Event of Default, as defined in the Note Agreement, shall
occur and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the Note
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
CONNER PERIPHERALS, INC.
By:
--------------------
Name:
Title:
Exhibit A1-2
EXHIBIT A2
TO AMENDMENT NO. 5
AMENDED AND RESTATED SERIES B SENIOR NOTE
CONNER PERIPHERALS, INC.
Series B Senior Note Due March 30, 1998
No. RB- [Closing Date]
$________ PPN: 208108 A# 7
FOR VALUE RECEIVED, the undersigned, CONNER PERIPHERALS, INC. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to ______ or registered assigns,
the principal sum of ______ DOLLARS ($______) on March 30, 1998, 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 nine and eight one-hundredths percent
(9.08%) per annum from April 1, 1991 until September 30, 1993, inclusive, nine
and fifty-eight one-hundredths percent (9.58%) per annum from October 1, 1993
until March 31, 1995, inclusive, and nine and eight one-hundredths percent
(9.08%) per annum on and after April 1, 1995 and to pay, as additional interest,
over and above the foregoing rates of interest, interest at a rate of forty one-
hundredths percent (0.40%) per annum at any time on and after October 1, 1993
when this Note does not have at such time an Acceptable Rating, in each case
payable semi-annually on the thirtieth (30th) day of March and September in each
year commencing with the later of September 30, 1991 or the interest payment
date next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of Yield-Maintenance Amount (as
defined in the Note Agreement referred to below) and, to the extent permitted by
applicable law, any overdue payment of interest, payable semiannually as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum from time to time equal to the greater of (i) the per annum rate
of interest that is payable at such time on this Note as provided above
(including any additional interest payable as provided above) plus two percent
(2%) per annum, or (ii) the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York from time to time in New York City as its
Prime Rate.
Payments of principal, Yield-Maintenance Amount, if any, and interest
are to be made as provided in the Purchaser Schedule attached as Annex 1 to the
Note Agreement referred to below or at such other place as the holder hereof
shall designate to the Company, in writing, in lawful money of the United States
of America.
This Note is one of a series of Series B Senior Notes (herein called
the "Notes") issued pursuant to separate identical Note Agreements, each dated
as of March 29, 1991 (collectively, as amended from time to time, the "Note
Agreement"), between the Company
Exhibit A2-3
and the respective original purchasers of the Notes named in the Purchaser
Schedule attached thereto as Annex 1, and the holder hereof is entitled to the
benefits and subject to the provisions thereof. As provided in the Note
Agreement, this Note is subject to prepayment in whole or from time to time in
part, in certain cases without a Yield-Maintenance Amount and in other cases
with a Yield-Maintenance Amount, as specified in the Note Agreement.
This Note is a registered Note and, as provided in the Note 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 shall not be affected by any notice to the contrary.
The Company agrees to make prepayments of principal on the dates and
in the amounts specified in the Note Agreement.
In case an Event of Default, as defined in the Note Agreement, shall
occur and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the Note
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
CONNER PERIPHERALS, INC.
By:____________________
Name:
Title:
Exhibit A2-4
EXHIBIT B
TO AMENDMENT NO. 5
CERTIFICATE OF CLOSING
December 22, 1993
Conner Peripherals, Inc.
3081 Zanker Road
San Jose, CA 95134
Attn: Mr. P. Jackson Bell
Reference is made to that certain Fifth Amendment, dated as of
December 22, 1993, in respect of those certain separate Note Agreements dated as
of March 29, 1991, as amended through December 21, 1993, between Conner
Peripherals, Inc. and the person identified therein as Purchaser, in respect of
Conner Peripherals, Inc.'s Series A Senior Notes due March 30, 1996 and its
Series B Senior Notes due March 30, 1998. In accordance with Section 4 of the
Fifth Amendment, the undersigned hereby notify you that the conditions precedent
set forth in such Section 4 have been satisfied.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:______________________
Name:
Title:
Certificate of Closing
December 22, 1993
Page 2
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By:________________________
Name:
Title:
By:________________________
Name:
Title:
CIG & CO.
c/o CIGNA Investments, Inc.
By:_______________________
Name:
Title:
GENERAL AMERICAN LIFE INSURANCE COMPANY
By:_________________________
Name:
Title: