-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, a+KyODI0f5ghFVPOdITgBmsuszfBBPaB3B0La3lskjFVVtSXQ+m80eE1wRGPusQU MlSR3tlE0axnoUjClbNjAg== 0000922423-95-000182.txt : 19950823 0000922423-95-000182.hdr.sgml : 19950823 ACCESSION NUMBER: 0000922423-95-000182 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19950822 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MARIETTA CORP CENTRAL INDEX KEY: 0000792969 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 161074992 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-38479 FILM NUMBER: 95565710 BUSINESS ADDRESS: STREET 1: 37 HUNTINGTON ST CITY: CORTLAND STATE: NY ZIP: 13045 BUSINESS PHONE: 6077536746 MAIL ADDRESS: STREET 1: 37 HUNTINGTON STREET CITY: CORTLAND STATE: NY ZIP: 13045 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DICKSTEIN PARTNERS INC CENTRAL INDEX KEY: 0000922415 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133537972 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 9 WEST 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10019 MAIL ADDRESS: STREET 1: 9 WEST 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D/A 1 MARIETTA CORPORATION 13D AMENDMENT FILING SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 11 to SCHEDULE 13D Under the Securities Exchange Act of 1934 Marietta Corporation (Name of Issuer) Common Stock, $.01 par value (Title of Class of Securities) 56763410 (CUSIP Number) David P. Levin, Esq. Kramer, Levin, Naftalis, Nessen, Kamin & Frankel 919 Third Avenue New York, New York 10022 (212) 715-9100 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 18, 1995 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box: /_/ Check the following box if a fee is being paid with this statement: /_/ PAGE Amendment No. 11 to Schedule 13D This Amendment amends the Schedule 13D, dated January 20, 1995, as amended by Amendment No. 1 thereto dated February 15, 1995, Amendment No. 2 thereto dated March 6, 1995, Amendment No. 3 thereto dated April 3, 1995, Amendment No. 4 thereto dated April 14, 1995, Amendment No. 5 thereto dated April 19, 1995, Amendment No. 6 thereto dated May 10, 1995, Amendment No. 7 thereto dated May 11, 1995, Amendment No. 8 thereto dated May 17, 1995, Amendment No. 9 thereto dated July 6, 1995 and Amendment No. 10 thereto dated August 1, 1995 (the "Schedule 13D"), filed by Dickstein & Co., L.P., Dickstein International Limited, Dickstein Partners, L.P., Dickstein Partners Inc., Mark Dickstein, Calibre Capital Advisors, Inc. and Howard R. Shapiro, with respect to the Common Stock, $.01 par value, of Marietta Corporation (the "Company"). Notwithstanding this Amendment, the Schedule 13D speaks as of its respective dates. Capitalized terms used without definition have the meanings assigned to them in the Schedule 13D. Item 4 of the Schedule 13D, "Purpose of the Transaction," is hereby amended by adding the following at the end thereof: "On August 21, 1995, Dickstein Inc. issued a press release concerning a commitment from the CIT Group/Business Credit, Inc. to finance the self-tender that Dickstein Inc. has proposed that the Company undertake. A copy of the press release is attached as Exhibit 19 and incorporated herein by reference. A copy of the commitment letter of CIT is attached as Exhibit 20 and incorporated herein by reference." Item 7 of the Schedule 13D, "Exhibits," is hereby amended by adding the following Exhibit: Exhibit 19 Press Release, dated August 21, 1995. Exhibit 20 Commitment Letter of CIT. 2 SIGNATURE After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certify that the information set forth in this Statement is true, complete and correct. Date: August 21, 1995 DICKSTEIN & CO., L.P. By: Alan Cooper, as Vice President of Dickstein Partners Inc., the general partner of Dickstein Partners, L.P., the general partner of Dickstein & Co., L.P. /s/ Alan Cooper Name: Alan Cooper DICKSTEIN INTERNATIONAL LIMITED By: Alan Cooper, as Vice President of Dickstein Partners Inc., the agent of Dickstein International Limited /s/ Alan Cooper Name: Alan Cooper DICKSTEIN PARTNERS, L.P. By: Alan Cooper, as Vice President of Dickstein Partners Inc., the general partner of Dickstein Partners, L.P. /s/ Alan Cooper Name: Alan Cooper 3 PAGE DICKSTEIN PARTNERS INC. By: Alan Cooper, as Vice President /s/ Alan Cooper Name: Alan Cooper /s/ Mark Dickstein Mark Dickstein CALIBRE CAPITAL ADVISORS, INC. By: Howard R. Shapiro, as President /s/ Howard R. Shapiro Name: Howard R. Shapiro /s/ Howard R. Shapiro Howard R. Shapiro 4 EX-19 2 FOR IMMEDIATE RELEASE Contact: Stanley J. Kay MacKenzie Partners, Inc. (212) 929-5500 DICKSTEIN PARTNERS OBTAINS CIT COMMITMENT TO FINANCE $16 MILLION SELF-TENDER BY MARIETTA CORP. NEW YORK, NEW YORK, AUGUST 21, 1995 -- Dickstein Partners Inc. announced today that it and Calibre Capital Advisors, Inc. had received a commitment from The CIT Group/Business Credit, Inc. to finance the self-tender offer that Dickstein Partners has proposed that Marietta Corporation (NASD: MRTA) undertake. Dickstein Partners is presently seeking to unseat Marietta's incumbent directors at the annual meeting scheduled for August 31. As indicated in the proxy materials Dickstein Partners mailed last week to Marietta's shareholders, Dickstein Partners' slate of director nominees proposes to cause Marietta to offer to pay an aggregate of $16 million to repurchase Marietta shares at a price between $8.00 and $9.00 per share in a "Dutch auction" tender offer. PAGE The CIT commitment is for $27 million of five-year financing, consisting of a $16 million revolving credit facility and an $11 million term loan. Approximately $20 million of the $27 million of committed financing (together with a portion of Marietta's existing cash and marketable securities) is expected to be utilized to fund the proposed self-tender offer, to refinance approximately $7.2 million of existing indebtedness (thereby freeing $2.6 million of restricted cash), and pay related fees and expenses. The balance of the financing would be available for working capital needs and other corporate purposes. The credit agreement will contain customary provisions as to interest, fees, prepayments, representations, covenants and defaults. The financing is conditioned upon the election of Dickstein Partners' nominees to a majority of the Marietta board. The financing is subject to other, customary conditions, including satisfactory completion of CIT's due diligence; the execution of definitive loan documentation satisfactory to CIT not later than December 1, 1995; final approval of CIT's credit committee; and there being not less than $3 million of unutilized availability under the revolving credit facility's borrowing base on the closing date. Dickstein Partners will soon be filing with the S.E.C. an amended 13D statement that will include a copy of the CIT commitment letter. Mark Dickstein, President of Dickstein Partners, stated: "The issuance of the commitment letter by CIT verifies our previously stated confidence that the self-tender offer that we have proposed is financeable. Since the incumbent directors are actively opposing any self-tender in their own proxy materials, Marietta's shareholders face a clear choice between director slates at the August 31 meeting." Dickstein Partners' proxy materials can be obtained through MacKenzie Partners, Inc., (212) 929-5500 (call collect) or 800-322-2885. EX-20 3 The CIT Group/Business Credit, Inc. 1211 Avenue of the Americas New York, New York 10036 August 17, 1995 Dickstein Partners Inc. 9 West 57th Street New York, New York 10019 Calibre Capital Advisors, Inc. 66 East 80th Street New York, New York 10021 Re: Marietta Corp. Gentlemen: Dickstein Partners Inc., a Delaware corporation ("Dickstein"), and Calibre Capital Advisors, Inc., a New York corporation ("Calibre" and together with Dickstein, the "Investors" and each an "Investor") have advised The CIT Group/Business Credit, Inc. ("CIT") that (i) they are investors in Marietta Corp., a Delaware corporation ("Marietta"), (ii) Dickstein is currently soliciting proxies to elect its nominees as the board of directors of Marietta and (iii) if such directors are so elected, they intend to cause Marietta to repurchase shares of its outstanding common stock at an aggregate purchase PAGE Dickstein Partners Inc. Calibre Capital Advisors, Inc. August 17, 1995 Page 2 price not in excess of $16,200,000. The Investors have also advised CIT that, in such event, Marietta will require financing for such share repurchases and that Marietta and/or its subsidiaries (collectively, the "Companies") will require financing for general working capital purposes and the Investors have requested CIT to provide such financing. CIT is pleased to advise you of its commitment to provide the Companies with a $16 million revolving credit facility, which will include a $2 million letter of credit subfacility, and a $11 million term loan, such facility and loan to be allocated by CIT among the Companies based upon the results of its due diligence (collectively, the "Financing Facilities"), substantially on the terms and conditions set forth in the Outline of Proposed Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"). The Financing Facilities will be guaranteed by all subsidiaries of the Companies and will be secured by substantially all assets of the Companies and their subsidiaries. CIT's commitment to provide the Financing Facilities is subject in all respects to satisfaction of the terms and conditions contained in this commitment letter and in the Term Sheet. Each of the Investors acknowledges that the Term Sheet is intended as an outline only and does not purport to summarize all the conditions, covenants, representations, warranties and other provisions which would be contained in definitive legal documentation for the Financing Facilities. CIT's commitment to provide the Financing Facilities is subject to negotiation and execution of definitive loan documents in form and substance satisfactory to CIT and its counsel. As you are aware, CIT has not had the opportunity to complete its business due diligence analysis and review or its legal due diligence analysis and review with respect to the stock repurchase transaction, the Investors and the Companies and their subsidiaries. CIT's willingness to participate in the financing described in this letter is therefore subject to the completion of such analysis and review and its satisfaction with the results thereof. Furthermore, if CIT discovers information not previously known to it which CIT believes is materially negative information with respect to the business, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Investors or the Companies and their subsidiaries, CIT may, in its sole discretion, suggest alternative financing amounts or structures that assure adequate protection for it or decline to provide the proposed financing. In any such case, CIT shall not PAGE Dickstein Partners Inc. Calibre Capital Advisors, Inc. August 17, 1995 Page 3 be responsible or liable for any damages which may be alleged as a result of its failure to provide the Financing Facilities. By their execution hereof and their acceptance of the commitment contained herein, the Investors, jointly and severally, agree to indemnify and hold harmless CIT and each of its assignees, their affiliates and their respective directors, officers, employees and agents (each an "Indemnified Party") from and against any and all losses, claims, damages, liabilities or other expenses to which such Indemnified Party may become subject, insofar as such losses, claims, damages, liabilities (or actions or other proceedings commenced or threatened in respect thereof) or other expenses arise out of or in any way relate to or result from the stock repurchases, this letter or the extension of the Financing Facilities contemplated by this letter, or in any way arise from any use or intended use of this letter or the proceeds of any of the Financing Facilities contemplated by this letter, and the Investors, jointly and severally, agree to reimburse each Indemnified Party for any legal or other expenses incurred in connection with investigating, defending or participating in any such loss, claim, damage, liability or action or other proceeding (whether or not such Indemnified Party is a party to any action or proceeding out of which indemnified expenses arise), but excluding therefrom all expenses, losses, claims, damages and liabilities which are finally determined in a non-appealable decision of a court to have resulted solely from the gross negligence or willful misconduct of the Indemnified Party. In addition, the Investors, jointly and severally, agree (i) to pay to CIT the fees and the deposit described in the letter agreement, dated the date hereof (the "Fee/Deposit Letter"), between the Investors and CIT (in the amounts and at the times expressly provided for therein), and (ii) to reimburse CIT for all reasonable fees and expenses (the "Expenses") incurred by or on behalf of CIT in connection with the negotiation, preparation, execution and delivery of this commitment letter, the Fee/Deposit Letter, the Term Sheet and any and all definitive documentation relating hereto and thereto, including, but not limited to, the reasonable fees and expenses of counsel to CIT. The obligations of the Investors under this paragraph shall remain effective even if definitive documentation is not executed and notwithstanding any termination of this commitment letter. PAGE Dickstein Partners Inc. Calibre Capital Advisors, Inc. August 17, 1995 Page 4 Each of the Investors represents and warrants that (i) all written information and other materials concerning the Companies or any of the Investors and their affiliates and subsidiaries (collectively, the "Information") which has been, or is hereafter, made available by, or on behalf of, any of the Investors is, or when delivered will be, when considered as a whole, complete and correct in all material respects and does not, or will not when delivered, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statement has been made and (ii) to the extent that any such information contains projec- tions, such projections were prepared in good faith on the basis of (X) assumptions, methods and tests stated therein which are believed by the Investors to be reasonable and (Y) information believed by the Investors to have been accurate based upon the information available to the Investors at the time such projections were furnished to CIT. The Investors are not authorized to show or circulate this letter or to disclose the terms hereof to any other person or entity (other than their legal and financial advisors in connection with their evaluation hereof) until such time as the Investors have accepted this letter as provided in the immediately succeeding paragraph. If this letter is not accepted by the Investors as provided in the immediately succeeding paragraph, the Investors are directed to immediately return this letter (and any copies hereof) to CIT. If this letter is so accepted, the Investors and their advisors are authorized to disclose the terms (as well as CIT's issuance) hereof (or file copies hereof) in any public filings or announcements, provided that the Investors shall first give CIT prior written notice thereof. The offer made by CIT in this commitment letter shall remain in effect until August 21, 1995 at which time it will expire unless prior thereto CIT has received (A) a copy of the Fee/Deposit Letter and this commitment letter, in each case signed by the Investors accepting this commitment letter and the Term Sheet and (B) in funds immediately available, payment of the fees then due and payable under the Fee/Deposit Letter. PAGE Dickstein Partners Inc. Calibre Capital Advisors, Inc. August 17, 1995 Page 5 The commitment by CIT to provide the Financing Facilities shall expire at 5:00 p.m. (New York time) (i) on October 15, 1995, unless on or prior to such date Marietta shall have agreed in writing to the terms and conditions contained in this Commitment Letter, the Term Sheet and the Fee/Deposit Letter and (ii) on December 1, 1995, unless on or prior to such date, definitive loan documentation shall have been agreed to in writing by all parties on or prior thereto. If Marietta so agrees in writing to the terms and conditions contained in this Commitment Letter, the Term Sheet and the Fee/Deposit Letter, the obligations of the Investors hereunder and thereunder shall thereupon terminate and be superseded in all respects by the obligations of Marietta to CIT. Should the terms and conditions of the offer contained herein meet with your approval, please indicate your acceptance by signing and returning a copy of this letter to CIT and paying in immediately available funds to CIT the fees due and payable under the Fee/Deposit Letter. The commitment letter, including the attached Term Sheet and the Fee Deposit Letter, (a) supersedes all prior discussions, agreements, commitments, arrangements, negotiations or understandings, whether oral or written, of the parties with respect thereto, (b) shall be governed by the law of the State of New York, without giving effect to the conflict of laws provisions thereof, and (c) shall be binding upon CIT, the Investors and their respective successors and assigns. This PAGE Dickstein Partners Inc. Calibre Capital Advisors, Inc. August 17, 1995 Page 6 commitment letter may be amended, modified or waived only in a writing signed by the parties hereto. Very truly yours, THE CIT GROUP/BUSINESS CREDIT, INC. By:/s/ Carl A. Toriello Name: Title: Agreed and accepted on this 18th day of August, 1995: DICKSTEIN PARTNERS INC. By:/s/ Samuel L. Katz Name: Title: CALIBRE CAPITAL ADVISORS, INC. By:/s/ Howard R. Shapiro Name: Title: Exhibit A MARIETTA CORP. Outline of Proposed Terms and Conditions This Outline of Proposed Terms and Conditions is part of the Commitment Letter, dated August 17, 1995 (the "Commitment Letter"), addressed to Dickstein Partners, L.P. and Calibre Capital Advisors by The CIT Group/Business Credit, Inc. and is subject to the terms and conditions of the Commitment Letter. Capitalised terms used herein shall have the meanings set forth in the Commitment Letter unless otherwise defined herein. BORROWERS: Marietta Corp., a Delaware corporation ("Marietta"), and/or its subsidiaries. LENDER: The CIT Group/Business Credit, Inc. ("CIT"). FINANCING A $16 million five year revolving credit FACILITIES: facility, with a sublimit of $2 million for letters of credit (the "Revolving Credit Facility") and a $11 million five year term loan (the "Term Facility" and together with the "Revolving Credit Facility," the "Financing Facilities"). The Financing Facilities shall be allocated by CIT among the Borrowers based upon the results of its due diligence. All obligations of the Borrowers to CIT in connection with the 1 Financing Facilities shall be unconditionally guaranteed by each subsidiary of the Borrowers and all loans to Borrowers (other than Marietta) shall be unconditionally guaranteed by Marietta. BORROWING BASE: Aggregate advances and letters of credit under the Revolving Credit Facility will be limited to the lesser of (i) $16 million and (ii) the Borrowing Base. The Borrowing Base shall be equal to the product of (A) the aggregate value of eligible accounts receivable and eligible inventory and (B) the Advance Rates. Each Borrower that is allocated a portion of the Revolving Credit Facility will have a separate Borrowing Base and the criteria for eligible accounts receivable and eligible inventory and the Advance Rates will be determined by CIT after its completion of its due diligence with respect to the Borrowers. In the case of eligible accounts receivable, the Advance Rate will not exceed 85% and, in the case of eligible inventory, the Advance Rate will not exceed 50%. In addition, a reserve to the Borrowing Base may be established by CIT with respect to potential liability from pending lawsuits involving the Borrowers and/or the share repurchases. LETTERS OF CREDIT: Letters of Credit will be issued for the account of the Borrowers by a bank selected by CIT and reasonably acceptable to the Borrowers and shall have an expiry date that (i) does not exceed one year from the date of issuance of such letter of credit and (ii) is not later than fifteen (15) days prior to the maturity date of the Revolving Credit Facility, unless, in the case of clause (ii), on or prior to such expiry date such letters of credit are cash collateralized in an amount equal to 105% of the face amount of such letters of credit. The Borrowers will be bound by the usual and customary terms contained in the letter of credit issuance documentation of the issuing bank and CIT. 2 LETTER OF CREDIT A fee equal to two and one-half percent FEE: (2-1/2%) per annum, payable monthly in arrears, of the average daily face amount of all letters of credit outstanding, as well as the issuing bank's and CIT's customary letter of credit fees and charges. MATURITY: All loans outstanding under the Revolving Credit Facility will be payable in full on the fifth anniversary of the closing date. The Term Facility will amortize in quarterly installments aggregating (i) $750,000 in the first year, (ii) $1,250,000 in the second year, (iii) $2,000,000 in the third and fourth years, and (iv) $5,000,000 in the fifth year. INTEREST: At the option of the Borrowers, interest on outstanding loans under the Revolving Credit Facility will be (i) Chemical Bank's prime rate (the "Prime Rate") plus one percent (1%) or (ii) Adjusted LIBOR plus two and one-half percent (2-1/2%). At the option of the Borrowers, interest on all outstanding loans under the Term Facility will be (i) the Prime Rate plus one and one-quarter percent (1-1/4%) or (ii) Adjusted LIBOR plus two and three quarters percent (2-3/4%). Interest and all fees will be payable based on a 360 day year. MANDATORY Upon the delivery of their audited financial PREPAYMENT; statements each year, the Borrowers shall EXCESS CASH FLOW: make a mandatory prepayment of the loans under the Term Facility in an amount equal to 50% of Excess Cash Flow. Excess Cash Flow shall be determined by CIT in accordance with its customary criteria after the completion of its due diligence. All such prepayments shall be applied (i) 75% to installments of the term loan in the inverse order of maturity and (ii) 25% to installments of the term loan in the direct order of maturity. FEES: Unused Line Fee 1/2 of 1% p.a. Collateral Management Fee $36,000 p.a. 3 EARLY TERMINATION Subject to customary indemnification for FEE: breakage with respect to LIBOR loans, the facilities are prepayable at any time, without penalty or premium, except that upon any termination of the Financing Facilities by the Borrowers prior to an anniversary date of the closing date CIT shall be entitled to an early termination fee equal to the average daily revolving loan balance during the term of the Financing Facilities multiplied by one and one-half percent (1-1/2%) if terminated during the first year and three-quarters of one percent (3/4%) if terminated during the second year. There will be no early termination fee thereafter. USE OF PROCEEDS: To finance the share repurchases of Marietta's common stock, to fund working capital in the ordinary course of business of the Borrowers and for other general corporate purposes of the Borrowers. COLLATERAL: A perfected, first and exclusive lien on all of the Borrowers' assets (including the assets of the subsidiaries of the Borrowers), including without limitation, stock of subsidiaries, real estate, leaseholds, inventory, receivables, equipment, patents, tradenames, trademarks, other intellectual property and licenses, subject to permitted liens acceptable to CIT. CASH MANAGEMENT: All proceeds of accounts receivable and inventory of the Borrowers and other Collateral shall be deposited in lockbox accounts under the sole dominion and control of CIT. All funds deposited in such lockbox accounts will be transferred to CIT on each business day and applied to repay the out- standing obligations of the Borrowers. No funds of any subsidiary or affiliate of the Borrowers that is not a borrower shall be deposited in such lockbox accounts or commingled with the funds contained therein. CONDITIONS The obligation of CIT to make loans will be PRECEDENT: subject to customary conditions precedent including, without limitation, the following special conditions precedent: 4 1. CIT shall have been granted a perfected, first priority lien on all Collateral, subject to permitted liens acceptable to CIT, and shall have received UCC, tax and judgment lien searches evidencing the absence of any other liens on the Collateral. 2. The Borrowers shall have aggregate minimum Borrowing Base availability of $3,000,000 on the date of the first advance under the Revolving Credit Facility. 3. An opinion from the Borrowers' outside counsel as to such matters as CIT and its counsel may request. 4. Insurance satisfactory to CIT, such insurance with respect to the Collateral to name CIT as loss payee. 5. Receipt by CIT of an audit of the books and records of the Borrowers, the results of which shall be satisfactory to CIT, and CIT's satisfaction with the results of its review with respect to material contracts, intellectual property, ERISA and tax matters, accounting matters and labor matters of the Borrowers and their subsidiaries. 6. CIT's satisfaction with the cash management system of the Borrowers. 7. Final approval of CIT's credit committee. 8. Receipt by CIT of a report reviewing the Borrowers' potential environmental liabilities and CIT's comfort with those liabilities. 9. A majority of the Board of Directors of Marietta shall have been designated by Dickstein and such Board of Directors shall have approved the stock repurchases. 5 10. The aggregate purchase price of the shares of its common stock repurchased by Marietta shall not exceed $16,200,000 and the average purchase price per share shall not exceed $9. 11. Receipt by CIT of an appraisal containing the orderly liquidation value of the equipment and real estate of the Borrowers, which value shall be satis- factory to CIT. 12. There shall have occurred no adverse change which CIT deems material in the condition (financial or otherwise), operations, performance, properties or prospects of the Investors, or of the Borrowers and their subsidiaries taken as a whole; and there shall have occurred no adverse change which CIT deems material in the financial markets generally since the date of the Commitment. 13. All necessary governmental and third party approvals in connection with the stock repurchases, or in connection with the financing therefor provided by CIT, shall have been obtained and remain in effect, and all applicable waiting periods shall have expired without any action being taken by any court or other competent authority which restrains, prevents or imposes materially adverse conditions upon, the stock repurchases. 14. There shall exist no claim, action, suit, investigation, litigation or proceeding (including, without limitation, shareholder or derivative litigation) pending or threatened in any court or before any arbitrator or governmental instrumentality which relates to the Financing Facilities or which, in the opinion of the CIT, has any reasonable likelihood of having a material adverse effect on (i) the condition (financial or otherwise), operations, business, properties or prospects of the Borrowers and their 6 subsidiaries taken as a whole or (ii) the stock repurchases or the Financing Facilities. 15. All loans made by CIT shall be in full compliance with all applicable requirements of law, including Regulations G, T, U and X of the Board of Governors of the Federal Reserve System, and the stock repurchases shall be made in compliance with all relevant federal and state securities laws. 16. CIT shall have received such financial and other information regarding the Borrowers and their subsidiaries as CIT may request. REPRESENTATIONS Usual representations and warranties, AND WARRANTIES: including, but not limited, to corporate existence and good standing, authority to enter into loan documentation, governmental approvals, non-violation of other agreements, financial statements, litigation, compliance with environmental pension and other laws, taxes, insurance, absence of material adverse change, absence of default or unmatured default and priority of CIT's liens. COVENANTS: Usual covenants, including, but not limited to, provision of financial statements, notices of litigation, defaults and unmatured defaults and other information, compliance with laws, inspection of properties, books and records, compliance with Borrowing Base, maintenance of insurance, limitations with respect to liens and encumbrances, dividends and retirement of capital stock, guarantees, sale and lease back transactions, consolidations and mergers, investments, capital expenditures, loans and advances, indebtedness, compliance with pension, environmental and other laws, operating leases, transactions with affiliates, prepayment of other indebtedness and customary financial covenants determined by CIT based upon its due diligence. 7 EVENTS OF DEFAULT: Usual events of default, including, but not limited to, payment, cross-default, violation of covenants, breach of representa- tions or warranties, bankruptcy or insolvency, judgment, ERISA, environmental and change of control. GOVERNING LAW: All documentation in connection with the Financing Facility shall be governed by the laws of the State of New York applicable to agreements made and performed in such state. INCREASED COSTS; The loan documents will contain customary CHANGE IN provisions protecting CIT in the event of CIRCUMSTANCES: unavailability of funding, illegality, capital adequacy requirements, increased costs and funding losses. In addition, the terms contained in this Outline of Proposed Terms and Conditions and the commitment by CIT will be subject to (i) there having occurred no change in any law, rule or regulation applicable to CIT or the Investors or the Borrowers and their subsidiaries, which adversely affects CIT's participation in the Financing Facilities and (ii) the Investors having paid to CIT the fees set forth in fee letter. 8 -----END PRIVACY-ENHANCED MESSAGE-----