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Draft of November 7, 1995 Exhibit 4.10
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AMCAST INDUSTRIAL CORPORATION
NOTE AGREEMENT
Dated as of November 1, 1995
Re: $50,000,000 7.09% Senior Notes
Due
November 7, 2005
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Description of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Commitment, Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3. Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2. PREPAYMENT OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2. Optional Prepayment with Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3. Prepayment of Notes upon Change of Control . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.4. Notice of Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Application of Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6. Direct Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3. REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.1. Representations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2. Representations of the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4. CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2. Waiver of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5. COMPANY COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.1. Corporate Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.3. Taxes, Claims for Labor and Materials; Compliance with Laws . . . . . . . . . . . . . . 8
Section 5.4. Maintenance, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.5. Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.6. Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.7. Maintenance of Consolidated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.8. Limitations on Consolidated Priority Indebtedness . . . . . . . . . . . . . . . . . . . 9
Section 5.9. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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Section 5.10. Mergers, Consolidations and Sales of Assets . . . . . . . . . . . . . . . . . . . 12
Section 5.11. Repurchase of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.12. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.13. Termination of Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.14. Notes to Rank Pari Passu . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.15. Reports and Rights of Inspection . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR . . . . . . . . . . . . . . . . . . . . . 19
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.2. Notice to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.3. Acceleration of Maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.4. Rescission of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.1. Consent Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.2. Solicitation of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.3. Effect of Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS . . . . . . . . . . . . . . . . . . . . 23
Section 8.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.2. Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 8.3. Directly or Indirectly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.1. Registered Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.2. Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.3. Loss, Theft, Etc. of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.4. Expenses, Stamp Tax Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative . . . . . . . . . . . . . . . . 32
Section 9.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.7. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.8. Survival of Covenants and Representations . . . . . . . . . . . . . . . . . . . . 32
Section 9.9. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.11. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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ATTACHMENTS TO NOTE AGREEMENT:
Schedule I - Names and Addresses of Purchasers and Amounts of
Commitments
Schedule II - Indebtedness; Liens Securing Indebtedness
(including Capitalized Leases); and Subsidiaries as
of the Closing Date
Schedule III - Use of Proceeds
Exhibit A - Form of 7.09% Senior Note due November 7, 2005
Exhibit B - Representations and Warranties of the Company
Exhibit C - Description of Special Counsel's Closing Opinion
Exhibit D - Description of Closing Opinions of Counsel to the
Company
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AMCAST INDUSTRIAL CORPORATION
7887 Washington Village Drive
Dayton, Ohio 45459
NOTE AGREEMENT
Re: $50,000,000 7.09% Senior Notes
Due November 7, 2005
Dated as of
November 1, 1995
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Amcast Industrial Corporation, an Ohio corporation
(the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of $50,000,000 aggregate principal amount of its 7.09% Senior
Notes (the "Notes") to be dated the date of issue, to bear interest from such
date at the rate of 7.09% per annum, payable quarterly on the seventh day of
February, May, August and November in each year (commencing February 7, 1996)
and at maturity and to bear interest on overdue principal (including any
overdue required or optional prepayment of principal) and premium, if any, and
(to the extent legally enforceable) on any overdue installment of interest at
the Overdue Rate after the date due, whether by acceleration or otherwise,
until paid, to be expressed to mature on November 7, 2005, and to be
substantially in the form attached hereto as Exhibit A. Interest on the Notes
shall be computed on the basis of a 360-day year of twelve 30-day months. The
Notes are not subject to prepayment or redemption at the option of the Company
prior to their expressed maturity dates except on the terms and conditions and
in the amounts and with the premium, if any, set forth in SECTION 2 of this
Agreement. The term "Notes" as used herein shall include each Note delivered
pursuant to this Agreement and the separate agreements with the other
purchasers named in Schedule I. You and
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the other purchasers named in Schedule I are hereinafter sometimes referred to
as the "Purchasers". The terms which are capitalized herein shall have the
meanings set forth in SECTION 8.1 unless the context shall otherwise require.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, Notes in the principal amount set forth
opposite your name on Schedule I hereto at a price of 100% of the principal
amount thereof on the Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603, against payment
therefor in Federal Reserve or other funds current and immediately available at
the principal office of in the amount of the purchase price at 10:00 A.M.,
Chicago, Illinois time, on November 7, 1995 or such later date (not later than
November 30, 1995) as shall mutually be agreed upon by the Company and the
Purchasers (the "Closing Date"). The Notes delivered to you on the Closing
Date will be delivered to you in the form of a single registered Note in the
form attached hereto as Exhibit A for the full amount of your purchase (unless
different denominations are specified by you), registered in your name or in
the name of such nominee, as may be specified in Schedule I attached hereto.
Section 1.3. Other Agreements. Simultaneously with the
execution and delivery of this Agreement, the Company is entering into similar
agreements with the other Purchasers under which such other Purchasers agree to
purchase from the Company the principal amount of Notes set opposite such
Purchasers' names in Schedule I, and your obligation and the obligations of the
Company hereunder are subject to the execution and delivery of the similar
agreements by the other Purchasers. This Agreement and said similar agreements
with the other Purchasers are herein collectively referred to as the
"Agreements". The obligations of each Purchaser shall be several and not joint
and no Purchaser shall be liable or responsible for the acts of any other
Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. In addition to paying the
entire outstanding principal amount and the interest due on the Notes on the
maturity date thereof, the Company agrees that on the seventh day of November
in each year, commencing November 7, 2002 and ending November 7, 2004, both
inclusive, it will prepay and apply and there shall become due and payable on
the principal indebtedness evidenced by the Notes an amount equal to the lesser
of (a) $12,500,000 or (b) the principal amount of the Notes then outstanding.
The entire remaining principal amount of the Notes shall become due and payable
on November 7, 2005. No premium shall be payable in connection with any
required prepayment made pursuant to this SECTION 2.1.
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In the event that the Company shall prepay less than all of the Notes
pursuant to SECTION 2.2, the amounts of the prepayments required by this SECTION
2.1 shall be reduced by an amount which is the same percentage of such required
prepayment as the percentage that the principal amount of Notes prepaid
pursuant to SECTION 2.2 is of the aggregate principal amount of outstanding
Notes immediately prior to such prepayment.
Section 2.2. Optional Prepayment with Premium. In addition to
the payments required by SECTION 2.1, upon compliance with SECTION 2.4, the
Company shall have the privilege, at any time and from time to time of
prepaying the outstanding Notes, either in whole or in part (but if in part
then in a minimum principal amount of $1,000,000), by payment of the principal
amount of the Notes, or portion thereof to be prepaid, and accrued interest
thereon to the date of such prepayment, together with a premium equal to the
Make-Whole Amount, determined as of two Business Days prior to the date of such
prepayment pursuant to this SECTION 2.2.
Section 2.3. Prepayment of Notes upon Change of Control. (a) In
the event that any Change of Control (as hereinafter defined) shall occur or
the Company shall have knowledge of any proposed Change of Control, the Company
will give written notice (the "Company Notice") of such fact in the manner
provided in SECTION 9.6 hereof to the holders of the Notes. The Company Notice
shall be delivered promptly upon receipt of such knowledge by the Company and
in any event no later than three Business Days following the occurrence of any
Change of Control. The Company Notice shall (1) describe the facts and
circumstances of such Change of Control in reasonable detail, (2) make
reference to this SECTION 2.3 and the right of the holders of the Notes to
require prepayment of the Notes on the terms and conditions provided for in
this SECTION 2.3, (3) offer in writing to prepay the outstanding Notes,
together with accrued interest to the date of prepayment, and (4) specify a
date for such prepayment (the "Change of Control Prepayment Date"), which
Change of Control Prepayment Date shall be not more than 90 days nor less than
30 days following the date of such Company Notice. Each holder of the then
outstanding Notes shall have the right to accept such offer and require
prepayment of the Notes held by such holder in full by written notice to the
Company (a "Noteholder Notice") given not later than 20 days after receipt of
the Company Notice. The Company shall on the Change of Control Prepayment Date
prepay in full all of the Notes held by holders which have so accepted such
offer of prepayment. The prepayment price of the Notes payable upon the
occurrence of any Change of Control shall be an amount equal to 100% of the
outstanding principal amount of the Notes so to be prepaid and accrued interest
thereon to the date of such prepayment.
(b)(1) Without limiting the foregoing, notwithstanding any failure on
the part of the Company to give the Company Notice herein required as a result
of the occurrence of a Change of Control, each holder of the Notes shall have
the right by delivery of written notice to the Company to require the Company
to prepay, and the Company will prepay, such holder's Notes in full, together
with accrued interest thereon to the date of prepayment. Notice of any
required
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prepayment pursuant to this SECTION 2.3(B)(1) shall be delivered by any holder
of the Notes which was entitled to, but did not receive, such Company Notice to
the Company after such holder has actual knowledge of such Change of Control.
On the date (the "Change of Control Delayed Prepayment Date") designated in
such holder's notice (which shall be not more than 90 days nor less than 30
days following the date of such holder's notice), the Company shall prepay in
full all of the Notes held by such holder, together with accrued interest
thereon to the date of prepayment. If the holder of any Note gives any notice
pursuant to this SECTION 2.3(B)(1), the Company shall give a Company Notice
within three Business Days of receipt of such notice and identify the Change of
Control Delayed Prepayment Date to all other holders of the Notes and each of
such other holders shall then and thereupon have the right to accept the
Company's offer to prepay the Notes held by such holder in full and require
prepayment of such Notes by delivery of a Noteholder Notice within 20 days
following receipt of such Company Notice; provided only that any date for
prepayment of such holder's Notes shall be the Change of Control Delayed
Prepayment Date. On the Change of Control Delayed Prepayment Date, the Company
shall prepay in full the Notes of each holder thereof which has accepted such
offer of prepayment at a prepayment price equal to 100% of the outstanding
principal amount of the Notes so to be prepaid and accrued interest thereon to
the date of such prepayment.
(2) Compliance with the provisions of this SECTION 2.3(B) shall
not be deemed to constitute a waiver of, or consent to, any Default or Event of
Default caused by any violation of the provisions of SECTION 2.3(A).
Section 2.4. Notice of Optional Prepayments. The Company will
give notice of any prepayment of the Notes pursuant to SECTION 2.2 to each
holder thereof not less than 30 days nor more than 60 days before the date
fixed for such optional prepayment specifying (a) such date, (b) the principal
amount of the holder's Notes to be prepaid on such date, (c) that a premium may
be payable, (d) the date when such premium will be calculated, (e) the
estimated premium, together with a reasonably detailed computation of such
estimated premium, and (f) the accrued interest applicable to the prepayment.
Such notice of prepayment shall also certify all facts, if any, which are
conditions precedent to any such prepayment. Notice of prepayment having been
so given, the aggregate principal amount of the Notes specified in such notice,
together with accrued interest thereon and the premium, if any, payable with
respect thereto shall become due and payable on the prepayment date specified
in said notice. Two Business Days prior to the prepayment date specified in
such notice, the Company shall provide each holder of a Note written notice of
the premium, if any, payable in connection with such prepayment and, whether or
not any premium is payable, a reasonably detailed computation of the Make-Whole
Amount.
Section 2.5. Application of Prepayments. All partial
prepayments made pursuant to SECTION 2.1 or SECTION 2.2 shall be applied on all
outstanding Notes ratably in accordance with the unpaid
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principal amounts thereof. All partial prepayments made pursuant to SECTION
2.3 shall be applied only to the Notes of the holders who have elected to
participate in such prepayment.
Section 2.6. Direct Payment. Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any Note
owned by you or your nominee or owned by any subsequent Institutional Holder
which has given written notice to the Company requesting that the provisions of
this SECTION 2.6 shall apply, the Company will punctually pay when due the
principal thereof, interest thereon and premium, if any, due with respect to
said principal, without any presentment thereof, directly to you, to your
nominee or to such subsequent Institutional Holder at your address or your
nominee's address set forth in Schedule I hereto or such other address as you,
your nominee or such subsequent Institutional Holder may from time to time
designate in writing to the Company or, if a bank account with a United States
bank is designated for you or your nominee on Schedule I hereto or in any
written notice to the Company from you, from your nominee or from any such
subsequent Institutional Holder, the Company will make such payments in
immediately available funds to such bank account, no later than 1:00 p.m.
Chicago, Illinois time on the date due, marked for attention as indicated, or
in such other manner or to such other account in any United States bank as you,
your nominee or any such subsequent Institutional Holder may from time to time
direct in writing. If for any reason whatsoever the Company does not make any
such payment by such 1:00 p.m. transmittal time, such payment shall be deemed
to have been made on the next following Business Day and such payment shall
bear interest at the Overdue Rate.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company
represents and warrants that all representations and warranties set forth in
Exhibit B are true and correct as of the date hereof and are incorporated
herein by reference with the same force and effect as though herein set forth
in full.
Section 3.2. Representations of the Purchaser. (a) You
represent, and in entering into this Agreement the Company understands, that
(1) you are an accredited investor within the meaning of Rule 501 of Regulation
D under the Securities Act of 1933, as amended, and (2) you are acquiring the
Notes for the purpose of investment and not with a view to the distribution
thereof, and that you have no present intention of selling, negotiating or
otherwise disposing of the Notes; it being understood, however, that the
disposition of your property shall at all times be and remain within your
control. You understand that the Notes have not been registered under the
Securities Act of 1933, as amended, or any state securities act and may be
resold only if registered pursuant to the provisions of such Securities Act or
such state laws or if an exemption from registration is available, except under
circumstances where neither such registration nor any
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such exemption is required by law. You further understand and acknowledge that
the Notes shall bear the following legend:
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
ACT OF 1933, AS AMENDED. THIS NOTE MAY BE OFFERED OR SOLD ONLY IF
REGISTERED UNDER SAID ACT OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
provided that the legend may be removed from the Notes of a holder upon
delivery of an opinion of counsel (which may be internal counsel for such
holder) that such legend is no longer required.
(b) You further represent that at least one of the following
statements concerning each source of funds to be used by you to purchase the
Notes is accurate as of the Closing Date:
(1) the source of funds is an "insurance company general
account" within the meaning of Department of Labor Prohibited
Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) and the
purchase of the Notes by you is eligible for and satisfies the
requirements of PTE 95-60;
(2) all or a part of such funds constitute assets of one
or more separate accounts, trusts or a commingled pension trust
maintained by you, and you have disclosed to the Company the names of
such employee benefit plans whose assets in such separate account or
accounts or pension trusts exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such account or accounts
or trusts as of the date of such purchase (for the purpose of this
clause (2), all employee benefit plans maintained by the same employer
or employee organization are deemed to be a single plan);
(3) all or part of such funds constitute assets of a bank
collective investment fund maintained by you, and you have disclosed
to the Company the names of such employee benefit plans whose assets
in such collective investment fund exceed 10% of the total assets or
are expected to exceed 10% of the total assets of such fund as of the
date of such purchase (for the purpose of this clause (3), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(4) all or part of such funds constitute assets of one or
more employee benefit plans, each of which has been identified to the
Company in writing;
(5) you are acquiring the Notes for the account of one or
more pension funds, trust funds or agency accounts, each of which is a
"governmental plan" as defined in Section 3(32) of ERISA;
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(6) the source of funds 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), 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 clause (6) or to negotiate the terms of said QPAM's management
agreement on behalf of any such identified plans; or
(7) if you are other than an insurance company, all or a
portion of such funds consists of funds which do not constitute "plan
assets".
The Company shall deliver a certificate on the Closing Date which
certificate shall either state that (i) it is neither a "party in interest" (as
defined in Title I, Section 3(14) of ERISA) nor a "disqualified person" (as
defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as
amended), with respect to any plan identified pursuant to clauses (2), (3) or
(4) above, or (ii) with respect to any plan identified pursuant to clause (6)
above, neither it nor any "affiliate" (as defined in Section V(c) of PTE 84-14)
is described in the proviso to said clause (6). As used in this SECTION
3.2(B), the terms "separate account" and "employee benefit plan" shall have the
respective meanings assigned to them in ERISA and the term "plan assets" shall
have the meaning assigned to it in Department of Labor Regulation 29 C.F.R.
Section 2510.3-101.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. Your obligation to purchase the Notes on
the Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Notes and to the following further conditions
precedent:
(a) Closing Certificate. You shall have received a
certificate dated the Closing Date, signed by the President or a Vice
President of the Company, the truth and accuracy of which shall be a
condition to your obligation to purchase the Notes proposed to be sold
to you and to the effect that (1) the representations and warranties
of the Company set forth in Exhibit B hereto are true and correct on
and with respect to the Closing Date, (2) the Company has performed
all of its obligations hereunder which are to be performed on or prior
to the Closing Date, and (3) no Default or Event of Default has
occurred and is continuing.
(b) Legal Opinions. You shall have received from Chapman
and Cutler, who are acting as your special counsel in this
transaction, and from Denis G. Daly, Esq.,
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General Counsel of the Company, and Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, P.C., special counsel for the Company, their
respective opinions dated the Closing Date, in form and substance
satisfactory to you, and covering the matters set forth in Exhibits C
and D, respectively, hereto.
(c) Company's Existence and Authority. On or prior to
the Closing Date, you shall have received, in form and substance
reasonably satisfactory to you and your special counsel, such
documents and evidence with respect to the Company as you may
reasonably request in order to establish the existence and good
standing of the Company and the authorization of the transactions
contemplated by this Agreement.
(d) Related Transactions. The Company shall have
consummated the sale of the entire principal amount of the Notes
scheduled to be sold on the Closing Date pursuant to this Agreement
and the other agreements referred to in SECTION 1.3.
(e) Private Placement Number. On or prior to the Closing
Date, special counsel to the Purchasers shall have duly made the
appropriate filings with Standard & Poor's CUSIP Service Bureau, as
agent for the National Association of Insurance Commissioners, in
order to obtain a private placement number for the Notes.
(f) Funding Instructions. At least three Business Days
prior to the Closing Date, you shall have received written
instructions executed by a Responsible Officer of the Company
directing the manner of the payment of funds and setting forth (1) the
name and address of the transferee bank, (2) such transferee bank's
ABA number, (3) the account name and number into which the purchase
price for the Notes is to be deposited, and (4) the name and telephone
number of the account representative responsible for verifying receipt
of such funds.
(g) Special Counsel Fees. Concurrently with the delivery
of the Notes to you on the Closing Date, the charges and disbursements
of Chapman and Cutler, your special counsel, shall have been paid by
the Company.
(h) Legality of Investment. The Notes to be purchased by
you shall be a legal investment for you under the laws of each
jurisdiction to which you may be subject (without resort to any
so-called "basket provisions" to such laws).
(i) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and
all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to you and your special counsel,
and you shall have received a copy (executed or certified as may be
appropriate)
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of all legal documents or proceedings taken in connection with the
consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the
Company fails to tender to you the Notes to be issued to you on such date or if
the conditions specified in SECTION 4.1 have not been fulfilled, you may
thereupon elect to be relieved of all further obligations under this Agreement.
Without limiting the foregoing, if the conditions specified in SECTION 4.1 have
not been fulfilled, you may waive compliance by the Company with any such
condition to such extent as you may in your sole discretion determine. Nothing
in this SECTION 4.2 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will
preserve and keep in full force and effect, and will cause each Subsidiary to
preserve and keep in full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its business, provided
that the foregoing shall not prevent any transaction permitted by SECTION 5.10.
Section 5.2. Insurance. The Company will maintain, and will
cause each Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers and in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials; Compliance
with Laws. (a) The Company will promptly pay and discharge, and will cause
each Subsidiary promptly to pay and discharge, all lawful taxes, assessments
and governmental charges or levies imposed upon the Company or such Subsidiary,
respectively, or upon or in respect of all or any part of the property or
business of the Company or such Subsidiary, all trade accounts payable in
accordance with usual and customary business terms, and all claims for work,
labor or materials, which if unpaid might become a Lien upon any property of
the Company or such Subsidiary; provided the Company or such Subsidiary shall
not be required to pay any such tax, assessment, charge, levy, account payable
or claim if (1) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or proceedings which will
prevent the forfeiture or sale of any property of the Company or such
Subsidiary or any material interference with the use thereof by the Company or
such Subsidiary, and (2) the Company or such Subsidiary shall set aside on its
books, reserves deemed by it to be adequate with respect thereto.
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(b) The Company will promptly comply and will cause each
Subsidiary to promptly comply with all laws, ordinances or governmental rules
and regulations to which it is subject, including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA and all
Environmental Laws, the violation of which could materially and adversely
affect the properties, business, prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries or would result in any Lien not
permitted under SECTION 5.9.
Section 5.4. Maintenance, Etc. The Company will maintain,
preserve and keep, and will cause each Subsidiary to maintain, preserve and
keep, its properties which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good repair and working order
and from time to time will make all necessary repairs, replacements, renewals
and additions so that at all times the efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Subsidiaries would be substantially changed from the
general nature of the business engaged in by the Company and its Subsidiaries
on the date of this Agreement.
Section 5.6. Consolidated Net Worth. The Company will at all
times keep and maintain Consolidated Net Worth at an amount not less than (a)
90,000,000 plus (b) 25% of Consolidated Net Earnings computed on a cumulative
basis for each of the elapsed fiscal years ending after August 31, 1995;
provided that notwithstanding that Consolidated Net Earnings for any such
elapsed fiscal year may be a deficit figure, no reduction as a result thereof
shall be made in the sum to be maintained pursuant hereto.
Section 5.7. Maintenance of Consolidated Indebtedness. The
Company will not at any time permit Consolidated Indebtedness to exceed 60% of
Consolidated Total Capitalization.
Section 5.8. Limitations on Consolidated Priority Indebtedness.
(a) The Company will not, and will not permit any Subsidiary to, create, assume
or incur or in any manner be or become liable in respect of any Consolidated
Priority Indebtedness, except:
(1) Consolidated Priority Indebtedness of the Company and
its Subsidiaries outstanding as of the Closing Date and reflected on
Schedule II hereto, or any extension, renewal or refunding of any such
Consolidated Priority Indebtedness; provided that (i) such extension,
renewal or refunding of such Consolidated Priority Indebtedness shall
be without increase in the principal amount thereof at the time of
such extension, renewal or refunding, (ii) in the case of secured
Consolidated Priority Indebtedness, the related Lien shall attach
solely to the same such property, and (iii) at the time of such
extension,
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renewal or refunding and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of Default
would exist; and
(2) additional Consolidated Priority Indebtedness of the
Company and its Subsidiaries incurred after the Closing Date; provided
that at the time of creation, issuance, assumption, guarantee or
incurrence thereof and after giving effect thereto and to the
application of the proceeds thereof:
(i) no Default or Event of Default would exist; and
(ii) Consolidated Priority Indebtedness would not exceed an amount
equal to 20% of Consolidated Net Worth.
(b) Any corporation which becomes a Subsidiary after the date
hereof shall for all purposes of this SECTION 5.8 be deemed to have created,
assumed or incurred at the time it becomes a Subsidiary all Indebtedness of
such corporation existing immediately after it becomes a Subsidiary.
Section 5.9. Limitation on Liens. (a) The Company will
not, and will not permit any Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their 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 or their general creditors, or
acquire or agree to acquire, or permit any Subsidiary to acquire, any property
or assets upon conditional sales agreements or other title retention devices,
except:
(1) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or demands of
mechanics and materialmen, provided that payment thereof is not at the
time required by SECTION 5.3;
(2) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary shall at
any time in good faith be prosecuting an appeal or proceeding for a
review and in respect of which a stay of execution pending such appeal
or proceeding for review shall have been secured;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory landlords' liens)
and Liens to secure the performance of bids, tenders or trade
contracts,
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or to secure statutory obligations, surety or appeal bonds or other
Liens of like general nature, in any such case incurred in the
ordinary course of business and not in connection with the borrowing
of money, provided in each case, the obligation secured is not overdue
or, if overdue, is being contested in good faith by appropriate
actions or proceedings;
(4) minor survey exceptions or minor 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 corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company, and the Company and its Subsidiaries, taken as a whole, or
the value of such properties for the purpose of such business;
(5) Liens securing Indebtedness of a Subsidiary to the
Company or to another Wholly-owned Subsidiary;
(6) Liens existing as of the Closing Date and described
on Schedule II hereto and any extensions, renewals or replacements, in
whole or in part, of any such Lien, provided that (i) such extension,
renewal or replacement of Indebtedness shall be without increase in
the principal amount remaining unpaid as of the date of such
extension, renewal or replacement, (ii) such Lien shall attach solely
to the same property theretofore subject to such Lien and (iii) after
giving effect to any such extension, renewal or refunding and to the
application of the proceeds thereof, no Default or Event of Default
would exist;
(7) Liens created or incurred after the Closing Date
given to secure the payment of the purchase price or cost of
construction of property or assets useful and intended to be used in
carrying on the business of the Company or a Subsidiary, including
Liens existing on such property or assets at the time of acquisition
thereof, whether or not such existing Liens were given to secure the
payment of the purchase price of the property or assets to which they
attach, provided that (i) except in connection with industrial
development bond financings where applicable law shall otherwise
require, the Lien shall attach solely to the property or assets
acquired, purchased or constructed, (ii) such Lien shall have been
created or incurred within 180 days of the date of acquisition or
purchase or of completion of construction, as the case may be, (iii)
at the time of acquisition or purchase or the date of completion of
construction, as the case may be, the aggregate amount remaining
unpaid on all Indebtedness secured by Liens on such property or
assets, whether or not assumed by the Company or a Subsidiary, shall
not exceed fair market value at the time of acquisition or purchase or
the date of completion of the construction
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of such property or assets (as determined in good faith by the Board
of Directors of the Company) and (iv) at the time of creation,
issuance, assumption, guarantee or incurrence of the Indebtedness
relating to such Lien and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of Default
would exist;
(8) Liens affixed on real or personal property existing
(i) at the time of acquisition thereof, whether or not the
Indebtedness secured thereby is assumed by the Company or any of its
Subsidiaries, or (ii) on the property or outstanding shares of a
corporation at the time such corporation is merged into or
consolidated with the Company or a Subsidiary or at the time of a
sale, lease or other disposition of the properties or outstanding
shares or Indebtedness of a corporation or firm as an entirety to the
Company or a Subsidiary; provided that (A) the amount of Indebtedness
secured by such Liens shall not exceed an amount equal to the fair
market value of such real or personal property (as determined in good
faith by the Board of Directors of the Company) and (B) at the time of
the creation, issuance, assumption, guarantee or incurrence of the
Indebtedness relating to any such Lien and after giving effect thereto
and to the application of the proceeds thereof, no Default or Event of
Default would exist; and
(9) Liens created or incurred after the Closing Date
given to secure Indebtedness of the Company or any Subsidiary in
addition to the Liens permitted by the preceding clauses (1) through
(8) hereof, provided that all Indebtedness secured by such Liens shall
have been incurred within the limitations provided in SECTION
5.8(A)(2).
(b) If at any time the Company is requested by any holder of
Indebtedness of the Company or any Subsidiary to grant a Lien (other than a
Lien expressly permitted by SECTION 5.9(A)) on any of the property or assets of
the Company or any of its Subsidiaries as security for the payment of such
Indebtedness, then and in such event the Company shall at least ten Business
Days prior to the granting of any such Lien so notify the holders of the Notes
and, concurrently with the granting of such Lien, the Company shall, in a
manner satisfactory to the Requisite Holders, equally and ratably secure the
Notes with the such Indebtedness under and pursuant to a mortgage, security
agreement or other agreement securing such Indebtedness and pursuant to an
intercreditor agreement to be entered into by the holder or holders of such
Indebtedness with the holders of the Notes confirming such equal and ratable
security of the such Indebtedness and the Notes, and the Company shall furnish
to the holders of the Notes on the date of the creation or incurrence of such
Lien an opinion of independent counsel (which independent counsel shall be
satisfactory to the Requisite Holders) to such effect and otherwise in form and
substance satisfactory to the Requisite Holders.
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Section 5.10. Mergers, Consolidations and Sales of Assets. (a)
The Company will not, and will not permit any Subsidiary to, consolidate with
or be a party to a merger with any other Person, or sell, lease or otherwise
dispose of all or substantially all of its assets; provided that:
(1) any Subsidiary may merge or consolidate with or into
the Company or any Wholly-owned Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the
surviving or continuing corporation;
(2) the Company may consolidate or merge with or into any
other corporation if (i) the corporation which results from such
consolidation or merger (the "surviving corporation") is organized
under the laws of any state of the United States or the District of
Columbia, (ii) the due and punctual payment of the principal of and
premium, if any, and interest on all of the Notes, according to their
tenor, and the due and punctual performance and observation of all of
the covenants in the Notes and this Agreement to be performed or
observed by the Company are expressly assumed in writing by the
surviving corporation and the surviving corporation shall furnish to
the holders of the Notes an opinion of counsel satisfactory to such
holders to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid
and binding contract and agreement of the surviving corporation
enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles, and (iii) at the
time of such consolidation or merger and immediately after giving
effect thereto, no Default or Event of Default would exist;
(3) the Company may sell or otherwise dispose of all or
substantially all of its assets (other than stock and Indebtedness of
a Subsidiary, which may only be sold or otherwise disposed of pursuant
to SECTION 5.10(C)) to any Person for consideration which represents
the fair market value of such assets (as determined in good faith by
the Board of Directors of the Company, a copy of which determination,
certified by the Secretary or an Assistant Secretary of the Company,
shall have been furnished to the holders of the Notes) at the time of
such sale or other disposition if (i) the acquiring Person is a
corporation organized under the laws of any state of the United States
or the District of Columbia, (ii) the due and punctual payment of the
principal of and premium, if any, and interest on all the Notes,
according to their tenor, and the due and punctual performance and
observance of all of the covenants in the Notes and in this Agreement
to be performed or observed by the Company are expressly assumed in
writing by the acquiring corporation and the acquiring corporation
shall furnish to the holders of the Notes an opinion of counsel
satisfactory to such holders to the effect that the instrument of
assumption has been duly authorized, executed and delivered and
constitutes the legal,
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valid and binding contract and agreement of such acquiring corporation
enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles, and (iii) at the
time of such sale or disposition and immediately after giving effect
thereto, no Default or Event of Default would exist.
(b) The Company will not, and will not permit any Subsidiary to,
sell, lease, transfer, abandon or otherwise dispose of assets (except assets
sold in the ordinary course of business for fair market value and except as
provided in SECTION 5.10(A)(3)); provided that the foregoing restrictions do
not apply to:
(1) the sale, lease, transfer or other disposition of
assets of a Subsidiary to the Company or a Wholly-owned Subsidiary; or
(2) the sale of the Flagg Brass Division Assets; or
(3) the sale of assets for cash or other property to a
Person or Persons other than an Affiliate if all of the following
conditions are met:
(i) such assets (valued at net book value) do
not, together with all other assets of the Company and its
Subsidiaries previously disposed of during the period from the
date of this Agreement to and including the date of the sale
of such assets (other than in the ordinary course of
business), exceed 25% of Consolidated Total Assets determined
as of the end of the immediately preceding fiscal year;
(ii) in the opinion of the Company's Board of
Directors, the sale is for fair value and is in the best
interests of the Company; and
(iii) immediately after the consummation of the
transaction and after giving effect thereto, no Default or
Event of Default would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets the proceeds of which were or
are applied within twelve months of the date of sale of such assets to
either (A) the acquisition of, or Binding Commitment to acquire, fixed
assets useful and intended to be used in the operation of the business
of the Company and its Subsidiaries as described in SECTION 5.5 and
having a fair market value (as determined in good faith by the Board
of Directors of the Company) at least equal to that of the assets so
disposed of or (B) the prepayment at any applicable prepayment
premium,
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on a pro rata basis, of Senior Indebtedness of the Company. It is
understood and agreed by the Company that any such proceeds paid and
applied to the prepayment of the Notes as hereinabove provided shall
be prepaid as and to the extent provided in SECTION 2.2.
Computations pursuant to this SECTION 5.10(B) shall include
dispositions made pursuant to SECTION 5.10(C) and computations pursuant to
SECTION 5.10(C) shall include dispositions made pursuant to this SECTION
5.10(B).
(c) The Company will not, and will not permit any Subsidiary to,
sell, pledge or otherwise dispose of any shares of the stock (including as
"stock" for the purposes of this SECTION 5.10(C) any options or warrants to
purchase stock or other Securities exchangeable for or convertible into stock)
of a Subsidiary (said stock, options, warrants and other Securities herein
called "Subsidiary Stock") or any Indebtedness of any Subsidiary, nor will any
Subsidiary issue, sell, pledge or otherwise dispose of any shares of its own
Subsidiary Stock, provided that the foregoing restrictions do not apply to:
(1) the issue of directors' qualifying shares; or
(2) the issue of Subsidiary Stock to the Company; or
(3) the sale or other disposition at any one time to a
Person (other than directly or indirectly to an Affiliate) of the
entire investment of the Company and its other Subsidiaries in any
Subsidiary if all of the following conditions are met:
(i) such assets (valued at net book value) of
such Subsidiary do not, together with all other assets of the
Company and its Subsidiaries previously disposed of during the
period from the date of this Agreement to and including the
date of the sale of such assets (other than in the ordinary
course of business), exceed 25% of Consolidated Total Assets
determined as of the end of the immediately preceding fiscal
year;
(ii) in the opinion of the Company's Board of
Directors, the sale is for fair value and is in the best
interests of the Company;
(iii) immediately after the consummation of the
transaction and after giving effect thereto, such Subsidiary
shall have no Indebtedness of or continuing investment in the
capital stock of the Company or of any Subsidiary and any such
Indebtedness or investment shall have been discharged or
acquired, as the case may be, by the Company or a Subsidiary;
and
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(iv) immediately after the consummation of the
transaction and after giving effect thereto, no Default or
Event of Default would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets the proceeds of which were or
are applied, within twelve months of the date of sale of such assets
to either (A) the acquisition of, or Binding Commitment to acquire,
fixed assets useful and intended to be used in the operation of the
business of the Company and its Subsidiaries as described in SECTION
5.5 and having a fair market value (as determined in good faith by the
Board of Directors of the Company) at least equal to that of the
assets so disposed of or (B) the prepayment at any applicable
prepayment premium, on a pro rata basis, of Senior Indebtedness of the
Company. It is understood and agreed by the Company that any such
proceeds paid and applied to the prepayment of the Notes as
hereinabove provided shall be prepaid as and to the extent provided
SECTION 2.2.
Computations pursuant to this SECTION 5.10(C) shall include
dispositions made pursuant to SECTION 5.10(B) and computations pursuant to
SECTION 5.10(B) shall include dispositions made pursuant to this SECTION
5.10(C).
Section 5.11. Repurchase of Notes. Except as provided in SECTION
2.2 or SECTION 2.3, neither the Company nor any Subsidiary or Affiliate,
directly or indirectly, may repurchase or make any offer to repurchase any
Notes.
Section 5.12. Transactions with Affiliates. The Company will
not, and will not permit any Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of
any service by or for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than would obtain in a comparable arm's-length transaction with
a Person other than an Affiliate.
Section 5.13. Termination of Pension Plans. The Company will not
and will not permit any Subsidiary to withdraw from any Multiemployer Plan or
permit any employee benefit plan maintained by it to be terminated if such
withdrawal or termination could result in withdrawal liability (as described in
Part 1 of Subtitle E of Title IV of ERISA) or the imposition of a Lien on any
property of the Company or any Subsidiary pursuant to Section 4068 of ERISA.
Section 5.14. Notes to Rank Pari Passu. The Company will keep
and maintain the obligation of the Company with respect to the Notes and all
other monetary obligations outstanding at any time owing to the holders of the
Notes under this Agreement as direct obligations of the Company ranking pari
passu as against assets of the Company with all of the
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present and future unsecured Senior Indebtedness of the Company with the
exception of Indebtedness secured by Liens maintained within the limitations of
SECTION 5.9(A).
Section 5.15. Reports and Rights of Inspection. The Company will
keep, and will cause each Subsidiary to keep, proper books of record and
account in which full and correct entries will be made of all dealings or
transactions of, or in relation to, the business and affairs of the Company or
such Subsidiary, in accordance with GAAP consistently applied (except for
changes disclosed in the financial statements furnished to you pursuant to this
SECTION 5.15 and concurred in by the independent public accountants referred to
in SECTION 5.15(B)), and will furnish to you so long as you are the holder of
any Note and to each other Institutional Holder of the then outstanding Notes
(in duplicate if so specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in
any event within 45 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, copies of:
(1) consolidated statements of financial
condition of the Company and its Subsidiaries as of the close
of such quarterly fiscal period, setting forth in comparative
form the consolidated figures for the fiscal year then most
recently ended,
(2) consolidated statements of operations and
retained earnings of the Company and its Subsidiaries for such
quarterly fiscal period and for the portion of the fiscal year
ending with such quarterly fiscal period, in each case setting
forth in comparative form the consolidated figures for the
corresponding periods of the preceding fiscal year, and
(3) a consolidated statement of cash flows of the
Company and its Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth
in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company;
(b) Annual Statements. As soon as available and in any
event within 90 days after the close of each fiscal year of the
Company, copies of:
(1) consolidated statements of financial
condition of the Company and its Subsidiaries as of the close
of such fiscal year, and
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(2) consolidated statements of operations,
shareholders' equity and cash flows of the Company and its
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated
figures for the preceding fiscal year, all in reasonable detail and
accompanied by a report thereon of a firm of independent public
accountants of recognized national standing selected by the Company to
the effect that the consolidated financial statements present fairly,
in all material respects, the consolidated financial position of the
Company and its Subsidiaries as of the end of the fiscal year being
reported on and the consolidated results of the operations and cash
flows for said year in conformity with GAAP and that the examination
of such accountants in connection with such financial statements has
been conducted in accordance with generally accepted auditing
standards and included such tests of the accounting records and such
other auditing procedures as said accountants deemed necessary in the
circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one
copy of each interim or special audit made by independent accountants
of the books of the Company or any Subsidiary and any management
letter received from such accountants;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or
proxy statement sent by the Company to its creditors and stockholders
generally and of each regular or periodic report, and any registration
statement or prospectus filed by the Company or any Subsidiary with
any securities exchange or the Securities and Exchange Commission or
any successor agency, and copies of any orders in any proceedings to
which the Company or any of its Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (1) a Reportable Event with respect to any Plan; (2)
the institution of any steps by the Company, any ERISA Affiliate, the
PBGC or any other Person to terminate any Plan; (3) the institution of
any steps by the Company or any ERISA Affiliate to withdraw from any
Plan; (4) a non-exempt "prohibited transaction" within the meaning of
Section 406 of ERISA in connection with any Plan; (5) any material
increase in the contingent liability of the Company or any Subsidiary
with respect to any post-retirement welfare liability; or (6) the
taking of any action by, or the threatening of the taking of any
action by, the Internal Revenue Service, the Department of Labor or
the PBGC with respect to any of the foregoing;
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(f) Officer's Certificates. Within the periods provided
in paragraphs (a) and (b) above, a certificate of the chief financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (1) the information
and computations (in sufficient detail) required in order to establish
whether the Company was in compliance with the requirements of
SECTIONS 5.6 through 5.15 at the end of the period covered by the
financial statements then being furnished, and (2) whether there
existed as of the date of such financial statements and whether, to
the best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying
the nature and period of existence thereof and the action the Company
is taking and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period
provided in paragraph (b) above, a certificate of the accountants who
render an opinion with respect to such financial statements, stating
that they have reviewed this Agreement and stating further whether, in
making their audit, such accountants have become aware of any Default
or Event of Default under any of the terms or provisions of this
Agreement insofar as any such terms or provisions pertain to or
involve accounting matters or determinations, and if any such
condition or event then exists, specifying the nature and period of
existence thereof; and
(h) Requested Information. With reasonable promptness,
such other data and information as you or any such Institutional
Holder may reasonably request.
Without limiting the foregoing, the Company will permit you, so long as you are
the holder of any Note, and each Institutional Holder of the then outstanding
Notes (or such Persons as either you or such Institutional Holder may
designate), to visit and inspect, under the Company's guidance, any of the
properties of the Company or any Subsidiary, to examine all of their books of
account, records, reports and other papers, to make copies and extracts
therefrom and to discuss their respective affairs, finances and accounts with
their respective officers, employees, and independent public accountants (and
by this provision the Company authorizes said accountants to discuss with you
the finances and affairs of the Company and its Subsidiaries), all at such
reasonable times and as often as may be reasonably requested. Any visitation
shall be at the sole expense of you or such Institutional Holder, unless a
Default or Event of Default shall have occurred and be continuing or the holder
of any Note or of any other evidence of Indebtedness of the Company or any
Subsidiary gives any written notice or takes any other action with respect to a
claimed default, in which case, any such visitation or inspection shall be at
the sole expense of the Company.
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You agree that you will keep confidential in accordance with your
internal policies and procedures in effect from time to time any written
information with respect to the Company or its Subsidiaries which is furnished
pursuant to this Agreement and which is designated by the Company or its
Subsidiaries to you in writing as confidential, provided that you may disclose
any such information (1) as has become generally available to the public (other
than as a consequence of your actions) or to you on a non-confidential basis
from a source other than the Company or its Subsidiaries or as was known to you
on a non-confidential basis prior to its disclosure by the Company or its
Subsidiaries, (2) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having
or claiming to have jurisdiction over you or to the National Association of
Insurance Commissioners or similar organizations or their successors, (3) as
may be required or appropriate in response to any summons or subpoena or in
connection with any litigation, (4) to the extent that you reasonably believe
it appropriate in order to protect your investment in the Notes or in order to
comply with any law, order, regulation or ruling applicable to you, (5) to your
officers, trustees, employees, auditors or counsel or to rating agencies or
another holder of the Notes, (6) to Persons who are parties to similar
confidentiality agreements, or (7) to the prospective transferee in connection
with any contemplated transfer of any of the Notes by you. By its acceptance
of a Note, any transferee shall be bound by the terms of this SECTION 5.15.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any
Note when the same shall have become due and such default shall
continue for more than five Business Days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in SECTION 2.1; or
(c) Default shall occur in the making of any other
payment of the principal of any Note or premium, if any, thereon at
the expressed or any accelerated maturity date or at any date fixed
for prepayment; or
(d) Default shall occur in the observance or performance
of any covenant or agreement contained in SECTION 5.6 through SECTION
5.10 or SECTION 6.2; or
(e) Default shall occur in the observance or performance
of any other provision of this Agreement which is not remedied within
30 days after the earlier of
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(1) the day on which a Responsible Officer of the Company first
obtains knowledge of such default, or (2) the day on which written
notice thereof is given to the Company by the holder of any Note; or
(f) Default shall be made in the payment when due
(whether by lapse of time, by declaration, by call for redemption or
otherwise) of the principal of or interest on any Indebtedness for
borrowed money (other than the Notes) of the Company or any Subsidiary
aggregating in excess of $5,000,000 in principal amount outstanding
may be issued and such default shall continue beyond the period of
grace, if any, allowed with respect thereto; or
(g) Default or the happening of any event shall occur
under any indenture, agreement or other instrument under which any
Indebtedness for borrowed money (other than the Notes) of the Company
or any Subsidiary aggregating in excess of $5,000,000 may be issued
and such default or event shall result in the acceleration of the
maturity of any Indebtedness for borrowed money of the Company or any
Subsidiary outstanding thereunder; or
(h) Any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company in connection with the consummation of the
issuance and delivery of the Notes or furnished by the Company
pursuant hereto, is untrue in any material respect as of the date of
the issuance or making thereof; or
(i) Final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 (net of insurance proceeds to the
extent the insurer has acknowledged liability in writing) is or are
outstanding against the Company or any Subsidiary or against any
property or assets of either and any one of such judgments has
remained unpaid, unvacated, unbonded or unstayed by appeal or
otherwise for a period of 45 days from the date of its entry; or
(j) A custodian, liquidator, trustee or receiver is
appointed for the Company or any Subsidiary or for the major part of
the property of either and is not discharged within 60 days after such
appointment; or
(k) The Company or any Subsidiary becomes insolvent or
bankrupt, is generally not paying its debts as they become due or
makes an assignment for the benefit of creditors, or the Company or
any Subsidiary applies for or consents to the appointment of a
custodian, liquidator, trustee or receiver for the Company or such
Subsidiary or for the major part of the property of either; or
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(l) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Subsidiary and, if instituted against the
Company or any Subsidiary, are consented to or are not dismissed
within 60 days after such institution.
Section 6.2. Notice to Holders. When any Event of Default
described in the foregoing SECTION 6.1 has occurred, or if the holder of any
Note or of any other evidence of Indebtedness of the Company gives any notice
or takes any other action with respect to a claimed default, the Company agrees
to give notice within five days of such event to all holders of the Notes then
outstanding.
Section 6.3. Acceleration of Maturities. When any Event of
Default described in paragraph (a), (b) or (c) of SECTION 6.1 has happened and
is continuing, any holder of any Note may, by notice in writing sent to the
Company in the manner provided in SECTION 9.6, declare the entire principal and
all interest accrued on such Note to be, and such Note shall thereupon become
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event
of Default described in paragraphs (a) through (i), inclusive, of said SECTION
6.1 has happened and is continuing, the holder or holders of 25% or more of the
principal amount of the Notes at the time outstanding may, by notice in writing
to the Company in the manner provided in SECTION 9.6, declare the entire
principal and all interest accrued on all Notes to be, and all Notes shall
thereupon become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived.
When any Event of Default described in paragraph (j), (k) or (l) of SECTION 6.1
has occurred, then all outstanding Notes shall immediately become due and
payable without presentment, demand or notice of any kind. Upon the Notes
becoming due and payable as a result of any Event of Default as aforesaid, the
Company will forthwith pay to the holders of the Notes the entire principal and
interest accrued on the Notes and, to the extent not prohibited by applicable
law, an amount as liquidated damages for the loss of the bargain evidenced
hereby (and not as a penalty) equal to the Make-Whole Amount, determined as of
the date on which the Notes shall so become due and payable. No course of
dealing on the part of the holder or holders of any Notes nor any delay or
failure on the part of any holder of Notes to exercise any right shall operate
as a waiver of such right or otherwise prejudice such holder's rights, powers
and remedies. The Company further agrees, to the extent permitted by law, to
pay to the holder or holders of the Notes all costs and expenses incurred by
them in the collection of any Notes upon any default hereunder or thereon,
including reasonable compensation to such holder's or holders' attorneys for
all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of
SECTION 6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been
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declared immediately due and payable by reason of the occurrence of any Event
of Default described in paragraphs (a) through (i), inclusive, of SECTION 6.1,
the Requisite Holders may, by written instrument filed with the Company,
rescind and annul such declaration and the consequences thereof, provided that
at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all
other sums payable under the Notes and under this Agreement (except
any principal, interest or premium on the Notes which has become due
and payable solely by reason of such declaration under SECTION 6.3)
shall have been duly paid; and
(c) each and every other Default and Event of Default
shall have been made good, cured or waived pursuant to SECTION 7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right
consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the Company shall have
obtained the consent in writing of the Requisite Holders; provided that without
the written consent of the holders of all of the Notes then outstanding, no
such amendment or waiver shall be effective (a) which will change the time of
payment (including any prepayment required by SECTION 2.1) of the principal of
or the interest on any Note or change the principal amount thereof or change
the rate of interest thereon, or (b) which will change any of the provisions
with respect to optional prepayments, or (c) which will change the percentage
of holders of the Notes required to consent to any such amendment or waiver of
any of the provisions of this SECTION 7 or SECTION 6.
Section 7.2. Solicitation of Holders. So long as there are any
Notes outstanding, the Company will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement or the Notes unless each holder of Notes (irrespective of the
amount of Notes then owned by it) shall be informed thereof by the Company and
shall be afforded the opportunity of considering the same and shall be supplied
by the Company with sufficient information to enable it to make an informed
decision with respect thereto. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration,
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whether by way of supplemental or additional interest, fee or otherwise, to any
holder of Notes as consideration for or as an inducement to entering into by
any holder of Notes of any waiver or amendment of any of the terms and
provisions of this Agreement or the Notes unless such remuneration is
concurrently offered, on the same terms, ratably to the holders of all Notes
then outstanding. Promptly and in any event within 30 days of the date of
execution and delivery of any such waiver or amendment, the Company shall
provide a true, correct and complete copy thereof to each of the holders of the
Notes.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation
not expressly amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both the
singular and plural forms of any of the terms herein defined:
"Acquiring Person" shall mean a "person" or "group of persons" within
the meaning of Section 13(d) and 14(d) of the Securities and Exchange Act of
1934, as amended.
"Affiliate" shall mean any Person (other than a Subsidiary) (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (b) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or (c) 5% or more of the Voting Stock (or in the case of a Person which
is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Binding Commitment" shall mean, with respect to the acquisition of
assets to be used in the operation of the business of the Company and its
Subsidiaries as described in SECTION 5.5, a binding agreement, in writing,
between the Company and the seller of such assets pursuant to which the Company
agrees to purchase such assets for a specified price and on a specified date,
which date shall not be more than 60 days following the date such agreement is
entered into.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in Dayton, Ohio or Chicago, Illinois are required by
law to close or are customarily closed.
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"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet (or the
statements of financial condition) of such Person.
"Change of Control" shall mean the earliest to occur of: (1) the date
the Company enters into a binding written agreement with an Acquiring Person to
permit such Acquiring Person to acquire, directly or indirectly, beneficial
ownership of more than 50% of the total Voting Stock of the Company then
outstanding, or (2) the date a tender offer or exchange offer results in an
Acquiring Person, directly or indirectly, beneficially owning more than 50% of
the total Voting Stock of the Company then outstanding, or (3) the date an
Acquiring Person becomes, directly or indirectly, the beneficial owner of more
than 50% of the total Voting Stock of the Company then outstanding, or (4) the
date of a merger between the Company and any other Person, a consolidation of
the Company with any other Person or an acquisition of any other Person by the
Company, if immediately after such event, an Acquiring Person shall hold more
than 50% of the total Voting Stock of the Company outstanding immediately after
giving effect to such merger, consolidation or acquisition, or, if the Company
shall not be the surviving entity, of the surviving, resulting or continuing
corporation, or (5) during any period of twelve consecutive calendar months,
the date on which individuals who served as Directors on the Company's Board of
Directors on the first day of such period shall cease to constitute a majority
of the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations from time to time promulgated thereunder.
"Company" shall mean Amcast Industrial Corporation, an Ohio
corporation, and any Person who succeeds to all, or substantially all, of the
assets and business of Amcast Industrial Corporation.
"Consolidated Indebtedness" shall mean all Indebtedness of the Company
and its Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Net Earnings" for any period shall mean the net income
of the Company and its Subsidiaries for such period determined in accordance
with GAAP, excluding (a) extraordinary items, and (b) any equity interest of
the Company on the unremitted earnings of any corporation which is not a
Subsidiary.
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"Consolidated Net Worth" shall mean, as of the date of any
determination thereof the amount of the capital stock accounts (net of treasury
stock, at cost) plus (or minus in the case of a deficit) the surplus in
retained earnings of the Company and its Subsidiaries as determined in
accordance with GAAP.
"Consolidated Priority Indebtedness" shall mean the sum of (a)
Indebtedness of the Company secured by any Lien other than Liens permitted by
SECTIONS 5.8(A)(1) through (8), plus (b) all Indebtedness of the Company's
Subsidiaries.
"Consolidated Total Assets" shall mean as of the date of any
determination thereof, total assets of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof, the sum of (a) Consolidated Indebtedness plus (b)
Consolidated Net Worth.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"Environmental Law" shall mean any international, federal, state or
local statute, law, regulation, order, consent decree, judgment, permit,
license, code, covenant, deed restriction, common law, treaty, convention,
ordinance or other requirement relating to public health, safety or the
environment, including, without limitation, those relating to releases,
discharges or emissions to air, water, land or groundwater, to the withdrawal
or use of groundwater, to the use and handling of polychlorinated biphenyls or
asbestos, to the disposal, treatment, storage or management of hazardous or
solid waste, or Hazardous Substances or crude oil, or any fraction thereof, or
to exposure to toxic or hazardous materials, to the handling, transportation,
discharge or release of gaseous or liquid Hazardous Substances and any
regulation, order, notice or demand issued pursuant to such law, statute or
ordinance, in each case applicable to the property of the Company and its
Subsidiaries or the operation, construction or modification of any thereof,
including without limitation, the following: the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and the Hazardous
and Solid Waste Amendments of 1984, the Hazardous Materials Transportation Act,
as amended, the Federal Water Pollution Control Act, as amended by the Clean
Water Act of 1976, the Safe Drinking Water Control Act, the Clean Air Act of
1966, as amended, the Toxic Substances Control Act of 1976, the Emergency
Planning and Community Right-to-Know Act of 1986, the National Environmental
Policy Act of 1975, the Oil Pollution Act of 1990 and any similar or
implementing state law, and any state statute and any further amendments to
these laws providing for financial responsibility
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for cleanup or other actions with respect to the release or threatened release
of Hazardous Substances or crude oil, or any fraction thereof, and all rules,
regulations, guidance documents and publications promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in SECTION 6.1.
"Flagg Brass Division Assets" shall mean the assets of the Company
used to manufacture brass pipe fittings in the operation of the Stanley G.
Flagg Division of the Company located in Stowe, Pennsylvania, which Division is
identified in Item 2 of the Company's August 31, 1994 Form 10-K as a
discontinued operation.
"GAAP" shall mean generally accepted accounting principles at the time.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (a) to purchase such Indebtedness or obligation
or any property or assets constituting security therefor, (b) to advance or
supply funds (1) for the purchase or payment of such Indebtedness or
obligation, or (2) to maintain working capital or any balance sheet or income
statement condition or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation, (c) to lease property
or to purchase Securities or other property or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation of the ability
of the primary obligor to make payment of the Indebtedness or obligation, or
(d) otherwise to assure the owner of the Indebtedness or obligation of the
primary obligor against loss in respect thereof. For the purposes of all
computations made under this Agreement, a Guaranty in respect of any
Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the
principal amount of such Indebtedness for borrowed money which has been
guaranteed, and a Guaranty in respect of any other obligation or liability or
any dividend
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shall be deemed to be Indebtedness equal to the maximum aggregate amount of
such obligation, liability or dividend.
"Hazardous Substance" shall mean any hazardous or toxic material,
substance or waste, pollutant or contaminant which is regulated under any
statute, law, ordinance, rule or regulation of any local, state, regional or
federal authority having jurisdiction over the property of the Company and its
Subsidiaries or its use, including but not limited to any material, substance
or waste which is: (a) defined as a hazardous substance under Section 311 of
the Federal Water Pollution Control Act (33 U.S.C. Section 1317), as amended;
(b) regulated as a hazardous waste under Section 1004 or Section 3001 of the
Federal Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), as amended; (c) defined as a
hazardous substance under Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), as
amended; or (d) defined or regulated as a hazardous substance or hazardous
waste under any rules or regulations promulgated under any of the foregoing
statutes.
"Indebtedness" of any Person shall mean and include all (a)
obligations of such Person for borrowed money or which have been incurred in
connection with the acquisition of property or assets, (b) obligations secured
by any Lien upon property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations,
(c) obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (d) Capitalized Rentals, (e) Guaranties of obligations of
others of the character referred to in this definition and (f) obligations of
such Person in respect of mandatorily redeemable Preferred Stock. Indebtedness
of the Company and its Subsidiaries shall be determined on a consolidated basis
after eliminating intercompany items. In no event shall Indebtedness include
(i) Unfunded Pension Liability of the Plans of the Company and its Subsidiaries
which amount, as of August 31, 1995, is reflected on Schedule II hereto and
(ii) letters of credit given to secure statutory worker's compensation bonds.
"Institutional Holder" shall mean any of the following Persons: (a)
any bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company, (d) any
fraternal benefit society, (e) any pension, retirement or profit-sharing trust
or fund within the meaning of Title I of ERISA or for which any bank, trust
company, national banking association or investment adviser registered under
the Investment Advisers Act of 1940, as amended, is acting as trustee or agent,
(f) any investment company or business development company, as defined in the
Investment Company Act of 1940, as amended, (g) any small business investment
company licensed under the Small Business Investment Act of 1958, as amended,
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(h) any broker or dealer registered under the Securities Exchange Act of 1934,
as amended, or any investment adviser registered under the Investment Advisers
Act of 1940, as amended, (i) any government, any public employees' pension or
retirement system, or any other government agency supervising the investment of
public funds, (j) any other entity all of the equity owners of which are
Institutional Holders or (k) any other Person which may be within the
definition of "qualified institutional buyer" as such term is used in Rule
144A, as from time to time in effect, promulgated under the Securities Act of
1933, as amended.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Company or a Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title to
the property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (a) the aggregate resent value
as of the date of such prepayment or payment of each dollar of principal being
prepaid or paid (taking into account the application of such prepayment or
payment required by SECTION 2.1) and the amount of interest (exclusive of
interest accrued to the date of prepayment or payment) that would have been
payable in respect of such dollar if such prepayment or payment had not been
made, determined by discounting such amounts at the Reinvestment Rate from the
respective dates on which they would have been payable, over (b) 100% of the
principal amount of the outstanding Notes being prepaid or paid. If the
Reinvestment Rate is equal to or higher than 7.09%, the Make-Whole Amount shall
be zero. For purposes of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean (1) the sum of 0.50%, plus the
yield reported on page "USD" of the Bloomberg Financial Markets
Services Screen (or, if not available, any other nationally recognized
trading screen reporting on-line intraday trading in the United States
government Securities) at 11:00 A.M. (Chicago, Illinois time) for the
United States government Securities having a maturity (rounded to the
nearest month) corresponding to the remaining Weighted Average Life to
Maturity of the principal of the Notes being prepaid or paid (taking
into account the application of such prepayment or payment
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required by SECTION 2.1) or (2) in the event that no nationally
recognized trading screen reporting on-line intraday trading in the
United States government Securities is available, Reinvestment Rate
shall mean the sum of 0.50%, plus the arithmetic mean of the yields
for the two columns under the heading "Week Ending" published in the
Statistical Release under the caption "Treasury Constant Maturities"
for the maturity (rounded to the nearest month) corresponding to the
Weighted Average Life to Maturity of the principal of the Notes being
prepaid or paid (taking into account the application of such
prepayment or payment required by SECTION 2.1). If no maturity
exactly corresponds to such Weighted Average Life to Maturity, yields
for the two published maturities most closely corresponding to such
Weighted Average Life to Maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be
interpolated or extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month.
For the purposes of calculating the "Reinvestment Rate", the most
recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve System
and which establishes yields on actively traded U.S. Government
Securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination hereunder,
then such other reasonably comparable index which shall be designated
by the Requisite Holders.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid or paid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then Remaining Dollar-Years of such principal by the aggregate amount
of such principal. The term "Remaining Dollar-Years" of such
principal shall mean the amount obtained by (1) multiplying (i) the
remainder of (A) the amount of principal that would have become due on
each scheduled payment date if such prepayment or payment had not been
made, less (B) the amount of principal on the Notes scheduled to
become due on such date after giving effect to such prepayment or
payment and the application thereof in accordance with the provisions
of SECTION 2.1, by (ii) the number of years (calculated to the nearest
one-twelfth) which will elapse between the date of determination and
such scheduled payment date, and (2) totalling the products obtained
in (1).
"Minority Interests" shall mean any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law) that
are not owned by the Company and/or one or more of its Subsidiaries. Minority
Interests shall be valued by valuing Minority Interests constituting preferred
stock at the voluntary or involuntary liquidating value of such preferred
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stock, whichever is greater, and by valuing Minority Interests constituting
common stock at the book value of capital and surplus applicable thereto
adjusted, if necessary, to reflect any changes from the book value of such
common stock required by the foregoing method of valuing Minority Interests in
Preferred Stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Overdue Rate" shall mean the lesser of (a) the maximum interest rate
permitted by law and (b) the greater of (1) 9.09% per annum and (2) the rate
which Morgan Guaranty Trust Company of New York, New York City, New York,
announces from time to time as its prime lending rate as in effect from time to
time, not to exceed 11%.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
"Plan" shall mean a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to which
the Company or any ERISA Affiliate contributed or is a member or otherwise may
have any liability.
"Purchasers" shall have the meaning set forth in SECTION 1.1.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or a Subsidiary, as lessee or sublessee under
a lease of real or personal property, but shall be exclusive of any amounts
required to be paid by the Company or a Subsidiary (whether or not designated
as rents or additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called "percentage leases"
shall be computed solely on the basis of the minimum rents, if any, required to
be paid by the lessee regardless of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Requisite Holders" shall mean the holders of at least 66-2/3% in
aggregate principal amount of outstanding Notes.
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"Responsible Officer" shall mean the President, the Chief Executive
Officer, the Chief Financial Officer, the Treasurer or any other financial
officer of the Company.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Senior Indebtedness" shall mean and include the Notes and all other
outstanding Indebtedness of the Company which is not expressed to be junior or
subordinate to any other Indebtedness of the Company.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 50% (by number of votes) of the
Voting Stock shall be beneficially owned, directly or indirectly, by such
parent corporation. The term "Subsidiary" shall mean a subsidiary of the
Company.
"Unfunded Pension Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year, determined in accordance
with statement of Financial Accounting Standards No. 35, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all Indebtedness for
borrowed money shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
Section 8.2. Accounting Principles. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in
accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in
this Agreement refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
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SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to be
kept at its principal office a register for the registration and transfer of
the Notes, and the Company will register or transfer or cause to be registered
or transferred, as hereinafter provided, any Note issued pursuant to this
Agreement.
At any time and from time to time the holder of any Note which has
been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the holder of
such Note or its attorney duly authorized in writing. Each holder by its
acceptance of any Note agrees that any transfer of such Note shall be made in
compliance with all applicable Federal and state securities laws.
The Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes of this Agreement.
Payment of or on account of the principal, premium, if any, and interest on any
Note shall be made to or upon the written order of such holder.
Section 9.2. Exchange of Notes. At any time and from time to
time, upon surrender of such Note at its office, the Company will deliver in
exchange therefor, without expense to such holder, except as set forth below, a
Note for the same aggregate principal amount as the then unpaid principal
amount of the Note so surrendered, or Notes in the denomination of $500,000 (or
such lesser amount as shall constitute 100% of the Notes of such holder) or any
amount in excess thereof as such holder shall specify, dated as of the date to
which interest has been paid on the Note so surrendered or, if such surrender
is prior to the payment of any interest thereon, then dated as of the date of
issue, registered in the name of such Person or Persons as may be designated by
such holder, and otherwise of the same form and tenor as the Notes so
surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of
evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss, theft or destruction
upon delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation upon
surrender and cancellation of the Note, the Company will make and deliver
without expense to the holder thereof, a new Note, of like tenor, in lieu of
such lost, stolen, destroyed or mutilated Note. If the Purchaser or any
subsequent Institutional Holder is the owner of any such lost, stolen or
destroyed Note, then the affidavit of an authorized officer of such owner,
setting forth the fact of loss, theft or destruction and of its ownership of
such Note at the time of such loss, theft or
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destruction shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the
Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to
pay directly all of your out-of-pocket expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to the charges and disbursements
of Chapman and Cutler, your special counsel, duplicating and printing costs and
charges for shipping the Notes, adequately insured to you at your home office
or at such other place as you may designate, and all such expenses relating to
any amendments, waivers or consents pursuant to the provisions hereof (whether
or not the same are actually executed and delivered), including, without
limitation, any amendments, waivers, or consents resulting from any work-out,
renegotiation or restructuring relating to the performance by the Company of
its obligations under this Agreement and the Notes. The Company also agrees to
pay, within 10 Business Days of receipt thereof, supplemental statements of
Chapman and Cutler for disbursements unposted or not incurred as of the Closing
Date. The Company further agrees that it will pay and save you harmless
against any and all liability with respect to stamp and other taxes, if any,
which may be payable or which may be determined to be payable in connection
with the execution and delivery of this Agreement or the Notes, whether or not
any Notes are then outstanding. The Company agrees to protect and indemnify
you against any liability for any and all brokerage fees and commissions
payable or claimed to be payable to any Person in connection with the
transactions contemplated by this Agreement. Without limiting the foregoing,
the Company agrees to pay the cost of obtaining the private placement number
for the Notes and authorizes the submission of such information as may be
required by Standard & Poor's CUSIP Service Bureau for the purpose of obtaining
such number.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative.
No delay or failure on the part of the holder of any Note in the exercise of
any power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
Section 9.6. Notices. All communications provided for hereunder
shall be in writing and, if to you, delivered or mailed prepaid by registered
or certified mail or overnight air courier, or by facsimile communication, in
each case addressed to you at your address appearing on Schedule I to this
Agreement or such other address as you or the subsequent holder of any Note
initially issued to you may designate to the Company in writing, and if to the
Company, delivered or mailed by registered or certified mail or overnight air
courier, or by facsimile communication,
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40
to the Company at 7887 Washington Village Drive, Dayton, Ohio 45459,
Attention: Treasurer, or to such other address as the Company may in writing
designate to you or to a subsequent holder of the Note initially issued to you;
provided, however, that a notice to you by overnight air courier shall only be
effective if delivered to you at a street address designated for such purpose
in Schedule I, and a notice to you by facsimile communication shall only be
effective if confirmed by transmission of a copy thereof by prepaid overnight
air courier, or, in either case, as you or a subsequent holder of any Note
initially issued to you may designate to the Company in writing.
Section 9.7. Successors and Assigns. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to your
benefit and to the benefit of your successors and assigns, including each
successive holder or holders of any Notes.
Section 9.8. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes.
Section 9.9. Severability. Should any part of this Agreement
for any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been executed
with the invalid or unenforceable portion thereof eliminated and it is hereby
declared the intention of the parties hereto that they would have executed the
remaining portion of this Agreement without including therein any such part,
parts or portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 9.10. Governing Law. This Agreement and the Notes issued
and sold hereunder shall be governed by and construed in accordance with Ohio
law, including all matters of construction, validity and performance.
Section 9.11. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
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41
The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one agreement.
AMCAST INDUSTRIAL CORPORATION
By
Its
Accepted as of November __, 1995.
[VARIATION]
By
Its
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42
NAME AND ADDRESSES
AMOUNTS OF
OF PURCHASERS
- ------------------
COMMITMENTS
-----------
THE NORTHWESTERN MUTUAL LIFE $25,000,000
INSURANCE COMPANY
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Telecopier Number: (414) 299-7124
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Amcast Industrial Corporation, 7.09% Senior Notes due November 7, 2005, PPN
023395 A@5, principal or interest") to:
Bankers Trust Company (ABA #0210-01033)
One Bankers Trust Plaza
New York, New York 10005
for credit to: The Northwestern Mutual Life Insurance Company
Account Number 00-000-027
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
to be addressed, Attention: Treasurer's Department/Securities Operations.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-0509570
Schedule I
(to Note Agreement)
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43
NAME AND ADDRESSES
AMOUNTS OF
OF PURCHASERS
- ------------------
COMMITMENT
----------
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY $25,000,000
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department-Securities Division
Regarding Bond Number OBI *07*S*60557@
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Amcast Industrial Corporation, 7.09% Senior Notes due November 7, 2005, PPN
023395 A@5, Bond Number OBI *07*S*60557@, principal, premium or interest") to:
ABA No. 073000228
Norwest Bank Iowa, N.A.
Des Moines, Iowa 50309
For credit to:
A. In the case of the Note originally issued in the denomination of
$21,000,000:
Principal Mutual Life Insurance Company
Account No. 014752
B. In the case of the Note originally issued in the denomination of
$4,000,000:
Principal Mutual Life Insurance Company
Account No. 032395
Notices
All notices concerning payment on or in respect of the Notes, to:
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44
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Department--Accounting & Treasury
Telefacsimile: (515) 247-5930
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 42-012-7290
I-44
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DESCRIPTION OF INDEBTEDNESS, LEASES
AND UNFUNDED PENSION LIABILITY
1. Indebtedness (other than Capitalized Rentals) and Liens related
thereto of the Company and its Subsidiaries outstanding on the Closing
Date is as follows:
OBLIGATION PRINCIPAL FINAL COLLATERAL
AMOUNT MATURITY
2. Capitalized Leases of the Company and its Subsidiaries outstanding on
the Closing Date are as follows:
3. Unfunded Pension Liability of Plans of the Company and its
Subsidiaries as of August 31, 1995 is as follows:
None
SCHEDULE II
(to Note Agreement)
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46
SUBSIDIARIES OF THE COMPANY
PERCENTAGE OF VOTING STOCK OWNED BY
COMPANY & EACH OTHER SUBSIDIARY
JURISDICTION OF INCORPORATION
NAME OF SUBSIDIARY
Amcast Aviation Corporation Ohio 100%
Amcast Industrial Limited Ontario, Canada 100%
Elkhart Products Corporation Indiana 100%
WheelTek Inc. Indiana 100%
Amcast Industrial Investment Corporation Delaware 100%
Amcast Industrial Financial Services, Inc. Ohio 100%
Amcast Industrial Sales Corporation U.S. Virgin Islands 100%
Amcast Automotive, Inc. Michigan 100%
Casting Technology Company Indiana General Partnership Partnership:
------------
Amcast (ACT) - 60%
Izumi - 40%
Amcast Casting Technologies, Inc. Indiana 100%
SCHEDULE II
(to Note Agreement)
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47
USE OF PROCEEDS
Amcast's issuance of the Notes will be used to support the Company's
capital investments in new plants, expansions of existing plants, new products
development and program launches, as well as for other general corporate and
business purposes.
SCHEDULE III
(to Note Agreement)
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48
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED. THIS NOTE MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER SAID ACT OR
IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
AMCAST INDUSTRIAL CORPORATION
7.09% Senior Note
Due November 7, 2005
No.
____________, ____
$
PPN 023395 A@5
AMCAST INDUSTRIAL CORPORATION, an Ohio corporation (the "Company"),
for value received, hereby promises to pay to
or registered assigns
on the seventh day of November, 2005
the principal amount of
DOLLARS ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at
the rate of 7.09% per annum from the date hereof until maturity, payable
quarterly on the seventh day of February, May, August and November in each year
(commencing on February 7, 1996) and at maturity. The Company agrees to pay
interest on overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the Overdue Rate after
the due date, whether by acceleration or otherwise, until paid. "Overdue Rate"
shall mean the lesser of (a) the maximum interest rate permitted by law and (b)
the greater of (1) 9.09% per annum and (2) the rate which Morgan Guaranty Trust
Company of New York, New York City, New York, announces from time to time as
its prime lending rate as in effect from time to time, not to exceed 11%.
EXHIBIT A
(to Note Agreement)
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49
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Dayton, Ohio in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts. If any amount of principal, premium,
if any, or interest on or in respect of this Note becomes due and payable on
any date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means any day other than a
Saturday, Sunday or other day on which banks in Dayton, Ohio or Chicago,
Illinois are required by law to close or are customarily closed.
This Note is one of the 7.09% Senior Notes due November 7, 2005 (the
"Notes") of the Company in the aggregate principal amount of $50,000,000 issued
or to be issued under and pursuant to the terms and provisions of the separate
Note Agreements, each dated as of November 1, 1995 (the "Note Agreements"),
entered into by the Company with the original Purchasers therein referred to
and this Note and the holder hereof are entitled equally and ratably with the
holders of all other Notes outstanding under the Note Agreements to all the
benefits provided for thereby or referred to therein. Reference is hereby made
to the Note Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the terms
and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the Company
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and interest
on this Note shall be made only to or upon the order in writing of the
registered holder.
This Note and said Note Agreements are governed by and construed in
accordance with the laws of Ohio, including all matters of construction,
validity and performance.
AMCAST INDUSTRIAL CORPORATION
A-49
193
50
By
Its
A-50
194
51
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Subsidiaries. Schedule II attached to the Agreements states
the name of each of the Company's Subsidiaries, its jurisdiction of
incorporation and the percentage of its Voting Stock owned by the Company
and/or its Subsidiaries. The Company and each Subsidiary has good and
marketable title to all of the shares it purports to own of the stock of each
Subsidiary, free and clear in each case of any Lien. All such shares have been
duly issued and are fully paid and non-assessable.
2. Corporate Organization and Authority. The Company, and each
Subsidiary,
(a) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all
necessary licenses and permits to own and operate its properties and
to carry on its business as now conducted and as presently proposed to
be conducted; and
(c) is duly licensed or qualified and is in good standing
as a foreign corporation in each jurisdiction wherein the nature of
the business transacted by it or the nature of the property owned or
leased by it makes such licensing or qualification necessary.
3. Financial Statements. (a) The consolidated statements of
financial condition of the Company and its consolidated Subsidiaries as of
August 31 in each of the years 1990 to 1994, both inclusive, and the statements
of operations and retained earnings and cash flows for the fiscal years ended
on said dates, each accompanied by a report thereon containing an opinion
unqualified as to scope limitations imposed by the Company and otherwise
without qualification except as therein noted, by Ernst & Young LLP, have been
prepared in accordance with GAAP consistently applied except as therein noted,
are correct and complete and present fairly the financial position of the
Company and its consolidated Subsidiaries as of such dates and the results of
their operations and changes in their cash flows for such periods. The
unaudited consolidated statements of financial condition of the Company and its
consolidated Subsidiaries as of May 28, 1995, and the unaudited statements of
operations and retained earnings and cash flows for the nine-month period ended
on said date prepared by the Company have been prepared in accordance with GAAP
consistently applied, are correct and complete and present fairly the financial
position of the Company and its consolidated Subsidiaries as of said date and
the results of their operations and changes in their cash flows for such
period.
EXHIBIT B
(to Note Agreement)
195
52
(b) Since August 31, 1994, there has been no change in the
condition, financial or otherwise, of the Company and its consolidated
Subsidiaries as shown on the consolidated balance sheet as of such date except
changes in the ordinary course of business, none of which individually or in
the aggregate has been materially adverse.
4. Indebtedness, Liens and Unfunded Pension Liability. Schedule
II attached to the Agreements correctly describes all Indebtedness of the
Company and its Subsidiaries and Liens related thereto and all Capitalized
Leases of the Company and its Subsidiaries outstanding on the Closing Date and
the Unfunded Pension Liability of Plans of the Company and its Subsidiaries.
5. Full Disclosure. Neither the financial statements referred to
in paragraph 3 hereof, nor the Agreements, or any other written statement
furnished by the Company to you in connection with the negotiation of the sale
of the Notes, contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein or herein not
misleading. There is no fact peculiar to the Company or its Subsidiaries which
the Company has not disclosed to you in writing which materially affects
adversely nor, so far as the Company can now foresee, will materially affect
adversely the properties, business, prospects, profits or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a whole.
6. Pending Litigation. Except as disclosed in Annex 1 hereto,
there are no proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary in any court or
before any governmental authority or arbitration board or tribunal which
involve the possibility of materially and adversely affecting the properties,
business, prospects, profits or condition (financial or otherwise) of the
Company and its Subsidiaries.
7. Title to Properties. The Company and each Subsidiary has good
and marketable title in fee simple (or its equivalent under applicable law) to
all material parcels of real property and has good title to all the other
material items of property it purports to own, including that reflected in the
most recent statements of financial condition referred to in paragraph 3
hereof, except as sold or otherwise disposed of in the ordinary course of
business and except for Liens permitted by the Agreements.
8. Patents and Trademarks. The Company and each Subsidiary owns
or possesses all the patents, trademarks, trade names, service marks,
copyrights, licenses and rights with respect to the foregoing necessary for the
present and planned future conduct of its business, without any known conflict
with the rights of others other than the patent matter described in Annex 1
hereto.
B-52
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53
9. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreements and the
Notes --
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any
order of any court or governmental authority or agency and will not
conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute a default under, the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or result in the imposition of any Liens or encumbrances
on any property of the Company; and
(c) have been duly authorized by proper corporate action
on the part of the Company (no action by the stockholders of the
Company being required by law, by the Articles of Incorporation or
By-laws of the Company or otherwise), executed and delivered by the
Company and the Agreements and the Notes constitute the legal, valid
and binding obligations, contracts and agreements of the Company
enforceable in accordance with their respective terms.
10. No Defaults. No Default or Event of Default has occurred and
is continuing. The Company is not in default in the payment of principal or
interest on any Indebtedness for borrowed money and is not in default under any
instrument or instruments or agreements under and subject to which any
Indebtedness for borrowed money has been issued and no event has occurred and
is continuing under the provisions of any such instrument or agreement which
with the lapse of time or the giving of notice, or both, would constitute an
event of default thereunder.
11. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of the
Agreements or the issuance, sale or delivery of the Notes or compliance by the
Company with any of the provisions of the Agreements or the Notes.
12. Taxes. All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective properties, income or franchises,
which are shown to be due and payable in such returns have been paid. For all
taxable years ending on or before August 31, 1991, the Federal income tax
liability of the Company and its Subsidiaries has been satisfied and either the
period of limitations on assessment of additional Federal income tax has
expired or the Company and its Subsidiaries have entered into an agreement with
the Internal Revenue Service closing conclusively the total tax liability for
the taxable year. The Company does not know of any proposed additional tax
assessment against
B-53
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54
it for which adequate provision has not been made on its accounts, and no
material controversy in respect of additional Federal or state income taxes due
since said date is pending or to the knowledge of the Company threatened. The
provisions for taxes on the books of the Company and each Subsidiary are
adequate for all open years, and for its current fiscal period.
13. Use of Proceeds. The net proceeds from the sale of the Notes
will be used for capital expansion as described in Schedule III attached to the
Agreement and for other corporate purposes. None of the transactions
contemplated in the Agreements (including, without limitation thereof, the use
of proceeds from the issuance of the Notes) will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or
any regulation issued pursuant thereto, including, without limitation,
Regulations G, T and X of the Board of Governors of the Federal Reserve System,
12 C.F.R., Chapter II. Neither the Company nor any Subsidiary owns or intends
to carry or purchase any "margin stock" within the meaning of said Regulation
G. None of the proceeds from the sale of the Notes will be used to purchase,
or refinance any borrowing the proceeds of which were used to purchase, any
"security" within the meaning of the Securities Exchange Act of 1934, as
amended.
14. Private Offering. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered or will offer the Notes or
any similar Security to or has solicited or will solicit an offer to acquire
the Notes or any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the Notes or any similar
Security with any Person other than the Purchasers and not more than 13 other
institutional investors, each of whom was offered a portion of the Notes at
private sale for investment. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Notes or any similar
Security to or has solicited or will solicit an offer to acquire the Notes or
any similar Security from any Person so as to bring the issuance and sale of
the Notes within the provisions of Section 5 of the Securities Act of 1933, as
amended.
15. ERISA. The consummation of the transactions provided for in
the Agreements and compliance by the Company with the provisions thereof and
the Notes issued thereunder will not involve any prohibited transaction within
the meaning of ERISA or Section 4975 of the Code. Each Plan complies in all
material respects with all applicable statutes and governmental rules and
regulations, and (a) no Reportable Event has occurred and is continuing with
respect to any Plan, (b) neither the Company nor any ERISA Affiliate has
withdrawn from any Plan or Multiemployer Plan or instituted steps to do so, and
(c) no steps have been instituted to terminate any Plan. No condition exists
or event or transaction has occurred in connection with any Plan which could
result in the incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty. No Plan maintained by the Company or any ERISA
Affiliate, nor any trust created thereunder, has incurred any "accumulated
funding deficiency" as defined in Section 302 of ERISA nor does the present
value of all benefits vested under all Plans exceed, as of the last
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annual valuation date, the value of the assets of the Plans allocable to such
vested benefits. Neither the Company nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement "welfare benefit plan"
(as such term is defined in ERISA) except as has been disclosed to the
Purchasers.
16. Compliance with Law. (a) Neither the Company nor any
Subsidiary (1) is in violation of any law, ordinance, franchise, governmental
rule or regulation to which it is subject; or (2) has failed to obtain any
license, permit, franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business, which violation or
failure to obtain would materially affect adversely the business, prospects,
profits, properties or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole, or impair the ability of the Company to
perform its obligations contained in the Agreements or the Notes. Neither the
Company nor any Subsidiary is in default with respect to any order of any court
or governmental authority or arbitration board or tribunal.
(b) Without limiting the provisions of clause (a) of this
paragraph 16, except as disclosed in Annex 2 hereto, the Company is in
compliance with all applicable Environmental Laws, the failure to comply with
which would materially affect adversely the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole or the ability of the Company to perform its
obligations under the Agreements or the Notes.
17. Investment Company Act. The Company is not, and is not
directly or indirectly controlled by or acting on behalf of any Person which
is, required to register as an "investment company" under the Investment
Company Act of 1940, as amended.
18. Foreign Assets Control Regulations, etc. Neither the Company
nor any Affiliate of the Company is, by reason of being a "national" of
"designated foreign country" or a "especially designated national" within the
meaning of the Regulations of the Office of Foreign Assets Control, United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or for any other
reason, subject to any restriction or prohibition under, or is in violation of,
any Federal statute or Presidential Executive Order, or any rules or
regulations of any department, agency or administrative body promulgated under
any such statute or order, concerning trade or other relations with any foreign
country or any citizen or national thereof or the ownership or operation of any
property.
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DESCRIPTION OF LITIGATION
[TO BE PROVIDED BY THE COMPANY]
ANNEX 1
(to Exhibit B)
200
57
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by SECTION 4.1 of the Note Agreements, shall be dated
the Closing Date and addressed to the Purchasers, shall be satisfactory in form
and substance to the Purchasers and shall be to the effect that:
1. The Company is a corporation, validly existing and in
good standing under the laws of the State of Ohio and has the
corporate power and the corporate authority to execute and deliver the
Note Agreements and to issue the Notes.
2. The Note Agreements have been duly authorized by all
necessary corporate action on the part of the Company, have been duly
executed and delivered by the Company and constitute the legal, valid
and binding contracts of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under
the circumstances contemplated by the Note Agreements does not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinions
of Denis G. Daly, Esq. and Reinhart, Boerner, Van Deuren, Norris & Rieselbach,
P.C. are satisfactory in scope and form to Chapman and Cutler and that, in
their opinion, the Purchasers are justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely solely upon an examination of the Articles of Incorporation
certified by, and a certificate of good standing of the Company from, the
Secretary of State of the State of Ohio, the By-laws of the
Exhibit C
(to Note Agreement)
201
58
Company and the General Corporation Law of the State of Ohio. The opinion of
Chapman and Cutler is limited to the laws of the State of Illinois, the General
Corporation Law of the State of Ohio and the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials and
officers of the Company.
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59
DESCRIPTION OF CLOSING OPINIONS OF COUNSEL TO THE COMPANY
The closing opinions of Denis G. Daly, Esq., General Counsel of the
Company, and Reinhart Boerner, Van Deuren, Norris & Rieselbach, P.C., special
counsel for the Company, which are called for by SECTION 4.1 of the Note
Agreements, shall be dated the Closing Date and addressed to the Purchasers,
shall be satisfactory in scope and form to the Purchasers and, taken together,
shall be to the effect that:
1. The Company is a corporation, duly incorporated,
validly existing and in good standing under the laws of the State of
Ohio, has the corporate power and the corporate authority to execute
and perform the Note Agreements and to issue the Notes and has the
full corporate power and the corporate authority to conduct the
activities in which it is now engaged and is duly licensed or
qualified and is in good standing as a foreign corporation in each
jurisdiction in which the character of the properties owned or leased
by it or the nature of the business transacted by it makes such
licensing or qualification necessary.
2. Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly licensed or qualified and is
in good standing in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary and
all of the issued and outstanding shares of capital stock of each such
Subsidiary have been duly issued, are fully paid and non-assessable
and are owned by the Company, by one or more Subsidiaries, or by the
Company and one or more Subsidiaries.
3. Each Note Agreement has been duly authorized by all
necessary corporate action on the part of the Company, has been duly
executed and delivered by the Company and constitutes the legal, valid
and binding contract of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally, and general
principles of equity
EXHIBIT D
(to Note Agreement)
203
60
(regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
5. No approval, consent or withholding of objection on
the part of, or filing, registration or qualification with, any
governmental body, Federal, state or local, is necessary in connection
with the execution, delivery and performance of the Note Agreements or
the Notes.
6. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Agreements do not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of
any Lien upon any of the property of the Company pursuant to the
provisions of the Articles of Incorporation or By-laws of the Company
or any agreement or other instrument known to such counsel to which
the Company is a party or by which the Company may be bound.
7. The issuance, sale and delivery of the Notes under
the circumstances contemplated by the Note Agreements does not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
8. The issuance of the Notes and the use of the proceeds
of the sale of the Notes in accordance with the provisions of and
contemplated by the Note Agreements do not violate or conflict with
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
9. There is no litigation pending or, to the best
knowledge of such counsel, threatened which in such counsel's opinion
could reasonably be expected to have a materially adverse effect on
the Company's business or assets or which would impair the ability of
the Company to issue and deliver the Notes or to comply with the
provisions of the Note Agreements.
The opinions of Denis G. Daly, Esq. and Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, P.C. shall cover such other matters relating to the sale
of the Notes as the Purchasers may reasonably request. With respect to matters
of fact on which such opinions are based, such counsel shall be entitled to
rely on appropriate certificates of public officials and officers of the
Company. The opinion of Denis G. Daly, Esq. shall state that Chapman and
Cutler may rely on such opinion for all matters of Ohio Law.
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