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EXHIBIT 4.7
September __, 1996
Transportation Manufacturing Operations, Inc.
Dial Tower
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Re: 9.02% Senior Notes due 2002
Gentlemen:
Reference is made to the Note Agreement (the "Agreement"), dated as
of November 15, 1994, among Transportation Manufacturing Operations, Inc. (the
"Company"), the undersigned and the other persons named on Schedule A thereto
(together with the undersigned, the "Purchasers"), pursuant to which the Company
issued and sold, and the Purchasers purchased, the Company's 9.02% Senior Notes
due November 15, 2002 in the original principal amount of $125,000,000. Unless
otherwise defined herein, capitalized terms used herein which are defined in the
Agreement shall have the meanings as given in the Agreement.
Pursuant to paragraph 11C of the Agreement and the request of the
Company, and subject to the satisfaction of the conditions set forth in Section
4 below, the undersigned and the Company agree as follows:
1. CONSENT. Notwithstanding paragraph 6C(9)(ii) of the Agreement,
the undersigned consent to the payment by the Company of a dividend in cash of
up to $30,000,000 to MCII, provided, that (a) the payment of such dividend is
permitted by clauses (i) and (iii) of paragraph 6C(9) of the Agreement, (b) such
dividend is paid on or before March 31, 1997 and (c) immediately upon receipt
of such payment, MCII pays a dividend to Grupo Xxxx in the same amount as the
dividend payment made by the Company to MCII.
2. AMENDMENTS TO AGREEMENT.
2.1. Paragraph 5A is amended by adding the following as new clauses
(iii) and (iv) and by renumbering the existing clauses (iii), (iv), (v) and (vi)
as (v), (vi), (vii) and (viii), respectively:
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(iii) as soon as available and in any event within 60
days after the end of each fiscal quarter (beginning with the fiscal
quarter ending September 30, 1996), the consolidated balance sheet
for Grupo Xxxx and its consolidated subsidiaries as at the end of
such fiscal quarter and the related consolidated statements of income
and cash flows of Grupo Xxxx and its consolidated Subsidiaries for
such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, setting forth
in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year, all in reasonable detail,
provided, that so long as Grupo Xxxx is a foreign private issuer
complying with reporting requirements under the Exchange Act, the
foregoing requirement shall be satisfied by delivery of Grupo Xxxx's
quarterly report for such fiscal quarter on Form 6K thereunder;
(iv) as soon as available and in any event within 120 days
after the end of each fiscal year, the consolidated balance sheet of
Grupo Xxxx and its consolidated Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income,
stockholders, equity and cash flows of Grupo Xxxx and its
consolidated Subsidiaries for such fiscal year, setting forth in
comparative form the corresponding figures for the previous fiscal
year, all in reasonable detail, provided, that so long as Grupo Xxxx
is a foreign private issuer complying with reporting requirements
under the Exchange Act, the foregoing requirement shall be satisfied
by delivery of Grupo Xxxx's annual report for such fiscal year on
Form 20F thereunder, and in the case of such consolidated financial
statements of Grupo Xxxx, reports thereon of Xxxxxx Xxxxxxxx LLP or
other independent auditors of recognized national standing selected
by Grupo Xxxx, which reports shall be unqualified and shall not
include any reference to doubts about the ability of Grupo Xxxx and
its Subsidiaries to continue as a going concern;
2.2. Clause (ii) of paragraph 6C(4) of the Agreement is amended and
restated in its entirety as follows:
(ii) The aggregate amount of all Contingent Liabilities (excluding
performance bonds not to exceed $180,000,000 relating to an order
which may be made by The New Jersey Transit Authority but including
the aggregate amount of coach repurchase contracts described in
clause (i)) to exceed 100% of Consolidated Net Worth, provided, that
the aggregate amount of Contingent Liabilities consisting of (a)
Surety Bonds and outstanding undrawn letters of credit for the
account of the Company or any Restricted Subsidiary shall not exceed
50% of Consolidated Net Worth and (b) Residual Value Guarantees and
the aggregate amount of coach repurchase contracts described in
clause (i) hereof shall not exceed 50% of Consolidated Net
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Xxxxx, in each case determined as of the end of the most recently
completed fiscal quarter.
2.3. Clause (iii) of paragraph 6C(5) of the Agreement is amended and
restated in its entirety as follows:
(iii) Investments in addition to those set forth in clauses (i) and
(ii) (other than Investments in any Person controlling, controlled by
or under common control with the Company (other than Restricted
Subsidiaries and Investments in Grupo Xxxx by the Company to the extent
such Investments consist of purchases of motor coaches from Grupo Xxxx
for resale in the United States or Canada ("Permitted Grupo Xxxx
Investments"))), so long as (a) the aggregate original cost of such
Investments, including, without limitation, Permitted Grupo Xxxx
Investments, does not, at any time, exceed 5% of Consolidated Net
Worth and (b) the aggregate original cost of such Permitted Grupo Xxxx
Investments does not, at any time, exceed 2.5% of Consolidated Net
Worth and all such Permitted Grupo Xxxx Investments are otherwise
permitted by paragraph 6C(7) and
2.4. Clause (iv) of paragraph 6C(5) of the Agreement is amended by
adding immediately after the phrase "Restricted Subsidiary" and before the
parenthetical the phrase "and Permitted Grupo Xxxx Investments."
2.5. The following is added as a new paragraph 6D:
6D. ADDITIONAL GUARANTORS. The Company covenants not to permit
any Subsidiary to become a guarantor of any of the obligations of the
Company under the Bank Credit Facility or any other agreement, document
or instrument now or hereafter executed or delivered in connection
therewith unless concurrently therewith such Subsidiary provides to the
holders of the Notes a guarantee of the obligations of the Company
under this Agreement and the Notes pursuant to a written agreement in
form and substance satisfactory to the Required Holders.
2.6. Paragraph 7A of the Agreement is amended by adding the following
immediately after clause (13) as a new clause (14):
(14) any Guarantor shall fail to perform or observe any
agreement, term or condition contained in, or otherwise be in default
(beyond any applicable grace period) under, any guarantee agreement in
favor of the holders of the Notes; or any representation or warranty
made by any Guarantor in any such guarantee shall be false in any
material respect as of the date when made; or any such guarantee shall
fail to be in full force and effect or otherwise shall not be
enforceable in accordance with its terms; or any Guarantor shall
contest or
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deny the validity or enforceability of, or deny that it
has any liability or obligations under, any such guarantee
to which it is a party;
The last sentence of paragraph 7A is also amended
by deleting the phrase "(12) to (13)" and inserting in lieu thereof
the phrase "(12) to (14)".
2.7. Paragraph 10B of the Agreement is amended as follows:
(a) The following definition is added immediately after the
definition of "Guarantee":
"Guarantor" shall mean any Subsidiary that is a
party to any guarantee agreement in favor of the holders of
the Notes with respect to the Company's obligations under
this Agreement and the Notes, including, without limitation,
any Subsidiary that becomes a guarantor pursuant to paragraph
6D.
(b) The definition of "Priority Debt" in paragraph 10B of
the Agreement is amended by adding immediately after "Intercompany
Indebtedness" the phrase "and Guarantees of Indebtedness under this
Agreement and the Notes and Guarantees of Indebtedness under the Bank
Credit Facility".
(c) The following definition is added immediately after the
definition of "Required Holders":
"Residual Value Guaranties" means any agreement
entered into by the Company or any of its Subsidiaries to
promote the sales of any bus or coach pursuant to which
the Company of any of its Subsidiaries is guaranteeing at
some future time any minimum value (which may be determined
by a formula) of a bus or coach as specified in such
agreement, the terms and provisions of which agreement are
consistent with the past practices and policies of the
Company and its Subsidiaries prior to September _, 1996.
(c) The definition of "Significant Subsidiary" in paragraph
10B of the Agreement is amended by adding immediately after the phrase
"fiscal year" the phrase ", provided, that for clauses (7) through
(12), inclusive, of paragraph 7A the term "Significant Subsidiary"
shall also mean any Guarantor."
3. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants as follows: (a) it has all necessary power and authority to
execute and deliver this letter; (b) the execution, delivery and
performance of this letter have been duly authorized by it; (c) this
letter and the Agreement, as amended hereby, constitute the legal,
valid and binding obligations of the Company and are enforceable
against it in accordance with their terms; (d) the approval,
execution, delivery and performance of the terms
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hereof do not violate any contractual provision to which it is a party or by
which it is or its properties are bound or any law applicable to it; (e) all
consents, notices, waivers and other actions by or of the Company or any other
Person that are necessary in connection with the subject matter of the
foregoing consents and amendments have been obtained or taken; and (f) no
Default or Event of Default has occurred and is continuing.
4. CONDITIONS TO EFFECTIVENESS. The effectiveness of the consents and
amendments herein is subject to satisfaction of the following conditions (the
date upon which such conditions are satisfied being called the "Effective
Date"):
4.1. The undersigned shall have received counterparts to this letter
executed by the Company;
4.2. The undersigned shall have received a Guarantee Agreement (the
"Guarantee") in favor of the holders of the Notes, in form and substance
satisfactory to the undersigned, duly executed by each Subsidiary that is
executing a guarantee pursuant to the Credit Agreement referred to below
(collectively, the "Guarantors"), and the Guarantee shall be in full force and
effect;
4.3. The undersigned shall have received a favorable opinion of Xxxxxx
& Xxxxxxx, special counsel to the Guarantors, in form and substance
satisfactory to the undersigned, as to the Guarantee;
4.4. The undersigned shall have received a copy of the Credit
Agreement among the Company, the First National Bank of Chicago, NBD Bank,
N.A. and the other parties thereto (the "Credit Agreement"), in form and
substance satisfactory to the undersigned, duly executed by each party
thereto, and the Credit Agreement shall be in full force and effect;
4.5. The holders of the Notes and the lenders that are parties to the
Credit Agreement shall have entered into an Intercreditor Agreement, in form
and substance satisfactory to the undersigned, and such Intercreditor
Agreement shall be in full force and effect;
4.6. The undersigned shall have received copies of duly executed
agreements, in substance identical to this letter agreement, from holders of
the Notes that together with the undersigned would constitute the Required
Holders, and all conditions to the effectiveness of such agreements shall have
been satisfied.
4.7. The representations and warranties of the Company contained in
Section 3 hereof and of the Guarantors in the Guarantee shall be true on and
as of the Effective Date, after giving effect to the amendments and other
transactions contemplated by this Agreement; and after giving effect to such
amendments and
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other transactions there shall exist no Default or Event of Default.
4.8. The Company shall have paid to the undersigned a $17,143
amendment fee.
4. 9. The Company shall have paid such fees and expenses of special
counsel to the holders of the Notes in connection with the transactions
contemplated hereby as holders of the Notes shall have requested be paid on or
prior to the Effective Date.
4.10. The transactions contemplated by this letter shall not violate
any applicable law or governmental regulation and shall not subject the
undersigned to any tax, penalty, liability or other onerous condition under or
pursuant to any applicable law or governmental regulation, and the undersigned
shall have received such certificates or other evidence as may be requested to
establish compliance with this condition.
4.11. All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this letter shall
be reasonably satisfactory in form and substance to undersigned and its counsel,
and the undersigned shall have received all information and copies of all
documents and papers, including records of corporate and governmental
proceedings, which the undersigned may reasonably have requested in connection
therewith, such documents and papers when appropriate to be certified by proper
corporate or governmental authorities.
5. MISCELLANEOUS.
5.1. Upon the Effective Date, each reference in the Agreement to
"this Agreement," "hereunder," "hereof," "herein" or words of like import shall
mean and be a reference to the Agreement as amended hereby and each reference
to the Agreement in the Notes shall mean and be a reference to the Agreement,
as amended hereby.
5.2. This letter shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the internal law of the
State of New York.
5.3. Except as specifically amended above, the Agreement and the
Notes shall remain in full force and effect and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this letter shall not,
except as expressly provided herein, operate as an amendment to any provision of
the Agreement nor a waiver of any right, power or remedy of any holder of a
Note, nor constitute a waiver of, or consent to any departure from, any
provision of the Agreement or any Note.
5.4. This letter may be executed by one or more of the parties to
this letter on any number of separate counterparts and all of
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said counterparts taken together shall be deemed to constitute one and the same
instrument.
(signature pages to follow)
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Please acknowledge the foregoing and your agreement thereto by signing
this letter agreement where indicated below.
Very truly yours,
THE TRAVELERS INSURANCE COMPANY
By:
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Title:
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Accepted and Agreed to
as of the date written above:
TRANSPORTATION MANUFACTURING OPERATIONS, INC.
By: /s/ illegible
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Title: Senior Vice President
