EXHIBIT 4.9
XXXXXX GROUP INC.
000 XXXX XXXXXX
XXXXXXX, XXXXXXXXXXX 00000
NOTE PURCHASE AGREEMENT
$25,OOO,OOO
7.13% SENIOR NOTES DUE DECEMBER 5, 2005
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
As of December 1, 1995
Dear Sirs:
Xxxxxx Group Inc. (the "Company"), a Delaware corporation, hereby
agrees with you as follows:
SECTION 1. PURCHASE AND SALE OF NOTES.
1.1 Issue of Notes.
The Company will issue $25,000,000 in aggregate principal
amount of its 7.13% Senior Notes due December 5, 2005 (herein
called the "Notes"), Each Note will bear interest on the unpaid
principal balance thereof from the date of the Note at the rate
of 7.13% per annum, payable semi-annually on the fifth day of
June and the fifth day of December in each year, commencing with
the payment date next succeeding the date of the Note, until the
principal amount shall be due and payable, and will bear
interest, payable on demand, on any overdue payment (including
any overdue prepayment) of principal or premium and (to the
extent permitted by law) on any overdue payment of interest at a
fluctuating rate per annum, to be adjusted daily, equal to the
greater of (a) the rate announced publicly by Citibank, N.A. in
New York, New York from time to time as its prime rate and (b)
9.13% per annum (but in no event higher than the maximum rate
permitted by law); and will mature on December 5, 2005. The
Notes will be registered notes in the form set out in Exhibit B.
1.2 The Closing.
The Company agrees to sell to you and you agree to purchase
from the Company, in accordance with the provisions of this
Agreement, the principal amount of the Notes set forth opposite
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your name on Exhibit A hereto at 100% of the principal amount
thereof.
The closing of your purchase shall be held at 9:00 a.m. on
December 5, 1995 ("Closing Date") at the office of CIGNA
Investments, Inc., Xxxxxxxxxx, Xxxxxxxxxxx 00000. At the closing
the Company will deliver to you, unless you otherwise request, a
single Note in the principal amount of your purchase, dated the
Closing Date and payable to you, or your nominee, as set forth in
Exhibit A, against payment in immediately available funds.
1.3 Purchase for Investment.
You represent to the Company that you are purchasing the
Notes for investment for your own account and the account of your
affiliated entities and with no present intention of distributing
or reselling the Notes or any part thereof to anyone other than
an affiliated entity, but without prejudice, however, to your
right at all times to sell or otherwise dispose of all or any
part of the Notes under a registration under the Securities Act
of 1933, as amended, or under a registration exemption available
under that Act. It is understood that, in making the
representations set out in Sections 2.9 and 2.11, the Company is
relying, to the extent applicable, upon your representation as
aforesaid.
1.4 Failure to Deliver.
If, at the closing, the Company fails to tender to you the
Notes to be purchased by you or if the conditions specified in
Section 3 have not been fulfilled, you may thereupon elect to be
relieved of all further obligations under this Agreement.
Nothing in this Section shall operate to relieve the Company from
any of its obligations hereunder or to waive any of your rights
against the Company.
1.5 Expenses; Issue Taxes.
Whether or not the Notes are sold, the Company will pay all
expenses relating to this Agreement, including but not limited
to:
(a) the cost of reproducing this Agreement and the Notes;
(b) the reasonable fees and disbursements of your special
counsel, if any, and of your in-house counsel;
(c) your out-of-pocket expenses;
(d) the cost of delivering to or from your home office,
insured to your satisfaction, the Notes purchased by
you at the closing, any Note surrendered by you to the
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Company pursuant to this Agreement and any Note issued
to you in substitution or replacement for a
surrendered Note;
(e) the cost of obtaining the Private Placement Number
referred to in Section 3.6;
(f) all expenses, including attorneys, fees, relating to
any amendments or waivers pursuant to the provisions
hereof; and
(g) all costs and expenses, including attorneys' fees,
incurred by the holder of any Note in enforcing any
rights under this Agreement or the Notes or in
responding to any subpoena or other legal process
issued in connection with this Agreement or the
transactions contemplated hereby, including without
limitation, costs and expenses incurred in any
bankruptcy case.
The Company will pay all taxes in connection with the
issuance and sale of the Notes and in connection with any
modification of the Notes and will save you harmless against any
and all liabilities with respect to such taxes. The obligations
of the Company under this Section 1.5 shall survive the payment
of the Notes and the termination of this Agreement.
SECTION 2. WARRANTIES AND REPRESENTATIONS
The Company warrants and represents to you as of the date hereof
that:
2.1 Subsidiaries.
Exhibit C to this Agreement correctly identifies (i) each of
the Company's active Subsidiaries (indicating which Subsidiaries
are Domestic Subsidiaries), its jurisdiction of incorporation and
the percentage of its voting stock owned by the Company and each
other Subsidiary and (ii) each of the Company's Affiliates (other
than Subsidiaries) which is a corporation or partnership or which
is a holder of 5% or more of the voting stock of the Company and
the nature of the affiliation. The Company and each Subsidiary
is the legal and beneficial owner of all of the shares of voting
stock it purports to own 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.
2.2 Corporate Organization and Authority.
The Company, and each Subsidiary,
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(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, permits, franchises and other
governmental authorizations to own and operate its
Properties and to carry on its business as now
conducted and as presently proposed to be conducted,
and
(c) has duly qualified and is authorized to do business
and in good standing as a foreign corporation in each
jurisdiction where the character of its Properties or
the nature of its activities makes such qualification
necessary and where the failure to be so qualified
would have a material adverse effect on the Company's
or Subsidiary's business or financial position.
2.3 Business, Property, Indebtedness and Liens.
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 filed by the Company with the
Securities and Exchange Commission and previously delivered to
you correctly describes the general nature of the business and
principal Properties of the Company and its Subsidiaries.
(b) Exhibit C correctly lists all outstanding Indebtedness
for borrowed money (including all Capitalized Leases) of, and all
Liens (other than those (x) permitted by clauses (i) - (v) of
Section 7.6(a) and (y) those on Property which individually does
not have a Fair Market Value in excess of $500,000 and which,
when aggregated with other Property subject to Liens not included
pursuant to this clause (y), does not have a Fair Market Value in
excess of $2,000,000) on Property of, the Company and its
Subsidiaries as of September 30, 1995. Neither the Company nor
any Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of
its Property, whether now owned or hereafter acquired, to be
subject to a Lien not permitted by Section 7.6(a).
2.4 Financial Statements.
(a) The consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of December 31 in the years 1991,
1992, 1993, and 1994 and the related statements of income,
retained earnings and changes in financial position or cash flows
for the fiscal years ended on such dates, all accompanied by
reports thereon containing opinions without qualification, except
as therein noted, by Ernst & Young or by Price, Waterhouse,
L.L.P., independent certified public accountants, and the
consolidated balance sheets of the Company and its Consolidated
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Subsidiaries as of June 30, 1995 and as of September 30, 1995, if
the representation is being made as of the Date of Closing, and
the related statements of income, retained earnings and cash
flows for the 6-month or 9-month period, as appropriate, then
ended, certified by the Company's chief financial officer or
chief accounting officer, have been prepared in accordance with
generally accepted accounting principles consistently applied,
and present fairly the financial position of the Company and its
Consolidated Subsidiaries as of such dates and the results of
their operations for such periods, provided, however, that the
1995 financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
statements.
(b) Since December 31, 1994 there have been no materially
adverse changes in the Properties, business, prospects, profits
or financial condition of the Company or the Company and its
Subsidiaries taken as a whole.
2.5 Full Disclosure.
The financial statements referred to in Section 2.4 do not,
nor does this Agreement nor the other written materials described
in Exhibit F furnished to you by the Company contain any untrue
statement of a material fact or omit a material fact necessary to
make the statements contained therein or herein not misleading.
There is no agreement, restriction or other factual matter
which the Company has not disclosed to you in writing which so
far as the Company can now reasonably foresee, will have a
material adverse impact on the long-term financial condition or
prospects of the Company and its Subsidiaries or the ability of
the Company to perform this Agreement.
2.6 Pending Litigation; Compliance with Law.
There are no proceedings or investigations pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any Subsidiary in or before any court, governmental
authority or agency or arbitration board or tribunal which, so
far as the Company can now reasonably foresee, individually or in
the aggregate, will have a material adverse impact on the long-
term financial condition or prospects of the Company and its
Subsidiaries, or would impair the ability of the Company to
perform this Agreement. Neither the Company nor any Subsidiary
is in default with respect to any order of any court,
governmental authority or agency or arbitration board or tribunal
or in violation of any laws or governmental rules or regulations
where, so far as the Company can now reasonably foresee, such
default or violation will have a material adverse impact on the
long-term financial condition or prospects of the Company and its
Subsidiaries, or the ability of the Company to perform this
Agreement.
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2.7 Title to Properties.
Except where the failure to possess good and marketable
title in fee simple or good title, as the case may be, would not
have a material adverse impact on the Company or on the Company
and its Subsidiaries taken as a whole, the Company, and each
Subsidiary, has good and marketable title in fee simple (or its
equivalent under applicable law) to all the real Property, and
has good title to all the other Property, it purports to own,
including that reflected in the most recent balance sheet
referred to in Section 2.4 (except as sold or otherwise disposed
of in the ordinary course of business), free from Liens not
permitted by Section 7.6(a).
2.8 Patents and Trademarks.
The Company, and each Subsidiary, owns or possesses all the
patents, trademarks, service marks, trade names, copyrights,
licenses and rights with respect to the foregoing necessary for
the present and planned future conduct of its business, without
any conflict with the rights of others known by Senior
Management.
2.9 Sale is Legal and Authorized.
The sale of the Notes by the Company and compliance by the
Company and each Subsidiary with all of the provisions of this
Agreement and of the Notes:
(a) have been duly authorized and are within the corporate
powers of the Company and each Subsidiary; and
(b) are legal and will not conflict with, constitute a
violation of, or result in the creation of any Lien
upon any Property of the Company or any Subsidiary
under the provisions of, any agreement, charter
instrument, by-law or other instrument to which the
Company or any Subsidiary is a party or by which any
of them or their respective Properties may be bound.
The Company is not a party to any agreement, or subject to
any charter or other corporate restriction, which restricts its
right or ability to incur Indebtedness, other than this Agreement
and the agreements listed on Exhibit C.
2.10 No Defaults.
No event has occurred and no condition exists which, upon
the issue of the Notes, would constitute a Default or an Event of
Default. The Company is not in violation (whether or not
temporarily waived) of any term of any certificate of
incorporation or by-law and neither the Company nor any
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Subsidiary is in default under any agreement or other instrument
with respect to borrowed money. Neither the Company nor any
Subsidiary is in violation of any term of any other agreement or
instrument to which it is a party or by which it or any of its
Property may be bound which violation, individually or in the
aggregate with other violations, will have a materially adverse
impact on the long-term business or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
2.11 Governmental Consent.
Neither the nature of the Company or of any Subsidiary, or
of any of their respective businesses or Properties, nor any
relationship between the Company or any Subsidiary and any other
Person, nor any circumstance in connection with the offer, issue,
sale or delivery of the Notes or the execution, delivery and
performance of this Agreement is such as to require a consent,
approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of the
Company or any Subsidiary in connection with the execution,
delivery and performance of this Agreement or the offer, issue,
sale or delivery of the Notes.
2.12 Taxes.
Consolidated Federal income tax returns for the Company and
its Domestic Subsidiaries have been examined by the Internal
Revenue Service for all years up to and including the year ended
December 31, 1989. The Company and each of its Subsidiaries have
filed or caused to be filed all Federal, state and local tax
returns which, to the knowledge of Senior Management are required
to be filed and have paid or caused to be paid all taxes as shown
on such returns or on any assessment received by it or by any of
them, to the extent that such taxes have become due, except any
such tax or assessment the validity of which is being contested
in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as appropriate, has set aside
on its books adequate reserves to the extent the Company or any
Subsidiary and a nationally recognized independent certified
public accountant believes such reserves are necessary. To the
extent that the Company in good faith believes is necessary, the
Company and its Subsidiaries have set up reserves which are
believed by the Company to be adequate for the payment of
additional taxes. All assessed deficiencies resulting from
examinations by the Internal Revenue Service up to and including
the year ended December 31, 1989 have been discharged, reserved
against or will not impair the Company's ability to repay the
Loans.
PAGE 7
2.13 Use of Proceeds.
The Company will apply the proceeds from the sale of the
Notes to refinance outstanding Indebtedness for borrowed money.
None of the transactions contemplated in this Agreement
(including, without limitation thereof, the use of the proceeds
from the sale of the Notes) will violate or result in a violation
of Section 7 of the Securities Exchange Act of 1934, as amended,
or any regulations 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.
2.14 Private Offering.
The Company has not offered any of the Notes or any similar
Security of the Company for sale to, or solicited offers to buy
any thereof from, or otherwise approached or negotiated with
respect thereto with, any prospective purchaser, other than the
purchasers of the Notes and not more than five (5) other
institutional investors, each of whom was offered all or a
portion of the Notes at private sale for investment. The Company
agrees that neither the Company nor anyone acting on its behalf
will offer the Notes or any part thereof or any similar
Securities for issue or sale to, or solicit any offer to acquire
any of the same from, anyone so as to bring the issuance and sale
of the Notes within the provisions of Section 5 of the Securities
Act of 1933, as amended.
2.15 ERISA.
(a) Relationship of Vested Benefits to Pension Plan Assets.
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The present aggregate value of all benefits vested under all
qualified "defined benefit pension plans", as such term is defined
in Section 3 of ERISA, maintained by the Company and its Related
Persons, or in which employees of the Company or any Related
Person are entitled to participate, as from time to time in effect
(herein called the "Pension Plans"), did not, as of January 1,
1994, the last annual valuation date, exceed the actuarial or
market value of the assets of the Pension Plans allocable to such
vested benefits.
(b) Prohibited Transactions. Neither the Company or any
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Related Person nor any of the Pension Plans nor any trusts
created thereunder, nor any trustee or administrator thereof, has
engaged in a "prohibited transaction", as such term is defined in
Section 4975 of the Internal Revenue Code of 1986, as amended, or
described in Section 406 of ERISA, which could subject the
Company, any Related Person, any of the Pension Plans, any such
trust, or any trustee or administrator thereof, or any party
dealing with the Pension Plans or any such trust to the tax or
penalty on prohibited transactions imposed by said Section 4975
or by Section 502(i) of ERISA.
PAGE 8
(c) Reportable Events. Since December 31, 1986, neither
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any of the Pension Plans nor any such trusts have been
terminated, nor have there been any "reportable events", as that
term is defined in Section 4043 of ERISA, since the effective
date of ERISA.
(d) Accumulated Funding Deficiency. Neither any of the
------------------------------
Pension Plans nor any such trusts have incurred any "accumulated
funding deficiency", as such term is defined in Section 302 of
ERISA (whether or not waived), since the effective date of ERISA.
2.16 Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor
its use of the proceeds thereof will violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.
2.17 Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, the
Interstate Commerce Act, as amended, or the Federal Power Act, as
amended.
2.18 Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding
has been instituted raising any claim against the Company or any
of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of
any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a material adverse effect on
the Company or the Company and its Subsidiaries taken as a whole.
Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge
of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or
operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be
expected to result in a material adverse effect on the
Company or the Company and its Subsidiaries taken as a
whole;
PAGE 9
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by any of them and has
not disposed of any Hazardous Materials in a manner contrary
to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a material adverse
effect on the Company or the Company and its Subsidiaries
taken as a whole; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries
are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to
result in a material adverse effect on the Company or the
Company and its Subsidiaries taken as a whole.
SECTION 3. CLOSING CONDITIONS
Your obligation to purchase and pay for the Notes to be delivered
to you at the closing shall be subject to the following
conditions precedent:
3.1 Opinions of Counsel.
You shall have received from Xxxx X. Xxxxxx, Esq., Senior
Vice President/Finance and Law of the Company, the closing
opinion described in Exhibit D and at your option from your
counsel stating that the opinion from Company counsel is
satisfactory in scope and form and that, in their opinion, you
are justified in relying thereon.
3.2 Warranties and Representations True as of Closing Date.
(a) The warranties and representations contained in
Section 2 shall (except as affected by transactions contemplated
by this Agreement) be true in all material respects on the
Closing Date with the same effect as though made on and as of
that date.
(b) Neither the Company nor any Subsidiary shall have
taken any action or permitted any condition to exist which would
have been prohibited by Section 7 if such Section had been
binding and effective at all times during the period from
December 31, 1994 to and including the Closing Date.
3.3 Compliance with this Agreement.
The Company shall have performed and complied with all
agreements and conditions contained herein which are required to
be performed or complied with by the Company before or at the
closing.
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3.4 Officers' Certificate.
You shall have received a certificate dated the Closing Date
and signed by the President or a Vice President and the Treasurer
or an Assistant Treasurer of the Company, certifying that the
conditions specified in Sections 3.2 and 3.3 have been fulfilled.
3.5 Proceedings Satisfactory.
All proceedings taken in connection with the sale of the
Notes and all documents and papers relating thereto shall be
satisfactory to you and your counsel. You and your counsel shall
have received copies of such documents and papers as you or they
may reasonably request in connection therewith or as a basis for
your counsel's closing opinion, if any, all in form and substance
satisfactory to you and your counsel.
3.6 Private Placement Number.
The Company shall have obtained from Standard & Poor's
Corporation and provided to you a Private Placement Number for
the Notes.
3.7 Legal Investment.
Each Note to be purchased by you shall qualify as a legal
investment for life insurance companies under the New York
Insurance Law and any other law applicable to you (other than
under any "basket" or leeway provisions thereof), and the Company
shall have delivered to you such officer's certificates or other
evidence as you may request to establish compliance with this
condition.
SECTION 4. DIRECT PAYMENT
The Company agrees that, notwithstanding any provision in this
Agreement or the Notes to the contrary, it will pay all sums
becoming due to any institutional holder of Notes in the manner
provided in Exhibit A or in any other reasonable manner as any
institutional holder may designate to the Company in writing
(without presentment of or notation on the Notes).
SECTION 5. PREPAYMENTS
5.1 Required Prepayments.
(a) In addition to paying the entire remaining principal
amount and interest due on the Notes at maturity, the Company
will prepay, and there shall become due and payable,
$6,250,000.00 principal amount of the Notes on December 5 in each
year beginning on December 5, 2002 and ending December 5, 2004,
inclusive. Each such prepayment shall be at 100% of the
PAGE 11
principal amount to be prepaid, together with interest accrued
thereon to the date of prepayment.
(b) The acquisition of any Notes by the Company shall not
reduce or otherwise affect its obligation to make any prepayment
required by Section 5.l(a). Upon any exercise by the Company of
the prepayment option in Section 5.2, each remaining scheduled
payment of principal shall be reduced on a pro rata basis to
reflect such reduction in outstanding principal amount.
5.2 Option to Prepay.
The Company may make optional prepayments to prepay the
Notes in whole or in part, in multiples of $1,000,000, at any
time at a price equal to the greater of (i) the principal amount
to be prepaid together with accrued interest on the principal
amount so prepaid to the prepayment date, and (ii) the Makewhole
Price applicable at such time with respect to the amount of the
Notes being prepaid.
5.3 Notice of Optional Prepayment.
The Company will give notice of any optional prepayment of
the Notes to each holder of the Notes not less than 10 Business
Days nor more than 60 days before the date fixed for prepayment,
specifying (a) such date, (b) the section of this Agreement under
which the prepayment is to be made, (c) the principal amount of
the Notes and of such holder's Notes to be prepaid on such date,
and (d) the accrued interest applicable to the prepayment, and
setting forth a detailed calculation of what the Makewhole Price
would be if the Notes were being prepaid on the date of such
notice. Notice of prepayment having been so given, the principal
amount of the Notes specified in such notice, together with the
premium, if any, and accrued interest thereon, shall become due
and payable on the prepayment date. The Company will provide a
supplemental notice by courier or facsimile confirmed by
telephone to be received by each holder of the Notes by
2:00 p.m., Hartford, Connecticut time, on the Business Day
immediately preceding the date fixed for prepayment which will
set forth a detailed calculation of the Makewhole Price.
5.4 Partial Payment Pro Rata.
If there is more than one Note outstanding at any time, the
aggregate principal amount of each required or optional partial
payment of the Notes shall be allocated among the outstanding
Notes in proportion, as nearly as practicable, to the respective
unpaid principal amounts of the Notes. For the purpose of this
Section 5.4 only, any Notes reacquired by the Company shall be
deemed to be outstanding.
PAGE 12
SECTION 6. REGISTRATION; SUBSTITUTION OF NOTES
6.1 Registration of Notes.
The Company will cause to be kept at its office maintained
pursuant to Section 7.3, a register for the registration and
transfer of the Notes. The names and addresses of the holders of
the Notes, the transfer thereof and the names and addresses of
the transferees of any of the Notes will be registered in the
register. The Person in whose name any Note is registered shall
be deemed and treated as the owner and holder thereof for all
purposes of this Agreement, and the Company shall not be affected
by any notice or knowledge to the contrary.
6.2 Exchange of Notes.
Upon surrender of any Note to the Company at its office
maintained pursuant to Section 7.3, the Company, upon request,
will execute and deliver, at its expense (except as provided
below), new Notes in exchange therefor, in denominations of at
least $100,000 (except as may be necessary to reflect any
principal amount not evenly divisible by $100,000), in an
aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Each such new Note (a) shall be payable
to such Person as the surrendering holder may request, and (b)
shall be dated and bear interest from the date to which interest
has been paid on the surrendered Note or dated the date of the
surrendered Note if no interest has been paid thereon. The
Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any
transfer.
6.3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note and,
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided, if
the holder of the Note is an institutional investor,
its own agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation of the Note, the Company at its expense
will execute and deliver a new Note of like tenor,
dated and bearing interest from the date to which
interest has been paid on the lost, stolen, destroyed
or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest has
been paid thereon.
PAGE 13
SECTION 7. COMPANY BUSINESS COVENANTS
The Company covenants that on and after the date of this
Agreement until the Notes are paid in full:
7.1 Payment of Taxes and Claims.
Except in situations where the failure to pay would not
result in a material adverse impact on the Company or the Company
and its Subsidiaries taken as a whole, the Company, and each
Subsidiary, will pay, before they become delinquent,
(a) all taxes, assessments and governmental charges or
levies imposed upon it or its Property, and
(b) all claims or demands of any kind (including but not
limited to those of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons) which,
if unpaid, might result in the creation of a Lien upon
its Property, provided that items of the foregoing
description need not be paid while being contested in
good faith and by appropriate proceedings, if and for
so long as book reserves reasonably believed by the
Company and independent certified public accountants
of recognized national standing to be adequate have
been established with respect thereto; provided
further that notwithstanding the foregoing provisions
of this Section 7.1, the Company and each Subsidiary
will pay all taxes known by Senior Management to be
due and payable no later than fifteen days after the
date such taxes are due.
7.2 Maintenance of Properties and Corporate Existence.
(a) Except where the failure to do so would not have a
material adverse impact on the Company or the Company and its
Subsidiaries taken as a whole, the Company, and each Subsidiary,
will:
(i) Property -- maintain its Property in good
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condition and make all necessary renewals,
replacements, additions, betterments and
improvements thereto;
(ii) Insurance -- keep its properties adequately
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insured at all times, by financially sound and
reputable insurers; maintain such other
insurance, to such extent and against such
risks, including fire and other risks insured
against by extended coverage as is customary
with companies in the same or similar businesses
located or operating in areas with similar
PAGE 14
geological conditions; maintain in full force
and effect public liability insurance against
claims for personal injury or death or property
damage occurring upon, in, about or in
connection with the use of any properties owned,
occupied or controlled by it, in such amounts as
the Company or any Subsidiary, as the case may
be, shall reasonably deem necessary; and
maintain such other insurance as may be required
by law;
(iii) Financial Records -- keep true books of records
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and accounts in which full and correct entries
will be made of all its business transactions,
and will reflect in its financial statements
adequate accruals and appropriations to
reserves, all in accordance with generally
accepted accounting principles, consistently
applied; and
(iv) Corporate Existence and Rights -- do or cause to
------------------------------
be done all things necessary to preserve and
keep in full force and effect its existence,
rights and franchises, except as otherwise
permitted by Section 7.4, provided, however that
--------
the Company may liquidate or sell any Subsidiary
if the transaction is permitted by Section 7.4.
(b) The Company will and will cause each of its Sub-
sidiaries to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including,
without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have
a material adverse effect on the Company or any Subsidiary.
7.3 Maintenance of Office.
The Company will maintain an office in the State of
Connecticut where notices, presentations and demands in respect
of this Agreement or the Notes may be made upon it. Such office
shall be maintained at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx
00000 until such time as the Company shall notify the holders of
the Notes of a change of location.
PAGE 15
7.4 Sale of Assets or Merger.
(a) Sale of Assets -- The Company will not, nor will it
--------------
permit any of its Subsidiaries to, directly or indirectly, except
in the ordinary course of business, sell, lease, transfer or
otherwise dispose of any of its Property or assets, now owned or
hereafter acquired, if, as a result of such sale, lease, transfer
or disposition, the aggregate net book value or fair market
value, whichever shall be higher, of all Property and assets
sold, leased, transferred or otherwise disposed of by the Company
and its Subsidiaries in the then current fiscal year of the
Company would exceed an amount equal to 10% of the book value
(computed in accordance with GAAP) of all Property and assets of
the Company and its Consolidated Subsidiaries at the end of the
preceding fiscal year.
(b) Consolidation, Merger -- The Company will not, nor
---------------------
will it permit any of its Subsidiaries to, directly or
indirectly, consolidate with or merge into any other corporation,
or permit another corporation to merge into it, provided, however,
-------- -------
that (i) any Subsidiary of the Company may be merged into the
Company or another wholly-owned Subsidiary, (ii) the Company or
any Subsidiary of the Company may merge or consolidate with
another Person or business, if the Company or such Subsidiary, as
the case may be, is the surviving corporation, (iii) the Company
or any Subsidiary may consolidate with or merge with another
Person or business in a transaction where the Company or
Subsidiary is not the surviving entity if (1) the continuing or
surviving entity shall assume in writing all of the obligations
of the Company under this Agreement and the Notes, (2) the
continuing or surviving entity shall not, immediately after such
merger or consolidation, be in default of any of the Company's
obligations under this Agreement or the Notes, (3) the continuing
or surviving entity shall be a corporation organized under the
laws of the United States or any state thereof, and (4) after
giving effect to such consolidation or merger, the continuing or
surviving entity could incur $1 of additional Indebtedness under
Section 7.7.
7.5 Leases.
The Company will not, nor will it permit any of its
Subsidiaries, directly or indirectly, to incur, create or assume
any commitment to make any direct or indirect payment, whether as
rent or otherwise, under any lease, rental or other arrangement
for the use of real or personal Property or both of any other
Person unless (a) after giving effect to such lease the aggregate
rental obligations of the Company and its Subsidiaries (exclusive
of obligations to pay taxes and rental increments attributable to
escalator clauses) during any fiscal year shall not exceed an
amount equal to 15% of the book value (computed in accordance
with GAAP) of all Properties and assets of the Company and its
PAGE 16
Consolidated Subsidiaries at the end of the preceding fiscal year
or (b) such lease was in existence as of the Closing Date and
disclosed on Schedule I hereto.
7.6 Liens and Encumbrances.
(a) Negative Pledge. The Company will not, nor will it
---------------
permit any of its Subsidiaries to, directly or indirectly incur,
create, assume or permit to exist any mortgage, pledge, security
interest, lien, charge or other encumbrance of any nature
whatsoever (including conditional sales or other title retention
agreements) on any of its Property or assets, whether owned at
the date hereof or hereafter acquired, or assign, or permit any
of its Subsidiaries to assign, any right to receive income,
except:
(i) liens incurred or pledges and deposits made
in connection with workers, compensation,
unemployment insurance, old-age pensions,
social security and public liability and
similar legislation;
(ii) liens securing the performance of bids,
tenders, leases, contracts (other than for
the repayment of borrowed money), statutory
obligations, surety and appeal bonds and
other obligations of like nature, incurred as
an incident to and in the ordinary course of
business;
(iii) statutory liens of landlords and other liens
imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and
vendors, liens, incurred in good faith in the
ordinary course of business;
(iv) liens securing the payment of taxes,
assessments and governmental charges or
levies, either (1) not delinquent, or
(2) being contested in good faith by
appropriate proceedings;
(v) zoning restrictions, easements, licenses,
reservations, restrictions on the use of real
property or minor irregularities incident
thereto which do not in the aggregate
materially detract from the value of the
Property or assets of the Company or such
Subsidiary, as the case may be, or impair the
use of such Property in the operation of its
business;
PAGE 17
(vi) purchase money liens on real Property or
equipment (which are filed against the real
Property or equipment within 180 days of
purchase) that do not exceed 100% of the fair
market value of the related Property; and
(vii) other liens, that in the aggregate, do not
exceed 15% of the book value (computed in
accordance with GAAP) of all Properties and
assets of the Company and its Consolidated
Subsidiaries at the end of the preceding
fiscal year.
(b) Equal and Ratable Lien: Equitable Lien. In case
--------------------------------------
any Property is subjected to a Lien in violation of Section
7.6(a), the Company will make or cause to be made provision
whereby the Notes will be secured pursuant to documents
reasonably satisfactory to the holders of at least 51% in
outstanding principal amount of the Notes (exclusive of Notes
owned by the Company, Subsidiaries and Affiliates) equally and
ratably with all other obligations secured thereby, and in any
case the Notes shall have the benefit, to the full extent that,
and with such priority as, the holders may be entitled thereto
under applicable law, of an equitable Lien on such Property
securing the Notes. Such violation of Section 7.6(a) shall
constitute an Event of Default hereunder, whether or not any such
provision is made pursuant to this Section 7.6(b).
7.7 Indebtedness.
The Company will not, nor will it permit any of its
Subsidiaries to, directly or indirectly incur, create, assume or
permit to exist any Indebtedness other than:
(a) Indebtedness incurred by the Company under the
Revolving Credit Agreement;
(b) the Notes;
(c) Indebtedness outstanding on the date hereof under the
Company's $40,000,000, 9.47% Senior Notes due
September 16, 2001;
(d) Indebtedness of the Company which constitutes
extensions, renewals or replacements on substantially
the same terms and conditions (and does not increase
the amount outstanding) of (a) through (c) above; and
(e) additional Indebtedness of the Company and its
Subsidiaries;
PAGE 18
provided, however, that (i) the total Indebtedness of the
Company's Subsidiaries shall not at any time exceed $50 million;
(ii) total Indebtedness of the Company's Domestic Subsidiaries
shall not at any time exceed $10 million (excluding from the
calculation thereof for all purposes except compliance with
Section 7,4(b)(4) any pre-existing Indebtedness of a newly
acquired Domestic Subsidiary for a period not exceeding 30 days
after acquisition of such Domestic Subsidiary); and (iii) the
aggregate amount of all Indebtedness of the Company and its
Subsidiaries at any time outstanding shall not exceed an amount
equal to 155% of Consolidated Net Worth at such time.
7.8 Net Worth.
The Company will not permit Consolidated Net Worth of the
Company and its Subsidiaries at any time to be less than $135
million plus 50% of Consolidated Net Income for each fiscal year
beginning after December 31, 1994 (but without deduction for any
fiscal year in which Consolidated Net Income is a negative
amount), with the annual adjustments to be applicable as of
December 31, 1995 and as of the end of each subsequent fiscal
year.
7.9 ERISA Compliance.
Neither the Company nor any Related Person will at any time
permit any Pension Plan maintained by it to:
(i) engage in any "prohibited transaction" as such
term is defined in Section 4975 of the Internal
Revenue Code of 1986, as amended, or described in
Section 406 of ERISA;
(ii) incur any accumulated funding deficiency" as such
term is defined in Section 302 Of ERISA, whether or
not waived; or
(iii) terminate under circumstances which could result in
the imposition of a Lien on the Property of the
Company or any Subsidiary pursuant to Section 4068
of ERISA.
7.1O Transactions with Affiliates.
Neither the Company nor any Subsidiary will enter into any
transaction (except transactions which do not in any one calendar
year involve in the aggregate an amount in excess of $500,000),
including without limitations the purchase, sale or exchange of
Property or the rendering of any service, with 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
PAGE 19
or such Subsidiary than would obtain in a comparable arms-length
transaction with a Person not an Affiliate.
7.11 Tax Consolidation.
The Company will not file or consent to the filing of any
consolidated income tax return with any Person other than a
Subsidiary.
7.12 Acquisition of Notes.
Neither the Company nor any Subsidiary nor any Affiliate
will directly or indirectly acquire or make any offer to acquire
any Notes unless the Company or such Subsidiary or Affiliate has
offered to acquire Notes, pro rata, from all holders of the Notes
and upon the same terms. In case the Company acquires any Notes,
such Notes shall thereafter be cancelled and no Notes shall be
issued in substitution therefor.
7.13 Lines of Business.
Neither the Company nor any Subsidiary will engage in any
line of business if as a result thereof the business of the
Company and its Subsidiaries taken as a whole would be
substantially different from what it was at December 31, 1994 as
described in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994.
7.14 Restricted Loans, Advances and Investments.
The Company shall not, and shall not permit any Subsidiary
to, at any time make or permit to exist any loans or advances to,
or purchase any stock, other securities or evidences of
indebtedness of, or make or permit to exist any investment or
acquire any interest whatsoever in, any other person, except (a)
the purchase of the Company's common or preferred stock, (b)
loans or advances of the Company or any Subsidiary of the Company
(in addition to loans or advances permitted by clauses (d) and
(e) of this Section 7.14) not in excess of $10,000,000 aggregate
principal amount for the Company and its Subsidiaries at any time
outstanding, (c) investments of its cash by the Company or any
Subsidiary of the Company in (i) marketable direct obligations
of, or marketable obligations guaranteed by, the United States of
America or Canada, or marketable obligations of any
instrumentality or agency thereof, the payment of the principal
and interest of which is unconditionally guaranteed by the United
States of America or Canada, (ii) certificates of deposit or
other obligations issued by, or bankers' acceptances of, any bank
or trust company organized under the laws of the Federal Republic
of Germany, France, the United Kingdom, Japan, Canada or the
United States of America or any state thereof (including foreign
branches of any such bank or trust company) and having capital,
PAGE 20
surplus and undivided profits in excess of $100,000,000, (iii)
open market commercial paper with a maturity not in excess of 270
days from the date of acquisition thereof and having the highest
credit rating by either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc., or (iv) in the case of any foreign
Subsidiary of the Company in a country in which a Subsidiary
exists as of the date of this agreement, such investments of a
comparable quality and term to the other investments permitted by
this clause (c) as are usually made in the jurisdiction or
jurisdictions in which the business of such foreign Subsidiary is
principally conducted by prudent corporate investors in like
circumstances, (d) loans or advances of the Company to any of its
Subsidiaries and loans or advances of any Subsidiary of the
Company to the Company or another such Subsidiary, (e) purchases
of stock or other securities of any corporations, associations or
other business entities; provided, however, that the aggregate
-------- -------
cost to or fair market value of the consideration paid by the
Company and its Subsidiaries for such stock or securities of any
such corporation, association or other business entity shall not
exceed 40% of the Company's Consolidated Net Worth within any
four-year period commencing on the Closing Date, or (f) such
other investments in an aggregate amount not to exceed $250,000
as the Company or a Subsidiary may elect.
7.15 Limitation on Restrictions on Dividends by Subsidiaries,
etc.
The Company shall not permit any Subsidiary or other entity
in which the Company or any Subsidiary has an equity investment
(a "Subsidiary Investment") to be or become subject to any
restriction (except restrictions applicable to corporations
generally and those restrictions set forth in the Revolving
Credit Agreement), whether arising by agreement, by its articles
of incorporation, by-laws or other constituent documents of such
Subsidiary or Subsidiary Investment or otherwise, on the right of
such Subsidiary or Subsidiary Investment from time to time to (w)
declare and pay Stock Payments with respect to capital stock
owned by the Company from time to time owed to the Company or any
Subsidiary, or (y) make loans or advances to the Company or any
Subsidiary, or ((z) transfer any of its properties or assets to
the Company or any Subsidiary; provided, however, that such
restriction may be permitted with respect to any Subsidiary or
Subsidiary Investment in which the Company or a Subsidiary
directly or indirectly owns less than 80% of the Voting Stock and
in which the Company's or such Subsidiary's cumulative investment
since the Closing Date (in terms of cash invested in and/or
assets contributed to the entity) (i) individually is less than
10% of the book value of the assets of the Company and its
consolidated subsidiaries, and (ii) when taken together with all
such Subsidiaries and Subsidiary Investments subject to any such
restrictions in which the Company or a Subsidiary directly or
indirectly owns less than 80% of the Voting Stock, is less than
PAGE 21
15% of the book value of the assets of the Company and its
consolidated Subsidiaries.
SECTION 8 INFORMATION AS TO COMPANY
8.1 Financial and Business Information.
The Company will deliver to you, if at the time you or your
nominee holds any Notes (or if you are obligated to Purchase any
Notes), and to each other institutional holder of outstanding
Notes:
(a) Quarterly Statements - within 60 days after the end of
--------------------
each of the first three quarterly fiscal periods in
each fiscal year of the Company, two copies of:
(i) a consolidated balance sheet of the Company and
its Consolidated Subsidiaries as at the end of
that quarter, and
(ii) consolidated statements of income, retained
earnings and cash flows of the Company and its
Consolidated Subsidiaries for that quarter and
(in the case of the second and third quarters)
for the portion of the fiscal year ending with
that quarter,
setting forth in each case in comparative form the
figures for the corresponding periods in the previous
fiscal year, all in reasonable detail and certified by
a principal financial officer of the company as
presenting fairly the financial condition of the
companies being reported upon and as having been
prepared in accordance with generally accepted
accounting principles for interim statements
consistently applied;
(b) Annual Statements - within 90 days after the end of
-----------------
each fiscal year of the Company, two copies of:
(i) a consolidated balance sheet of the Company and
its Consolidated Subsidiaries, as at the end of
that year, and
(ii) consolidated statements of income, retained
earnings and cash flows of the Company and its
Consolidated Subsidiaries, for that year,
setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied
by an opinion of independent certified public
accountants of recognized national standing stating
PAGE 22
that such financial statements fairly present the
financial condition of the companies being reported
upon and have been prepared in accordance with
generally accepted accounting principles consistently
applied (except for changes in application in which
such accountants concur), and that the examination of
such accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and which independent
auditors, report shall not identify either (A) any
departure from the consistent application of generally
accepted accounting principles (except for identified
changes in application in which such accountants
concur), or (B) any tests of the accounting records or
other auditing procedures which were considered
necessary in the circumstances and which were not
performed;
(c) Audit Reports - promptly upon receipt thereof, one
-------------
copy of each other report submitted to the Company or
any Subsidiary by independent accountants in
connection with any material interim or special audit
made by them of the books of the Company or any
material Subsidiary;
(d) SEC and Other Reports - promptly upon their becoming
---------------------
available one copy of each report, notice or proxy
statement sent by the Company to stockholders
generally, and of each periodic report and any
registration statement, filed by the Company with any
securities exchange or the Securities and Exchange
Commission or any successor agency;
(e) ERISA - as soon as practicable, but in no event later
-----
than five days, after a member of Senior Management
becoming aware of the occurrence of any (i)
"reportable event" as such term is defined in
Section 4043 of ERISA, or (ii) "accumulated funding
deficiency" as such term is defined in Section 302 of
ERISA, or (iii) "prohibited transaction", as such term
is defined in Section 4975 of the Internal Revenue
Code of 1986, as amended, or described in Section 406
of ERISA, in connection with any Pension Plan or any
trust created thereunder, a notice specifying the
nature thereof, what action the Company or a Related
Person is taking or proposes to take with respect
thereto, and, when known, any action taken by the
Internal Revenue Service with respect thereto;
(f) Notice of Default or Event of Default - immediately
-------------------------------------
upon becoming aware of the existence of any Default or
PAGE 23
Event of Default a notice describing its nature and
the action the Company is taking with respect thereto;
(g) Notice of Claimed Default - immediately upon becoming
-------------------------
aware that the holder of any Note or of any
Indebtedness or Security of the Company or any
Subsidiary has given notice or taken any other action
with respect to a claimed Default or Event of Default,
a notice specifying the notice given or action taken
by such holder, the nature of the claimed Default or
Event of Default and the action the Company is taking
with respect thereto;
(h) Report on Proceedings - The Company and each
---------------------
Subsidiary will give each holder of the Notes (a)
notice, promptly, of any action, suit or proceeding at
law or in equity or by or before any court or other
governmental instrumentality or agency (i) which is
not fully covered by insurance without the
applicability of any co-insurance provisions or with
respect to which insurance coverage is being contested
and which has not been bonded and in which either the
aggregate specified dollar amount of all claims
(either as set forth in the complaint, demand letters
or other written communications by or on behalf of the
plaintiff or as otherwise determined in good faith by
the Company or its counsel) against the Company and
its Subsidiaries taken as a whole, exceeds the amount
of any applicable insurance coverage by (x) $1,000,000
for any single proceeding or (y) $5,000,000 in the
aggregate during any fiscal year of the Company;
provided, however, that after giving notice of such
-----------------
claims aggregating at least $5,000,000, notice is only
required of subsequent claims made during the same
fiscal year which exceed insurance coverage by
$500,000 for any single proceeding, or (ii) if the
results thereof may have a material adverse effect on
the business or condition of the Company or any
Subsidiary of the Company, and (b) with respect to any
such action, suit or proceeding such documentation as
the holder of any Note reasonably requests;
(i) Requested Information - with reasonable promptness,
---------------------
such data and information as from time to time may be
reasonably requested.
8.2 Officers' Certificates.
Each set of financial statements delivered pursuant to
Section 8.1(a) or 8.1(b) will be accompanied by a certificate of
the President or a Vice President and the Treasurer or an
Assistant Treasurer of the Company setting forth:
PAGE 24
(a) Covenant Compliance - the information required in
-------------------
order to establish compliance with the requirements of
Section 7 during the period covered by the income
statements being furnished; and
(b) Event of Default - that the signers have reviewed the
----------------
relevant terms of this Agreement and have made, or
caused to be made, under their supervision, a review
of the transactions and condition of the Company and
its Subsidiaries from the beginning of the period
covered by the income statements being furnished and
that the review has not disclosed the existence during
such period of any Default or Event of Default or, if
any such Default or Event of Default existed or
exists, describing its nature and the action the
Company has taken with respect thereto.
8.3 Accountants' Certificates.
Each set of annual financial statements delivered pursuant
to Section 8.1(b) will be accompanied by a certificate of the
accountants who certify such financial statements, stating that
they have reviewed this Agreement and whether, in making the
examination necessary for their certification of such statements,
they have become aware of any Default or Event of Default, and,
if any Default or Event of Default then exists, describing its
nature.
8.4 Inspection.
The Company will permit your representatives, while you or
your nominee holds any Note, or the representatives of any other,
institutional holder of the Notes, at your or such holder's
expense, to visit and inspect any of the Properties of the
Company or any Subsidiary, to examine and make copies and
abstracts of all their books of account, records, and other
papers, and to discuss their respective affairs, finances and
accounts with their respective officers, employees designated by
said officers and independent public accountants (and by this
provision the Company authorizes said accountants to discuss the
finances and affairs of the Company and its Subsidiaries) all at
reasonable times, upon notice to a member of Senior Management
(unless there shall exist a Default or an Event of Default), and
as often as may be reasonably requested. Any visit or inspection
made pursuant to this Section 8.4 shall be at the expense of the
holder requesting the same unless, at the time of such visit or
inspection, there shall exist a Default or Event of Default, in
which event the Company shall bear the cost thereof.
PAGE 25
SECTION 9. EVENTS OF DEFAULT.
9.1 Nature of Events.
An "Event of Default" shall exist if any of the following
occurs and is continuing:
(a) Principal Payments - failure to pay principal or
------------------
Makewhole Price on any Note on or before the date such
payment is due;
(b) Interest Payments - failure to pay interest on any
-----------------
Note on or before the fifth Business Day following the
date such payment is due;
(c) Financial Covenant Defaults - the Company defaults in
---------------------------
the performance of or compliance with any term
contained in Sections 7.7, 7.8 and 8.1(f);
(d) Other Defaults - failure to comply with any other
--------------
provision of this Agreement, which continues for more
than 30 days after it first becomes known to any
member of Senior Management of the Company;
(e) Warranties or Representations - any warranty or
-----------------------------
representation by or on behalf of the Company
contained in this Agreement or in any instrument
delivered under or in reference to this Agreement is
false or misleading in any material respect;
(f) Default on Other Indebtedness - a default or defaults
-----------------------------
shall have occurred under any other Indebtedness or
Securities of the Company having a principal or face
amount, individually or in the aggregate, in excess of
$5,000,000; or any event shall occur or any condition
shall exist, the effect of which is to cause (or
permit any holder of such Indebtedness or Securities
having a principal or face amount, individually or in
the aggregate, in excess of $5,000,000, or a trustee
to cause) such Indebtedness or Security, or a portion
thereof, to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment;
(g) Involuntary Bankruptcy Proceedings - a custodian
-----------------------------------
receiver, liquidator or trustee of the Company or of
any of its Property, is appointed or takes possession
and such appointment or possession remains in effect
for more than 30 days; or the Company is adjudicated
bankrupt or insolvent; or an order for relief is
entered under the Federal Bankruptcy Code against the
Company; or any of the Property of the Company is
sequestered by court order and the order remains in
PAGE 26
effect for more than 30 days; or a petition is filed
against the Company under any bankruptcy,
reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and
is not dismissed within 30 days after filing;
(h) Voluntary Petitions - the Company files a petition in
-------------------
voluntary bankruptcy or seeking relief under any
provision of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, or consents to the
filing of any petition against it under any such law;
(i) Assignments for Benefit of Creditors, etc. - the
-----------------------------------------
Company makes an assignment for the benefit of its
creditors, or generally fails to pay its debts as they
become due, or consents to the appointment of or
taking possession by a custodian, receiver, liquidator
or trustee of the Company or of all or any part of the
Property of the Company; or
(j) Undischarged Final Judgments - final judgment or
----------------------------
judgments which are not subject to appeal for the
payment of money aggregating in excess of $5,000,000
is or are outstanding against one or more of the
Company and its Subsidiaries and any one of such
judgments (x) has not been stayed or paid on the date
it is finally due and payable or (y) has resulted in
the attachment of a Lien on any Property of the
Company or any Subsidiary; or
(k) Change of Control - the occurrence of a Change of
-----------------
Control.
9.2 Default Remedies.
(a) If an Event of Default described in Section 9.1(g),
9.1(h) or 9.1(i) occurs, the entire outstanding principal amount
of the Notes shall automatically become due and payable, without
the taking of any action on the part of any holder of the Notes
or any other Person and without the giving of any notice with
respect thereto. If an Event of Default described in
Section 9.1(a) or 9.1(b) exists, any holder of Notes may, at its
option, exercise any right, power or remedy permitted by law,
including but not limited to the right by notice to the Company
to declare the Notes held by such holder to be immediately due
and payable. If any other Event of Default exists, the holder or
holders of at least 51% in outstanding principal amount of the
Notes (exclusive of Notes owned by the Company, Subsidiaries and
Affiliates) may exercise any right, power or remedy permitted by
PAGE 27
law, including but not limited to the right by notice to the
Company to declare all the outstanding Notes immediately due and
payable. Upon any such acceleration the principal of the Notes
declared due or automatically becoming due shall be immediately
payable together with all interest accrued thereon without any
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, and the Company will
immediately pay the greater of (x) the principal of and interest
accrued on such Notes and (y) the Makewhole Price applicable at
such time to such Notes.
(b) No course of dealing or delay or failure on the part
of any holder of the 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 will pay or reimburse
the holders of the Notes, to the extent permitted by law, for all
costs and expenses, including but not limited to reasonable
attorneys, fees, incurred by them in collecting any sums due on
the Notes or in otherwise enforcing any of their rights.
9.3 Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 9.2(a), the
holders of at least 51% of the outstanding principal amount of
the Notes may annul such declaration and the consequences thereof
if no judgment or decree has been entered for the payment of any
monies due pursuant to such declaration and if all sums payable
under the Notes and this Agreement (except principal, interest or
premium which has become due solely by reason of such
declaration) have been duly paid. No such annulment shall extend
to or waive any subsequent Default or Event of Default.
SECTION 10. INTERPRETATION OF THIS AGREEMENT
10.1 Terms Defined.
As used in this Agreement (including Exhibits), the
following terms have the respective meanings set forth below or
in the Section indicated:
Affiliate - a Person other than a Subsidiary (1) which
---------
directly or indirectly controls, or is controlled by, or is
under common control with, the Company, (2) which owns 5% or
more of the Voting Stock of the Company or (3) 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
owned 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 securities,
by contract or otherwise.
PAGE 28
Business Day - any day other than a Saturday, Sunday or a
------------
national, Connecticut or New York holiday.
Capitalized Lease - any lease which is shown or is required
-----------------
to be shown in accordance with GAAP as a liability on a balance
sheet of the lessee thereunder.
Change of Control - shall mean any Person or group of
-----------------
Persons (as used in Sections 13 and 14 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder) shall have become the beneficial owner
(as defined in Rules 13d-3 and 13d-5 promulgated by the
Securities and Exchange Commission (the "SEC") under the Exchange
Act) of 30% or more of the Company's outstanding voting stock
provided, however, that members of the Xxxxxx family, Fleet
Norstar financial group and any of its affiliates, successors and
assigns (to the extent that it owns stock in which a member of
the Xxxxxx family has an interest), the Xxxxxx Group Inc.
Guaranteed Stock Plan and State Street Bank & Trust Company, in
its capacity as trustee under such plan, or its successor or
assigns in its capacity as trustee under such plan, and employees
of the Company (except employees of the Company who became
beneficial owners of more than 10% of the Company's voting stock
prior to becoming employees of the Company) shall not be counted
as a person for purposes hereof.
Closing Date - Section 1.2.
------------
Consolidated Net Income - the consolidated net income of the
-----------------------
Company and its Subsidiaries for any period as determined in
accordance with GAAP.
Consolidated Net Worth - shall mean the assets of the
----------------------
Company and its Subsidiaries less the liabilities of the
Company and its Subsidiaries, each as shown on a consolidated
balance sheet of the Company and its Subsidiaries in accordance
with GAAP, plus any negative (less any positive) foreign
currency translation adjustments shown in the equity section of
such a consolidated balance sheet pursuant to FAS 52, plus any
amount shown on such a consolidated balance sheet in the equity
contra account arising from the Guaranty.
Consolidated Subsidiary - shall mean any Subsidiary the
-----------------------
accounts of which shall at the time in question be consolidated
with the Company.
Default - an event or condition which will, with the lapse
-------
of time or the giving of notice or both, become an Event of
Default.
Domestic Subsidiary - shall mean a Subsidiary incorporated
-------------------
in the United States.
PAGE 29
Environmental Laws - shall mean any and all Federal, state,
------------------
local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the
environment or the release of any materials into the en-
vironment, including but not limited to those related to
hazardous substances or wastes, air emissions and discharges to
waste or public systems.
ERISA - means the Employee Retirement Income Security Act of
-----
1974, as amended from time to time.
Event of Default - Section 9.1.
----------------
Fair Market Value - means, at any time and with respect to
-----------------
any property, the sale value of such property that would be
realized in an arm's-length sale at such time between an
informed and willing buyer and an informed and willing seller
(neither being under a compulsion to buy or sell).
GAAP - means generally accepted accounting principles which
----
are consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors;
provided, however, that such principles shall be applied
without giving effect to FAS 106.
Guaranty - means the Company's obligations as guarantor
--------
under a certain Guaranty Agreement, effective as of July 28,
1989, from the Company to Shawmut Bank (formerly known as The
Connecticut National Bank) and NBD Bank (formerly known as
National Bank of Detroit).
Hazardous Material - means any and all pollutants, toxic or
------------------
hazardous wastes or any other substances that might pose a
hazard to health or safety, the removal of which may be
required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage,
or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation,
asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).
Indebtedness - with respect to any Person, means, without
------------
duplication, (a) all debt arising from borrowed money and
similar monetary obligations, whether direct or indirect; (b)
all Indebtedness of others secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing
on Property owned by the Company or any Subsidiary or acquired
by the Company or any Subsidiary subject thereto, whether or
not the Indebtedness secured thereby shall have been assumed;
PAGE 30
(c) all guarantees, endorsements and other contingent
obligations, in respect of Indebtedness of others, including
(x) any obligation to supply funds to or in any manner to
invest in, directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness against
loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make payment
of the Indebtedness held by such owner or otherwise and (y) any
obligation of any partnership in which the Company or any
Subsidiary is a general partner; and (d) the obligations to
reimburse the issuer in respect of any letters of credit.
Indebtedness shall not include the indebtedness of (i) a
Subsidiary of the Company to the Company or to another
Subsidiary of the Company, or (ii) the Company to a Subsidiary
of the Company; provided, however, that in the case of debt of
a Subsidiary not wholly owned by the Company and/or another
Subsidiary, Indebtedness shall include a percentage of such
Indebtedness equal to the percentage of the total minority
ownership.
Investment - means any investment, made in cash or by
----------
delivery of property, by the Company or any of its Subsidiaries
(i)in any Person, whether by acquisition of stock, Indebtedness
or other obligation or Security, or by loan, guaranty, advance,
capital contribution or otherwise, or (ii) in any property.
Lien - any mortgage, lien, charge, security interest or
----
other encumbrance of any kind upon any Property or assets of
any character, or upon the income or profits therefrom, any
conditional sale or other title retention agreement, device or
arrangement (including Capitalized Leases), or any sale
assignment, pledge or other transfer for security of any
accounts, general intangibles or chattel paper, with or without
recourse.
Makewhole Price - with respect to full or partial optional
---------------
prepayments of the Notes pursuant to Section 5.2 or repayment
of Notes which have become or been declared immediately due and
payable pursuant to Section 9.2, the present value of all
scheduled payments of principal and interest in respect of the
Notes (or portions thereof being prepaid) which, but for such
optional prepayment or required repayment, would be required to
be made following the date of the proposed prepayment or the
date on which such Notes became or are declared due and
payable, determined by discounting (on a semi-annual basis), at
a rate which is equal to the Treasury Constant Yield at such
time plus .50%, the amount of each such payment (or portion
thereof) from the date such payment would be required to be
made to the prepayment or repayment date.
Notes - Section 1.1.
-----
PAGE 31
Pension Plans - Section 2.15(a).
-------------
Person - shall mean any individual, corporation partnership,
------
joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or
political subdivision thereof.
Property - any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
Related Person - any Person (whether or not incorporated)
--------------
which is under common control with the Company within the
meaning of Section 414(c) of the Internal Revenue Code of 1986,
as amended, or of Section 4001(b) of ERISA.
Revolving Credit Agreement - means the $100,000,000
--------------------------
Revolving Credit Agreement dated as of December 1, 1991 among
the Company, Mellon Bank, N.A., as Agent, and the banks
signatory thereto, as amended.
Security - shall have the same meaning as in Section 2(l) of
--------
the Securities Act of 1933, as amended.
Senior Management - shall mean any of the following officers
-----------------
of the Company: President, any Group Vice President, Chief
Financial Officer, Treasurer or General Counsel.
Stock Payment - by any Person shall mean any dividend,
-------------
distribution or payment of any nature (whether in cash,
securities, or other property) on account of or in respect of
any shares of the capital stock (or warrants, options or rights
therefor) of such Person, including but not limited to any
payment on account of the purchase, redemption, retirement,
defeasance or acquisition of any shares of the capital stock
(or warrants, options or rights therefor) of such Person, in
each case regardless of whether required by the terms of such
capital stock (or warrants, options or rights) or any other
agreement or instrument.
Subsidiary - of a Person shall mean any corporation,
----------
association or other business entity of which more than 50% of
the outstanding stock having by its terms ordinary voting power
to elect a majority of the board of directors of such
corporation, or other business entity (irrespective of whether
at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned directly
or indirectly by such Person.
Treasury Constant Yield - at any time with respect to any
-----------------------
optional prepayment of the Notes pursuant to Section 5.2 or
repayment of Notes which have been declared or become
PAGE 32
immediately due and payable pursuant to Section 9.2, means the
yield to maturity at such time of United States Treasury
obligations with a remaining life to maturity (as compiled by
and published in the most recently published issue of the
United States Federal Reserve Bulletin or its successor
publication) most nearly equal to the Weighted Average Life to
Maturity of the Notes (or portions thereof) to be prepaid or
repaid at the time. If there are United States Treasury
obligations listed in such publication with a remaining life to
maturity equal to the Weighted Average Life to Maturity of the
Notes (or portions thereof), then the yield on such Treasury
obligations shall be the Treasury Constant Yield. If no such
Treasury obligation exists, then the Treasury obligation with
the remaining life to maturity closest to and greater than the
Weighted Average Life to Maturity of the Notes (or portions
thereof) to be prepaid or repaid shall be used, along with the
Treasury obligation with a remaining life to maturity closest
to and less than the Weighted Average Life to Maturity of such
Notes being prepaid or repaid (or portions thereof) in order to
calculate the Treasury Constant Yield. In this event these two
Treasury obligations will be examined together and the Treasury
Constant Yield will be calculated through interpolation of the
yields on such Treasury obligations.
Voting Stock - shall mean, with respect to any corporation,
------------
the capital stock of such corporation having the power to vote
for a majority of the board of directors of such corporation
under ordinary circumstances.
Weighted Average Life to Maturity - of the Notes or any
---------------------------------
portion thereof, at the time of the determination thereof,
means the number of years obtained by dividing the then
Remaining Dollar-years of such Notes or portion thereof by the
then outstanding principal amount of such Notes or portion
thereof. The term "Remaining Dollar-years" of any Indebtedness
for borrowed money means the amount obtained by (1) multiplying
(A) the amount of each then remaining required repayment or
redemption (including repayment or redemption at final
maturity) by (B) the number of years (calculated at the nearest
one-twelfth) which will elapse between the date as of which the
calculation is made and the date that such required repayment
is due and (2) totaling all the products obtained in (1).
10.2 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 under this Agreement, this shall be done in accordance with
GAAP.
PAGE 33
10.3 Directly or Indirectly.
Where any provision in this Agreement refers to any action
which a Person is prohibited from taking, the provision shall be
applicable whether such action is taken directly or indirectly by
such Person, including actions taken by or on behalf of any
partnership in which such Person is a general partner and all
liabilities of such partnerships shall be considered liabilities
of such Person for purposes of this Agreement.
10.4 Governing Law.
This Agreement and the Notes shall be governed by and
construed in accordance with Connecticut law.
SECTION 11. MISCELLANEOUS
11.1 Notices.
All notices provided for hereunder shall be in writing and
sent (a) by telecopy if the sender on the same day sends a
-
confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by registered or certified mail
-
with return receipt requested (postage prepaid), or (c) by a
-
recognized overnight delivery service (with charges prepaid).
Any such notice must be sent:
a. if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such
other address as you or it shall have specified to the Company
in writing,
b. if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the
Company in writing, or
c. if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of "Treasurer",
or at such other address as the Company shall have specified to
the holder of each Note in writing.
Notices under this Section 11 will be deemed given only when
actually received.
11.2 Reproduction of Documents.
This Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents
received by you at the closing of your purchase of the Notes
(except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter
PAGE 34
furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or
other similar process and you may destroy any original document
so reproduced. The Company agrees and stipulates that any such
reproduction shall, to the extent permitted by applicable law, be
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in
the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
11.3 Survival.
All warranties, representations, and covenants made by the
Company herein or on any certificate or other instrument
delivered by it or on its behalf pursuant to the terms of this
Agreement shall be considered to have been relied upon by you and
shall survive the delivery to you of the Notes regardless of any
investigation made by you or on your behalf. All statements in
any such certificate or other instrument shall constitute
warranties and representations by the Company hereunder.
11.4 Successors and Assigns.
This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties, except
that the Company's right to require you to purchase the Notes in
accordance with Section 1.2 shall be personal to the Company and
shall not be assignable or transferable to any other Person
(including successors at law) whether voluntarily or
involuntarily. The provisions of this Agreement are intended to
be for the benefit of all holders, from time to time, of the
Notes, and shall be enforceable by any holder, whether or not an
express assignment to such holder of rights under this Agreement
has been made by you or your successor or assign.
11.5 Amendment and Waiver.
This Agreement may be amended, and the observance of any
term of this Agreement may be waived, with (and only with) the
written consent of the Company and the holders of at least
66-2/3% of the outstanding principal amount of the Notes
(exclusive of Notes owned by the Company, Subsidiaries and
Affiliates); provided that no such amendment or waiver of any of
--------
the provisions of Sections 1 through 4 shall be effective as to
you unless consented to by you in writing; and provided further,
--------
that no such amendment or waiver shall, without the written
consent of the holders of all the outstanding Notes, (i) subject
to Section 9.3, change the amount or time of any prepayment or
payment of principal or premium or the rate or time of payment of
interest, (ii) amend Section 9, or (iii) amend this Section 11.5.
PAGE 35
Executed or true and correct copies of any amendment or waiver
effected pursuant to the provisions of this Section 11.5 shall be
delivered by the Company to each holder of outstanding Notes
promptly following the date on which the same shall become
effective. No such amendment or waiver shall extend to or affect
any provision or obligation not expressly amended or waived.
11.6 Duplicate Originals.
Two or more duplicate originals of this Agreement may be
signed by the parties, each of which shall be an original but all
of which together shall constitute one and the same instrument.
If this Agreement is satisfactory to you, please so indicate by
signing the acceptance at the foot of a counterpart of this
Agreement and return such counterpart to the Company, whereupon
this Agreement will become binding between us in accordance with
its terms.
Very truly yours,
XXXXXX GROUP INC.
By: /s/ Xxxx X. Xxxxxx
------------------
Title: Senior Vice President-Finance and Law
Accepted:
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc.
By: /s/ Xxxxxx Xxxxx
----------------
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
ON BEHALF OF ONE OR MORE OF ITS SEPARATE ACCOUNTS
By: CIGNA Investments, Inc.
By: /s/ Xxxxxx Xxxxx
----------------
Title: Managing Director
[Signatures Continued On Next Page]
PAGE 36
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY
By: CIGNA Investments, Inc.
By: /s/ Xxxxxx Xxxxx
----------------
Title: Managing Director
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA Investments, Inc.
By: /s/ Xxxxxx Xxxxx
----------------
Title: Managing Director
PAGE 37
EXHIBIT A
PAGE 1 of 4
XXXXXX GROUP, INC.
----------------------------------------------------------------
Purchaser Name | CONNECTICUT GENERAL LIFE INSURANCE COMPANY
-----------------------------------------------------------------
Name in Which Note | CIG & Co.
is to be Registered |
-----------------------------------------------------------------
Principal Amount | $10,000,000
-----------------------------------------------------------------
Payment on Account |
of Note | Federal Funds Wire Transfer
|
Method |
| Chase NYC/CTR/
Account | BNF=CIGNA Private
Information | Placements/AC=9009001802
| ABA# 000000000
-----------------------------------------------------------------
Accompanying | OBI=XXXXXX GROUP, INC.; 7.13% Senior
Information | Secured Notes due December, ___ 2005;
| PPN: ________; due date and application
| (as among principal, premium and interest
| of the payment being made; contact name
-----------------------------------------------------------------
Address for Notices | CIG & Co.
Related to Payments | c/o CIGNA Investments, Inc.
| Attention: Securities Processing S-206
| 000 Xxxxxxx Xxxxx Xxxx
| Xxxxxxxx XX 00000-0000
|
| with a copy to:
|
| Chase Manhattan Bank, N.A.
| Private Placement Servicing
| X.X. Xxx 0000
| Bowling Green Station
| Xxx Xxxx, Xxx Xxxx 00000
| Attention: CIGNA Private Placements
| FAX: 000-000-0000/1005
-----------------------------------------------------------------
Address for All | CIG & Co.
Other Notices | c/o CIGNA Investments, Inc.
| Attention: Private Securities Division -
| S-307
| 000 Xxxxxxx Xxxxx Xxxx
| Xxxxxxxx, Xxxxxxxxxxx 00000-0000
| FAX: 000-000-0000
-----------------------------------------------------------------
Tax Identification | 00-0000000
Number |
-----------------------------------------------------------------
EXHIBIT A
PAGE 2 of 4
XXXXXX GROUP
----------------------------------------------------------------
Purchaser Name | CONNECTICUT GENERAL LIFE INSURANCE COMPANY
| on behalf of one or more separate accounts
-----------------------------------------------------------------
Name in Which Note | CIG & Co.
is to be Registered |
-----------------------------------------------------------------
Principal Amount | $5,000,000
-----------------------------------------------------------------
Payment on Account |
of Note |
| Federal Funds Wire Transfer
Method |
| Chase NYC/CTR/
Account | BNF=CIGNA Private
Information | Placements/AC=9009001802
| ABA# 000000000
-----------------------------------------------------------------
Accompanying | OBI=XXXXXX GROUP, INC.; 7.13% Senior
Information | Secured Notes due December, ___ 2005;
| PPN: ________; due date and application
| (as among principal, premium and interest
| of the payment being made; contact name
-----------------------------------------------------------------
Address for Notices | CIG & Co.
Related to Payments | c/o CIGNA Investments, Inc.
| Attention: Securities Processing S-206
| 000 Xxxxxxx Xxxxx Xxxx
| Xxxxxxxx XX 00000-0000
|
| with a copy to:
|
| Chase Manhattan Bank, N.A.
| Private Placement Servicing
| X.X. Xxx 0000
| Bowling Green Station
| Xxx Xxxx, Xxx Xxxx 00000
| Attention: CIGNA Private Placements
| FAX: 000-000-0000/1005
-----------------------------------------------------------------
Address for All | CIG & Co.
Other Notices | c/o CIGNA Investments, Inc.
| Attention: Private Securities Division -
| S-307
| 000 Xxxxxxx Xxxxx Xxxx
| Xxxxxxxx, Xxxxxxxxxxx 00000-0000
| FAX: 000-000-0000
-----------------------------------------------------------------
Tax Identification | 00-0000000
Number |
-----------------------------------------------------------------
EXHIBIT A
PAGE 3 of 4
MATTER NAME: XXXXXX GROUP, INC.
----------------------------------------------------------------
Purchaser Name | CIGN PROPERTY AND CASUALTY INSURANCE
-----------------------------------------------------------------
Name in Which Note | CIG & Co.
is to be Registered |
-----------------------------------------------------------------
Principal Amount | $5,000,000
-----------------------------------------------------------------
Payment on Account |
of Note |
| Federal Funds Wire Transfer
Method |
| Chase NYC/CTR/
Account | BNF=CIGNA Private
Information | Placements/AC=9009001802
| ABA# 000000000
-----------------------------------------------------------------
Accompanying | OBI=XXXXXX GROUP, INC.; 7.13% Senior
Information | Secured Notes due December, ___ 2005;
| PPN: ________; due date and application
| (as among principal, premium and interest
| of the payment being made; contact name
-----------------------------------------------------------------
Address for Notices | CIG & Co.
Related to Payments | c/o CIGNA Investments, Inc.
| Attention: Securities Processing S-206
| 000 Xxxxxxx Xxxxx Xxxx
| Xxxxxxxx XX 00000-0000
|
| with a copy to:
|
| Chase Manhattan Bank, N.A.
| Private Placement Servicing
| X.X. Xxx 0000
| Bowling Green Station
| Xxx Xxxx, Xxx Xxxx 00000
| Attention: CIGNA Private Placements
| FAX: 000-000-0000/1005
-----------------------------------------------------------------
Address for All | CIG & Co.
Other Notices | c/o CIGNA Investments, Inc.
| Attention: Private Securities Division -
| S-307
| 000 Xxxxxxx Xxxxx Xxxx
| Xxxxxxxx, Xxxxxxxxxxx 00000-0000
| FAX: 000-000-0000
-----------------------------------------------------------------
Tax Identification | 00-0000000
Number |
-----------------------------------------------------------------
EXHIBIT A
PAGE 4 of 4
MATTER NAME: XXXXXX GROUP, INC.
----------------------------------------------------------------
Purchaser Name | LIFE INSURANCE COMPANY OF NORTH AMERICA
-----------------------------------------------------------------
Name in Which Note | CIG & Co.
is to be Registered |
-----------------------------------------------------------------
Principal Amount | $5,000,000
-----------------------------------------------------------------
Payment on Account |
of Note |
| Federal Funds Wire Transfer
Method |
| Chase NYC/CTR/
Account | BNF=CIGNA Private
Information | Placements/AC=9009001802
| ABA# 000000000
-----------------------------------------------------------------
Accompanying | OBI=XXXXXX GROUP, INC.; 7.13% Senior
Information | Secured Notes due December, ___ 2005;
| PPN: ________; due date and application
| (as among principal, premium and interest
| of the payment being made; contact name
-----------------------------------------------------------------
Address for Notices | CIG & Co.
Related to Payments | c/o CIGNA Investments, Inc.
| Attention: Securities Processing S-206
| 000 Xxxxxxx Xxxxx Xxxx
| Xxxxxxxx XX 00000-0000
|
| with a copy to:
|
| Chase Manhattan Bank, N.A.
| Private Placement Servicing
| X.X. Xxx 0000
| Bowling Green Station
| Xxx Xxxx, Xxx Xxxx 00000
| Attention: CIGNA Private Placements
| FAX: 000-000-0000/1005
-----------------------------------------------------------------
Address for All | CIG & Co.
Other Notices | c/o CIGNA Investments, Inc.
| Attention: Private Securities Division -
| S-307
| 000 Xxxxxxx Xxxxx Xxxx
| Xxxxxxxx, Xxxxxxxxxxx 00000-0000
| FAX: 000-000-0000
-----------------------------------------------------------------
Tax Identification | 00-0000000
Number |
-----------------------------------------------------------------
EXHIBIT B
FORM OF NOTE
XXXXXX GROUP INC.
7.13% Senior Unsecured Note,
due December 5, 2005
Private Placement No.:
No. R-B______________ Bloomfield, CT
U.S. $______________ December 5, 0000
Xxxxxx Group Inc., (the "Company"), a Delaware corporation,
for value received, hereby promises to pay to ______________, or
registered assigns, the principal amount of U.S. $____________ on
December 5, 2005, with interest (computed on the basis of a 360-
day year of twelve 30-day months) on the unpaid balance of such
principal amount at the rate of 7.13% per annum from the date
hereof, payable semiannually on each June 5 and December 5 after
the date hereof, until such unpaid balance shall become due and
payable (whether at maturity or at a date fixed for prepayment or
by declaration or otherwise), and with interest on any overdue
principal (including any overdue prepayment of principal) and the
Makewhole Price, as defined in the Note Purchase Agreement (as
hereinafter defined), if any, and (to the extent permitted by
applicable law) on any overdue interest, at the rate of 1% per
annum above the applicable interest rate until paid, payable
semiannually as aforesaid or, at the option of the holder hereof,
on demand. Payments of principal, premium, if any, and interest
on this Note shall be made without tender of the Note in
immediately available funds by federal wire transfer in lawful
money of the United States of America on the due date therefor to
the account of the respective holder hereof at the address shown
in the register maintained by the Company for such purpose, in
the manner provided in the Note Purchase Agreement.
This Note is one of the Company's 7.13% Unsecured Notes, due
December 5, 2005 (the "Notes"), originally issued in the
aggregate principal amount of U.S. $25,000,000 pursuant to the
Note Purchase Agreement (the "Note Purchase Agreement"), dated as
of October ____, 1995, as from time to time amended, between the
Company and each of the Purchasers listed therein. The
registered holder of this Note is entitled to the benefits of
such Note Purchase Agreement and may enforce the agreements of
the Company contained therein and exercise the remedies provided
for thereby or otherwise available in respect thereof.
This Note has not been registered under the Securities Act
of 1933, as amended, or the laws of any state and may be
transferred
in whole or in part only pursuant to an effective registration
statement under such Act and applicable state laws or under an
exemption from such registration available under such Act and
applicable state law. Subject to the foregoing, transfers of
this Note shall be registered upon registration books maintained
for such purpose by or on behalf of the Company as provided in
the Note Purchase Agreement. Prior to presentation of this Note
for registration of transfer, the Company shall treat the
registered holder hereof as the owner and holder of this Note for
the purpose of receiving all payments of principal and interest
hereon and for all other purposes whatsoever, whether or not this
Note shall be overdue, and the Company shall not be affected by
notice to the contrary. This Note is transferable only in
accordance with the provisions of the Note Purchase Agreement and
the holder hereof is subject to and bound by the provisions of
the Note Purchase Agreement as if it were an original signatory
thereto.
This Note is subject to prepayment, in whole or in part, in
certain cases with the Makewhole Price, all as specified in such
Note Purchase Agreement.
In case an Event of Default, as defined in such Note
Purchase Agreement, shall occur and be continuing, the unpaid
balance of the principal of this Note, together with the
Makewhole Price applicable thereto, may become due and payable in
the manner and with the effect provided in such Note Purchase
Agreement.
This Note is made and delivered in Bloomfield, Connecticut,
and shall be governed by the laws of the State of Connecticut.
XXXXXX GROUP INC.
By: ______________________________
Name:
Title:
EXHIBIT C
I. THE COMPANY'S ACTIVE SUBSIDIARIES, EACH OF WHICH HAS ONLY
A SINGLE CLASS OF STOCK OUTSTANDING, ARE AS FOLLOWS:
Jurisdiction of
Name Incorporation
---- ---------------
Associated Spring-Asia PTE. LTD. Singapore
Associated Spring SPEC Limited United Kingdom
Xxxxxx Group (Bermuda) Limited Bermuda
Xxxxxx Group Canada Inc. Canada
Xxxxxx Group Holding B.V. Netherlands
Xxxxxx Distribution Europe Limited United Kingdom
Xxxxxx Distribution France S.A. France
Resortes Mecanicos, S.A. Mexico
Ressorts SPEC, EURL France
Xxxxxx & Xxxxxxx do Brasil Industria e
Comercio Limitada Brazil
Windsor Airmotive Asia PTE, LTD. Singapore
Associated Spring SPEC Limited is wholly-owned by Xxxxxx
Distribution Europe Limited. Ressorts SPEC, EURL is wholly-owned
by Xxxxxx Distribution France S.A. Windsor Airmotive Asia PTE.
LTD. is wholly-owned by Xxxxxx Group Canada Inc. Associated
Spring-Asia PTE. Ltd., Resortes Mechanicos, S.A., and Xxxxxx &
Xxxxxxx do Brasil Industria e Comercio Limitada are wholly-owned
by Xxxxxx Group (Bermuda) Limited. Xxxxxx Group Canada Inc.,
Xxxxxx Distribution Europe Limited, and Xxxxxx Distribution
France S.A. are wholly-owned by Xxxxxx Group Holding B.V. Xxxxxx
Group (Bermuda) Limited and Xxxxxx Group Holding B.V. are
wholly-owned by Xxxxxx Group Inc. The Company's consolidated
financial statements include all of the above-named subsidiaries.
For a statement of the principles of consolidation applicable to
these subsidiaries, see note 1 of the Notes to Consolidated
Financial Statements on page 18 of the 1994 Annual Report to
Stockholders.
EXHIBIT C (CONTINUED)
II. AFFILIATES
The Company's Affiliates, other than Subsidiaries, are as
follows:
Jurisdiction of Nature and Extent
Name of Affiliate Incorporation of Affiliation
----------------- --------------- -----------------
a) NHK-Associated Spring Delaware 45% of Voting Stock
Owned by Company
b) Xxxxxxx X. Xxxxxx Have beneficial
Xxxxxx X. Xxxxxx ownership of more
Xxxxxxx Xxxxxx than 5% of the
Fleet Bank of Connecticut Company's stock as
Xxxxxxxx Xxxxxxxx Institutional determined under
Investors, Inc. Rule 13d-3 of the
State Street Bank & Trust Company Securities Exchange
(in its capacity as Trustee for Act of 1934
the Company's Guaranteed
Stock Plan)
EXHIBIT C (CONTINUED)
III. DESCRIPTION OF INDEBTEDNESS
[UPDATED DESCRIPTION OF INDEBTEDNESS TO BE PROVIDED BY THE
COMPANY]
(A) The Indebtedness for borrowed money (including
Financing Leases) of the Company and its Subsidiaries as of
September 30, 1995 is as follows:
Description Amount
----------- ------
1. Senior Notes Travelers Insurance Company $23,077,000.00
Allstate Life Insurance $ 9,231,000.00
Company
Aid Association for Lutherans $ 4,615,000.00
2. Revolving Mellon Bank, N.A. Trustee $ -0-
Credit
Agreement
3. Industrial Commercia Bank, N.A. Trustee $ 7,000,000.00
Revenue Bond
Saline, MI
4. Short Term Various $26,500,000.00
Credit Line
5. Bank Overdraft Society National Bank $ 557,000.00
6. Letter of Fuji Bank, Ltd. $ 7,394,000.00
Credit
7. NASCO Guaranty LTCB Trust Co. $ 3,780,000.00
8. NASCO Guaranty Tohlease Corp. $ 1,282,000.00
9. NASCO Guaranty Yokohama Bank $ 450,000.00
10. NASCO Guaranty LTCB Trust Co. $ 1,350,000.00
11. NASCO Guaranty LTCB Trust Co. $ 3,150,000.00
12. ESOP Guaranty Shawmut Bank, N.A. $10,398,000.00
NBD Bank N.A.
13. Standby L/C Shawmut Bank, N.A. $ 6,448,000.00
14. Commercial L/C Shawmut Bank, N.A. $ 2,680,000.00
15. Company Various $ 100,000.00
Guaranty
Total Debt: $101,012,000.00
Total excludes duplication items listed:
#3 Industrial Revenue Bond, Saline, $7,000,000.00
EXHIBIT C (CONTINUED)
(B) Agreement Restricting the Company's Ability to Incur
Indebtedness:
1. Senior Notes, Travelers Insurance Company, Allstate Life
------------
Insurance Co., Aid Association for Lutherans, dated
September 16, 1991;
2. Revolving Credit Agreement, Mellon Bank, N.A., agent, dated
--------------------------
December 1, 1991;
3. Reimbursement Agreement, Fuji Bank Limited, New York Branch,
-----------------------
dated February 1, 1986;
4. Guarantee Agreement, Connecticut National Bank and National
-------------------
Bank of Detroit, dated July 28, 1989;
5. Interest Rate Swap Agreement, Chemical Bank, N.A., dated
----------------------------
September 16, 1991;
6. Xxxxxx Group Inc. Company Resolution, Xxxxxx Group Inc.,
------------------------------------
dated April 14, 1990.
IV. LIENS ON PROPERTY
Liens existing as of June 30, 1995 (other than Liens of the
types permitted by clauses (i) through (v) of Section 7.6(a)) on
any Property of the Company and its Subsidiaries which has a cost
or market value greater than $500,000 are as follows:
a. NONE
EXHIBIT D
DESCRIPTION OF COMPANY COUNSEL'S CLOSING OPINION
The closing opinion of Xxxx X. Xxxxxx, Esq., Counsel of the
Company, which is called for by Section 3.1, shall be dated the
Closing Date and addressed to you, shall be satisfactory in form
and substance to you, and shall be to the effect that:
(1) Organization, Standing, etc. of the Company--the Company is
a duly incorporated and validly existing corporation in good
standing under the laws of the State of Delaware and has all
requisite power and authority to issue, sell and deliver the
Notes and to carry on its business and own its Property;
(2) Organization, Standing, etc, of Subsidiaries--each
Subsidiary is a duly incorporated and validly existing
corporation in good standing under the laws of its
jurisdiction of incorporation and has all requisite
corporate power and authority to carry on its business and
own its Property;
(3) Authority to Conduct Business--the Company, and each
Subsidiary, is duly authorized to conduct its business in
each jurisdiction in which it operates and has duly
qualified and is in good standing as a foreign corporation
in each jurisdiction where the character of its Properties
or the nature of its activities makes such qualification
necessary or desirable;
(4) Agreement, Notes--the Agreement and the Notes being
delivered to you at the closing have been duly authorized by
all necessary corporate action on the part of the Company
(no action by the stockholders of the Company being required
by law, by the Certificate of Incorporation or By-Laws of
the Company or otherwise), have been duly executed and
delivered by the Company, and are legal, valid and binding
obligations of the Company enforceable in accordance with
their terms except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors, rights generally or by general
equitable principles;
(5) No Conflict with Charter, By-Laws or Other Agreements--the
issue and sale of the Notes and compliance by the Company
with the terms of the Notes and the Agreement will 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
EXHIBIT D (CONTINUED)
pursuant to the provisions of, the Certificate of
Incorporation or By-Laws of the Company, or any agreement or
other instrument to which the Company is a party or by which
it is bound;
(6) Title to Stock of Subsidiaries--the Company is the legal and
beneficial owner of all of the shares it purports to own of
the capital stock of each Subsidiary, free and clear in each
case of any Lien and all such shares have been duly issued
and are fully paid and non-assessable;
(7) Governmental Consent, etc,--all consents, approvals or
authorizations, if any, of any governmental authority
required on the part of the Company in connection with the
execution and delivery of the Agreement or the offer, issue,
sale or delivery of the Notes to you have been duly
obtained, and the Company has complied with any applicable
provisions of law requiring any designation, declaration,
filing, registration or qualification with any governmental
authority in connection with such offer, issue, sale or
delivery;
(8) Margin Requirements--none of the transactions contemplated
in the Agreement (including, without limitation thereof, the
use of the proceeds from the sale of the Notes) will violate
or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulations 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; and
(9) Exempted Offering--the issuance, sale and delivery of the
Notes under the circumstances contemplated by the Agreement
are exempted transactions under the registration provisions
of the Securities Act of 1933, as amended, and do not, under
existing law, require the registration of the Notes under
the Securities Act of 1933, as amended, or qualification of
an indenture under the Trust Indenture Act of 1939.
(10) Litigation--there is no action, suit, or proceeding at law
or in equity or any investigation pending, or to the best
knowledge of such counsel threatened, against or affecting
the Company or any Subsidiary in or before any court,
governmental authority or agency or arbitration board or
tribunal which, individually or in the aggregate will have a
material adverse impact on the long-term financial condition
or prospects of the Company and its Subsidiaries, or the
ability of the Company to perform the Agreement.
EXHIBIT D (CONTINUED)
(11) The Company is not an "investment company," or a company
"controlled" by an "investment company," within the meaning
of the Investment Company Act of 1940, as amended.
(12) The Company is not a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
Such opinion shall also cover such other matters incident to the
transactions contemplated hereby as you or your counsel may
reasonably request.
EXHIBIT E
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of special counsel for you, which is called
for by Section 3.1 of the Agreement, shall be dated the Closing
Date and addressed to you, shall be satisfactory in form and
substance to you, and shall cover the matters referred to in
paragraphs 1 (as to incorporation and good standing only), and 4,
5 (as to Certificate of Incorporation and ByLaws only), 7, 8 and
9 of Exhibit D. Such opinion shall also state that based on such
due investigation and inquiry as deemed relevant and appropriate,
the closing opinion of Company counsel delivered pursuant to
Section 3.1 is satisfactory in scope and form to special counsel
and that in their opinion you are justified in relying thereon,
and shall cover such other matters relating to the sale of the
Notes as you may reasonably request.
EXHIBIT F
CERTAIN DOCUMENTS FURNISHED TO PURCHASERS
1. Financial Statements for 1991, 1992, 1993 and 1994.
2. The Company's 1994 Proxy Statement and 10k filing.
3. Offering Memorandum with respect to the Company's
$40,000,000 9.47% Senior Notes due September 16, 2001.
CONFORMED COPY
XXXXXX GROUP INC.
NOTE PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
----
SECTION 1. PURCHASE AND SALE OF NOTES 1
1.1 Issue of Notes 1
1.2 The Closing 1
1.3 Purchase for Investment 2
1.4 Failure to Deliver 2
1.5 Expenses; Issue Taxes 2
SECTION 2. WARRANTIES AND REPRESENTATIONS 3
2.1 Subsidiaries 3
2.2 Corporate Organization and Authority 3
2.3 Business, Property, Indebtedness and Liens 4
2.4 Financial Statements 4
2.5 Full Disclosure 5
2.6 Pending Litigation; Compliance with Law 5
2.7 Title to Properties 6
2.8 Patents and Trademarks 6
2.9 Sale is Legal and Authorized 6
2.10 No Defaults 6
2.11 Governmental Consent 7
2.12 Taxes 7
2.13 Use of Proceeds 8
2.14 Private Offering 8
2.15 ERISA 8
2.16 Foreign Assets Control Regulations, etc 9
2.17 Status under Certain Statutes 9
2.18 Environmental Matters 9
SECTION 3. CLOSING CONDITIONS 10
3.1 Opinions of Counsel 10
3.2 Warranties and Representations True as of
Closing Date 10
3.3 Compliance with this Agreement 10
3.4 Officers' Certificate 11
3.5 Proceedings Satisfactory 11
3.6 Private Placement Number 11
3.7 Legal Investment 11
SECTION 4. DIRECT PAYMENT 11
SECTION 5. PREPAYMENTS 11
5.1 Required Prepayments 11
5.2 Option to Prepay 12
5.3 Notice of Optional Prepayment 12
5.4 Partial Payment Pro Rata 12
TABLE OF CONTENTS (CONTINUED)
PAGE
----
SECTION 6. REGISTRATION; SUBSTITUTION OF NOTES 13
6.1 Registration of Notes 13
6.2 Exchange of Notes 13
6.3 Replacement of Notes 13
SECTION 7. COMPANY BUSINESS COVENANTS 14
7.1 Payment of Taxes and Claims 14
7.2 Maintenance of Properties and
Corporate Existence 14
7.3 Maintenance of Office 15
7.4 Sale of Assets or Merger 16
7.5 Leases 16
7.6 Liens and Encumbrances 17
7.7 Indebtedness 18
7.8 Net Worth 19
7.9 ERISA Compliance 19
7.10 Transactions with Affiliates 19
7.11 Tax Consolidation 20
7.12 Acquisition of Notes 20
7.13 Lines of Business 20
7.14 Restricted Loans, Advances and Investments 20
7.15 Limitation on Restrictions on Dividends by
Subsidiaries, etc. 21
SECTION 8. INFORMATION AS TO COMPANY 22
8.1 Financial and Business Information 22
8.2 Officers' Certificates 24
8.3 Accountants' Certificates 25
8.4 Inspection 25
SECTION 9. EVENTS OF DEFAULT 26
9.1 Nature of Events 26
9.2 Default Remedies 27
9.3 Annulment of Acceleration of Notes 28
SECTION 10. INTERPRETATION OF THIS AGREEMENT 28
10.1 Terms Defined 28
10.2 Accounting Principles 33
10.3 Directly or Indirectly 34
10.4 Governing Law 34
TABLE OF CONTENTS (CONTINUED)
PAGE
----
SECTION 11. MISCELLANEOUS 34
11.1 Notices 34
11.2 Reproduction of Documents 34
11.3 Survival 35
11.4 Successors and Assigns 35
11.5 Amendment and Waiver 35
11.6 Duplicate Originals 36
Exhibit A - Schedule of Purchasers
Exhibit B - Form of Note
Exhibit C - Subsidiaries and Affiliates of Company,
Description of Indebtedness
Exhibit D - Form of Opinion of General Counsel of Company
Exhibit E - Form of Opinion of Special Counsel of Company
Exhibit F - List of Disclosure Documents
Schedule I - List of Leases
