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EXHIBIT 10.23
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BALDWIN AMERICAS CORPORATION
BALDWIN TECHNOLOGY LIMITED
$25,000,000 of
8.17% JOINT AND SEVERAL SENIOR NOTES DUE OCTOBER 29, 2000
(PPN: 05777* AA 8)
________________________________________________________________________________
NOTE AGREEMENT
________________________________________________________________________________
Dated as of October 29, 1993
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TABLE OF CONTENTS
Page
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1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES; CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. PREPAYMENT; SCHEDULED PAYMENTS OF PRINCIPAL . . . . . . . . . . . . . . . . . . . . . . . 3
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5A Financial Reporting by the Company . . . . . . . . . . . . . . . . . . . . . . . . 5
5B Information Required by Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . 8
5C Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5D Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5E Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5F Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5G Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5H Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5I Scope of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5J Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5K Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5L Maintenance of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . 9
5M Payment of Trade Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6A Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6A(1) Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6A(2) Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6B Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6C Liens and Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6C(1) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6C(2) Loans, Advances and Investments . . . . . . . . . . . . . . . . . . . . . . 12
6C(3) Sale of Stock and Debt of Subsidiaries . . . . . . . . . . . . . . . . . . . 13
6C(4) Merger and Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . 13
6C(5) Subsidiary Dividend and other
Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6C(6) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 15
6C(7) Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6D Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6D(1) Company Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6D(2) Subsidiary Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6E Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6F Tax Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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8 REPRESENTATIONS, COVENANTS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . 20
8A Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8B Business; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8C Actions Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8D Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8E Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8F Conflicting Agreements and Other Matters . . . . . . . . . . . . . . . . . . . . . 22
8G Offering of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8H Regulation G, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8I ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8J Governmental Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8K Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8L Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8M Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8N Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8O Status Under Certain Federal Statute . . . . . . . . . . . . . . . . . . . . . . . 25
9 REPRESENTATIONS OF THE PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11A Note Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11B Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11C Consent to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11D Persons Deemed Owners; Participations . . . . . . . . . . . . . . . . . . . . . . 35
11E Survival of Representations and Warranties;
Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11F Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11G Disclosure to Other Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11H Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11I Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11J Solicitation of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11K Reproduction of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11L Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11M Consent to Jurisdiction and Service . . . . . . . . . . . . . . . . . . . . . . . 37
11N Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11O Form, Registration, Transfer and Exchange of
Notes; Lost Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11P Joint and Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 38
PURCHASER SCHEDULE
EXHIBIT A - Form of Note
EXHIBIT B - Wiring Instructions
EXHIBIT C-1 - Form of Opinion of Counsel to the Company, the
Borrowers and the Affiliate Guarantors
EXHIBIT C-2 - Form of Opinion of Bermuda Counsel to BTL
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EXHIBIT D - Form of Officers' Certificate
EXHIBIT E-1 - Form of Affiliate Guaranty from the Company
EXHIBIT E-2 - Form of Affiliate Guaranty from the Affiliate
Guarantors
EXHIBIT F - Form of Contribution Agreement
EXHIBIT G - Form of Subordination Agreement
SCHEDULE 3H - Debt to be Repaid
SCHEDULE 6C(1) - Debt Secured by Liens
SCHEDULE 6C(6) - Transactions with Affiliates
SCHEDULE 8A - Incorporation and Foreign Qualifications of
the Company and Subsidiaries; Ownership
of Subsidiaries
SCHEDULE 8C - Actions Pending
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BALDWIN AMERICAS CORPORATION
700 Hackney Avenue
Elkwood, Virginia 22718
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BALDWIN TECHNOLOGY LIMITED
Clarendon House
Church Street
Hamilton, HM11 Bermuda
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BALDWIN TECHNOLOGY COMPANY, INC.
65 Rowayton Avenue
Rowayton, Connecticut 06853
As of October 29, 1993
To: Each of the Purchasers
Listed on the Purchaser
Schedule
Gentlemen:
The undersigned, Baldwin Technology Company, Inc., a Delaware
corporation (the "COMPANY"), Baldwin Americas Corporation, a Delaware
corporation ("BAM"), and Baldwin Technology Limited, a Bermuda corporation
("BTL"; BAM and BTL are hereinafter referred to individually as a "BORROWER"
and collectively as the "BORROWERS"), agree with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Borrowers will authorize
the issue and sale of their Joint and Several Senior Promissory Notes, in the
aggregate principal amount of $25,000,000, to be dated the date of issue, to
mature October 29, 2000, to bear interest on the unpaid principal balance from
the date of issue until the principal shall have become due and payable at the
rate of 8.17% per annum, payable semi-annually in arrears, and to bear interest
on overdue principal, overdue premium and, to the extent permitted by law,
overdue interest, at the rate of 10.17% per annum and to be substantially in
the form of EXHIBIT A. Such notes, which may be issued pursuant to any
provision of this Agreement and any such notes which may be issued hereunder in
substitution or exchange for any such notes pursuant to any such provision, are
collectively referred to as the "NOTES".
2. PURCHASE AND SALE OF NOTES; CLOSING.
2A. PURCHASE AND SALE OF NOTES. Subject to the terms and
conditions of this Agreement, the Borrowers shall sell to each of you (each
individually a "PURCHASER" and, collectively, the "PURCHASERS"), and each
Purchaser shall severally purchase from the Borrowers, Notes of the respective
principal amounts, or aggregate principal amounts, set forth after its name in
the PURCHASER SCHEDULE at a price equal to 100% of such principal amount,
registered in its name or that of its nominee or nominees specified in the
PURCHASER SCHEDULE.
2B. CLOSING. The purchase and sale of the Notes shall take place
at the offices of the Purchasers' special counsel, Sullivan & Worcester
("SPECIAL COUNSEL"), One Post Office Square, Boston, Massachusetts 02109, at a
closing (the "CLOSING") to be held on October 29, 1993 or on such other date as
the Purchasers and the Borrowers may agree (the "CLOSING DATE"). At the
Closing, the Borrowers will
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deliver to each Purchaser the Note or Notes to be purchased by it, against
payment of the purchase price therefor by transfer of immediately available
funds in accordance with the wiring instructions stated on EXHIBIT B.
3. CONDITIONS OF CLOSING. Each Purchaser's obligation to
purchase and pay for its Note or Notes is subject to the fulfillment to its
satisfaction or its written waiver, on or before the Closing Date, of the
following conditions:
3A. OPINION OF COMPANY COUNSEL. Each Purchaser shall have
received opinions, dated the Closing Date and addressed to it, from Morgan,
Lewis & Bockius, counsel to the Company, the Borrowers and the Affiliate
Guarantors, in substantially the form of EXHIBIT C-1, and from Conyers, Dill &
Pearman, Bermuda counsel to BTL, in substantially the form of EXHIBIT C-2. To
the extent that either opinion referred to above in this PARAGRAPH 3A is
rendered in reliance upon the opinion of any other counsel, each Purchaser
shall have received a copy of the opinion of such other counsel, dated the
Closing Date and addressed to it, or a letter from such other counsel, dated
the Closing Date and addressed to it, in form and substance satisfactory to
each Purchaser, authorizing it to rely on such other counsel's opinion.
3B. OPINION OF PURCHASERS' SPECIAL COUNSEL. Each Purchaser shall
have received from the Purchasers' Special Counsel an opinion satisfactory to
it as to such matters incident to the transactions contemplated by this
Agreement as it may reasonably request.
3C. REPRESENTATIONS AND WARRANTIES; COMPLIANCE; NO DEFAULT. The
representations and warranties contained in PARAGRAPH 8 shall be true on and as
of the Closing Date; there shall exist on the Closing Date no Default or Event
of Default; the Company, the Borrowers and the Affiliate Guarantors shall each
have performed and complied with all agreements and conditions contained in
this Agreement required to be performed or complied with by it on or prior to
the Closing; and the Company and the Borrowers shall each have delivered to
each Purchaser an Officers' Certificate in the form of EXHIBIT D, dated the
Closing Date, certifying as to the matters set forth in this PARAGRAPH 3C.
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The offering,
issuance, purchase and sale of, and payment for, the Notes to be purchased by
the Purchasers on the Closing Date on the terms and conditions of this
Agreement (including the use of the proceeds of such Notes by the Borrowers)
shall not violate any applicable law or governmental regulation (including,
without limitation, section 5 of the Securities Act or Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System) and shall not subject
any Purchaser to any tax, penalty, liability or other condition adverse to it
under or pursuant to any applicable law or governmental regulation, and the
Purchasers shall have received such certificates or other evidence as they may
request to establish compliance with this condition.
3E. PRIVATE PLACEMENT NUMBER. A Private Placement Number shall
have been assigned to the Notes by Standard & Poor's CUSIP Service Bureau.
3F. PROCEEDINGS. All corporate and other proceedings taken or to
be taken by the Company, the Borrowers and the Affiliate Guarantors in
connection with the transactions contemplated by this Agreement and all
documents incident thereto shall be satisfactory in substance and form to each
Purchaser and Purchasers' Special Counsel, and each Purchaser shall have
received all such counterpart originals or certified or other copies of such
documents as it may reasonably request.
3G. CONSENT OF LENDERS AND OTHER PERSONS. The Company and the
Borrowers shall have received the written consent of all Persons whose consent
is necessary for the transactions contemplated by this Agreement satisfactory
in form and substance to each Purchaser.
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3H. REPAYMENT OF DEBT. Concurrently with the Closing, the
Borrowers shall have applied or the Company shall have caused its appropriate
Subsidiary to apply $24,550,000 of the net proceeds of the sale of the Notes to
the repayment of the Debt identified on SCHEDULE 3H and all such Debt shall
have been repaid in its entirety.
3I. GUARANTIES. Each of the Company, Baldwin Europe Consolidated
Inc., a Delaware corporation ("BEC"), and Baldwin Asia Pacific Corporation, a
Delaware corporation ("BAP"), shall have guaranteed the payment of the Notes
and the performance by the Borrowers of their obligations under this Agreement
pursuant to separate guaranties in the form of EXHIBIT E-1 in respect of the
Company and in the form of EXHIBIT E-2 in respect of BEC and BAP, such
guaranties shall be in full force and effect, and the Purchasers shall have
received from the Company and the Borrowers such confirmation thereof as they
or their Special Counsel may reasonably request.
3J. CONTRIBUTION AGREEMENT. The Company, the Borrowers, BEC and
BAP shall have entered into a Contribution Agreement in the form of EXHIBIT F
hereto (the "CONTRIBUTION AGREEMENT"), such agreement shall be in full force
and effect, and the Purchasers shall have received from the Company and the
Borrowers such confirmation thereof as they or their Special Counsel may
reasonably request.
4. PREPAYMENT; SCHEDULED PAYMENTS OF PRINCIPAL. The Notes may be
prepaid only under the circumstances set forth in PARAGRAPHS 4A and 4D and
shall be repaid in accordance with PARAGRAPH 4C or upon any acceleration of
final maturity as provided in PARAGRAPH 7.
4A. OPTIONAL PREPAYMENT WITH MAKE WHOLE PREMIUM. The Borrowers
shall have the option of prepaying the Notes at any time or from time to time
in whole or in part (in minimum amounts of $1,000,000 or larger amounts which
are integral multiples of $250,000), at 100% of the principal amount so
prepaid, plus interest accrued thereon to the Settlement Date and the Make
Whole Premium, if any. All partial prepayment(s) of the Notes pursuant to this
PARAGRAPH 4A shall be applied to the obligations of the Borrowers to make the
mandatory repayments of principal required in PARAGRAPH 4C below in inverse
order of maturity.
4B. NOTICE OF OPTIONAL PREPAYMENT. The Borrowers shall give each
Holder to be prepaid in whole or in part pursuant to PARAGRAPH 4A irrevocable
written notice of such prepayment at least 30 days prior to the Settlement
Date, specifying (i) the Settlement Date and (ii) the Called Principal of the
Notes held by each such Holder, and stating that such prepayment is an optional
prepayment pursuant to PARAGRAPH 4A of this Agreement. Upon the giving of such
notice, the Called Principal as specified in such notice, together with
interest thereon to the Settlement Date and the Make Whole Premium, if any,
shall become due and payable on the Settlement Date. On the date which is two
(2) Business Days prior to the Settlement Date of a prepayment under PARAGRAPH
4A, the Borrowers shall deliver to the Holder of each Note being prepaid an
Officers' Certificate stating whether a Make Whole Premium is payable in
connection with such prepayment and setting forth in detail the calculations
used in making such determination.
4C. SCHEDULED PAYMENTS OF PRINCIPAL. The Borrowers shall,
beginning October 29, 1997 and on each October 29th thereafter until October
29, 1999, repay $6,250,000 of the aggregate principal amount of the Notes, each
at 100% of the principal amount so prepaid plus interest accrued thereon to the
date of payment. On October 29, 2000, all remaining principal and accrued
interest then outstanding under the Notes shall be repaid in full.
4D. PREPAYMENT UPON CHANGE OF CONTROL. The Borrowers shall give
prompt written notice (a "CHANGE OF CONTROL NOTICE") to each Holder not less
than 30 days prior to the effective date of any Change of Control which
requires or has received the approval of the Company's stockholders or Board of
Directors. The Change of Control Notice shall identify the Persons involved,
describe the transaction, include such financial and other information as is
available to the Company and the Borrowers with
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reasonable effort that shall be reasonably necessary to each Holder to make an
informed decision as to whether to elect to require prepayment and set forth
the effective date of such proposed Change of Control. Any Holder, by giving
written notice of such election not later than five (5) Business Days prior to
the stated effective date of such Change of Control, shall have the option to
require the Borrowers to prepay all, but not less than all, of its Notes at
100% of the principal amount thereof plus interest accrued thereon to the
Settlement Date and the Make Whole Premium, if any. Any such prepayment shall
be made on the effective date of the Change of Control.
If the proposed terms of a proposed Change of Control change
substantially, the Borrowers shall deliver to each Holder a revised Change of
Control Notice which includes the information required above and each Holder
shall then have another opportunity to elect to require prepayment of its Notes
(by delivering to the Borrowers written notice of such election not later than
ten (10) days following receipt of such revised Change of Control Notice), and
any such prepayment shall occur on the later to occur of (a) the effective date
of such Change of Control or (b) three (3) Business Days following the
Borrowers' receipt of the Holders election to require repayment.
On the date which is two (2) Business Days prior to the Settlement
Date of a prepayment under this PARAGRAPH 4D, the Borrowers shall deliver to
the Holder of each Note being prepaid an Officers' Certificate stating whether
a Make Whole Premium is payable in connection with such prepayment and setting
forth in detail the calculations used in making such determination.
If the Borrowers fail to give proper notice of a Change of Control or
if a Change of Control occurs with respect to which the Borrowers were not
obligated to give prior notice, then, without limitation of any other rights
the Holders may have by reason thereof under this Agreement, any Holder whose
Notes were not prepaid in connection with such Change of Control may at any
time thereafter or, if the Borrowers give a Change of Control Notice after a
Change of Control has occurred, not later than thirty (30) days following the
date that the Borrowers gave such Change of Control Notice, require the
Borrowers to prepay in full the aggregate principal amount of its Notes at 100%
of the principal amount so prepaid plus accrued interest to the Settlement Date
and the Make Whole Premium, if any.
4E. APPLICATION OF PAYMENTS. Upon any partial prepayment of the
Notes pursuant to PARAGRAPH 4A and any scheduled repayment of the Notes
pursuant to PARAGRAPH 4C, the principal amount so prepaid plus the interest
accrued thereon and the Make Whole Premium, if any, shall be allocated to all
Notes at the time outstanding in proportion to their respective outstanding
principal amounts. All payments made to the Holders on account of the Notes
shall be applied first to expenses, then to accrued interest (including accrued
interest on interest and on the Make Whole Premium, if any), then to the Make
Whole Premium, if any, and then to principal.
4F. RETIREMENT OF NOTES. The Company and the Borrowers shall not,
and shall not permit any of their Affiliates to, prepay or otherwise retire in
whole or in part prior to their stated maturity (other than by prepayment
pursuant to PARAGRAPH 4A or 4D, scheduled repayment pursuant to PARAGRAPH 4C or
upon acceleration of such final maturity pursuant to PARAGRAPH 7A), or purchase
or otherwise acquire, directly or indirectly, Notes held by any Holder unless
the Company, such Borrower or such Affiliate shall have offered to prepay or
otherwise retire or purchase or otherwise acquire, as the case may be, the same
proportion of the aggregate principal amount of Notes held by each other Holder
at the time outstanding upon the same terms and conditions. No Notes so
prepaid or otherwise retired or purchased or otherwise acquired by the Company,
either Borrower or any their Affiliates shall thereafter be reissued or deemed
to be outstanding for any purpose under this Agreement.
4G. MAKE WHOLE PREMIUM. The Borrowers acknowledge that the Make
Whole Premium due at any optional prepayment or prepayment upon a Change of
Control or upon acceleration of final maturity
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has been negotiated with the Purchasers to provide a bargained for rate of
return on the Notes and is not a penalty.
5. AFFIRMATIVE COVENANTS. The Company and the Borrowers covenant
and agree that:
5A. FINANCIAL REPORTING BY THE COMPANY. The Company will deliver
to each Holder and to any prospective Transferee of a Note designated by any
Holder in writing to the Borrowers:
(i) as soon as practicable and in any event not more than
45 days after the end of each quarterly period in each fiscal year of
the Company (except the fourth quarter), a consolidated (and upon the
request of any Holder, consolidating) balance sheet of the Company and
its Subsidiaries as at the end of such quarterly period and for the
fiscal year to date, and the related consolidated (and, with respect
to statements of income and changes in shareholders' equity, upon the
request of any Holder, consolidating) statements of income, of changes
in shareholders' equity and of cash flows of the Company and its
Subsidiaries for such period(s) setting forth, in each case in
comparative form, figures for the corresponding period(s) in the
preceding fiscal year of the Company, all in reasonable detail and in
accordance with GAAP and certified by the chief accounting officer or
chief financial officer of the Company as fairly presenting the
consolidated (and, if requested, consolidating) financial condition of
the Company and its Subsidiaries as at the dates indicated and the
consolidated results of their operations and cash flows, in each case
for the periods indicated, in conformity with GAAP (except as
disclosed in the certificate of such chief accounting officer or chief
financial officer with any changes in accounting policies discussed in
reasonable detail), subject to changes resulting from year-end
adjustments not material in scope or amount;
(ii) as soon as practicable and in any event not more than
90 days after the end of each fiscal year of the Company, a
consolidated and consolidating balance sheet of the Company and its
Subsidiaries as of the end of such year and the related consolidated
(and, with respect to statements of income and changes in
shareholders' equity, upon the request of any Holder, consolidating)
statements of income, of cash flows and of changes in shareholders'
equity of the Company and its Subsidiaries for such year, and setting
forth in each case, in comparative form, corresponding figures for the
preceding fiscal year of the Company, all in reasonable detail and in
accordance with GAAP and (a) in the case of such consolidated
financial statements accompanied by a report thereon of Price
Waterhouse or other independent certified public accountants of
recognized national standing selected by the Company, which report
shall be without limitations to the scope of the audit and shall state
that such consolidated financial statements present fairly the
financial condition of the Company and its Subsidiaries as at the
dates indicated and the consolidated results of their operations and
cash flows for the periods indicated in conformity with GAAP (except
as otherwise specified in such report) and that the audit by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards
and (b) in the case of any consolidating financial statements,
certified by the chief accounting officer or chief financial officer
of the Company as presenting fairly the information contained therein
in conformity with GAAP;
(iii) together with each delivery of financial statements
of the Company and its Subsidiaries pursuant to SUBPARAGRAPHS (I) and
(II) of THIS PARAGRAPH 5A, a certificate of the chief financial
officer of the Company (a) stating that (i) the signer has reviewed
the terms of this Agreement and the Notes and has made, or caused to
be made under his supervision, a review in reasonable detail of the
transactions and condition of the Company and its Subsidiaries during
the fiscal period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
fiscal period, and that to the best of his knowledge after reasonable
investigation the signer has no knowledge of the existence as at the
date of such certificate, of any condition or event which constitutes
a Default or Event of Default or, if any such
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condition or event existed or exists, specifying the nature and period
of existence thereof and what action the Company and the Borrowers
have taken, are taking or propose to take with respect thereto and
(ii) the Company, the Borrowers and their Subsidiaries are in
compliance with the provisions of PARAGRAPHS 6A, 6B, 6C and 6D and (b)
demonstrating (with computations in reasonable detail) compliance by
the Company, the Borrowers and their Subsidiaries with the provisions
of PARAGRAPHS 6A, 6B, 6C(4)(V) and 6D;
(iv) together with each delivery of financial statements
of the Company and its Subsidiaries pursuant to SUBPARAGRAPH (II) of
this PARAGRAPH 5A, a certificate by the Company's independent public
accountants stating (a) that their audit examination has included a
review of the terms of this Agreement and the Notes as they relate to
accounting matters and that such review is sufficient to enable them
to make the statement referred to in CLAUSE (C) of this SUBPARAGRAPH
(IV), (b) whether, in the course of their audit examination, there has
been disclosed the existence during the fiscal year covered by such
financial statements (and whether they have knowledge of the existence
as of the date of such accountants' certificate) of any condition or
event which constitutes a Default or Event of Default under PARAGRAPH
6A, 6B, 6C (other than PARAGRAPHS 6C(1) and 6C(6)), or 6D, and if
during their audit examination there has been disclosed (or if they
have knowledge of) such a condition or event, specifying the nature
and period of existence thereof (it being understood, however, that
such accountants shall not be liable to any Person by reason of their
failure to obtain knowledge of any Default or Event of Default which
would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards), and (c) that
based on their annual examination nothing came to their attention
which causes them to believe that the information contained in the
certificate of the Company's chief financial officer delivered
pursuant to SUBPARAGRAPH (III) of this PARAGRAPH 5A insofar as it
relates to accounting or auditing matters is not correct or that the
matters set forth in such certificate are not stated in accordance
with the terms of this Agreement (it being understood that such
independent public accountants' examination was not primarily directed
toward determining the accuracy of such information);
(v) promptly after receipt thereof by the Company or
either Borrower, copies of all material reports submitted to the
Company or such Borrower by independent public accountants and
consultants in connection with each annual, interim or special audit
of the books of the Company or any Significant Subsidiaries made by
such accountants;
(vi) promptly after any officer of the Company, either
Borrower or any of their Subsidiaries obtain knowledge (a) that a
condition or event exists that constitutes a Default or Event of
Default, (b) that any Holder has given any notice or taken any other
action with respect to a claimed Default or Event of Default under
this Agreement, (c) of any condition or event peculiar to the Company,
either Borrower or their Subsidiaries which could reasonably be
expected to have a Material Adverse Effect on the Company, any
Significant Subsidiary or the Consolidated Group, (d) that any Person
has given any notice to the Company, either Borrower or any of their
Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in SUBPARAGRAPH
(III) of PARAGRAPH 7A, (e) of the institution of any litigation
involving claims against the Company, either Borrower or any of their
Subsidiaries equal to or greater than $500,000 with respect to any
single cause of action or $1,000,000 in the aggregate, (f) of the
assertion by any Person of a claim for breach or violation of any
Environmental Law or for damages resulting from such breach or
violation against the Company, either Borrower or any of their
Subsidiaries which if adversely determined against the Company or such
Borrower or Subsidiary would have a Material Adverse Effect on the
Company or such Borrower or Subsidiary or on the Consolidated Group,
(g) of the assertion of any claim by any Person seeking injunctive
relief against the Company, either Borrower or any of their
Subsidiaries which would impair the conduct by the Company, either
Borrower or any of their Subsidiaries of its business in the ordinary
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course or the performance of this Agreement, the Notes or any Related
Agreement, or (h) the occurrence of any default or any event of
default under the Revolving Credit Facility or any other agreement,
instrument or note evidencing or pursuant to which any other Debt, the
outstanding principal amount of which exceeds $1,000,000, has been
issued by the Company, either Borrower or any of their Subsidiaries,
an Officers' Certificate specifying the nature and period of existence
of any such condition or event, or specifying the notice given or
action taken by such Holder or Person and the nature of such claimed
Default, Event of Default, event or condition, and what action the
Company or the Borrowers have taken, are taking or propose to take
with respect thereto;
(vii) promptly after any officer of the Company, either
Borrower or any of their Subsidiaries obtain knowledge of the
occurrence of any (i) "reportable event", as such term is defined in
section 4043 of ERISA with respect to any Plan, (ii) "prohibited
transaction" as such term is defined in section 4975 of the Code, in
connection with any Plan or any trust created thereunder which is not
otherwise exempt under a statutory, class or administrative exemption,
(iii) event described in PARAGRAPH 6E, (iv) reorganization or
termination of any Multiemployer Plan to which the Company, either
Borrower or any Related Person is obligated or has been obligated to
contribute, (v) termination of any Plan, or proceedings to terminate
any Plan which are pending or threatened, (vi) liability to or on
account of any Plan under section 4062, 4063 or 4064 of ERISA which
will or may be incurred by the Company, either Borrower or a Related
Person, a written notice specifying the nature thereof, what action
the Company, such Borrower or any Related Person has taken, is taking
or proposes to take with respect thereto, and, when known, any action
taken or threatened by the Internal Revenue Service or the PBGC with
respect thereto;
(viii) promptly after the transmission thereof, copies of
all such financial statements, proxy statements, notices and reports
as the Company, either Borrower or any of their Subsidiaries shall
send to its public debtholders or public stockholders and copies of
all registration statements (without exhibits) and all reports which
the Company, either Borrower or any of their Subsidiaries files with
the SEC;
(ix) promptly after the transmission thereof, copies of
all such financial statements, notices, certificates and reports as
the Company, either Borrower or any of their Subsidiaries shall send
to the lender(s) under the Revolving Credit Facility or to any other
lender, or group of lenders, if the aggregate Debt outstanding to such
lender, or group of lenders, (x) from the Company, the Borrowers and
their Subsidiaries (other than BAP and its Subsidiaries or BEC and its
Subsidiaries) exceeds $1,000,000 or (y) from BAP and its Subsidiaries
or BEC and its Subsidiaries exceeds $3,000,000;
(x) promptly after receipt thereof, copies of all
reports, statements and notices the Company, either Borrower or any of
their Subsidiaries may receive in accordance with Section 13(d) or
14(d) of the Exchange Act and the rules and regulations promulgated
thereunder by the SEC; and
(xi) with reasonable promptness, such other information
and data with respect to the Company, either Borrower or any of their
Subsidiaries as from time to time may be reasonably requested by any
Holder.
5B. INFORMATION REQUIRED BY RULE 144A. Each of them will, upon
the request of any Holder, provide such Holder, and any qualified institutional
buyer designated by such Holder, such financial and other information as such
Holder may reasonably determine to be necessary in order to permit compliance
with the information requirements of Rule 144A in connection with a resale or
proposed resale of Notes. For the purpose of this PARAGRAPH 5B, the term
"qualified institutional buyer" shall have the meaning specified in Rule 144A.
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5C. INSPECTION OF PROPERTY. Each of them will permit any Person
designated by any Holder, at such Holder's expense (unless such inspection
shall be made during the continuance of a Default or after the occurrence of an
Event of Default, in which event the reasonable expense of such inspection
shall be borne by the Borrowers), to visit and inspect any of the properties of
itself or any of its Subsidiaries, to examine the corporate books and financial
records of itself or any of its Subsidiaries and make copies thereof or
extracts therefrom and to discuss the affairs, finances and accounts of itself
or any of its Subsidiaries with the principal officers of it or such
Subsidiary, and (prior to the occurrence and continuance of a Default or Event
of Default, upon consent of the Company or either Borrower (which consent shall
not be unreasonably withheld) and at the expense of the Holder, and during the
continuance of a Default or after the occurrence of an Event of Default without
the consent of the Company or either Borrower and at the expense of the
Borrowers) the Company's and each Borrower's independent public accountants
(and by this provision the Company and the Borrowers authorize such accountants
to discuss with any Person so designated the affairs, finances and accounts of
the Company, the Borrowers and their Subsidiaries), all at such reasonable
times and as often as such Holder may reasonably request.
5D. CORPORATE EXISTENCE, ETC. Each of them shall at all times
preserve and keep in full force and effect its and its Subsidiaries' corporate
existence, and rights and franchises material to the business of the Company,
any Significant Subsidiary or the Consolidated Group except as otherwise
specifically permitted by PARAGRAPH 6C(4), and will qualify, and will cause
each of its Subsidiaries to qualify, to do business in any jurisdiction where
the failure to do so would have a Material Adverse Effect on the Company, any
Significant Subsidiary or the Consolidated Group.
5E. PAYMENT OF TAXES AND CLAIMS. Each of them will pay, and will
cause each of its Subsidiaries to pay, (i) all income taxes before the same
shall become delinquent, except where such income taxes are contested in good
faith by appropriate proceedings promptly instituted and diligently conducted,
if adequate reserves therefor have been established on its books of account in
accordance with GAAP, and (ii) all other taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its franchises, business, income or profits before any
penalty or interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable, provided that no such tax, assessment, charge or
claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if such reserves
or other appropriate provision, if any, as shall be required by GAAP shall have
been made therefor.
5F. COMPLIANCE WITH LAWS, ETC. Each of them will comply, and will
cause each of its Subsidiaries to comply, with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority
(including, without limitation, the Occupational Safety and Health Act of 1970,
as amended, ERISA and all Environmental Laws), the violation of which would
have a Material Adverse Effect on the Company, any Significant Subsidiary or
the Consolidated Group.
5G. MAINTENANCE OF PROPERTIES. Each of them will maintain or make
adequate arrangements for the maintenance of, and will cause each of its
Subsidiaries to maintain or make adequate arrangements for the maintenance of,
in good repair and working order and condition, subject to reasonable wear and
tear and obsolescence, all properties used or useful in its or their business,
and from time to time make or cause to be made all appropriate repairs,
renewals and replacements thereof.
5H. INSURANCE. Each of them will maintain, and will cause each of
its Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to its properties and business and the properties and
business of its Subsidiaries in such forms and amounts and against such risks
customarily insured against by corporations of established reputation engaged
in the same or similar business and similarly situated.
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5I. SCOPE OF BUSINESS. Each of them will engage, and will cause
its Subsidiaries to engage, only in businesses in substantially the same fields
as the businesses conducted on the date of this Agreement and described in the
Memorandum.
5J. USE OF PROCEEDS. The Borrowers will use $24,550,000 of the
proceeds of the sale of the Notes for repayment of the Debt designated on
SCHEDULE 3H and $450,000 of the proceeds for working capital of BAM and not for
any purpose which would violate any applicable law or governmental regulation
or which is otherwise prohibited under PARAGRAPH 6B or 8H.
5K. ENVIRONMENTAL COMPLIANCE. Each of them (i) will obtain and
maintain, and will cause each of its Subsidiaries to obtain and maintain, all
permits, licenses, and other authorizations that are required under all
Environmental Laws, (ii) will comply, and cause each of its Subsidiaries to
comply, with all terms and conditions of all such permits, licenses, and
authorizations and with all other applicable limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables contained in all Environmental Laws or in any regulation, ordinance,
code, plan, order, decree, judgment, injunction, notice, or demand letter
issued, entered, promulgated, or approved thereunder, except to the extent that
failure so to do does not have a Material Adverse Effect on the Company, either
Borrower, or any of their Subsidiaries, and (iii) will operate, and will cause
each of its Subsidiaries to operate, all property owned or leased by it such
that no claim or obligation, including a clean-up obligation, which would have
a Material Adverse Effect on the Company, either Borrower or any of their
Subsidiaries, shall arise under any Environmental Law, and if any claim is made
against the Company, either Borrower or their Subsidiaries or any such
obligation of the Company, either Borrower or any of their Subsidiaries, which
would have a Material Adverse Effect on the Company, either Borrower, any of
their Subsidiaries or the Consolidated Group, arises under any Environmental
Law, the party against whom such claim is made shall timely satisfy such claim
or obligation.
5L. MAINTENANCE OF BOOKS AND RECORDS. Each of them will do, and
will cause each of its Subsidiaries to do, the following: (i) keep proper
records and books of account with respect to its business activities in which
proper entries are made in the ordinary course of all dealings or transactions
of or in relation to its business and affairs; (ii) set up on its books
adequate reserves with respect to all taxes, assessments, charges, levies and
claims; and (iii) set up on its books reserves against doubtful accounts
receivable, advances and all other proper reserves (including reserves for
depreciation, obsolescence or amortization of its property). All
determinations pursuant to this PARAGRAPH 5L shall be made in accordance with,
or as required by, GAAP. Notwithstanding the foregoing, the Company, either
Borrower or any of their Subsidiaries may make adjustments and changes in the
manner in which their books and records are kept; provided, that:
(a) all such adjustments and changes shall be required or
permitted by GAAP but need not conform with its prior
accounting practice;
(b) each Holder shall be given (i) written notice from the Company
of all such changes or adjustments with the delivery of the
financial statements required by PARAGRAPH 5A(I) or 5A(II), as
the case may be, for the fiscal period in which such
adjustment or change was first put into effect, and (ii) with
the delivery of the financial statements required by PARAGRAPH
5A(II) a description by the independent certified public
accountants who audited such financial statements of the
effect of all such changes and adjustments put into effect in
the preceding fiscal year on such financial statements (a)
which are required by generally accepted auditing standards to
be referred to in such financial statements or such
independent certified public accountants' opinion thereon or
(b) if not required by generally accepted auditing standards,
with respect to which the Required Holders have reasonably
requested a description;
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(c) the financial covenants and ratios set forth in PARAGRAPH 6A
and the ratios set forth in PARAGRAPH 6D(1) shall continue to
be calculated without regard to such adjustments or changes
unless and until each Holder has consented thereto.
5M. PAYMENT OF TRADE PAYABLES. Each of them will pay, and will
cause each of its Subsidiaries to pay, all Trade Payables promptly (i) in
accordance with their terms or (ii) in accordance with prior practice, if
paying Trade Payables in accordance with such prior practice (and not in
accordance with their terms) would not, in each circumstance or in the
aggregate, have a Material Adverse Effect on the Company, any Significant
Subsidiary or the Consolidated Group.
6. NEGATIVE COVENANTS. The Company and the Borrowers covenant
and agree that:
6A. FINANCIAL COVENANTS. They will not:
6A(1). CONSOLIDATED NET WORTH. Permit Consolidated Net Worth,
calculated as of the last day of any fiscal quarter of the Company after June
30, 1993, to be less than (i) $70,000,000, plus (ii) an amount equal to 50% of
the aggregate of the Consolidated Net Income (without deduction for quarterly
losses) in each fiscal quarter thereafter.
6A(2). CURRENT RATIO. Permit the Current Ratio, calculated as of the
last day of any fiscal quarter after June 30, 1993, to be less than 1.4 to 1.0.
6B. RESTRICTED PAYMENTS. They will not make, and will not permit
any of their Subsidiaries to make, any Restricted Payments unless:
(i) the aggregate of all such Restricted Payments made
after June 30, 1993 does not exceed the sum of (x) $3,000,000; plus
(y) the net cash proceeds received by the Company from the issuance of
shares of Eligible Capital Stock; plus (z)(a) 50% of the Consolidated
Net Income from June 30, 1993 through the Company's fiscal quarter
most recently ended for which financial statements have been (or are
required to have been) furnished to the Holders in accordance with
PARAGRAPH 5A(I) or 5A(II), as the case may be, taken as a single
accounting period or, (b) in the event Consolidated Net Income for
such period shall be a negative number, 100% of such amount (expressed
as a negative number); and
(ii) no Event of Default or Default exists immediately
before or immediately after such payment or would otherwise reasonably
be anticipated to result therefrom.
6C. LIENS AND OTHER RESTRICTIONS. They will not, and will not
permit any of their Subsidiaries to:
6C(1). LIENS. Create, assume or suffer to exist any Lien on its
property or assets, whether now owned or hereafter acquired or upon any income
or profits therefrom, or transfer any property for the purpose of subjecting
the same to the payment of obligations in priority to the payment of its
general creditors except for:
(i) Liens on Fixed Assets incurred by the Company, either
Borrower or any of their Subsidiaries in the ordinary course of
business in connection with the acquisition or construction thereof,
which secure all or part of the purchase price thereof (including
Capitalized Leases) and Liens existing on property at the time of its
purchase or construction thereof; provided, however, that (a) each
such Lien is confined solely to the property so purchased or
constructed, improvements thereto and proceeds thereof, (b) such Liens
secure only the purchase price for such property and the amount of the
Debt secured by such Lien does not exceed 80% of the cost of such
property, (c) the Debt secured by such Lien is incurred at the time of
the acquisition, or within
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one hundred twenty (120) days following the date of acquisition, of
the Fixed Assets subject thereto, and (d) the Debt secured thereby
would otherwise be permitted by PARAGRAPH 6D;
(ii) Liens representing any renewal, refunding or
extension of any Lien permitted by CLAUSE (I) of this PARAGRAPH 6C(1)
provided that the principal amount secured and then outstanding is not
increased, the Lien is not extended to other property and the Debt
secured thereby would be permitted under PARAGRAPH 6D;
(iii) Liens, and other charges incidental to the conduct of
its business, or the ownership of its property (including charges for
taxes or otherwise arising by operation of law, mechanics', carriers',
workers', repairmen's, warehousers' or other similar liens), which are
not incurred in connection with the borrowing of money or the securing
of Debt, provided in each case the obligation secured is not overdue
or is being contested in good faith by appropriate actions or
procedures promptly instituted and diligently conducted and such
reserves as shall be required by GAAP shall have been made therefor
and which in the aggregate do not materially diminish the value of the
property or assets of the Company, any Significant Subsidiary or of
the Consolidated Group;
(iv) Liens existing as of this date securing Debt and
listed on SCHEDULE 6C(1);
(v) deposits or pledges to secure worker's compensation,
unemployment insurance, old age benefits or other social security
obligations or retirement benefits;
(vi) Liens arising out of deposits in connection with, or
to secure the performance of, bids, tenders, trade contracts not for
the payment of money or leases, or to secure statutory obligations or
surety or appeal bonds, performance bonds or other pledges or deposits
for purposes of like nature in the ordinary course of business;
(vii) Liens arising under Title IV of ERISA which would not
have a Material Adverse Effect on the Company, any Significant
Subsidiary or on the Consolidated Group;
(viii) survey exceptions or encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Company and its Subsidiaries or which customarily
exist on properties of Persons engaged in similar activities and
similarly situated and which do not in any event have a Material
Adverse Effect on, or materially impair their use in the operation of
the business of, the Company, any Significant Subsidiary or the
Consolidated Group;
(ix) Liens arising from judgments or decrees not
constituting a Default or Event of Default unless such lien remains
undischarged, unstayed on appeal, unbonded and undismissed for a
period of sixty (60) consecutive days;
(x) Liens on receivables and inventory of the Company,
the Borrowers and their Subsidiaries if the aggregate principal amount
of the Debt (exclusive of any Debt set forth on Schedule 6C(1)),
secured by all such Liens does not at any time exceed $15,000,000; and
(xi) Liens on any capital stock of the Borrowers and the
Company's other Subsidiaries if the aggregate principal amount of the
Debt (exclusive of the Funded Debt represented by the Notes) secured
by all such Liens does not at any time exceed $20,000,000, provided
that the Notes are secured by all such Liens equally and ratably with
all other Debt secured thereby pursuant to a written agreement in form
and substance satisfactory to the Holders and their Special Counsel,
the
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enforceability of which has been confirmed to the satisfaction of the
Holders and their Special Counsel.
6C(2). LOANS, ADVANCES AND INVESTMENTS. Make or permit to remain
outstanding any loan or advance to, or extend credit to, or own, purchase or
acquire any stock (including that of the Company), obligations or securities
of, or any other interest in, or make any capital contribution to any Person
(other than the present investment of the Company and its Subsidiaries in their
respective Subsidiaries), except that the Company and any of its Subsidiaries
may:
(i) make or permit to remain outstanding loans or
advances to any Wholly-Owned Subsidiary of the Company provided that
any such loans to a Borrower are subordinated to the payment of the
Funded Debt represented by the Notes and any such loans to an
Affiliate Guarantor are subordinated to such Affiliate Guarantor's
obligations under its Affiliate Guaranty, in each case pursuant to a
subordination agreement in the form of EXHIBIT G and the
enforceability of which has been confirmed to the reasonable
satisfaction of the Holders and their Special Counsel (a
"SUBORDINATION AGREEMENT");
(ii) acquire and own stock, obligations or securities
received in settlement of debts (created in the ordinary course of
business) owing to the Company or such Subsidiary;
(iii) own, purchase or acquire: (a) securities issued or
directly and fully and unconditionally guaranteed or insured by the
United States of America, Japan or any country which is a member of
the European Economic Community or any agency thereof backed by the
full faith and credit of the United States of America, Japan or any
country which is a member of the European Economic Community and
maturing within one (1) year from the date of acquisition; (b) demand
deposits in banks in the ordinary course of business (not for
investment purposes); (c) time deposits, or certificates of deposit
maturing within one (1) year from the date of acquisition issued by
commercial banks which are members of the Federal Reserve System and
chartered under the laws of the United States of America or any state
or the District of Columbia or Japan or any country which is a member
of the European Economic Community whose short-term securities are
rated at least A-1 (or then existing equivalent) by Standard & Poor's
Corporation and at least P-1 (or then existing equivalent) by Moody's
Investors Service, Inc.; (d) prime commercial paper maturing not more
than 270 days from the date of acquisition, having as at any date a
rating of at least A-1 (or the existing equivalent) from Standard &
Poor's Corporation or at least P-1 (or then existing equivalent) from
Moody's Investors Service, Inc. and issued by a corporation organized
in any state of the United States of America or the District of
Columbia or Japan or any country which is a member of the European
Economic Community; and (e) securities of the type described in CLAUSE
(A) of this SUBPARAGRAPH but issued or directly and fully and
unconditionally guaranteed or insured by any country (or agency backed
by the full faith and credit thereof) other than the United States of
America, Japan or a member of the European Economic Community and
investments of the type described in CLAUSES (C) and (D) of this
SUBPARAGRAPH of a bank chartered or a corporation organized in any
jurisdiction other than the United States of America, any state
thereof or the District of Columbia, Japan or a member of the European
Economic Community, provided that the aggregate of all such securities
and investments, together with the aggregate amount of demand deposits
in banks located in all countries other than the United States of
America, Japan or a member of the European Economic Community does not
exceed at any time $5,000,000;
(iv) endorse negotiable instruments for collection in the
ordinary course of business;
(v) purchase or acquire stock of any Person if
immediately after such purchase or acquisition such Person will be an
80% Subsidiary of the Company, provided that if, after giving pro
forma effect to such purchase or acquisition as if it had occurred as
of the first day of the most
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recently completed fiscal quarter for which financial statements were
delivered pursuant to PARAGRAPH 5A, such 80% Subsidiary would have
been a Significant Subsidiary as of such date, then such 80%
Subsidiary shall have become an Affiliate Guarantor;
(vi) make or permit to remain outstanding loans or
advances to their employees other than advances to employees for
expenses incurred in the ordinary course of business and loans to
employees provided the aggregate principal amount of all such loans by
the Company and its Subsidiaries does not at any time exceed
$2,500,000 less the principal amount of any such loans which has been
repaid as of the date of determination and provided further (i) the
proceeds of such loans are used solely by such employees to acquire
common stock of the Company; (ii) such loans are secured by a pledge
by the employee of the stock so acquired; and (iii) such loans are
otherwise made on terms no less favorable to the Person making such
loan than those which might be obtained at arm's length between
unaffiliated parties;
(vii) make capital contributions to either Borrower or the
Subsidiaries of the Borrowers or any Affiliate Guarantor or the
Subsidiaries of the Affiliate Guarantors; and
(viii) may make Restricted Payments to the extent permitted
by PARAGRAPH 6B.
6C(3). SALE OF STOCK AND DEBT OF SUBSIDIARIES. Either directly or
indirectly by the issuance of rights, options for or securities convertible
into such shares, issue, sell or otherwise dispose of, or part with control of,
any shares of capital stock (other than directors' qualifying shares) or Debt
of either Borrower or any other Subsidiary of the Company, except for (i) the
issuance, sale or other disposition of shares of such capital stock to the
Company or another Wholly-Owned Subsidiary of the Company; and (ii) sales of
shares of then issued capital stock of a Subsidiary of the Company (other than
the capital stock of either Borrower or any Affiliate Guarantor) to a Person
which is not a Wholly-Owned Subsidiary of the Company, if immediately after
such sale the issuer of such capital stock is no longer a Subsidiary of the
Company and the sale would otherwise be permitted under PARAGRAPH 6C(4).
6C(4). MERGER AND SALE OF ASSETS. Merge or consolidate with any
other Person or sell, lease or transfer or otherwise dispose of its assets to
any Person or Persons, except, that:
(i) any Wholly-Owned Subsidiary of the Company may merge
with the Company (provided that the Company shall be the continuing or
surviving corporation) or merge or consolidate with any one or more
other Wholly-Owned Subsidiaries of the Company (provided if either
Borrower or any Affiliate Guarantor is a party to such merger or
consolidation it shall be the continuing or surviving corporation
except in the case of a merger or consolidation involving either
Borrower and any Affiliate Guarantor, in which case such Borrower
shall be the controlling or surviving corporation);
(ii) any Wholly-Owned Subsidiary of the Company (other
than either Borrower or any Affiliate Guarantor) may sell, lease,
transfer or otherwise dispose of any of its assets to the Company or
another Wholly-Owned Subsidiary of the Company provided that
immediately after giving effect to such transaction, no Default or
Event of Default would result therefrom or otherwise exist immediately
before or immediately after such transaction;
(iii) the Company may merge or consolidate with any other
corporation, provided that (a) the Company shall be the continuing or
surviving corporation; (b) immediately after giving effect to such
transaction, were the Company or any of its Subsidiaries to incur
additional Debt of $1.00, no Default or Event of Default would result
therefrom; and (c) no Default or Event of Default would otherwise
exist immediately before or immediately after such merger or
consolidation;
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(iv) a Wholly-Owned Subsidiary of the Company may merge or
consolidate with any other corporation, provided that (a) such
Subsidiary shall be the continuing or surviving corporation; (b) such
Subsidiary shall continue to be a Wholly- Owned Subsidiary of the
Company; (c) immediately after giving effect to such transaction, were
the Company or any of its Subsidiaries to incur additional Debt of
$1.00, no Default or Event of Default would result therefrom; and (d)
no Default or Event of Default would otherwise exist immediately
before or immediately after such merger or consolidation;
(v) the Company or any of its Subsidiaries may sell,
transfer or otherwise dispose of some or all of its properties or
assets for such consideration as may be determined to be fair and
adequate by the Board of Directors of the Company or such Subsidiary
(a "DISPOSITION"); provided, however, that (a) no Default or Event of
Default exists immediately before or immediately after and giving
effect to such Disposition or would otherwise reasonably be
anticipated to result therefrom, and (b) immediately after and giving
effect to any such Disposition, the aggregate book value, as reflected
on the most recent balance sheet of the Company furnished to the
Holders pursuant to PARAGRAPH 5A(I) or 5A(II), as the case may be, of
all such properties and assets so sold by the Company and its
Subsidiaries (which, in the case of a sale of capital stock of a
Subsidiary, shall equal the seller's share of the aggregate book value
of the properties and assets of such Subsidiary and its Subsidiaries,
calculated on a consolidated basis) ("ASSETS SOLD") during the then
current fiscal year, less the aggregate amount of Qualifying
Reinvestments then made by the Company and its Subsidiaries during
such fiscal year, does not exceed 10% of Consolidated Net Tangible
Assets at the end of the fiscal year immediately preceding such
Disposition; and
(vi) the Company or any of its Subsidiaries may sell
inventory in the ordinary course of business and BJL may sell
receivables in the ordinary course of its business in accordance with
its past practices.
For purposes of SUBPARAGRAPH (V) of this PARAGRAPH 6C(4), a "QUALIFYING
REINVESTMENT" is the use of proceeds of Assets Sold to (A) purchase not more
than ninety (90) days prior to nor more than three hundred sixty-five (365)
days after the date of such Disposition (x) tangible, depreciable assets or
equipment or real property or depreciable improvements thereon usable in the
same business as the Assets Sold, or (y) either (1) purchase all of the
outstanding capital stock or other equity interests of a Person which is
immediately after such purchase a Subsidiary of the Company and is engaged in
any such business, or (2) purchase all or substantially all of the assets and
business of a Person which is engaged in any such business, or (B) permanently
repay Consolidated Debt, if such repayment is made within 90 days after the
date of such Disposition.
6C(5). SUBSIDIARY DIVIDEND AND OTHER RESTRICTIONS. Enter into, or be
otherwise subject to, any contract or agreement (including its charter) which
limits the amount of, or otherwise imposes restrictions on the payment of,
dividends by any of the Company's Subsidiaries or distributions on any other
securities of any of the Company's Subsidiaries held by either Borrower or the
Company.
6C(6). TRANSACTIONS WITH AFFILIATES. Except as set forth on SCHEDULE
6C(6), directly or indirectly engage in any transaction (including, without
limitation, the purchase, sale or exchange of assets or the payment of salary,
bonuses and other compensation for services rendered) with any present or
former stockholder (other than Persons who do not own and have not owned,
directly or indirectly, any shares of stock of any Subsidiary of the Company
and who do not own and have not owned, directly or indirectly, at any one time
more than ten (10) shares of common stock of the Company and any shares of any
other class of capital stock of the Company), officer or Affiliate (other than
a Wholly-Owned Subsidiary of the Company) or to any successor, assign,
Affiliate or transferee thereof, except in the ordinary course of business
pursuant to the reasonable requirements of the Company's, the Borrower's or
their Subsidiaries' business and upon terms which might be obtained at arms'
length between unaffiliated parties.
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6C(7). SALE AND LEASEBACK. Enter into any Sale and Leaseback
Transaction, unless the obligation incurred and evidenced by such leasing
arrangement would be a Capitalized Lease Obligation and the Debt incurred would
be permitted to be incurred by PARAGRAPH 6D.
6D. DEBT.
6D(1). COMPANY DEBT. The Company will not create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to any
Debt, other than:
(i) its Guaranty of the Funded Debt represented by the
Notes;
(ii) its Guaranty of the Funded Debt from time to time
outstanding under the Revolving Credit Facility in an aggregate
principal amount not at any time to exceed $20,000,000;
(iii) Debt outstanding as of the date of this Agreement
other than the Debt set forth in SCHEDULE 3H;
(iv) other Funded Debt of the Company if, at the time of
incurrence thereof and after giving effect thereto, (a) no Default or
Event of Default exists or would otherwise reasonably be anticipated
to result from such transaction, (b) the ratio of Consolidated Funded
Debt to Consolidated Total Capitalization, in each case calculated on
the basis of the most recently available financial information and
giving pro forma effect to the incurrence of such Funded Debt and the
application of the net proceeds therefrom, would not exceed 0.55 to
1.00, and (c) the financial tests set forth in PARAGRAPH 6A,
calculated on the basis of the most recently available financial
information, would have been satisfied on a pro forma basis; and
(v) other Debt of the Company if, at the time of
incurrence thereof and after giving effect thereto, (a) no Default or
Event of Default exists or would otherwise reasonably be anticipated
to result from such transaction, (b) the ratio of Consolidated Debt to
Consolidated Total Capitalization, in each case calculated on the
basis of the most recently available financial information and giving
pro forma effect to the incurrence of such Debt and the application of
the net proceeds therefrom, would not exceed 0.60 to 1.00, and (c) the
financial tests set forth in PARAGRAPH 6A, calculated on the basis of
the most recently available financial information, would have been
satisfied on a pro forma basis.
6D(2). SUBSIDIARY DEBT. The Borrowers will not, and the Company will
not permit any of its other Subsidiaries to, create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to Debt other than:
(i) the Funded Debt represented by the Notes and the
Affiliate Guaranties;
(ii) the Funded Debt from time to time outstanding to the
Borrowers under the Revolving Credit Facility in an aggregate
principal amount not at any time to exceed $20,000,000, and any
Guaranties of such Funded Debt;
(iii) Debt of Wholly-Owned Subsidiaries of the Company for
loans permitted under PARAGRAPH 6C(2)(I); and
(iv) any other Debt; provided, however, (a) at the time of
such incurrence and after giving effect thereto, the Company would be
able to incur an additional $1.00 of Debt without breach of PARAGRAPH
6(D)(1)(V); and (b) that the aggregate principal amount of all such
other Debt of the Company's Subsidiaries (other than the Borrowers)
shall not at any one time exceed
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$25,000,000 (which amount shall include amounts outstanding under the
Revolving Credit Facility only if (1) the Company or any of its
Subsidiaries (other than the Borrowers) is a borrower thereunder or
(2) any of the Company's Subsidiaries (other than the Affiliate
Guarantors) has Guarantied the obligations of the Borrowers
thereunder).
6E. COMPLIANCE WITH ERISA. They will not and will not permit any
of their Subsidiaries or any Related Person, if it will have a Material Adverse
Effect on the Company, any Significant Subsidiary or the Consolidated Group to:
(i) engage in any transaction in connection with which a
civil penalty could be assessed pursuant to section 502(i) of ERISA or
a tax imposed by section 4975 of the Code, terminate or withdraw from
any Plan (other than a Multiemployer Plan) in a manner, or take any
other action with respect to any such Plan (including, without
limitation, a substantial cessation of business operations or an
amendment of a Plan within the meaning of section 4041(e) of ERISA),
which could result in any liability of the Company or either Borrower
or any Related Person to the PBGC, to a Plan, to a Plan participant,
to the Department of Labor or to a trustee appointed under section
4042(b) or (c) of ERISA), incur any liability to the PBGC or a Plan on
account of a withdrawal from or a termination of a Plan under section
4063 or 4064 of ERISA, incur any liability for post-retirement
benefits under any and all welfare benefit plans (as defined in
section 3(1) of ERISA), fail to make full payment when due of all
amounts which, under the provisions of any Plan or applicable law, the
Company, either Borrower or any Related Person is required to pay as
contributions thereto, or permit to exist any accumulated funding
deficiency, whether or not waived, with respect to any Plan (other
than a Multiemployer Plan);
(ii) at any time permit the termination of any defined
benefit pension plan intended to be qualified under Section 401(a) and
Section 501(a) of the Code unless such plan is funded so that the
value of all benefit liabilities upon the termination date does not
exceed the then current value of all assets in such plan;
(iii) if the Company, either Borrower or any Related Person
becomes obligated under a Multiemployer Plan, permit the aggregate
complete or partial withdrawal liability under Title IV of ERISA with
respect to Multiemployer Plans incurred by the Company, either
Borrower, any of their Subsidiaries or any Related Person or the
aggregate liability under Title IV of ERISA incurred by the Company or
its Subsidiaries or any Related Person to exceed any amount the
payment of which would have a Material Adverse Effect on the Company,
any Significant Subsidiary or the Consolidated Group.
For the purposes of SUBPARAGRAPH (III) of this PARAGRAPH 6E, the amount of the
withdrawal liability of the Company, either Borrower, or any Related Person at
any date shall be the aggregate present value of the amount claimed to have
been incurred less any portion thereof as to which the Company reasonably
believes, after appropriate consideration of possible adjustments arising under
subtitle E of Title IV of ERISA, neither it, nor either Borrower, nor any of
their Subsidiaries nor any Related Person will have any liability, provided
that the Company shall obtain promptly written advice from independent
actuarial consultants supporting such determination. Upon the request of any
Holder, the Company will request and obtain a current statement of withdrawal
liability from each Multiemployer Plan to which the Company, either Borrower or
any Related Person is or has been obligated to contribute and (y) transmit a
copy of such statement to each Holder, within 15 days after the Company
receives the same.
As used in this PARAGRAPH 6E, the term "accumulated funding deficiency" has the
meaning specified in section 302 of ERISA and section 412 of the Code, the
terms "present value" and "current value" have the meanings specified in
section 3 of ERISA, the term "benefit liabilities" has the meaning specified in
section
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4001(a)(16) of ERISA and the term "amount of unfunded liabilities" has the
meaning specified in section 4001(18) of ERISA.
6F. TAX SHARING. They will not, and will not on behalf of their
Subsidiaries, consent to or permit the filing of or be a party to any
consolidated income tax return with any Person (other than a consolidated
return of the Company and its Subsidiaries).
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur or
condition shall exist and be continuing for any reason whatsoever, and whether
such occurrence or condition shall be voluntary or involuntary or come about or
be effected by operation of law or otherwise (any such event or condition and
continuation shall constitute an "EVENT OF DEFAULT"):
(i) the Borrowers default in the payment of any principal
or Make Whole Premium of any Note when the same shall become due,
either by the terms thereof or otherwise as provided in this
Agreement; or
(ii) the Borrowers default in the payment of any interest
of any Note when the same shall become due, either by the terms
thereof or otherwise as provided in this Agreement and such default
shall continue for five (5) days thereafter; or
(iii) the Company, either Borrower or any of their
Subsidiaries defaults (whether as primary obligor or guarantor or
surety) in any payment of principal of, premium, if any, or interest
on any Debt other than that evidenced by the Notes beyond any period
of grace provided with respect thereto, the outstanding principal
amount of which Debt exceeds $1,000,000 in the aggregate, or fails to
perform or observe any other agreement, term or condition contained in
any agreement under which any such Debt 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 Debt (or a trustee
on behalf of such holder or holders) to cause, such Debt to become due
or be repurchased prior to any stated maturity unless prior to any
acceleration of the Notes on account of such default, failure or other
event, the Company, either Borrower or such Subsidiary, as the case
may be, shall have obtained the written waiver of such default,
failure or other event by the holders of such Debt in respect of which
such default, failure or other event shall have occurred and shall
have delivered a copy of the same to each Holder; or
(iv) any representation or warranty made by the Company or
the Borrowers 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
(v) the Company, either Borrower or any of their
Subsidiaries fails to perform or observe any covenant contained in
PARAGRAPH 5D, 6A, 6B, 6C or 6D or the Company or any Affiliate
Guarantor fails to perform or observe any covenant contained in
PARAGRAPH 2 of their respective Affiliate Guaranties; or
(vi) the Company, either Borrower or any of their
Subsidiaries fails to perform or observe any other agreement, term or
condition of this Agreement, or the Company, either Borrower, or any
Affiliate Guarantor fails to perform any provision of the Contribution
Agreement or, to the extent it is a party thereto, any provision
(other than PARAGRAPH 2) of their respective Affiliate Guaranties, and
such failure shall not be remedied within 30 days of such failure; or
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(vii) the Company, either Borrower or any other Significant
Subsidiary voluntarily or involuntarily suspends or discontinues
operations or liquidates all or substantially all of its assets, or
the Company, either Borrower or any of their Subsidiaries makes an
assignment for the benefit of creditors or is generally not paying its
debts as such debts become due or otherwise becomes insolvent; or
(viii) the Company, either Borrower or any of their
Subsidiaries petitions or applies to any tribunal for, or consents to,
the appointment of, or taking possession by, a trustee, receiver,
custodian, liquidator or similar official of the Company, either
Borrower or any of their Subsidiaries, or of any substantial part of
the assets of the Company, either Borrower or any of their
Subsidiaries, or commences a voluntary case under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect ("BANKRUPTCY LAW") of the United States or any
proceedings relating to the Company, either Borrower or any of their
Subsidiaries under the Bankruptcy Law of any other jurisdiction; or
(ix) any such petition or application is filed, or any
such proceedings are commenced, against the Company, either Borrower
or any of their Subsidiaries and the Company, such Borrower or such
Subsidiary by any act indicates its approval thereof, consent thereto
or acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such proceedings,
and such order, judgment or decree remains unstayed and in effect for
more than 30 days; or
(x) any decree or order for relief in respect of the
Company, either Borrower or any of their Subsidiaries pursuant to
proceedings described in SUBPARAGRAPH (VIII) and (IX) of this
PARAGRAPH 7A, is entered under any Bankruptcy Law of any jurisdiction;
or
(xi) any order, judgment or decree is entered in any
proceedings against the Company, either Borrower or any of their
Subsidiaries decreeing the dissolution of the Company, such Borrower
or such Subsidiary; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company, either Borrower or any of their
Subsidiaries which requires a split-up of the Company, such Borrower
or such Subsidiary, or requires the divestiture of any assets of the
Company, either Borrower or any of their Subsidiaries, or the
divestiture of the capital stock of either Borrower or any of the
Company's or either Borrower's Subsidiaries; or
(xiii) a final judgment or judgments for the payment of
money in which the aggregate amount of such judgment or of all such
judgments exceeds $1,000,000 (net of insurance proceeds, if any) is
rendered against the Company, either Borrower or any of their
Subsidiaries and within ten days thereof such judgment or judgments
are not discharged or execution thereof stayed pending appeal, or
within ten days after the expiration of any such stay, such judgment
or judgments are not discharged; or
(xiv) the report of the certified public accountants with
respect to any of the audited financial statements furnished pursuant
to PARAGRAPH 5A for any fiscal year shall state that such financial
statements do not present a true and fair view of the Company's and
its Subsidiaries state of affairs and profit (or loss) as of the close
of such fiscal year, or shall contain any Impermissible Qualification;
or
(xv) the Company or any Affiliate Guarantor or any of
their successors seeks to terminate their respective Affiliate
Guaranties or have any of such Affiliate Guaranties declared
unenforceable
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or any order, judgment or decree is entered declaring any of the
Affiliate Guaranties to be unenforceable; or
(xvi) the Company, either Borrower, any Affiliate Guarantor
or any other Subsidiary of the Company party to any Subordination
Agreement fails to perform or observe (a) any agreement, term or
condition (other than PARAGRAPH 2) of such Subordination Agreement and
such failure shall not be remedied within 30 days of such failure or
(b) any covenant contained in PARAGRAPH 2 of such Subordination
Agreement;
then (a) if such event is an Event of Default specified in SUBPARAGRAPH (VII),
(VIII), (IX), (X) or (XI) of this PARAGRAPH 7A, all of the Notes at the time
outstanding shall automatically become due and payable at par together with
interest accrued thereon, without presentment, demand, protest or notice of any
kind, all of which are expressly waived by the Borrowers; (b) if such event is
an Event of Default specified in subparagraph (I), (II) or (XV) of this
PARAGRAPH 7A, at the option of any Holder upon demand, all of the Notes held by
such Holder at the time outstanding shall become immediately due and payable at
par together with interest accrued thereon and together with the Make Whole
Premium, if any, without presentment, other demand, protest or notice of any
kind, all of which are hereby waived by the Borrowers; and (c) if such event is
any other Event of Default, the Required Holder(s) may at its or their option
by written notice to the Borrowers declare all of the Notes to be, and all of
the Notes shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon and together with the Make Whole
Premium, if any, with respect to each Note, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrowers.
7B. RESCISSION OF ACCELERATION. At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
CLAUSES (B) and (C) of the concluding paragraph of PARAGRAPH 7A, the Required
Holder(s) may, by notice in writing to the Borrowers, rescind and annul such
declaration and its consequences if (i) the Borrowers shall have paid all
overdue interest on the Notes, the principal of and Make Whole Premium, if any,
payable with respect to any Notes which have become due otherwise than by
reason of such declaration, and interest on such overdue interest and overdue
principal at the amount specified in the Notes, (ii) none of the Borrowers, the
Company or the Affiliate Guarantors shall have paid any principal of or Make
Whole Premium, if any, or interest on the Notes which have become due solely by
reason of such declaration, (iii) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to PARAGRAPH 11C, and
(iv) no judgment or decree shall have been entered for the payment of any
amounts of principal of or Make Whole Premium, if any, or interest on the Notes
due pursuant to the Notes or this Agreement solely by reason of such
declaration. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall
become or be declared immediately due and payable pursuant to PARAGRAPH 7A, or
any such declaration under CLAUSE (B) or (C) of the concluding paragraph of
PARAGRAPH 7A shall be rescinded and annulled pursuant to PARAGRAPH 7B, the
Borrowers shall forthwith give written notice thereof to each other Holder at
the time outstanding.
7D. OTHER REMEDIES. If any Event of Default shall occur and be
continuing, any Holder 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 the Notes or in aid of the
exercise of any power granted in this Agreement or the Notes, in such order as
such Holder may determine in its sole discretion. No remedy conferred in this
Agreement or the Notes upon any Holder is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise. No failure or delay by any Holder
in
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exercising any right or remedy under this Agreement or under the Notes or any
other document executed in connection therewith shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or remedy
preclude any other right or remedy hereunder or thereunder.
8. REPRESENTATIONS AND WARRANTIES. The Company and the Borrowers represent
and warrant that:
8A. ORGANIZATION, ETC. The Company and BAM are corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware, BTL is a corporation duly organized, validly existing and in good
standing under the laws of Bermuda, each of the Company's other Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated as set forth in SCHEDULE 8A, and the
Company, each Borrower and each of their Subsidiaries has the corporate power
and authority to own, operate and lease its respective property and to carry on
its respective business as now being conducted. The Company, each Borrower and
each of their Subsidiaries is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the failure
to do so would have a Material Adverse Effect on the Company, any Significant
Subsidiary or the Consolidated Group. Each of the Borrowers, BEC and BAP are
Wholly-Owned Subsidiaries of the Company. SCHEDULE 8A sets forth the
jurisdiction of incorporation of the Company's Subsidiaries (other than the
Borrowers) and each jurisdiction in which the Company, each Borrower or any of
their Subsidiaries is authorized to do business as a foreign corporation. This
Agreement, the Notes, the Contribution Agreement and any Subordination
Agreement to which it is a party have been duly authorized by all necessary
corporate action on the part of the Borrowers and, when executed and delivered
by the Borrowers, will constitute legal, valid and binding obligations of the
Borrowers, and, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the enforcement or priority of creditors' rights
generally, now or hereafter in effect, and subject to the provision that
equitable remedies shall be within the discretion of the court having
jurisdiction to exercise the same, are enforceable in accordance with their
respective terms. This Agreement (with respect to the Company) and the
Related Agreements to which the Company, any Affiliate Guarantor or any other
Subsidiary of the Company is party have been duly authorized by all necessary
corporate action on the part of the Company, such Affiliate Guarantor or such
other Subsidiary, as the case may be, and, when executed and delivered by the
Company, such Affiliate Guarantor or such other Subsidiary, as the case may be,
will constitute legal, valid and binding obligations of the Company, such
Affiliate Guarantor and such other Subsidiary, as the case may be, and, subject
to bankruptcy, insolvency, reorganization, moratorium and other laws affecting
the enforcement or priority of creditors' rights generally, now or hereafter in
effect, and subject to the provision that equitable remedies shall be within
the discretion of the court having jurisdiction to exercise the same, are
enforceable in accordance with their respective terms. There are no
Subsidiaries of the Company or either Borrower in existence as of the date
hereof other than those listed in SCHEDULE 8A. All of the outstanding capital
stock of the Company is validly issued, fully paid and non-assessable.
8B. BUSINESS; FINANCIAL STATEMENTS. The Company has furnished
each Purchaser with (i) audited consolidated balance sheets of the Company and
its Subsidiaries as of June 30 in each of the years 1988 through 1993 and the
related consolidated statements of income, of changes in shareholders' equity
and of cash flows and, as applicable, changes in financial position or cash
flows for the periods of twelve months ended on each such date; (ii) the
unaudited Balance Sheet of BAM as of June 30 in each of the years 1991 through
1993 and (iii) the unaudited Balance Sheet of BTL as of October 28, 1993. The
financial statements referred to in this PARAGRAPH 8B, including any related
schedules and/or notes (the "FINANCIAL STATEMENTS"), are true and correct in
all material respects, have been prepared in accordance with GAAP and show all
liabilities of the Company and its consolidated Subsidiaries (including BAM and
BTL) required to be shown therein accordance with GAAP. The balance sheets
included in the Financial Statements fairly present the condition of the
Company and its consolidated Subsidiaries (including BAM), of BAM and of BTL,
as the case may be, as at the dates thereof, and the statements of income, of
changes in shareholders' equity and of cash flows included in the Financial
Statements fairly present the results of the operations, the
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changes in shareholders' equity and the cash flows of the Company and its
consolidated Subsidiaries (including BAM) for the periods indicated. The
Company has furnished each Purchaser with each filing or report filed with the
SEC under Section 13 or 15(d) of the Exchange Act in respect of the fiscal year
ended June 30, 1993. There has been no change which has had a Material Adverse
Effect on the Company, any Significant Subsidiary or the Consolidated Group
since June 30, 1993.
8C. ACTIONS PENDING. Except as disclosed in SCHEDULE 8C, there is
no action, suit, investigation or proceeding pending or, to the knowledge of
the Company, either Borrower or any of their Subsidiaries, threatened against
the Company, either Borrower or any of their Subsidiaries, or any properties or
rights of the Company, either Borrower or any of their Subsidiaries, by or
before any court, arbitrator or administrative or governmental body which might
have a Material Adverse Effect on the Company, any Significant Subsidiary or
the Consolidated Group, or impairs either Borrower's ability to perform this
Agreement, the Notes, the Contribution Agreement or any Subordination Agreement
to which it is a party, the Company's ability to perform this Agreement or the
Related Agreements to which it is a party or any Affiliate Guarantor's or any
of the Company's other Subsidiaries' ability to perform the Related Agreements
to which it is a party.
8D. TITLE TO PROPERTIES. Each of the Company, the Borrowers and
their Subsidiaries has good title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the
balance sheets as of June 30, 1993 included in the Financial Statements (other
than properties and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Liens permitted by PARAGRAPH 6C(1). All
leases necessary in any material respect for the conduct of the respective
businesses of the Company, the Borrowers and their Subsidiaries are valid and
subsisting and are in full force and effect. As of the date of this Agreement,
all of the outstanding capital stock of the Borrowers and each of the
Subsidiaries listed in SCHEDULE 8A is validly issued, fully paid and
non-assessable, and is 100% owned directly or indirectly by the Company or, if
not, is owned by the Persons and in the amounts listed on SCHEDULE 8A, which
Persons collectively own 100% of the issued and outstanding shares of capital
stock of such Borrower and each such Subsidiary, and all such capital stock
owned by the Company, either Borrower or their Subsidiaries and is owned free
and clear of any Lien of any kind and the Company, such Borrower or such other
Subsidiary has the right, subject only to limitations imposed by applicable law
to receive dividends and distributions on such capital stock.
8E. TAX RETURNS AND PAYMENTS. Each of the Company, the Borrowers
and their Subsidiaries has filed all Federal, State, local and foreign income
tax returns, franchise tax returns, real and personal property tax returns and
other tax returns required by law to be filed by or on behalf of them or with
respect to their respective properties or assets other than those which the
failure to file in the aggregate do not and will not have a Material Adverse
Effect on the Company, any Significant Subsidiary or the Consolidated Group,
and all taxes, assessments and other governmental charges imposed upon any of
the Company, the Borrowers or their Subsidiaries and any of their respective
properties, assets, income or franchises which are due and payable have been
paid, other than those presently payable without penalty or interest, those
presently being contested in good faith by appropriate proceedings diligently
conducted and for which such reserves or other appropriate provisions, if any,
as may be required by GAAP have been made and those which in the aggregate with
all other unpaid taxes, assessment and governmental charges do not and will not
have a Material Adverse Effect on the Company, any Significant Subsidiary or
the Consolidated Group.
8F. CONFLICTING AGREEMENTS AND OTHER MATTERS. None of the
Company, the Borrowers or any of their Subsidiaries is in violation of any term
of its charter or by-laws, or in breach of any term of any agreement (including
any agreement with stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which it is subject, the consequences of which
violation or breach are reasonably likely to have a Material Adverse Effect on
the Company, any Significant Subsidiary or the Consolidated Group or impair
either Borrower's ability to perform this Agreement, the Notes, the
Contribution Agreement or any Subordination Agreement to which it is a party,
the Company's ability to perform this Agreement or the
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Related Agreements to which it is a party or any Affiliate Guarantor's or any
of the Company's other Subsidiaries' ability to perform the Related Agreements
to which it is a party. None of the Company, the Borrowers or any of their
Subsidiaries is a party to any contract or agreement or subject to any charter
or other corporate restriction which has a Material Adverse Effect on the
Company, any Significant Subsidiary or the Consolidated Group. Neither the
execution and delivery of this Agreement, the Notes and the Related Agreements,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions of this Agreement, the Notes and the
Related Agreements, will conflict with the provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company, either Borrower or
any of their Subsidiaries pursuant to, its charter or by-laws, any award of any
arbitrator or any agreement (including any agreement with stockholders),
instrument, order, judgment, decree, statute, law, rule or regulation to which
it is subject. None of the Company, the Borrowers or any of their Subsidiaries
is a party to, or otherwise subject to any provision contained in, any
instrument evidencing Debt, any agreement relating thereto or any other
contract or agreement (including its charter) which limits the amount of, or
otherwise imposes restrictions on the incurring of, the Funded Debt to be
evidenced by the Notes and the Affiliate Guaranties.
8G. OFFERING OF NOTES. None of the Company or the Borrowers nor
any agent acting on their behalf has, directly or indirectly, offered the Notes
or any similar security of the Company or either Borrower for sale to, or
solicited any offers to buy the Notes or any similar security of the Company or
either Borrower from, or otherwise approached or negotiated with respect
thereto with, any Person other than 30 Institutional Investors, and none of the
Company or the Borrowers nor any agent acting on their behalf has taken or will
take any action which would subject the issuance or sale of the Notes to the
provisions of Section 5 of the Securities Act or to the registration provisions
of any securities or Blue Sky law of any applicable jurisdiction. Upon
issuance of the Notes, the Notes will not be of the same class as any
securities of either Borrower listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system, within the meaning of Rule 144A.
8H. REGULATION G, ETC. None of the Company, the Borrowers or any
of their Subsidiaries 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 (herein called "margin stock"). None
of the proceeds of the sale of the Notes 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 which was originally incurred to purchase or carry
any stock that is currently a margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of such
Regulation G. Neither of the Company or either Borrower nor any agent acting
on their behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation G, Regulation T, Regulation U,
Regulation X or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.
8I. ERISA.
(a) To the knowledge of the Company and the Borrowers,
neither the Company nor any Related Person has breached any of the fiduciary
rules of ERISA or engaged in any prohibited transaction in connection with
which the Company or any Related Person could be subjected to (in the case of
any such breach) a suit for damages or (in the case of any such prohibited
transaction), either a civil penalty assessed pursuant to section 502(i) of
ERISA, a tax imposed under section 4975 of the Code or a lien imposed under
section 412(n) of the Code, in any such case which would have a Material
Adverse Effect on the Company, any Significant Subsidiary or the Consolidated
Group.
(b) No Plan subject to Title IV of ERISA or any trust
created under any such Plan has been terminated since September 2, 1974 other
than any such Plan or trust, the termination of which did
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not or would not give rise to a liability which had or would have a Material
Adverse Effect on the Company, any Significant Subsidiary or the Consolidated
Group. Neither the Company nor any Related Person has within the past six
years contributed, or had any obligation to contribute, to a single employer
plan that has at least two contributing sponsors not under common control or
ceased operations at a facility under circumstances which could result in
liability under the Code or ERISA which would have a Material Adverse Effect on
the Company, any Significant Subsidiary or the Consolidated Group. No
liability to the PBGC has been or is expected by the Company or any Related
Person to be incurred with respect to any Plan by the Company or any Related
Person which would have a Material Adverse Effect on the Company, any
Significant Subsidiary or the Consolidated Group. There has been no reportable
event (within the meaning of section 4043(b) of ERISA) or any other event or
condition with respect to any Plan which presents a risk of termination of any
such Plan by the PBGC under circumstances which in any case would have a
Material Adverse Effect on the Company, any Significant Subsidiary or the
Consolidated Group.
(c) Except to the extent the failure to do so would not
have a Material Adverse Effect on the Company, any Significant Subsidiary or
the Consolidated Group, (i) full payment has been made (or will be made within
the period described in section 412 of the Code) of all amounts which the
Company or any Related Person is required under the terms of each Plan to have
paid as contributions to such Plan as of the last day of the most recent fiscal
year of such Plan ended prior to the date hereof (or will be made within the
period described in section 404 of the Code), (ii) no accumulated funding
deficiency (as defined in section 302 of ERISA and section 412 of the Code),
whether or not waived, exists with respect to any Plan, and (iii) each Plan
satisfies the minimum funding standard of section 412 of the Code.
(d) (i) Neither the Company nor any Related Person has
been obligated to contribute to any Multiemployer Plan, the withdrawal from
which would have a Material Adverse Effect on the Company, any Significant
Subsidiary or the Consolidated Group, and (ii) neither the Company nor any
Related Person has been notified by the sponsor of a Multiemployer Plan to
which the Company or any Related Person is obligated or has been obligated to
contribute that such Multiemployer Plan has been terminated or is in
reorganization and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated if such reorganization or termination would
result in a liability which would have a Material Adverse Effect on the
Company, any Significant Subsidiary or the Consolidated Group.
(e) Neither the Company nor any Related Person has, or is
expected to incur, any liability for post retirement benefits under any and all
welfare benefit plans (as defined in section 3(1) of ERISA), whether written or
unwritten, which are or have been established or maintained, or to which
contributions are or have been made, by the Company or any Related Person which
would have a Material Adverse Effect on the Company, any Significant Subsidiary
or the Consolidated Group.
(f) Neither the Company nor any Related Person has
engaged in any transaction that could result in the incurrence of any
liabilities under section 4069 or section 4212 of ERISA which would have a
Material Adverse Effect on the Company, any Significant Subsidiary or the
Consolidated Group.
(g) The execution and delivery of this Agreement and the
issuance and sale of the Notes will not involve any transaction which is
subject to the prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to section 4975 of the Code. The
representation by the Company in the preceding sentence is made in reliance
upon and subject to the accuracy of each Purchaser's representation in
PARAGRAPH 9(II) as to the source of the funds to be used to pay the purchase
price of the Notes to be purchased by it. With respect to any Plan identified
in writing to the Company in accordance with CLAUSE (E) of PARAGRAPH 9(II),
neither the Company nor any "affiliate" (as defined in Section V(c) of PTE
84-14) is described in the proviso of such CLAUSE (E). The Company is neither
a "party in interest" (as defined in Title I, Section 3(14) of ERISA, nor a
"disqualified person" (as defined in Section 4915(e)(2) of the Code, with
respect to any Plan identified pursuant to PARAGRAPH 9(II)(E) or (F).
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8J. GOVERNMENTAL CONSENT. Neither the nature of the Company,
either Borrower or any of their Subsidiaries, nor any of their respective
businesses or properties, nor any relationship between the Company, the
Borrowers or any of their Subsidiaries and any other Person, nor any
circumstance in connection with the execution and delivery of this Agreement
and the Related Agreements, or the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or administrative or
governmental body in connection with the execution and delivery of this
Agreement and the Related Agreements and the offering, issuance, sale or
delivery of the Notes (other than any filing required in connection with an
exemption from the registration requirements of any federal or state securities
laws) or fulfillment of or compliance with the terms and provisions hereof, of
the Related Agreements and of the Notes.
8K. ENVIRONMENTAL MATTERS. Each of the Company, the Borrowers and
their Subsidiaries has obtained authorizations that are required and are in
compliance with all terms and conditions of all permits, licenses, and other
authorizations required to be obtained by it under all applicable environmental
laws, including any and all laws, statutes, ordinances, rules, regulations,
orders, decrees, permits, concessions, grants, franchises, licenses or
governmental restrictions or determinations of any governmental authority
relating to emissions, discharges, releases, or threatened release of
contaminants into the environment (including, without limitation, ambient air,
surface water, ground water, or land) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of contaminants, fuels, chemicals or waste materials, including,
without limitation, the Clean Air Act, the Clean Water Act, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Section
9601 et seq., the Occupational Safety and Health Act, RCRA, the Safe Drinking
Water Act and the Toxic Substances Control Act, all as amended (collectively
"ENVIRONMENTAL LAWS"), and are also in compliance with all other applicable
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in those Environmental Laws or
in any regulation, ordinance, code, plan, order, decree, judgment, injunction,
notice, or demand letter issued, entered, promulgated, or approved thereunder,
except to the extent that failure so to comply does not have a Material Adverse
Effect on the Company, the Borrowers or any of their Subsidiaries. The Company
and the Borrowers are not aware of any prior use of any of the owned or leased
properties of the Company, the Borrowers or any of their Subsidiaries by any
Person, that constitutes a violation of any Environmental Laws, except to the
extent that such violation does not have a Material Adverse Effect on the
Company, either Borrower, any of their Subsidiaries or the Consolidated Group.
The Company and the Borrowers are not aware of any event, condition, or
activity which may interfere with or prevent continued compliance by the
Company, the Borrowers and their Subsidiaries with all Environmental Laws,
except to the extent that failure so to continue to comply would not have a
Material Adverse Effect on the Company, either Borrower, any of their
Subsidiaries or the Consolidated Group.
8L. LABOR RELATIONS. There is not now pending, nor to the
knowledge of the Company, the Borrowers or any of their Subsidiaries
threatened, any strike, work stoppage, work slow down, or material grievance or
other dispute between the Company, the Borrowers or any of their Subsidiaries
and any bargaining unit or significant number of its respective employees.
8M. FINANCIAL CONDITION. After giving effect to the transactions
contemplated hereby, (i) the aggregate present fair saleable value of the
assets of each of the Company, each Borrower and each Affiliate Guarantor will
be greater than the amount that will be required to pay the probable
liabilities of such Person on its debts, including contingent liabilities, as
they become absolute and mature; (ii) each of the Company, each Borrower and
each Affiliate Guarantor has (and has no reason to believe that it will not
have) sufficient capital for the conduct of its business; and (iii) each of the
Company, each Borrower and each Affiliate Guarantor does not intend to incur,
and does not believe it has incurred, debts beyond its ability to pay as they
mature.
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8N. DISCLOSURE. Neither this Agreement, the Notes nor any other
document, certificate or statement furnished to the Purchasers by or on behalf
of the Company or the Borrowers in connection herewith (including without
limitation the Memorandum and the Related Agreements) contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading. There is no fact
peculiar to the Company, the Borrowers or any of their Subsidiaries which has a
Material Adverse Effect on the Company, any Significant Subsidiary or the
Consolidated Group and which has not been set forth in this Agreement or in the
other documents, certificates and statements furnished to the Purchasers by or
on behalf of the Company or the Borrowers prior to the date hereof in
connection with the transactions contemplated by this Agreement.
8O. STATUS UNDER CERTAIN FEDERAL STATUTES. Neither the Company
nor either Borrower nor any Affiliate Guarantor is (a) an "investment company"
or a company "controlled" by an "investment company" or an "open-end investment
company" or a "unit investment trust" or a "face-amount certificate company",
within the meaning of the Investment Company Act of 1940, as amended, (b) a
"holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended, or (c) a "carrier", as defined in section 11,301(a)(1) of
Title 49 of the United States Code and subject to the provisions of such Title.
Neither the Company nor either Borrower nor any of their Subsidiaries is a
"national of any designated foreign country", within the meaning of the Foreign
Assets Control Regulations or the Cuban Assets Control Regulations of the
United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as
amended, or any regulations or rulings issued thereunder. Neither the sale of
the Notes nor the use of such proceeds by the Borrowers as required by this
Agreement will violate the Foreign Assets Control Regulations, the Foreign
Funds Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Iranian Assets Control Regulations, the Libyan
Sanctions Regulations, the Iranian Transactions Regulations, the Iraqi
Sanctions Regulations, the Haitian Transactions Regulations, or any other
regulations of the U.S. Treasury Department (as set forth in 31 C.F.R.,
Subtitle B, Chapter V, as amended), or any of Executive Orders 12,722, 12,724,
12,808 and 12,810 of the President of the United States.
9. REPRESENTATIONS OF THE PURCHASERS.
(i) Each Purchaser represents that it is purchasing its Notes
for its own account, or for one or more separate accounts maintained by it or
for the account of one or more pension or trust funds, in each case for
investment and not with a view to the distribution thereof or with any present
intention of distributing or selling any of the Notes, provided that the
disposition of a Purchaser's property shall at all times be within its control.
The Company and the Borrowers acknowledge that a sale of Notes by a Purchaser
to one or more Qualified Institutional Buyers in compliance with Rule 144A
would not be a distribution of such Notes or otherwise constitute a breach of
the foregoing representation.
(ii) Each Purchaser represents that, with respect to each
source of funds to be used by it to pay the purchase price of the Notes
purchased by it hereunder (respectively, the "SOURCE"), at least one of the
following statements is accurate as of the Closing Date:
(a) The Source is not "plan assets" as defined in 29 CFR
Section 2510.3-101;
(b) The Source is a "governmental plan" as defined in
Title I, Section 3(32) of ERISA;
(c) The Source is not a "separate account" as defined in
Title I, Section 3(17) of ERISA;
(d) The Source is either (i) an insurance company pooled
separate account, in which case the purchase is exempt in accordance
with Prohibited Transaction Exemption ("PTE") 90-1
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(issued January 29, 1990), or (ii) a bank collective investment fund,
in which case the purchase is exempt in accordance with PTE 91-38
(issued July 21, 1991);
(e) The Source is an "investment fund" managed by a
"qualified professional asset manager" or "QPAM" (as defined in Part V
of PTE 84-14, issued March 13, 1984), and the purchase is exempt under
PTE 84-14, provided that no other party to the transactions described
in this Agreement and no "affiliate" of such other party (as defined
in Section V(c) of PTE 84-14) has at this time, and during the
immediately preceding one year has exercised the authority to appoint
or terminate said QPAM as manager of the assets of any plan identified
in writing pursuant to this PARAGRAPH (E) or to negotiate the terms of
said QPAM's management agreement on behalf of any such identified
plans; or
(f) The Source is a plan or a separate account comprised
of plans identified in writing pursuant to this PARAGRAPH (F).
As used in this PARAGRAPH 9, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
10. DEFINITIONS. For the purposes of this Agreement, the
following terms shall have the respective meanings specified with respect
thereto:
10A. MAKE WHOLE PREMIUM TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to PARAGRAPH 4A or 4D or is
declared to be immediately due and payable pursuant to PARAGRAPH 7A.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
from their respective scheduled due dates, in accordance with accepted
financial practice and at a discount factor (applied on a semi-annual basis)
equal to the Discount Rate with respect to such Called Principal.
"DISCOUNT RATE" shall mean, with respect to the Called Principal of
any Note, the yield to maturity of the Called Principal implied by (a) the
yield reported as of 10:00 A.M. (New York City time) on the date which is two
Business Days prior to the Settlement Date with respect to such Called
Principal, on the display designated as "Page 5" on the Telerate Service (or
such other display as may replace Page 5 of the Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining Life
of such Called Principal as of such Settlement Date, or (b) if such yields
shall not be reported as of such time or the yields reported as of such time
shall not be ascertainable, the Treasury Constant Maturity Series yields
reported, for the latest day for which such yields shall have been so reported
as of the second 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 Life of such
Called Principal as of such Settlement Date plus, in either case, (c) 50 basis
points. Such implied yield shall be determined, if necessary, by (x)
converting U.S. Treasury Bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (y) interpolating linearly
between yields reported for various maturities.
"MAKE WHOLE PREMIUM" shall mean, with respect to any Note, a premium
equal to the excess, if any, of (x) the Discounted Value over (y) the sum of
(i) such Called Principal plus (ii) interest accrued thereon as of and due on
the Settlement Date with respect to such Called Principal. The Make Whole
Premium shall in no event be less than zero.
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"REMAINING LIFE" shall mean, with respect to the Called Principal of
any Note, the number of years (calculated to nearest one-twelfth year) which
will elapse between the Settlement Date with respect to such Called Principal
and its scheduled due date.
"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 during the Remaining Life of such Called Principal if
no payment of such Called Principal were made prior to its scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
PARAGRAPH 4A or 4D or is declared to be immediately due and payable pursuant to
PARAGRAPH 7A.
10B. OTHER TERMS.
"AFFILIATE" shall mean as to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct common control with,
such Person. 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.
"AFFILIATE GUARANTIES" shall mean the Guaranty of the Company in the
form of EXHIBIT E-1 and of the other Affiliate Guarantors in the form of
EXHIBIT E-2.
"AFFILIATE GUARANTOR(S)" shall mean as of the date hereof BAP and BEC
and as of any other date in question BAP, BEC and any of the Company's other
Subsidiaries which at the time in question is a guarantor of the payment of the
Notes and the performance by the Borrowers of their obligations under this
Agreement pursuant to an Affiliate Guaranty in the form of EXHIBIT E-2 and is a
party to the Contribution Agreement and the enforceability of such Affiliate
Guaranty and the Contribution Agreement against such new Affiliate Guarantor
has been confirmed to the reasonable satisfaction of the Holders and their
Special Counsel.
"AGREEMENT" shall have the meaning specified in PARAGRAPH 11C.
"BAM" shall have the meaning specified in the first paragraph of this
Agreement.
"BANKRUPTCY LAW" shall have the meaning specified in SUBPARAGRAPH
(VIII) of PARAGRAPH 7A.
"BAP" shall have the meaning specified in PARAGRAPH 3I.
"BEC" shall have the meaning specified in PARAGRAPH 3I.
"BJL" shall mean Baldwin Japan Ltd., a Wholly-Owned Subsidiary of BAP.
"BORROWER(S)" shall have the meaning specified in the first paragraph
of this Agreement.
"BTL" shall have the meaning specified in the first paragraph of this
Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in Boston, Massachusetts are required or
authorized to be closed.
"CAPITALIZED LEASE" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) by such Person which would, in
accordance with GAAP, be required to be classified and
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accounted for as a capitalized lease on a balance sheet of such Person, other
than, in the case of the Company, either Borrowers or any of their
Subsidiaries, any such lease under which the Company, such Borrower or such
Subsidiary is the lessor.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation under
a Capitalized Lease taken at the amount thereof accounted for as indebtedness
(net of interest expense) in accordance with GAAP.
"CHANGE OF CONTROL" shall occur if any Person, or group of Persons
(other than Wendell M. Smith, Akira Hara, Gerald A. Nathe, William J.
Lauricella, and David J. Youngman, individually or acting in concert) acting in
concert, in one or more transactions, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of Capital
Stock of the Company, the ownership of which entitles the holder(s) to cast
more than fifty percent (50%) of the votes entitled to vote generally in the
election of directors of the Company.
"CLOSING" and "CLOSING DATE" shall have the meanings specified in
PARAGRAPH 2B.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COMPANY" shall have the meaning specified in the first paragraph of
this Agreement.
"CONSOLIDATED DEBT" shall mean, as at any date of determination, the
aggregate total Debt of the Company and its Subsidiaries on a consolidated
basis, determined in accordance with GAAP.
"CONSOLIDATED FUNDED DEBT" shall mean, as at any date of
determination, the aggregate total Funded Debt of the Company and its
Subsidiaries on a consolidated basis, determined in accordance with GAAP.
"CONSOLIDATED GROUP" shall mean the Company and its Subsidiaries,
taken as a whole.
"CONSOLIDATED NET INCOME" shall mean, with respect to any period,
consolidated gross revenues of the Company and its Subsidiaries less all
operating and non-operating expenses of the Company and its Subsidiaries
including all charges of a proper character (including current and deferred
taxes on income, provision for taxes on unremitted foreign earnings which are
included in gross revenues, amortization, depreciation and current additions to
reserves), but not including in gross revenues any gains (net of expenses and
taxes applicable thereto) in excess of losses resulting from the sale,
conversion or other disposition of assets (other than inventory and used
equipment in the ordinary course of the business of the Company and its
Subsidiaries), any earnings or losses attributable to any corporation which is
not a Subsidiary of the Company, any gains arising from transactions of a non-
recurring and material nature, any gains arising from the sale or
discontinuation of operations, any gains resulting from the write- up of
assets, any equity of the Company or any of its Subsidiaries in the unremitted
earnings of any corporation which is not a Subsidiary of the Company, any
earnings of any Person acquired by the Company or any of its Subsidiaries
through purchase, merger or consolidation or otherwise for any year prior to
the year of acquisition, any revenues of the Company or any of its Subsidiaries
from sales of goods or services to any other Subsidiary of the Company, or to
the Company, or any deferred credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost of the investment in such
Subsidiary; all determined in accordance with GAAP.
"CONSOLIDATED NET TANGIBLE ASSETS" shall mean (i) Consolidated Total
Assets, less (ii) the sum of (a) patents, copyrights, trademarks, trade names,
franchises, goodwill, and other similar intangibles; (b) unamortized debt
discount and expense; and (c) all liabilities of the Company and its
Subsidiaries on a consolidated basis as of the most recent balance sheet,
determined in accordance with GAAP, other than Consolidated Funded Debt,
minority interests and deferred taxes.
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"CONSOLIDATED NET WORTH" shall mean, on any date as of which the
amount thereof is to be determined, the shareholders' equity of the Company and
its Subsidiaries, determined on a consolidated basis in accordance with GAAP,
except that such amount shall (i) include preferred stock (other than preferred
stock which would not qualify as Eligible Capital Stock), and (ii) exclude
non-cash losses from discontinued operations and any foreign exchange
translation adjustments.
"CONSOLIDATED TOTAL ASSETS" shall mean the aggregate total assets of
the Company and its Subsidiaries on a consolidated basis as of the most recent
balance sheet, determined in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" shall mean (a) for purposes of
PARAGRAPH 6D(1)(IV), the sum of (i) Consolidated Funded Debt, plus (ii)
Consolidated Net Worth; and (b) for purposes of PARAGRAPH 6D(1)(V), the sum of
(i) Consolidated Debt plus (ii) Consolidated Net Worth.
"CONTRIBUTION AGREEMENT" shall have the meaning specified in PARAGRAPH
3J.
"CURRENT DEBT" shall mean, as applied to any Person, (i) any Debt of
such Person maturing within one year or less from the creation thereof and not
renewable or extendable beyond such period pursuant to the terms thereof (which
amount shall exclude the aggregate principal amount of any Funded Debt which is
required to be paid during the next twelve (12) months) and (ii) bankers and
trade acceptances, whenever maturing.
"CURRENT RATIO" shall mean on any date as of which the amount thereof
is to be determined, the ratio of (a) the sum of (i) the current assets of the
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, plus (ii) the lesser of (x) the amount equal to the undrawn
availability under the Revolving Credit Facility as of the date of
determination or (y) the maximum amount which could be drawn on the Revolving
Credit Facility if after giving effect thereto, on a pro forma basis, the ratio
of Consolidated Funded Debt to Consolidated Total Capitalization as set forth
in PARAGRAPH 6D(1)(IV) and the ratio of Consolidated Debt to Consolidated Total
Capitalization as set forth in PARAGRAPH 6D(1)(V) would be satisfied, to (b)
the current liabilities of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"DEBT" shall mean, as applied to any Person, (i) obligations of such
Person for borrowed money, (ii) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligations of such
Person to pay the deferred purchase price of property or services, (iv)
Capitalized Lease Obligations of such Person, (v) obligations of such Person to
purchase securities or other property that arise out of or in connection with
the sale of the same or substantially similar securities or property, (vi)
obligations of such Person to reimburse any other Person in respect of amounts
paid under a letter of credit or similar instrument, (vii) obligations with
respect to interest rate and currency swaps and similar obligations obligating
such Person to make payments, whether periodically or upon the happening of a
contingency, except that if any agreement relating to such obligations provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligations shall be the net
amount thereof, (viii) Debt secured by (or for which the holder of such Debt
has an existing right, contingent or otherwise, to be secured by) a Lien on any
asset of such Person, whether or not such Debt is assumed by such Person, (ix)
any recourse obligations of such Person in connection with a sale of
receivables (except sales of receivables by BJL permitted by PARAGRAPH
6C(4)(VI)), (x) obligations of such Person to make payment for any products,
materials or supplies or for any transportation or services regardless of the
non-delivery or nonfurnishing thereof, (xi) Guaranties by such Person of Debt
of others, and (xii) any other items (excluding (a) items of contingency
reserves or reserves for deferred income taxes, (b) Trade Payables other than
set forth in CLAUSE (X) of this paragraph, (c) accrued salaries, bonuses and
profit sharing contributions, (d) accrued pension obligations, (e) customer
deposits, (f) taxes payable, and (g) other accrued liabilities
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which if a payable would be a Trade Payable) which in accordance with GAAP
would be determining total liabilities as shown on the liabilities side of the
balance sheet of such person.
"DEFAULT" shall mean any event or condition which with the giving of
notice or the passage of time, or both, would become an Event of Default.
"80% SUBSIDIARY" shall mean as to any Person, a Subsidiary of such
Person at least 80% of the total combined voting power of all classes of Voting
Stock of which and at least 80% of the beneficial interest of which, or at
least 80% of the equity interest of which, if such Subsidiary is not a
corporation, are owned directly or indirectly through Subsidiaries by such
Person.
"ELIGIBLE CAPITAL STOCK" shall mean any class or series of capital
stock of the Company other than any class or series which has fixed payment
obligations or is redeemable at the option of the holder unless such fixed
payment obligations or repurchase obligations on exercise of such redemption
option can be satisfied, at the election of the Company, through the issuance
of shares of common stock.
"ENVIRONMENTAL LAWS" shall have the meaning specified in PARAGRAPH 8K.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EVENT OF DEFAULT" shall have the meaning specified in PARAGRAPH 7A.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FINANCIAL STATEMENTS" shall have the meaning specified in PARAGRAPH
8B.
"FIXED ASSETS" shall mean all assets of the Company and its
Subsidiaries which are classified as "property, plant and equipment" on the
balance sheet in accordance with GAAP.
"FUNDED DEBT" shall mean, as applied to any Person, (i) any Debt of
such Person maturing more than one year from the creation thereof or which is
renewable or extendable beyond one year from such date pursuant to the terms
thereof and (ii) any Current Debt which remains outstanding beyond one year
from the date of its creation or incurrence, but excluding bankers or trade
acceptances whenever maturing.
"GAAP" shall mean accounting principles generally accepted in the
United States applied on a consistent basis throughout the relevant periods.
"GUARANTY", as applied to any Person, shall mean any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor
of such obligation, or to make payment for any products, materials or supplies
or for any transportation or services regardless of the non-delivery or
nonfurnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. The amount of any Guaranty shall be equal to the amount of the
obligation guaranteed.
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"HOLDER" as to any Note, shall mean the Person at the time shown as
the holder thereof on the register referenced in PARAGRAPH 11O hereof.
"IMPERMISSIBLE QUALIFICATION" shall mean, with respect to the opinion
or report of the Company's certified public accountants as to any financial
statements supplied under PARAGRAPH 5A, any qualification or exception to such
opinion or certification or comment thereon which:
(i) is of a "going concern" or similar nature;
(ii) indicates that the scope of the examination of
matters relevant to such financial statements was limited to an extent
not consistent with generally accepted auditing standards; or
(iii) relates to the treatment or classification of any
item in such financial statements and, as a condition to its removal,
would require an adjustment to such item of which the effect would be
to cause the Company to be in default of one or more of its
obligations under PARAGRAPH 6A.
"INSTITUTIONAL INVESTOR" shall mean each Purchaser, any insurance
company, pension fund, mutual fund, investment company, bank, savings bank,
savings and loan association, investment banking company, trust company, or any
finance or credit company, any portfolio or any investment fund managed by any
of the foregoing, or any other institutional investor, and any nominee of the
foregoing.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien, purchase option, call or right, or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any Capitalized Lease, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction).
"MATERIAL ADVERSE EFFECT" shall mean, (i) with respect to any Person,
any material adverse effect on such Person's business, assets, liabilities,
financial condition, results of operations or business prospects, (ii) with
respect to a group of Persons "taken as a whole", any material adverse effect
on such Persons' business, assets, liabilities, financial conditions, results
of operations or business prospects taken as a whole on, where appropriate, a
consolidated basis in accordance with GAAP, and (iii) with respect to this
Agreement, the Notes and the Related Agreements, ANY IMPAIRMENT, TO ANY DEGREE,
on the binding nature, validity or enforceability thereof as obligations of the
Borrowers, the Company or any Affiliate Guarantor, as the case may be.
"MEMORANDUM" shall mean the Confidential Private Placement Memorandum
prepared by Dean Witter Reynolds Inc. in connection with the offering of the
Notes on the basis of information supplied by the Company.
"MULTIEMPLOYER PLAN" shall mean any plan which is a "multiemployer
plan" as such term is defined in section 4001(a)(3) of ERISA.
"NOTE(S)" shall have the meaning specified in PARAGRAPH 1.
"OFFICERS' CERTIFICATE" shall mean a certificate signed in the name of
the Company and/or either Borrower by any two of the President, a Vice
President and the Treasurer of the Company or such Borrower, as the case may
be.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
other governmental authority succeeding to any of its functions.
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"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, a government or
any department or agency thereof, and any other form of business organization
(whether or not incorporated).
"PLAN" shall mean an "employee pension benefit plan" (as defined in
section 3(2) of ERISA) which is or has been established or maintained, or to
which contributions are or have been made, by the Company or any of its Related
Persons.
"PTE" shall have the meaning specified in PARAGRAPH 9(II)(D).
"PURCHASER(S)" shall have the meaning specified in PARAGRAPH 2A.
"QUALIFIED INSTITUTIONAL BUYER" shall have the meaning specified in
Rule 144A.
"RELATED AGREEMENTS" shall mean the Affiliate Guaranties, the
Contribution Agreement and the Subordination Agreements.
"RELATED PERSON" shall, for plan purposes, mean, with respect to any
Person, any trade or business, whether or not incorporated, which, together
with such Person, is under common control, as defined in section 414 (b), (c),
(m) or (o) of the Code.
"REQUIRED HOLDER(S)" shall mean the Holder or Holders of at least a
majority of the aggregate principal amount of the Notes at the time
outstanding.
"RESTRICTED PAYMENTS" shall mean the declaration, payment or making,
directly or indirectly, of any dividend, payment or other distribution, other
than dividends payable solely in common stock of the Company, on or in respect
to any of the capital stock of the Company, either Borrower or any of their
Subsidiaries (other than a Wholly-Owned Subsidiary of the Company) or the
setting apart of any funds or property therefor, or the making of any payment
on account of the purchase, redemption, retirement or other acquisition, direct
or indirect, of, or the forgiveness or foreclosure of any Debt owed to the
Company, either Borrower or any of their Subsidiaries and secured by a pledge
of, the capital stock of the Company, either Borrower or any of their
Subsidiaries (other than a purchase or other acquisition of capital stock of a
Wholly-Owned Subsidiary of the Company from such Wholly-Owned Subsidiary by the
Company or another Wholly-Owned Subsidiary of the Company).
"REVOLVING CREDIT FACILITY" shall mean the credit facility not to
exceed $20,000,000 in the aggregate to be extended to the Borrowers by
NationsBank, and its participants and assigns, substantially on the terms of
the commitment letter dated September 22, 1993 between NationsBank and the
Company.
"RULE 144A" shall mean Rule 144A promulgated under the Securities Act,
as such rule may be amended from time to time and including any successor rule
thereto.
"SALE AND LEASEBACK TRANSACTION" of a Person shall mean any
arrangement whereby (a) property has been sold or transferred by such Person
with the intention on the part of such Person of taking back a lease of such
property pursuant to which the rental payments are calculated to amortize the
purchase price of such property substantially over the useful life of such
property, and (b) such property is in fact so leased by such Person.
"SEC" shall mean the United States Securities and Exchange Commission,
or any governmental body or agency hereafter succeeding to the functions of
such Securities and Exchange Commission in the administration of the Securities
Act and/or the Exchange Act.
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"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SIGNIFICANT SUBSIDIARY" shall mean (a) each Borrower, (b) each
Affiliate Guarantor, and (c) each other Subsidiary of the Company of which the
net income (calculated by reference to the components included in the
definition of Consolidated Net Income), or if such Subsidiary has Subsidiaries
of its own, of which the consolidated net income of such Subsidiary and its
Subsidiaries, determined in either case for the latest fiscal year for which
financial statements have been provided under PARAGRAPH 5A(II), exceeded twenty
percent (20%) of Consolidated Net Income.
"SPECIAL COUNSEL" shall have the meaning specified in PARAGRAPH 2B.
"SUBORDINATION AGREEMENT" shall have the meaning specified in
PARAGRAPH 6C(2)(I).
"SUBSIDIARY" shall mean as to any Person (i) any corporation of which
such Person shall, at the time as of which any determination is being made,
own, either directly or through its Subsidiaries, more than (x) 50% of the
total combined voting power of all classes of the Voting Stock and (y) 50% of
the beneficial interest, (ii) any other corporation which is otherwise
permitted to be consolidated with such Person under GAAP, and (iii) any
partnership, association, joint venture or other form of business organization,
whether or not it constitutes a legal entity, in which such Person directly or
indirectly, through its Subsidiaries has more than 50% of the equity interest
at the time.
"TRADE PAYABLES" shall mean amounts payable by the Company or its
Subsidiaries to suppliers of goods and services incurred in the ordinary course
of business.
"TRANSFEREE" shall mean any direct or indirect transferee of all or
any part of any Note purchased by a Purchaser under this Agreement.
"VOTING STOCK" shall mean any securities of any class of a Person
whose holders are entitled under ordinary circumstances to vote for the
election of directors of such Person (or Persons performing similar functions)
(irrespective of whether at the time securities of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency).
"WHOLLY-OWNED SUBSIDIARY" shall mean with respect to any Person, a
Subsidiary of such Person, all of the outstanding shares of capital stock of
every class or series of which (other than directors' qualifying shares), or
all of the equity interest of which, if such Subsidiary is not a corporation,
are at the time owned, directly or indirectly through Subsidiaries, by such
Person.
11. MISCELLANEOUS
11A. NOTE PAYMENTS. The Borrowers agree that, so long as a
Purchaser shall hold any Note, they will make payments of principal of such
Note and Make Whole Premium, if any, and interest thereon, which comply with
the terms of this Agreement, by wire transfer of immediately available funds
for credit to its respective account or accounts as specified in the PURCHASER
SCHEDULE, or such other account or accounts in the United States as it may
designate in writing, notwithstanding any contrary provision herein or in such
Note with respect to the place of payment. Each Purchaser agrees that, before
disposing of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made and of the date to
which interest has been paid. The Borrowers agree to afford the benefits of
this PARAGRAPH 11A to any Transferees which shall have made the same agreement
in writing as each Purchaser has made in this PARAGRAPH 11A.
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11B. EXPENSES. The Company and the Borrowers agree, whether or not
the transactions provided for hereby shall be consummated, to pay on demand,
and save each Purchaser and its Transferees 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 reasonable fees and expenses of Purchasers' Special Counsel in connection
with this Agreement, the transactions provided for hereby and all document
production and duplication charges and the reasonable fees and expenses of any
special counsel or other special advisers engaged by the Purchasers in
connection with any subsequent proposed modification requested by the Company
or the Borrowers of, or proposed consent requested of the Company or the
Borrowers under, this Agreement, the Notes or any Related Agreement, whether or
not such proposed modification shall be effected or such proposed consent
granted, (ii) the costs of obtaining a private placement number for the Notes,
as called for by PARAGRAPH 3E, and (iii) the costs and expenses, including
reasonable attorneys' fees and the fees of any other special advisers, incurred
by any Purchaser or any of its Transferees in enforcing any rights under this
Agreement, any of the Notes or any Related Agreement or in responding to any
subpoena or other legal process issued in connection with this Agreement or the
transactions provided for hereby or thereby or by reason of any Purchaser's or
any Transferee's having acquired any Note, including without limitation costs
and expenses incurred in any bankruptcy case. The obligations of the Company
and the Borrowers under this PARAGRAPH 11B shall survive the transfer of any
Note or portion thereof or interest therein by each Purchaser or any Transferee
and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may not be amended, and
neither the Company nor either Borrower may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, without the
written consent of the Required Holder(s), except that no change to the
interest rate of, or Make Whole Premium payable on, the Notes or the mandatory
repayment as provided in PARAGRAPH 4C or 4D or any change to this paragraph
shall be made without the written consent of the Holder or Holders of all Notes
at the time outstanding. 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/or the Borrowers or either of them
and the Holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any Holder of such
Note. As used herein and in the Notes, the term "THIS AGREEMENT" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
11D. PERSONS DEEMED OWNERS; PARTICIPATIONS. The Company and the
Borrowers may treat the Person at the time shown on the Note register
referenced in PARAGRAPH 11O in whose name any Note is issued as the owner and
Holder of such Note for the purpose of receiving payment of principal of and
Make Whole Premium, if any, and interest on such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and neither the
Company nor the Borrowers shall be affected by notice to the contrary.
11E. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or made in writing by or on
behalf of the Company or either Borrower or any Affiliate Guarantor in
connection herewith shall survive the execution and delivery of this Agreement,
the Notes and the Related Agreements, the transfer by any Purchaser of any Note
or portion thereof or interest therein and the payment of any Note and may be
relied upon by any Transferee,
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regardless of any investigation made at any time by or on behalf of any
Purchaser or any Transferee. This Agreement, the Notes and the Related
Agreements embody the entire agreement and understanding among the Purchasers
and the Company, the Borrowers and the Affiliate Guarantors and supersede all
prior agreements and understandings relating to the subject matter hereof and
thereof.
11F. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
11G. DISCLOSURE TO OTHER PERSONS. The Company and the Borrowers
acknowledge 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, either
Borrower or any other Subsidiary of the Company in connection with or pursuant
to this Agreement to (i) such Holder's directors, officers, employees, agents
and professional consultants, (ii) any other Holder of any Note, (iii) any
Person to which such Holder offers to sell such Note or any part thereof, (iv)
any Person 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, (vii) Standard & Poor's Corporation
(in connection with obtaining a private placement number for the Notes) or
(viii) any other Person to which such delivery or disclosure may be necessary
or appropriate (a) in compliance with any law, rule, regulation or order
applicable to such Holder, (b) in response 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. Each Holder
agrees that prior to disclosing any information which has been marked
confidential and is not publicly available received from the Company, either
Borrower or any of their Subsidiaries to any Persons described in CLAUSE (III)
and (IV) above, it will obtain an agreement from such Person to maintain such
information in confidence (subject to the right to disclose any such
information to the Persons identified in CLAUSES (I) through (VIII) above and
in the case of CLAUSES (III) and (IV) above, subject to this sentence).
11H. NOTICES. All notices and other written communications
provided for hereunder shall be given in writing and shall be sent by overnight
delivery service (with charges prepaid) or by facsimile transmission with the
original of such transmission being sent by overnight delivery service (with
charges prepaid), and (i) if to any Purchaser or its nominee, addressed to such
Person at the address specified for such communications in the PURCHASER
SCHEDULE, or at such other address as such Person 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 is specified for such Holder in the Note
register referenced in PARAGRAPH 11O and (iii) if to the Company, the Borrowers
or either Borrower addressed to them or it c/o the Company at 65 Rowayton
Avenue, Rowayton, Connecticut 06853, Attention: President or at such other
address as the Company, the Borrowers or such Borrower, as the case may be,
shall have specified to the Holder of each Note in writing given in accordance
with this PARAGRAPH 11H. Notice so given shall be effective upon the earlier
of the date of delivery or the first business day at the place of delivery
after dispatch.
11I. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11J. SOLICITATION OF NOTEHOLDERS. None of the Company, the
Borrowers or any of their Subsidiaries will, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of
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supplemental or additional interest, fee or otherwise, to any Holder of the
Notes for any consent by such Holder in its capacity as a Holder of Notes to
any waiver or amendment of any of the terms of the Notes or of this Agreement
or of any Related Agreement unless such remuneration is concurrently paid, on
the same terms, ratably to the Holders of all of the Notes then outstanding.
11K. REPRODUCTION OF DOCUMENTS. This Agreement, the Notes, and all
related documents, including (a) consents, waivers and modifications which may
subsequently be executed, (b) documents received by the Purchasers on their
purchase of the Notes (except the Notes themselves), and (c) financial
statements, certificates and other information previously or subsequently
furnished to each Purchaser, may be reproduced by the Purchasers by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and each Purchaser may destroy any original document so
reproduced. The Company and the Borrowers agree and stipulate that any such
reproduction shall, to the extent permitted by applicable law, be admissible in
evidence as the original itself in any judicial or administrative proceeding
whether or not the original is in existence and whether or not the reproduction
was made by a Purchaser in the regular course of business, and that any
enlargement, facsimile or further reproduction of the reproduction shall
likewise be admissible in evidence.
11L. 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 Commonwealth of Massachusetts (without giving effect to principles of
conflicts law).
11M. CONSENT TO JURISDICTION AND SERVICE. TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THE COMPANY AND EACH BORROWER HEREBY ABSOLUTELY AND
IRREVOCABLY CONSENTS AND SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS AND OF ANY FEDERAL COURT LOCATED IN SAID
JURISDICTION IN CONNECTION WITH ANY ACTIONS OR PROCEEDINGS BROUGHT AGAINST IT
BY ANY HOLDER ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY NOTE OR ANY
RELATED AGREEMENT. THE COMPANY AND EACH BORROWER HEREBY WAIVES AND AGREES NOT
TO ASSERT IN ANY SUCH ACTION OR PROCEEDING, IN EACH CASE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (A) IT IS NOT PERSONALLY SUBJECT TO
THE JURISDICTION OF ANY SUCH COURT, (B) IT IS IMMUNE FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO IT OR ITS PROPERTY,
(C) ANY SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, OR
(D) THIS AGREEMENT, ANY NOTE OR ANY RELATED AGREEMENT MAY NOT BE ENFORCED IN OR
BY ANY SUCH COURT. IN ANY SUCH ACTION OR PROCEEDING, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE COMPANY AND EACH BORROWER HEREBY ABSOLUTELY
AND IRREVOCABLY WAIVES PERSONAL IN HAND SERVICE OF ANY SUMMONS, COMPLAINT,
DECLARATION OR OTHER PROCESS AND HEREBY ABSOLUTELY AND IRREVOCABLY AGREES THAT
THE SERVICE MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED, IN THE CASE OF THE COMPANY AND BAM, TO IT AT ITS ADDRESS
SET FORTH IN OR FURNISHED PURSUANT TO THE PROVISIONS OF THIS AGREEMENT OR BY
ANY OTHER MANNER PROVIDED BY LAW, OR IN THE CASE OF BTL, TO IT IN THE CARE OF
THE COMPANY AT THE COMPANY'S ADDRESS SET FORTH OR FURNISHED PURSUANT TO THE
PROVISIONS OF THIS AGREEMENT OR BY ANY OTHER MANNER PROVIDED BY LAW, AND BTL
HEREBY DESIGNATES THE COMPANY AS ITS AGENT FOR SERVICE OF PROCESS IN ANY SUCH
ACTION. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY OR EITHER BORROWER IN ANY
APPROPRIATE JURISDICTION.
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11N. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
11O. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST
NOTES. The Notes are issuable and transferable as registered notes without
coupons in denominations of at least $1,000,000 except as may be necessary to
reflect any principal amount not evenly divisible by $1,000,000 or any
principal amount less than $1,000,000. The Borrowers shall keep at the
Company's principal office or, if such office is no longer located in the State
of Connecticut or The Commonwealth of Massachusetts, at the principal banking
office in Boston, Massachusetts of the First National Bank of Boston, a
register in which the Borrowers shall provide for the registrations of Notes
and of transfers of Notes and shall cause to be recorded therein the names and
addresses of the Holders from time to time of the Notes and all transfers
thereof provided, however, that the Borrowers shall be required to record the
transfer of a Note only if and when a subsequent holder shall have presented
such Note to the Borrowers for inspection, properly endorsed or assigned and in
order for transfer, and delivered to the Borrowers a written notice of its
acquisition of such Note and designated in writing an address to which payments
on and notices in respect of such Note shall be transmitted. Upon surrender
for registration of transfer of any Note at the principal office of the
Company, the Borrowers shall, at their 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, or 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 Borrowers shall, at their
expense, execute and deliver the Notes which the Holder making the exchange is
entitled to receive. Every Note surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the Holder of such Note or such Holder's attorney
duly authorized in writing. Any Note or Notes issued in exchange for any Note
or upon transfer thereof shall carry the rights to unpaid interest and interest
to accrue which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange. Upon receipt of written notice from the Holder of any Note of the
loss, theft, destruction or mutilation of such Note and, in the case of any
such loss, theft or destruction, upon receipt of the unsecured indemnification
agreement of such Holder, or in the case of any such mutilation upon surrender
and cancellation of such Note, the Borrowers will make and deliver a new Note,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11P. JOINT AND SEVERAL OBLIGATIONS. Each and every representation,
warranty, covenant and agreement made in this Agreement by the Company and
Borrowers shall be their joint and several obligation whether or not so
expressed, and each and every representation, warranty, covenant and agreement
made by the Borrowers under the Notes shall be joint and several, whether or
not so expressed, and such obligations of the Company and/or the Borrowers
shall not be subject to any counterclaim, setoff, recoupment or defense based
upon any claim the Company or Borrower may have against the other, you or any
Holder.
-37-
42
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 and the Borrowers, whereupon this letter shall become a binding
agreement among the Purchasers, the Borrowers and the Company.
Very truly yours,
BALDWIN TECHNOLOGY COMPANY, INC.
By:___________________________________
Title:
BALDWIN AMERICAS CORPORATION
By:___________________________________
Title:
BALDWIN TECHNOLOGY LIMITED
By:___________________________________
Title:
The foregoing Agreement is
hereby accepted as of the date
first above written.
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:____________________________
Title:
JOHN HANCOCK VARIABLE LIFE
INSURANCE COMPANY
By:____________________________
Title:
JOHN HANCOCK LIFE INSURANCE
COMPANY OF AMERICA
By:____________________________
Title:
-38-
43
EXHIBIT A
BALDWIN AMERICAS CORPORATION
BALDWIN TECHNOLOGY LIMITED
8.17% Joint and Several Senior Note
due October 29, 2000
PPN 05777* AA 8
No. R-__ ___________ __, ____
$_______________
FOR VALUE RECEIVED, the undersigned, Baldwin Americas Corporation, a
Delaware corporation, and Baldwin Technology Limited, a Bermuda corporation
(together, with their respective successors, the "BORROWERS"), hereby jointly
and severally promise to pay to the order of _______________, ________________
or its registered assigns ("HOLDER"), the principal sum of
____________________________________________, Dollars ($___________) on October
29, 2000, with interest (computed on the basis of a 360-day year of twelve
30-day months) on the principal amount from time to time unpaid at the rate of
8.17% per annum from the date hereof, payable semi-annually in arrears on April
29 and October 29 of each year with the first of such payments to be made on
April 29, 1994. Any overdue payment of principal, any overdue payment of
premium and, to the extent permitted by applicable law, any overdue payment of
interest, shall bear interest at the rate of 10.17% per annum, whether overdue
by acceleration or otherwise. All principal and interest shall in all events
be paid in full on October 29, 2000.
This note is one of the series of Joint and Several Senior Notes (the
"NOTES") issued by the Borrowers pursuant to a Note Agreement dated as of
October 29, 1993 among the Borrowers, Baldwin Technology Company, Inc., John
Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance
Company and John Hancock Life Insurance Company of America, as amended from
time to time (the "AGREEMENT"). The Holder is entitled, equally and ratably
with holders of all other Notes, to the benefits of the Agreement and each of
the Affiliate Guaranties and the Subordination Agreements provided for therein.
Payments of principal, premium, if any, and interest are to be made at
the place specified by the Holder in the Purchaser Schedule to the Agreement or
at such other place as the Holder shall designate to the Borrowers in writing,
in lawful money of the United States of America. If any payment of principal,
premium, if any, or interest on or in respect of this note becomes due and
payable on any day which is a Saturday, Sunday or any day on which commercial
banks in Boston, Massachusetts, are required or authorized to be closed the
payment shall be due and payable on the next preceding Business Day.
This note is a registered note and, as provided in the Agreement, upon
surrender of this note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the Holder 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
Borrowers 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 Borrowers shall not be affected by any notice to the contrary.
This note may be declared or may otherwise become due and payable
prior to its expressed maturity in the events, on the terms, with the premium
and in the manner and amounts as provided in the Agreement.
This note is not subject to prepayment or redemption at the option of
the Borrowers prior to its expressed maturity except on the terms, with the
premium and in the manner and amounts as provided in the Agreement.
44
-2-
The Borrowers and every maker, endorser and guarantor hereof or of the
indebtedness evidenced hereby (a) waives presentment, demand, notice, protest
and all other demands, notices and suretyship defenses generally, in connection
with the delivery, acceptance, performance, default or enforcement of or under
this note, and (b) agrees to pay, to the extent permitted by law, all costs and
expenses, including, without limitation, reasonable attorneys' fees, incurred
or paid by the Holder hereof in enforcing this note and any collateral or
security therefor on default, whether or not litigation is commenced.
Capitalized terms used in this note and not defined herein shall have
the meanings given therefor in the Agreement.
WITNESS: BALDWIN AMERICAS CORPORATION
______________________________ By:___________________________
Title:
WITNESS: BALDWIN TECHNOLOGY LIMITED
______________________________ By:____________________________
Title:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR QUALIFIED UNDER STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, AND
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, OR (B) IF SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE
RULES AND REGULATIONS IN EFFECT THEREUNDER AND ANY APPLICABLE STATE SECURITIES
LAWS.