-----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, F992KevtlQT3wsgDGW0QPqYNsZoI+uR5LDMGmSEXN5C7cRiWCCOTnEM5NMzt2Vtj spKITDIL6iFpO1Xs7X++Gg== 0000898430-94-000435.txt : 19940621 0000898430-94-000435.hdr.sgml : 19940621 ACCESSION NUMBER: 0000898430-94-000435 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19940501 FILED AS OF DATE: 19940613 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROHR INC CENTRAL INDEX KEY: 0000084801 STANDARD INDUSTRIAL CLASSIFICATION: 3728 IRS NUMBER: 951607455 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06101 FILM NUMBER: 94534057 BUSINESS ADDRESS: STREET 1: FOOT OF H STREET CITY: CHULA VISTA STATE: CA ZIP: 91910 BUSINESS PHONE: 6196914111 MAIL ADDRESS: STREET 1: PO BOX 878 CITY: CHULA VISTA STATE: CA ZIP: 91912 FORMER COMPANY: FORMER CONFORMED NAME: ROHR INDUSTRIES INC DATE OF NAME CHANGE: 19911219 FORMER COMPANY: FORMER CONFORMED NAME: ROHR CORP DATE OF NAME CHANGE: 19711220 FORMER COMPANY: FORMER CONFORMED NAME: ROHR AIRCRAFT CORP DATE OF NAME CHANGE: 19710317 10-Q 1 FORM 10-Q FY94: THIRD QUARTER ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE QUARTERLY PERIOD ENDED MAY 1, 1994 COMMISSION FILE NUMBER 1-6101 ROHR, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 95-1607455 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 850 LAGOON DRIVE, CHULA VISTA, CALIFORNIA 91910 (Address of principal executive offices) (619) 691- 4111 (Registrant's Telephone No.) INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO --- --- AS OF MAY 31, 1994, THERE WERE 18,030,430 SHARES OF THE REGISTRANT'S COMMON STOCK OUTSTANDING. ================================================================================ Page 1 of 17 PART 1. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS ROHR, INC. AND SUBSIDIARIES --------------------------- CONSOLIDATED BALANCE SHEETS --------------------------- (in thousands except for share data) ------------------------------------
MAY 1, JULY 31, 1994 1993 ----------- ----------- (UNAUDITED) ASSETS - - ------ Cash and short-term investments $ 25,985 $ 42,186 Accounts receivable 91,899 94,140 Inventories: Work-in-process 463,305 560,139 Raw materials, purchased parts and supplies 28,078 32,575 Less customers' progress payments and advances (105,537) (152,976) --------- ---------- Inventories - net 385,846 439,738 Prepaid expenses and other current assets 12,091 16,861 Deferred tax asset 13,723 13,654 --------- ---------- TOTAL CURRENT ASSETS 529,544 606,579 PROPERTY, PLANT AND EQUIPMENT 498,784 496,452 Less accumulated depreciation and amortization (273,122) (257,407) --------- ---------- Property, plant and equipment - net 225,662 239,045 INVESTMENT IN LEASES 37,699 38,233 DEFERRED TAX ASSET 119,123 89,348 OTHER ASSETS 37,616 44,581 --------- ---------- $ 949,644 $1,017,786 ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY - - ------------------------------------ Trade accounts and other payables $ 127,695 $ 166,916 Salaries, wages and benefits 35,694 38,623 Current portion of long-term debt 15,574 50,719 --------- ---------- TOTAL CURRENT LIABILITIES 178,963 256,258 LONG-TERM DEBT 466,562 480,889 PENSION AND POST-RETIREMENT OBLIGATIONS 131,509 63,040 OTHER OBLIGATIONS 27,058 35,356 COMMITMENTS AND CONTINGENCIES - - SHAREHOLDERS' EQUITY: Preferred stock, $1 par value per share, 10 million shares authorized, none issued - - Common stock, $1 par value per share, authorized 50,000,000 shares; issued and outstanding 18,009,680 and 17,995,866 shares respectively 18,010 17,996 Additional paid-in capital 102,546 102,312 Retained earnings 80,289 75,241 Minimum pension liability adjustment (55,293) (13,306) --------- ---------- TOTAL SHAREHOLDERS' EQUITY 145,552 182,243 --------- ---------- $ 949,644 $1,017,786 ========= ==========
Page 2 of 17 ROHR, INC. AND SUBSIDIARIES --------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED ------------------------------------------------- (in thousands except for per share data) ----------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED -------------------- --------------------- MAY 1, MAY 2, MAY 1, MAY 2, 1994 1993 1994 1993 -------- -------- --------- --------- Sales $231,101 $296,781 $715,924 $ 922,785 Costs and Expenses 209,255 308,934 648,974 903,521 General & Administrative Expenses 7,286 11,214 20,732 33,662 Unusual Items 7,926 7,926 -------- -------- -------- --------- Operating Income (Loss) 6,634 (23,367) 38,292 (14,398) Interest Income 395 272 915 677 Interest Expense 11,436 12,890 35,637 36,065 -------- -------- -------- --------- Income (Loss) before Taxes and Cumulative Effect of Accounting Changes (4,407) (35,985) 3,570 (49,786) Taxes (Benefit) on Income (1,720) (13,784) (1,478) (19,070) -------- -------- -------- --------- Income (Loss) before Cumulative Effect of Accounting changes (2,687) (22,201) 5,048 (30,716) Cumulative Effect through July 31, 1992 of accounting changes, net of taxes - - - (223,950) -------- -------- -------- --------- Net Income (Loss) $ (2,687) $(22,201) $ 5,048 $(254,666) ======== ======== ======== ========= Net Income (Loss) per Average Share of Common Stock: Before cumulative effect of accounting changes $(0.15) $(1.24) $ 0.28 $ (1.72) Effect through July 31, 1992 of accounting changes - - - (12.52) -------- -------- -------- --------- Net Income (Loss) $ (0.15) $ (1.24) $ 0.28 $ (14.24) ======== ======== ======== ========= Cash Dividends per Share of Common Stock - - - - Total Common Stock and Common Stock Equivalents 18,063 17,898 18,041 17,889
Page 3 of 17 ROHR, INC. AND SUBSIDIARIES --------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED ------------------------------------------------- (in thousands) --------------
NINE MONTHS ENDED ----------------------- MAY 1, MAY 2, 1994 1993 ---------- ---------- OPERATING ACTIVITIES: Net income (loss) $ 5,048 $(254,666) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Cumulative effect of accounting changes, net of taxes 223,950 Depreciation and amortization 17,041 18,974 Changes due to (increase) decrease in operating assets: Accounts receivable 21,408 19,218 Net inventories 53,892 43,844 Prepaid expenses and other assets 4,060 8,202 Deferred taxes (1,618) (24,064) Changes due to increase (decrease) in operating liabilities: Payables and Other Liabilities (43,391) 7,322 Other (463) 2,720 --------- --------- Net cash provided by operating activities 55,977 45,500 --------- --------- INVESTING ACTIVITIES: Proceeds from sale-leaseback transactions - 52,247 Purchase of property, plant and equipment - net (3,660) (22,889) Other 75 (1,274) --------- --------- Net cash provided by (used in) investing activities (3,585) 28,084 --------- --------- FINANCING ACTIVITIES: Issuance of 9.33% senior notes - 62,000 Annual principal payment on 9.35% senior notes (12,500) (12,500) Repayment of medium-term notes (35,000) (10,000) Net short-term borrowings (repayments) - (20,000) Long-term borrowings under revolving credit agreement 101,000 90,000 Repayment of borrowings under revolving credit agreement (101,000) (90,000) Repayment of other long-term borrowings (1,972) (27,370) Net repayment of receivable and equivalents - (45,000) Proceeds from cash values in insurance policies - 9,984 Cash collateral for receivables sales program (19,167) - Stock contributions to employee benefit plans - 741 Other 46 20 --------- --------- Net cash used in financing activities (68,593) (42,125) --------- --------- INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS (16,201) 31,459 CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF PERIOD 42,186 21,122 --------- --------- CASH AND SHORT-TERM INVESTMENTS, END OF PERIOD $ 25,985 $ 52,581 ========= ========= SUPPLEMENTAL INFORMATION: Cash paid for interest, net of amounts capitalized $ 36,612 $ 33,990 Cash paid for income taxes, net of refunds 115 5,112
Page 4 of 17 ROHR, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED) The consolidated balance sheet as of May 1, 1994, and statements of operations for the three month and nine month periods ended May 1, 1994 and May 2, 1993, and cash flows for the nine month periods ended May 1, 1994, and May 2, 1993, reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods. Financial results for interim periods are not necessarily indicative of results to be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements included in the July 31, 1993 Form 10-K. CONTINGENCIES In June 1987, the U.S. District Court of Los Angeles, in U.S. et al, vs. Stringfellow, granted partial summary judgment against the Company and 14 other defendants on the issue of liability under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). This suit alleges that the defendants are jointly and severally liable for all damage in connection with the Stringfellow hazardous waste disposal site in Riverside County, California. In June 1989, a federal jury and a special master appointed by the federal court found the State of California also liable for the cleanup costs. On November 30, 1993, the special master released his "Findings of Fact, Conclusions of Law and Reporting Recommendations of the Special Master Regarding the State Share Fact Finding Hearing". In it, he allocated liability between the State of California and other parties. As this hearing did not involve the valuation of future tasks and responsibilities, the order did not specify dollar amounts of liability. The order, phrased in percentages of liability, recommended allocating liability on the CERCLA claims as follows: 65% to the State of California and 10% to the Stringfellow entities, leaving 25% to the generator/counterclaimants (including the Company) and other users of the site (or a maximum of up to 28% depending on the allocation of any Stringfellow entity orphan share). On the state law claims, the special master recommended a 95% share for the State of California, and 5% for the Stringfellow entities, leaving 0% for the generator/counterclaimants. This special master's finding is subject to a final decision and appeal. The Company and the other generators of wastes disposed at the Stringfellow site, Page 5 of 17 which include numerous companies with assets and equity significantly greater than the Company, are jointly and severally liable for the share of cleanup costs for which the generators, as a group, may ultimately be found to be responsible. Notwithstanding, this CERCLA liability is sometimes allocated among hazardous waste generators who used a waste disposal site based on the volume of hazardous waste they disposed at the site. The Company is the second largest generator of wastes by volume disposed at the site, although it and certain other generators have argued the final allocation of cleanup costs among generators should not be determined solely by volume. The largest volume generator of wastes disposed at the Stringfellow site has indicated it is significantly dependent on insurance to fund its share of any cleanup costs, and that it is in litigation with certain of its insurers. The Company has claims against its comprehensive general liability insurers for reimbursement of its cleanup costs at the site. These claims are the subject of separate litigation, although the insurers nevertheless are paying substantially all of the Company's costs of defense in the CERCLA and State actions against the generators of wastes disposed at the site. Certain of these insurance policies have pollution exclusion clauses which are being argued as a defense and the insurers are alleging various other defenses to coverage. The Company has entered settlements with some of the insurance carriers and is engaged in settlement discussions with certain others. The Company intends to continue to vigorously defend itself in the Stringfellow matter and believes, based upon currently available information, that the ultimate resolution will not have a material adverse effect on the financial position, liquidity, or results of operations of the Company. The Company is also involved in several other proceedings and investigations related to environmental protection matters. It is difficult to estimate the ultimate level of environmental expenditures that will be required in connection with these matters due to a number of uncertainties, including the complexity of the related laws and their interpretation, alternative cleanup technologies and methods, insurance and other recoveries, and in some cases, the extent and uncertainties of the Company's involvement. However, the Company has heard of preliminary estimates of cleanup costs for the Rio Bravo, Chatham Brothers and Casmalia waste disposal sites as approximately $7 million, $30 million and $70 million, respectively, and the Company's share (based on estimated, respective volumes of discharges into such sites by all generators, all of which cannot now be known with certainty) could approximate $0.5 million for the Rio Bravo site, $0 for the Chatham Brothers site (based on the Company's belief that it never used that site), and $1.8 million for the Casmalia site. The Company does not yet know Page 6 of 17 about the ability of all of the other waste generators using the Casmalia and Rio Bravo sites to fund their allocable share, and the Company could be found jointly or severally liable with all waste generators using such sites. The Company has made claims against its insurance carriers for certain of these items, and has received claims acknowledgment letters reserving the rights of such carriers. The insurers have alleged or may allege various defenses to coverage, although no litigation has been commenced. Based upon presently available information, the Company believes that capital expenditures and costs of remedial actions in relation to these other matters will not have a material adverse effect on the financial position or results of operations of the Company. In 1990, the Division of Enforcement of the Securities and Exchange Commission (the "SEC") began conducting an informal inquiry regarding various Company production programs, program and contract estimates at completion and related accounting practices. Following the filing of a registration statement with the SEC, the Company received on August 17, 1993, and shortly thereafter responded to, a request for documents from the SEC Division of Enforcement concerning its decision to change its accounting practices relating to long-term programs and contracts, and its previous practice of capitalizing pre-certification and certain general and administrative costs. The Company has received no further comments from the SEC Division of Enforcement since that date. The Company is involved as plaintiff or defendant in various other legal and regulatory actions and inquiries incident to its business, none of which are believed by management to have a material adverse effect on the financial position or results of operations of the Company. EMPLOYEE BENEFIT PLANS AND UNUSUAL ITEMS The Company reduced the actuarially assumed discount rate for pension plan valuation to 7.5% for fiscal year 1994 from the 8.5% used for fiscal year 1993 in order to reflect prevailing interest rates. This increased the Company's accrued pension benefit obligation. This change, along with increased early retirements and market performance of trust assets, increased the reported underfunded status of the plan by $66.6 million to a total of $124.1 million as of May 1, 1994. This $66.6 million increase resulted in the recognition of such amount as additional pension liability along with a $42 million reduction to shareholders' equity, net of the related tax benefits. Operating income was reduced by unusual items aggregating $7.9 million, representing the write-off of unamortized pension past service costs related to the downsizing of employment Page 7 of 17 levels in line with current business conditions, net of a gain on the sale of the Auburn, Washington facility, which was closed during the prior fiscal year. SUBSEQUENT EVENTS On May 19, 1994, subsequent to the close of the third quarter, the Company completed its public offering of $100 million of 11.625% Senior Notes due May 15, 2003 and the concurrent public offering of $50 million of 7.75% Convertible Subordinated Notes due May 15, 2004. On June 9, 1994, the Company was notified that Salomon Brothers Inc, the underwriter for the offerings, had elected to exercise its over-allotment option to purchase an additional $7.5 million of Convertible Subordinated Notes. Approximately $64 million of the net proceeds from these offerings was used to repay all amounts outstanding under the Company's revolving credit agreement. The remaining proceeds will be used for general corporate purposes. Both series of notes are general unsecured obligations of the Company paying interest semi-annually commencing November, 1994 and do not have sinking fund requirements. The Convertible Subordinated Notes are convertible at the option of the holder at any time prior to maturity into shares of the Company's common stock at a conversion price of $10.35 per share. Effective upon the issue date of the new Notes, the Company amended the revolving credit agreement extending the credit commitment through April, 1997. The revised commitment is initially for $110 million and steps down by $10 million every six months beginning October 1995 until it reaches $80 million. This credit facility matures in April 1997. This amendment, as well as amendments to other of the Company's principal financing agreements, revised the existing financial covenant levels and removed the requirement that the Company issue $100 million of subordinated debt on or prior to August 1, 1994. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Presented below is management's analysis of operating results for the three month and nine month periods ended May 1, 1994 and May 2, 1993. Also presented are material developments in the Company's liquidity and capital resources since July 31, 1993. These discussions should be read in conjunction with the financial statements and management's discussion and analysis thereof included in the Company's July 31, 1993 Form 10K. Page 8 of 17 First Nine Months Fiscal 1994 Compared to First Nine Months Fiscal 1993 Total sales for the first nine months of fiscal year 1994 were $715.9 million, down $206.9 million or 22.4% from the first nine months of fiscal year 1993. Commercial sales during the first nine months of fiscal year 1994 were down compared to the same period of fiscal year 1993 due primarily to reductions in deliveries. Government sales for the comparative period declined due primarily to a reduction in the delivery rate on the Titan program. Commercial sales aggregated 87% and government sales 13% of the Company's total sales in the first nine months of fiscal year 1994, very similar to the prior year. Operating income for the first nine months of fiscal year 1994 was $38.3 million. Operating income was reduced by unusual items aggregating $7.9 million, representing the write-off of unamortized pension past service costs related to the downsizing of employment levels in line with current business conditions, net of a gain on the sale of the Auburn, Washington facility, which was closed during the prior fiscal year. Operating income before the unusual items was $46.2 million for the first nine months of fiscal year 1994 compared to an operating loss of $14.4 million for the same period of fiscal year 1993. A significant contributor to improved operating income was reduced general and administrative expenses which declined $13.0 million from $33.7 million for the first nine months of fiscal 1993 to $20.7 million in the first nine months of fiscal 1994. The decline was primarily the result of downsizing and other ongoing cost cutting efforts. Fiscal 1994 results are being adversely impacted by a reduction in sales volume on several programs. Fiscal 1993 results were impacted by losses on tooling and design efforts, and cost problems related to certain programs including the V2500. In addition, fiscal 1993 results were negatively impacted by a $25.0 million net provision for asset and liability valuations and litigation uncertainties. During and shortly following the third quarter of fiscal 1994, several of these litigation uncertainties were settled with the U.S. Air Force and U.S. Government at amounts in line with provisions previously established. Net interest expense was $34.7 million for the first nine months of fiscal year 1994 compared to $35.4 million for the same period last year. While total debt has declined, interest rates paid by the Company have increased primarily due to the replacement of certain variable rate financings with long-term fixed rate financings. Net income for the first nine months of fiscal year 1994 was a positive $5.0 million or 28 cents per share compared to a loss of $30.7 million or $1.72 per share (before the cumulative effect of the accounting change described below) for the same period last year. The net impact of the unusual items described above was to reduce net income for the nine months of fiscal 1994 by Page 9 of 17 $4.8 million or 27 cents per share. The increase in federal income tax rates resulting from the Omnibus Budget Reconciliation Act, implemented in August 1993, increased net income by $2.8 million and earnings per share or 16 cents. Excluding unusual items and the positive impact of the tax act, earnings would have been 39 cents per share for the nine months of fiscal 1994. The first nine months of fiscal year 1993 were also impacted by a loss of $223.9 million, net of taxes, or $12.52 per share, due to the cumulative effect for the changes in the application of accounting principles through July 31, 1992, adopted on a retroactive basis in the third quarter of fiscal year 1993. Third Quarter of Fiscal 1994 Compared to Third Quarter of Fiscal 1993 Total sales during the third quarter of fiscal 1994 were $231.1 million compared to $296.8 million in the third quarter of the fiscal year 1993. Commercial sales during the third quarter of fiscal 1994 were down compared to the same period of fiscal 1993 due primarily to reduction in deliveries. Government sales for the comparable period declined due primarily to a reduction in the delivery rate on the Titan program. Commercial sales aggregated 84% and government sales 16% of the Company's total sales in the third quarter of fiscal year 1994. Operating income for the third quarter of fiscal 1994, excluding the impact of unusual items described in the previous section, was $14.5 million, representing an operating margin of 6.3 percent. Including unusual items of $7.9 million, operating income was $6.6 million for the third quarter. Operating income was impacted by the factors discussed in the previous section. Additional Items In fiscal 1993, the IRS issued a Revenue Agent's Report challenging the Company's adoption in 1984 of the Completed Contract Method of Accounting ("CCMA"), the Company's tax deduction for funding liabilities related to a Voluntary Employee Benefit Association ("VEBA") and certain other matters. During the third quarter of fiscal 1994, the IRS conceded that the Company was entitled to use CCMA. The Company is negotiating a resolution of the remaining adjustment issues with the IRS. The Company believes that the resolution of these remaining issues will not have a material adverse effect on the Company and its financial position. Government (military and space) sales accounted for approximately 13% of the Company's total sales for the nine months ended May 1, 1994 and for the fiscal year ended July 31, 1993. The Page 10 of 17 Company expects that the percentage of Company revenues attributable to government sales will decline in future years. The production rate for the Titan rocket motor casing program, which accounted for 5.9% of revenues in fiscal 1993, is expected to decline substantially in response to market demand. In addition, another company's alternative technology casing approach may allow it to become a leading competitor in the market for this product in the future. The Company's military sales are primarily associated with older programs which are being phased out of production. Following the end of the third quarter, the Company reached an agreement with International Aero Engines on the V2500 program for Airbus A319, A320, A321 aircraft under which the Company will continue to manufacture key program components and provide total system support. Retention of this program under mutually agreeable contractual terms was a key objective of the Company. LIQUIDITY AND CAPITAL RESOURCES For the first nine months of fiscal year 1994, net cash provided by operating activities totaled $56.0 million compared to $45.5 million during the first nine months of fiscal year 1993. Net cash provided by operations for the three months ended May 1, 1994 totaled $11.0 million. During the three months ended May 2, 1993, net cash provided by operating activities totaled $81.1 million due to several large receipts for tooling, engineering changes and similar non-recurring expenses, as well as the receipt of certain amounts that had been deferred pending aircraft certification. Net cash provided by operations is subject to significant variations from period to period. The Company's total debt at May 1, 1994 aggregated $482.1 million, a decrease of $49.5 million from $531.6 million on July 31, 1993. This reduction was primarily the result of a scheduled repayment of the medium term note for $35 million in October, 1993 and the annual scheduled principal payment of $12.5 million in January, 1994 on its 9.35% Senior Notes due 2000. At May 1, 1994, the Company had $50 million of borrowings under its committed revolving credit agreement, the same amount borrowed at July 31, 1993. Total financings, which include balance sheet indebtedness and off-balance sheet financings, aggregated $572.6 million at May 1, 1994, down $71.3 million from July 31, 1993. In addition to the decline in debt reported on the balance sheet, this decrease reflects a temporary reduction to the receivables financing program as discussed below. Page 11 of 17 The Company is a party to a $60.0 million accounts receivable facility under which it sells receivables from specified customers on an on-going basis. Due to the slow down in the aerospace industry, the amount of outstanding receivables from these customers has fallen below levels which existed at the start of the facility. As a result, the Company has elected to deposit cash collateral from time to time as required to support the facility and has withdrawn such cash when it is no longer required to be deposited. At May 1, 1994 the Company had $19.2 million of cash collateral on deposit. The Company is also a party to certain equipment leases and has granted the lessors a security interest in selected customer receivables to secure $10 million of obligations. If the parties who lease this equipment to the Company do not assign approximately one-half of their beneficial interests in the leased equipment to other parties by January 1995, the equipment lessors may require the Company to prepay up to $10 million of its equipment lease obligations. In order to enhance liquidity and improve its financial flexibility, the Company adopted a financing plan with the objective of increasing long-term financing and extending the Company's revolving credit agreement. On May 19, 1994, subsequent to the close of the third quarter, the Company completed its public offering of $100 million of 11.625% Senior Notes due May 15, 2003 and the concurrent public offering of $50 million of 7.75% Convertible Subordinated Notes due May 15, 2004. On June 9, 1994, the Company was notified that Salomon Brothers Inc, the underwriter for the offerings, had elected to exercise its over-allotment option to purchase an additional $7.5 million of Convertible Subordinated Notes. Approximately $64 million of the net proceeds from these offerings was used to repay all amounts outstanding under the Company's revolving credit agreement. The remaining net proceeds will be used for general corporate purposes. Both series of notes are general unsecured obligations of the Company paying interest semi-annually commencing November, 1994 and do not have sinking fund requirements. The Convertible Subordinated Notes are convertible at the option of the holder at any time prior to maturity into shares of the Company's common stock at a conversion price of $10.35 per share. Effective upon the issue date of the new Notes, the Company amended the revolving credit agreement extending the credit commitment through April, 1997. The revised commitment is initially for $110 million and steps down by $10 million every six months beginning October 1995 until it reaches $80 million. This credit facility matures in April 1997. This amendment, as well as amendments to other of the Company's principal financing agreements, revised the existing financial covenant levels and removed the requirement that the Company issue $100 million of subordinated debt on or prior to August 1, 1994. Page 12 of 17 During the third quarter, the Company renewed a letter of credit securing its obligations to the State of California in connection with its self- insured workers' compensation program. A second letter of credit, which supports $16.5 million of industrial development bonds, will expire in July, 1994. In connection with this pending expiration, the Company will repurchase the bonds from the existing holders and is preparing to re-market the bonds to new holders. The Company has been negotiating the sale of several non-core assets which are not material to its business. In March 1994, the Company completed the sale of its Auburn, Washington plant which had been closed in fiscal year 1993. In addition, on June 13, 1994, subsequent to the end of the fiscal quarter, the Company completed the sale of its corporate jet product line. The Company is continuing to negotiate the sale of its business for the overhaul and repair of nacelle and thrust reverser components. The corporate jet product line and the overhaul and repair business generated approximately $25 million and $10 million, respectively, of revenues in the fiscal year ended July 31, 1993. As previously announced, the Company reduced the actuarially assumed discount rate used to calculate the accrued benefit obligation for its pension plans from 8-1/2% used in the prior year to 7-1/2%. This reduction was made to reflect prevailing interest rates. This change, along with increased early retirements and market performance of trust assets, increased the reported underfunded status of the plans by $66.6 million to a total of $124.1 million as of May 1, 1994. This $66.6 million increase resulted in the recognition of such amount as additional pension liability along with a $42 million reduction to shareholders' equity, net of the related tax benefits. The Company's net inventory decreased to $385.8 million at May 1, 1994 from $439.7 million at July 31, 1993. Production inventory declined as a result of the claims settlement on the U.S. Air Force contracts, a slowdown in delivery schedules and the efforts of management to control inventory levels through shorter lead and cycle times and just-in-time contracts with suppliers. Excess-over-average inventory declined reflecting the increased maturity of newer programs. These reductions were partially offset by an increase in pre-production inventory, primarily in the MD-90, A340, PW4000 and V2500 programs. Customer progress payments and advances declined primarily as a result of the claims settlement on the U.S. Air Force contracts. Capital expenditures for property, plant and equipment totaled $3.7 million for the first nine months of fiscal year 1994, down from $22.9 million in the first nine months of fiscal year 1993. Capital expenditures in the first nine months of fiscal year 1993 were higher due in large part to expenditures for new office and manufacturing facilities. In addition, the Company has substantially curtailed its previously planned capital expenditures for the balance of fiscal year 1994 in line with other cost cutting efforts and anticipates such expenditures will not exceed an average of $20 million per year over the subsequent four years. Given its substantial recent Page 13 of 17 investments, the Company believes that the amount it plans to spend on capital expenditures over the next several years will be sufficient to meet the Company's production requirements. The Company's firm backlog, which includes the sales price of all undelivered units covered by customers' orders for which the Company has production authorization, was approximately $1.3 billion at May 1, 1994 compared to $1.4 billion at July 31, 1993. Approximately $0.2 billion of the $1.3 billion backlog is expected to be delivered in the remainder of fiscal year 1994. (Sales during any period include certain sales which were not part of backlog at the end of the prior period.) Customer orders in firm backlog are subject to rescheduling and/or termination for customer convenience; however, in certain cases the Company is entitled to an adjustment in contract amounts. The Company has an additional $2.6 billion in anticipated backlog, which represents the sales price of units which the Company expects that its customers will order under existing contracts and the Company will deliver within seven years. Page 14 of 17 PART II. OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES Under the terms of the Company's three-year revolving credit agreement, as amended after the end of the third quarter of fiscal 1994, the Company may not pay dividends on its common stock. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Index to Exhibits: 4.3.2 Second Amendment Agreement, dated as of September 24, 1993, to Note Agreement dated as of January 15, 1990. 4.3.3 Third Amendment Agreement, dated as of May 10, 1994, to Note Agreement dated as of January 15, 1990. 4.4.1 Second Amendment Agreement, dated as of September 24, 1993, to Note Agreement dated as of December 21, 1992. 4.4.2 Third Amendment Agreement, dated as of May 10, 1994, to Note Agreement dated as of December 21, 1992. 4.5 Indenture, dated as of May 15, 1994, between Rohr, Inc., and IBJ Schroder Bank and Trust Company, trustee, relating to 11-5/8% senior notes. 4.6 Indenture, dated as of May 15, 1994, between Rohr, Inc., and The Bank of New York, trustee, relating to 7-3/4% convertible subordinated notes. 10.11.6 Sixth Amendment to Bank Credit Agreement, dated as of September 24, 1993. Page 15 of 17 10.11.7 Seventh Amendment to Bank Credit Agreement, dated as of May 10, 1994. 10.13.3 Amendment Agreement, dated as of September 24, 1993. 10.13.4 Amendment Agreement, dated as of May 10, 1994. 11.1 Calculation of Primary Net Income Per Share of Common Stock 11.2 Calculation of Fully Diluted Net Income Per Share of Common Stock (b) Reports on Form 8-K There were no reports filed on Form 8-K during this period. However, on May 4, 1994 a report on Form 8-K, dated May 2, 1994, was filed by the Company under Item 5, "Other Events" discussing (i) the settlement of all contractors disputes between the Company and the U.S. Air Force and (ii) the settlement of the civil and criminal claims concerning an investigation by the Los Angeles office of the U.S. Attorney. Page 16 of 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ROHR, INC. June 13, 1994 By:/S/ A. L. MAJORS ---------------- A. L. Majors Vice President and Controller (Chief Accounting Officer) Page 17 of 17 EX-4.3.2 2 2ND AMENDMENT AGREEMENT (9.35%) Exhibit 4.3.2 SECOND AMENDMENT AGREEMENT SECOND AMENDMENT AGREEMENT (this "Amendment"), dated as of September 24, 1993, among ROHR, INC. (together with its successors and assigns, the "Company"), and each of the holders of Notes whose name appears on the signature pages hereof (individually, a "Holder" and, collectively, the "Holders"). RECITALS: WHEREAS, the Company issued its 9.35% Senior Notes due January 29, 2000, pursuant to those certain several identical Note Agreements, each dated as of January 15, 1990, between the Company and the Purchasers identified on Annex 1 thereto; and WHEREAS, such Note Agreements were amended by that certain Amendment Agreement, dated as of June 30, 1993 (such Note Agreements, as amended by such Amendment Agreement, collectively being the "Existing Note Agreement"); and WHEREAS, the Company has requested the Holders to modify certain terms of the Existing Note Agreement; and WHEREAS, the Holders are agreeable to such modifications and such amendments, on the terms and conditions hereinafter set forth; NOW THEREFORE, in consideration of the premises and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. DEFINITIONS. Capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings ascribed to them in the Existing Note Agreement. 2. AMENDMENTS. Paragraph 10B of the Existing Note Agreement shall be amended by amending and restating Subparagraph (ii)(f) of the definition of "Consolidated Net Income Available for Fixed Charges" to read as follows: "(f) in the case of any such period that includes the fiscal month ending May 2, 1993, the provisions and charges, not in excess of $38,000,000 in the aggregate, established by the Company in the third quarter of Fiscal Year 1993; and". 1 3. CONDITIONS TO EFFECTIVENESS. The amendment set forth in Paragraph 2 shall become effective only upon the satisfaction in all respects of the conditions set forth below: 3A. The Required Holders and the Company shall have executed and delivered to each other this Amendment and the Existing Note Agreement, as amended hereby, shall be in full force and effect. 3B. The definition of "Consolidated Net Income Available for Fixed Charges" in the Note Agreement, dated as of December 21, 1992, between the Company and the note holders party thereto, as amended through June 30, 1993, shall have been amended in substantially the same manner as set forth in Paragraph 2 hereof. 3C. The definition of "Net Income Available for Fixed Charges" in the Credit Agreement, dated as of April 26, 1989, between the Company and the other parties thereto, as amended through July 9, 1993 (the "Credit Agreement"), shall have been amended in substantially the same manner as set forth in Paragraph 2 hereof. 3D. The definition of "Net Income Available for Fixed Charges" incorporated from the Credit Agreement into the Sublease Agreement, dated as of September 14, 1992, between the Company and State Street Bank and Trust Company of California, National Association, and W. Jeffrey Kramer, not in an individual capacity but solely as owner trustees under a trust for the benefit of General Electric Capital Corporation, as amended through July 9, 1993, shall have been effectively amended in substantially the same manner as set forth in Paragraph 2 hereof. 4. COSTS AND EXPENSES. The Company shall pay all out-of-pocket expenses of the Holders in connection with the negotiation, preparation, execution and delivery of this Amendment, including, without limitation, all the fees and expenses of special counsel engaged by the Holders in connection therewith. 5. MISCELLANEOUS. 5A. All provisions of this Amendment by or for the benefit of the parties hereto shall bind and inure to the benefit of their respective successors and assigns hereunder. 5B. This Amendment may be executed in one or more counterparts, all of which taken together shall constitute a single instrument. 2 5C. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK. 5D. Except as expressly provided herein, (i) no other terms and provisions of the Existing Note Agreement shall be modified or changed by this Amendment and (ii) the terms and provisions of the Existing Note Agreement shall continue in full force and effect. The Company hereby acknowledges and reaffirms all of its obligations and duties under the Existing Note Agreement, as amended by this Amendment, and under the Notes, as amended to date, issued thereunder. 5E. Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 5F. This Amendment may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year fist above written. ROHR, INC. By: /s/ R.W. Madsen --------------------------------- Name: R.W. Madsen Title: Vice President, General Counsel and Secretary THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /s/ Dennis B. Murphy --------------------------------- Name: Title: 3 CONNECTICUT GENERAL LIFE INSURANCE COMPANY CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY INSURANCE COMPANY OF NORTH AMERICA LIFE INSURANCE COMPANY OF NORTH AMERICA CONGEN TWO & CO. THESE ENTITIES ARE EITHER THE REGISTERED OWNERS OF ONE OR MORE OF THE SECURITIES PERTAINING HERETO OR ARE BENEFICIAL OWNERS OF ONE OR MORE OF SUCH SECURITIES OWNED BY AND REGISTERED IN THE NAME(S) OF NOMINEES FOR THESE ENTITIES. BY CIGNA INVESTMENTS, INC. By /s/ Stephen L. Roberts -------------------------------- Name: Stephen L. Roberts Title: Vice President PRINCIPAL MUTUAL LIFE INSURANCE COMPANY By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: SUN LIFE ASSURANCE COMPANY OF CANADA By /s/ L. Brock Thomson ---------------------------------- Name: L. Brock Thomson Title: Assistant Vice President - For President By /s/ Margaret S. Mead ---------------------------------- Name: Margaret S. Mead Title: Assitant Vice President and Counsel - For Secretary SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) By /s/ L. Brock Thomson ---------------------------------- Name: L. Brock Thomson Title: Treasurer 4 EX-4.3.3 3 3RD AMENDMENT AGREEMENT (9.35%) =============================================================================== ROHR, INC. --------------------------- THIRD AMENDMENT AGREEMENT ----------------------- DATED AS OF MAY 10, 1994 9.35% SENIOR NOTES DUE JANUARY 29, 2000 ================================================================================ THIRD AMENDMENT AGREEMENT THIRD AMENDMENT AGREEMENT (this "Third Amendment"), dated as of May 10, 1994, among ROHR, INC. (together with its successors and assigns, the "Company"), and each of the holders of Notes (as such term is defined below) whose name appears on the signature pages hereof (individually, a "Holder" and, collectively, the "Holders"). RECITALS: WHEREAS, the Company entered into those certain separate Note Agreements, each dated as of January 15, 1990, between the Company and the Purchasers identified on Annex 1 thereto, as previously amended by that certain Amendment Agreement (the "First Amendment"), dated June 30, 1993, and that certain Second Amendment Agreement, dated September 24, 1993 (collectively, as in effect immediately prior to the Third Amendment Date, the "Existing Note Agreement," and, as further amended and restated by this Third Amendment, the "Amended Note Agreement"), pursuant to which the Company has issued its 9.35% Senior Notes due January 29, 2000, as amended by the First Amendment (the "Existing Notes"); and WHEREAS, each of the Holders is a holder of the Existing Notes; WHEREAS, the Company has requested the Holders to consent to certain transactions by the Company and to amend and restate in full the Existing Note Agreement; WHEREAS, the Holders are willing to give such consent, and to enter into such amendment and restatement, on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. DEFINITIONS Capitalized terms used in this Third Amendment and not otherwise defined herein shall have the respective meanings ascribed to them in the Amended Note Agreement attached hereto as Exhibit A. 2. AMENDMENTS TO EXISTING NOTE AGREEMENT The Existing Note Agreement is hereby amended and restated in its entirety to read as set forth in the form attached hereto as Exhibit A. 3. CONSENT TO CERTAIN TRANSACTIONS. Each of the undersigned Holders hereby consents to the following transactions by the Company: (i) the sale of the shares of, or substantially all of the assets of Rohr Aero Services, Inc. and Rohr Aero Services Europe; (ii) the sale of assets relating to the business jet product line; (iii) the sale of the Company's facilities located in Hagerstown, Maryland and related assets; and (iv) the sale of the Company's facilities located in Auburn, Washington. Each of the undersigned Holders hereby agrees that the aforementioned transactions shall not be deemed a Default or Event of Default pursuant to paragraph 7A(v) or paragraph 7A(vi) of the Amended Note Agreement resulting from the failure of the Company to comply with the provisions of paragraph 6D or paragraph 6Q of the Amended Note Agreement or paragraph 6M of the Amended Note Agreement (as it incorporates by reference Section 5.02(d) of the Credit Agreement) with respect to the above transactions. Notwithstanding the foregoing, sales of any of the Property described in clauses (i) through (iv), inclusive, of this paragraph 3 shall be deemed to be sales of Property subject to paragraph 6Q(i) of the Amended Note Agreement for the purpose of determining the compliance by the Company with paragraph 6Q in connection with any other sale, lease, transfer or other disposition of Property of the Company or any Consolidated Subsidiary. In addition, each of the undersigned Holders, as a holder of Warrants and Registrable Securities (as such term is defined in the Warrant Agreement) hereby waives any default under, or violation of, the provisions of paragraph 8B(ii) of the Warrant Agreement that may have resulted by virtue of any failure of the notice of the registration of the 1994 Subordinated Notes (provided to such Holders pursuant to paragraph 8B(i) of the Warrant Agreement) to contain the Company's agreement to use its best efforts, if requested to do so, to arrange for such underwriters to include in such underwriting any Registrable Securities that the Company was requested to register pursuant to paragraph 8B(i) of the Warrant Agreement, and hereby waives (without prejudice to the right of such Holder to participate in any future registration of Securities of the Company) any right to participate in the registration or sale of the 1994 Subordinated Notes. 4. CONDITIONS TO EFFECTIVENESS. The amendment and restatement of the Existing Note Agreement set forth in paragraph 2 and the consent by the Holders set forth in paragraph 3 shall become effective only upon the satisfaction in all respects of the conditions set forth below. The first date upon which all such conditions shall have been satisfied is herein referred to as the "Effective Date." 4A. Each of the Holders and the Company shall have executed and delivered to each other this Third Amendment, and the Amended Note Agreement shall be in full force and effect. 4B. Each of the Holders shall have received a legal opinion of: (i) Gibson, Dunn & Crutcher, special counsel to the Company, dated the Effective Date and substantially in the form set forth in Exhibit B1 attached hereto; and (ii) Richard Madsen, Esq, general counsel to the Company, dated the Effective Date and substantially in the form set forth in Exhibit B2 attached hereto; and 2 (iii) Hebb & Gitlin, special counsel to the holders of the Existing Notes, dated the Effective Date and substantially in the form set forth in Exhibit B3 attached hereto. 4C. The representations and warranties set forth in paragraph 5 hereof shall be true and correct as of the date hereof and as of the Effective Date; no Default or Event of Default pursuant to the Existing Note Agreement shall have occurred and be continuing on the Effective Date; and each of the Holders shall have received a written certificate, in the form of Exhibit C hereto, signed by a duly authorized officer of the Company to such effect. Each of the Holders shall have received a certificate of the Secretary or an Assistant Secretary of the Company, substantially in the form of Exhibit D hereto, with respect to the matters therein set forth. 4D. On or before the Effective Date, the Company shall have paid to each Holder in immediately available funds an amendment fee equal to the product of (i) twenty-five one-hundredths of one percent (0.25%) times (ii) the outstanding principal amount of Existing Notes held by such Holder on the Effective Date. 4E. On or before the Effective Date, the Company shall have paid to each Holder in immediately available funds, in exchange for such holder's consent to the Company's issuance of $100,000,000 of additional pari passu Debt, a consent fee equal to the product of (i) thirty-eight one-hundredths of one percent (0.38%) times (ii) the outstanding principal amount of Existing Notes held by such Holder on the Effective Date. 4F. On or before the Effective Date, the Company shall have closed on the issuance of the Company's 1994 Senior Debt on terms and conditions acceptable to the Holders in all respects. 4G. On or before the Effective Date, the Company shall have closed on the issuance of Company's 1994 Subordinated Debt on terms and conditions acceptable to the Holders in all respects. 4H. The Company shall have paid all amounts which are payable pursuant to paragraph 6 hereof and paragraph 11B of the Amended Note Agreement. 4I. The holders of the 9.33 Senior Notes due December 15, 2002, of the Company (the "Other Notes") shall have entered into an amendment of those certain several identical Note Agreements, each dated as of December 21, 1992, between the Company and the Purchasers identified on Annex 1 thereto, as previously amended (collectively, the "Other Note Agreement"), further amending such Other Note Agreement and the notes issued thereunder in a manner consistent with paragraph 2 of this Third Amendment and consenting to certain transactions by the Company in a manner consistent with paragraph 3 of this Agreement. Each Holder shall have received a copy of the amendment agreement for such Other Note Agreement, and the terms thereof shall be satisfactory to the Holders in all respects. 4J. The Credit Agreement and the Sublease Agreement between the Company and the trustees named therein for the benefit of General Electric Capital Corporation, shall have been amended in form and substance satisfactory to the Holders, which amendments shall be consistent with the amendments provided for herein and permit the transactions contemplated by paragraph 3 of this Third Amendment. Each Holder shall have received copies of said 3 amendment documents and all agreements, instruments or other documents containing any substantive agreement of the Company or any Consolidated Subsidiary, executed or delivered in connection therewith, other than that certain letter agreement (the "Agency Letter") between the Company and the agent under the Credit Agreement relating to the agency fee paid to such agent, which letter relates solely to the fee payable to the agent under the Credit Agreement for acting in such capacity. 4K. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to such Holder, and such Holder shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request. 5. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to each of the Holders as follows: 5A. The Company: (i) is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation, (ii) has all requisite power and authority and all necessary licenses and permits to own and operate its Properties and to carry on its business as now conducted and presently proposed to be conducted, and (iii) is duly qualified and is authorized to do business 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. 5B. The Company has the corporate power and authority: (i) to authorize, execute, deliver and enter into this Third Amendment; and (ii) to perform its obligations under this Third Amendment and the Amended Note Agreement. 5C. This Third Amendment has been duly authorized by the Company. This Third Amendment and the Amended Note Agreement constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as such enforceability may be: (i) limited by bankruptcy, insolvency or other similar laws affecting the enforceability of creditors' rights generally; and (ii) subject to the availability of equitable remedies. The holders of the Existing Notes are entitled to the benefits of the Amended Note Agreement. 4 5D. The authorization, execution and delivery by the Company of this Third Amendment is not, and the performance by the Company of its obligations under the Amended Note Agreement will not be, inconsistent with its certificate of incorporation or by-laws, does not and will not contravene any law, governmental rule or regulation, violate any judgment, order or award of any arbitrator applicable to the Company, does not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument to which the Company is a party or by which any of its Property is bound, and will not result in the imposition of a Lien upon any Property of the Company. 5E. No consent or approval of, giving of notice to, registration with, or taking of any other action in respect of or by, any federal, state or local governmental authority or agency, or other Person (except for actions that will have occurred by the Effective Date), is required with respect to: (i) the authorization, execution and delivery by the Company of this Third Amendment, or (ii) the performance by the Company of its obligations under the Amended Note Agreement. 5F. After giving effect to this Third Amendment, the Seventh Amendment to the Credit Agreement and the issuance and sale of the 1994 Senior Notes and the 1994 Subordinated Notes, no Default or Event of Default will exist and no default or event of default exists under: (i) the Other Note Agreement, as amended as contemplated pursuant to paragraph 4I hereof; (ii) the Credit Agreement; (iii) the SubLease Agreement between the Company and the trustees named therein acting for the benefit of General Electric Capital Credit Corporation; (iv) the 1994 Senior Notes or the indenture governing such 1994 Senior Notes; or (v) the 1994 Subordinated Notes or the indenture governing such 1994 Subordinated Notes. After giving effect to this Third Amendment, the Seventh Amendment to the Credit Agreement and the issuance and sale of the 1994 Senior Notes and the 1994 Subordinated Notes, the Company will be able to satisfy all conditions necessary pursuant to the terms of the Credit Agreement to draw an amount, when added to the amount of drawings and letter of credits then outstanding under the Credit Agreement, equal to the full maximum commitment of One Hundred Ten Million Dollars ($110,000,000) available under the Credit Agreement. 5 5G. Except as set forth on Annex 2 hereto, as of the Effective Date, each of the warranties and representations contained in the Amended Note Agreement are true, correct and complete in all material respects, and such warranties and representations are hereby incorporated by reference with the same effect as though set forth in their entirety herein. 5H. There is no agreement between the Company and any of the banks which are parties to the Credit Agreement with respect to the matters described in paragraph 4J of this Third Amendment other than as set forth in the documents delivered to the Holders pursuant to paragraph 4J of this Third Amendment. Other than as set forth on Annex 2 hereto, there is no agreement between the Company or any Consolidated Subsidiary and any other holder of Debt of the Company or any Consolidated Subsidiary which provides for any compensation, fees or other financial consideration in exchange or partial exchange for any amendment, waiver or consent referred to in paragraph 4J. Copies of all agreements and documents relating to such agreements have been provided to you pursuant to paragraph 4J of this Third Amendment. 5I. Except as disclosed to you on Annex 2 hereto, it is not reasonably foreseeable that any action, suit, investigation or proceeding or group of similar actions, suits, investigations or proceedings (including, as such a group, without limitation, all actions, suits, investigations or proceedings arising out of federal or state environmental protection laws), pending or, to the knowledge of the Company, threatened against the Company or any of the Consolidated Subsidiaries, or any properties or rights of the Company or any of the Consolidated Subsidiaries, by or before any court, arbitrator or administrative or governmental body would result in any material adverse change in the business, condition (financial or otherwise) or operations of the Company and the Consolidated Subsidiaries taken as a whole. 6. COSTS AND EXPENSES. Whether or not the conditions to effectiveness set forth in paragraph 3 of this Third Amendment are satisfied, the Company shall pay all out-of-pocket expenses of the Holders in connection with the negotiation, preparation, execution and delivery of this Third Amendment, including, without limitation, all the fees and expenses of special counsel engaged by the Holders in connection therewith. Without limiting the generality of the foregoing, the Company will pay, on the date of the Third Amendment, the fees and disbursements of Holder's special counsel presented on such date, and shall also pay, upon receipt of any statement thereof, each additional statement for reasonable fees and disbursements of Holder's special counsel rendered after the date of this Third Amendment in connection with this Third Amendment. 7. MISCELLANEOUS. 7A. All the provisions of this Third Amendment by or for the benefit of the parties hereto shall bind and inure to the benefit of their respective successors and assigns hereunder. 7B. This Third Amendment may be executed in one or more counterparts, all of which taken together shall constitute a single instrument. 6 7C. THIS THIRD AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK. 7D. The Company hereby acknowledges and reaffirms all of its obligations and duties under the Amended Note Agreement and under the Existing Notes. 7E. Any provision of this Third Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7F. This Third Amendment constitutes the final written expression of all of the terms hereof and is a complete and exclusive statement of those terms. [THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 7 IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed by their respective authorized officers as of the day and year first above written. ROHR, INC. By: /s/ R. M. MILLER ------------------------------ Name: R. M. Miller Title: Vice President and Treasurer THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /s/ THOMAS KLAMKA ------------------------------ Name: Thomas Klamka Title: Vice President PRINCIPAL MUTUAL LIFE INSURANCE COMPANY By: /s/ LEANNE M. SWENSON ------------------------------ Name: Leanne M. Swenson Title: Counsel By: /s/ JOSEPH P. McLAUGHLIN ------------------------------ Name: Joseph P. McLaughlin Title: Counsel SUN LIFE ASSURANCE COMPANY OF CANADA By: /s/ JOHN N. WHELIHAN ------------------------------ Name: John N. Whelihan Title: Assistant Vice President --For President By: /s/ JEFFREY J. SKERRY ------------------------------ Name: Jeffrey J. Skerry Title: Assistant Counsel --For Secretary SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) By: /s/ L. BROCK THOMSON ------------------------------ Name: L. Brock Thomson Title: Treasurer Signature Page 1 to the THIRD AMENDMENT AGREEMENT, among ROHR, INC. and the holders of Notes named therein. CONNECTICUT GENERAL LIFE INSURANCE COMPANY, ON BEHALF OF ONE OR MORE ACCOUNTS, CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY, INSURANCE COMPANY OF NORTH AMERICA AND LIFE INSURANCE COMPANY OF NORTH AMERICA EACH OF THESE ENTITIES, SEVERALLY AND NOT JOINTLY, IS EITHER THE REGISTERED OWNER OF ONE OR MORE SECURITIES PERTAINING HERETO OR IS A BENEFICIAL OWNER OF ONE OR MORE SECURITIES OWNED BY AND REGISTERED IN THE NAME OF A NOMINEE FOR THAT ENTITY. BY: CIGNA INVESTMENTS, INC. By: /s/ STEPHEN J. MYOTT -------------------------------- Name: Stephen J. Myott Title: Vice President Signature Page 2 to the THIRD AMENDMENT AGREEMENT, among ROHR, INC. and the holders of Notes named therein. EXHIBIT A FORM OF AMENDED AND RESTATED NOTE AGREEMENT ROHR, INC. ------------------------------ AMENDED AND RESTATED NOTE AGREEMENT ======================= DATED AS OF MAY 10, 1994 $100,000,000 9.35% SENIOR NOTES DUE JANUARY 29, 2000 A-2 TABLE OF CONTENTS
PAGE 1. AUTHORIZATION OF ISSUE OF NOTES........................... A-5 2. PURCHASE AND SALE OF NOTES................................ A-5 3. CONDITIONS OF CLOSING..................................... A-6 3A. Opinion of Purchaser's Special Counsel............... A-6 3B. Opinions of Company's Counsel........................ A-6 3C. Representations and Warranties; No Default........... A-6 3D. Sale of Notes to Other Purchasers.................... A-6 3E. Purchase Permitted By Applicable laws................ A-6 3F. Private Placement Number............................. A-6 3G. Closing Expenses..................................... A-6 3H. Proceedings.......................................... A-6 4. PREPAYMENTS............................................... A-7 4A. Required Prepayments................................. A-7 4B. Optional Prepayment With Yield-Maintenance Premium... A-7 4C. Notice of Optional Prepayment........................ A-7 4D. Partial Prepayments Pro Rata......................... A-7 4E. Right to Put......................................... A-7 4F. Retirement of Notes.................................. A-8 4G. Tender of Notes in Payment of Warrant Exercise Price. A-8 5. AFFIRMATIVE COVENANTS..................................... A-8 5A. Payment of Taxes and Claims.......................... A-8 5B. Maintenance of Properties and Corporate Existence.... A-9 5C. Payment of Notes and Maintenance of Office........... A-10 5D. Financial Reporting and Notices...................... A-10 5E. Inspection of Property............................... A-11 5F. Covenant to Secure Note Equally...................... A-12 5G. ERISA Compliance..................................... A-12 5H. Involuntary Prepayment............................... A-12 6. NEGATIVE COVENANTS........................................ A-14 6A. Limitations on Liens................................. A-14 6B. Limitations on Leases................................ A-16 6C. Limitations on Indebtedness.......................... A-16 6D. Limitations on Mergers and Sales of Assets........... A-18 6E. Adjusted Consolidated Tangible Net Worth Maintenance. A-19 6F. Limitations on Distributions......................... A-19 6G. Limitations on Capital Expenditures.................. A-20 6H. Private Offering..................................... A-20 6I. Transactions with Affiliates......................... A-20 6J. Line of Business..................................... A-21 6K. Fixed Charge Coverage................................ A-21
A-3 TABLE OF CONTENTS (Cont.)
PAGE 6L. Debt Ratio........................................... A-21 6N. Maintenance of Senior Status......................... A-23 6P. Sales of Assets...................................... A-24 6Q. Sale of Receivables.................................. A-25 6R. Limitation on Certain Obligations.................... A-25 7. EVENTS OF DEFAULT......................................... A-25 7A. Acceleration......................................... A-25 7B. Acceleration on Payment Default...................... A-28 7C. Other Remedies....................................... A-29 8. REPRESENTATIONS, COVENANTS AND WARRANTIES................. A-29 8A. Subsidiaries......................................... A-29 8B. Corporate Organization and Authority................. A-30 8C. Financial Statements................................. A-30 8D. Actions Pending...................................... A-31 8E. Outstanding Debt..................................... A-31 8F. Title to Properties.................................. A-31 8G. Patents, Trademarks, Licenses, etc................... A-31 8H. Taxes................................................ A-31 8I. Conflicting Agreements and Other Matters............. A-32 8J. Offering of Notes.................................... A-32 8K. Regulation G, etc.................................... A-33 8L. Governmental Consent................................. A-33 8M. Disclosure........................................... A-33 8N. Compliance with Law.................................. A-33 8O. Certain Laws......................................... A-34 9. REPRESENTATIONS OF THE PURCHASER.......................... A-34 10. DEFINITIONS............................................... A-34 10A. Yield-Maintenance Terms.............................. A-35 10B. Other Terms.......................................... A-36 11. MISCELLANEOUS............................................. A-64 11A. Note Payments........................................ A-64 11B. Expenses............................................. A-64 11C. Consent to Amendments................................ A-65 11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes........................................... A-65 11E. Persons Deemed Owners; Participations................ A-66 11F. Accounting Terms..................................... A-66 11G. Directly or Indirectly............................... A-66 11H. Survival of Representations and Warranties; Entire Agreement..................................... A-67 11I. Successors and Assigns............................... A-67
A-4 TABLE OF CONTENTS (Cont.)
11J. Disclosure to Other Persons........................... A-67 11K. Notices............................................... A-68 11L. Descriptive Headings.................................. A-68 11M. Satisfaction Requirement.............................. A-68 11N. Governing Law......................................... A-69 11O. Payments Due on Non-Business Days..................... A-69 11P. Counterparts.......................................... A-69 Annex 1 -- Purchaser's Schedule Annex 2 -- Subsidiary Information Annex 3 -- Restrictions on Debt Exhibit A -- Form of Note Exhibit B -- Form of Opinion of Purchaser's Special Counsel Exhibit C1 -- Form of Opinion of Company's General Counsel Exhibit C2 -- Form of Opinion of Company's Special Counsel Exhibit D -- Form of Officer's Certificate Exhibit E -- Form of Secretary's Certificate Exhibit F -- Form of Notice of Sale
A-5 ROHR, INC. FOOT OF H STREET CHULA VISTA, CA 92012 As of May 10, 1994 [Name and Address of Purchaser] Gentlemen: The undersigned, Rohr, Inc., (together with its predecessor, Rohr Industries, Inc. and its successors, the "Company"), a Delaware corporation, hereby agrees with you as follows: 1. AUTHORIZATION OF ISSUE OF NOTES. Rohr Industries, Inc., predecessor to the Company, has authorized the issuance of its senior promissory notes (the "Notes") in the aggregate principal amount of One Hundred Million Dollars ($100,000,000) dated the date of issue thereof, to mature on January 29, 2000, bearing interest on the unpaid balance thereof from the date thereof until the principal thereof shall have become due and payable at the rate of nine and thirty-five one-hundredths percent (9.35%) per annum and on overdue payments at the rate specified therein, which senior promissory notes have been amended pursuant to the First Amendment and, as amended, are substantially in the form of Exhibit A attached hereto. The term "Notes" as used herein shall include each such senior promissory note delivered pursuant to any provision of this Agreement and each such senior promissory note delivered in substitution or exchange for any other Note pursuant to any such provision. 2. PURCHASE AND SALE OF NOTES. The Company sold to you and, subject to the terms and conditions herein set forth, you purchased from the Company the aggregate principal amount of Notes set forth opposite your name in the Purchaser Schedule attached hereto at one hundred percent (100%) of such aggregate principal amount. The Company delivered to you, at the offices of Hebb & Gitlin, a Professional Corporation, at One State Street, Hartford, Connecticut, one or more Notes registered in your name, evidencing the aggregate principal amount of Notes purchased by you and in the denomination or denominations specified with respect to you in the Purchaser Schedule, against payment of the purchase price thereof by transfer of immediately available funds as directed by the Company in writing on the date of closing, February 2, 1990 (the "Closing" or the "Closing Date"). Concurrently with the execution and delivery of this Agreement, the Company is entered into other Note Agreements (the "Other Note Agreements") substantially identical with this Agreement (except as to the identity of the purchaser and the principal amount of Notes to be purchased) with the other purchasers (the "Other Purchasers") named in the Purchaser Schedule. The sale to you and the sales to the Other Purchasers were separate and several sales. A-6 3. CONDITIONS OF CLOSING. Your obligation to purchase and pay for the Notes to be purchased by you hereunder was subject to the satisfaction, on or before the Closing Date, of the following conditions: 3A. OPINION OF PURCHASER'S SPECIAL COUNSEL. You shall have received from Hebb & Gitlin, a Professional Corporation, who are acting as special counsel for you in connection with this transaction, a favorable opinion satisfactory to you and substantially in the form of Exhibit B hereto. 3B. OPINIONS OF COMPANY'S COUNSEL. You shall have received from Richard Madsen, Esq., general counsel for the Company, and Gibson, Dunn & Crutcher, special counsel for the Company, favorable opinions satisfactory to you and substantially in the form of Exhibit C1 and Exhibit C2, respectively, hereto. 3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and warranties contained in paragraph 8 hereof shall be true on and as of the Closing Date, except to the extent of changes caused by the transactions herein contemplated; there shall exist on the Closing Date no Event of Default or Default; and the Company shall have delivered to you an Officer's Certificate, dated the Closing Date, in the form of Exhibit D hereto. 3D. SALE OF NOTES TO OTHER PURCHASERS. The Company shall have sold to the Other Purchasers the Notes to be purchased by them at the Closing and shall have received payment in full therefor. 3E. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment for the Notes to be purchased by you on the Closing Date on the terms and conditions herein provided (including the use of the proceeds of such Notes by the Company) shall not violate any applicable law or governmental regulation (including, without limitation, section 5 of the Securities Act or Regulation G, T or X of the Board of Governors of the Federal Reserve System) and shall not subject you to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and you shall have received such certificates or other evidence as you may request to establish compliance with this condition. 3F. PRIVATE PLACEMENT NUMBER. The Company shall have provided reasonable evidence that it has complied with the requirements necessary to obtain a private placement number for the Notes from the CUSIP Division of Standard & Poor's Corporation. 3G. CLOSING EXPENSES. The Company shall have paid at the Closing the statement for fees and disbursements of the special counsel of the Purchasers presented at the Closing. 3H. PROCEEDINGS. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to you, and you shall have received all such counterpart originals or certified or other copies of such documents as you may reasonably request. The Company shall have delivered to you a certificate of the secretary or assistant secretary of the Company in the form of Exhibit E hereto. A-7 4. PREPAYMENTS. 4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid in full, the Company shall apply to the prepayment of the Notes, without premium, the sum of Twelve Million Five Hundred Thousand Dollars ($12,500,000) on January 29 in each of the years beginning on January 29, 1993, and ending on January 29, 1999, inclusive, and such principal amounts of the Notes, together with interest thereon to the prepayment dates, shall become due on such prepayment dates. The remaining Twelve Million Five Hundred Thousand Dollars ($12,500,000) in principal amount of the Notes, together with interest accrued thereon, shall become due on the maturity date of the Notes. 4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE PREMIUM. The Notes shall be subject to prepayment, in whole at any time or from time to time in part (in multiples of $5,000,000), at the option of the Company, at one hundred percent (100%) of the principal amount so prepaid plus interest thereon to the prepayment date and the Yield-Maintenance Premium, if any, with respect to the principal amount so prepaid. Any prepayment made by the Company pursuant to this paragraph 4B shall be applied first to the principal of the Notes due on the maturity date thereof and second to the prepayments required by this paragraph 4 in the inverse order of their scheduled due dates. 4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of each Note irrevocable written notice of any prepayment to be made pursuant to paragraph 4 hereof not less than ten (10) Business Days prior to the prepayment date, specifying such prepayment date and the principal amount of the Notes, and of the Notes held by such holder, to be prepaid on such date and stating that such prepayment is to be made pursuant to paragraph 4 hereof. Notice of prepayment having been given as aforesaid, the principal amount of the Notes specified in such notice, together with interest thereon to the prepayment date and together with the premium, if any, herein provided, shall become due and payable on such prepayment date. 4D. PARTIAL PREPAYMENTS PRO RATA. Upon any prepayment of the Notes, the principal amount so prepaid shall be allocated to all Notes at the time outstanding in proportion to the respective outstanding principal amount thereof (including, for the purpose of this paragraph only, all Notes prepaid or otherwise retired or purchased or otherwise acquired by the Company or any Subsidiary or Affiliate). 4E. RIGHT TO PUT. (i) GRANTING OF PUT. The Company hereby gives and grants to each holder of Notes the option, right and privilege (such option, right and privilege herein collectively referred to as the "Right to Put") to require the Company, upon or after the occurrence of any Designated Event, to purchase from such holder on the terms and conditions hereinafter set forth, and the Company agrees so to purchase from such holder, for an amount equal to the Agreed Put Consideration, all, but not less than all, of the Notes held by such holder. (ii) EXERCISE OF PUT. Within ten (10) Business Days after the occurrence of any Designated Event, the Company shall give each holder of Notes written notice thereof describing such Designated Event, and the facts and circumstances surrounding the occurrence thereof, in reasonable detail. At any time prior to ninety (90) days after any holder of Notes shall receive A-8 such notice, such holder may exercise its Right to Put by delivering to the Company a notice of sale (a "Notice of Sale") substantially in the form of Exhibit F hereto. If a holder of Notes shall deliver a Notice of Sale, the Company shall purchase the Notes then held by such holder on the date specified in such notice (which shall be not less than fifteen (15) days after delivery of such Notice of Sale), and such holder shall sell such Notes to the Company without recourse, representation or warranty (other than as to such holder's full right, title and interest to such Notes free of any adverse claim therein), at a price, payable in immediately available funds by wire transfer to the account specified pursuant to paragraph 11 hereof or to such other account as may be specified in such notice, equal to the Agreed Put Consideration. Each holder of Notes shall have the rights specified in this paragraph 4 with respect to each Designated Event which shall occur, regardless of any act or omission to act with respect to any previous Designated Event. 4F. RETIREMENT OF NOTES. The Company shall not, and shall not permit any of the Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part prior to their stated final maturity (other than by prepayment pursuant to paragraph 4A or paragraph 4B or upon acceleration of such final maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly or indirectly (other than pursuant to paragraph 4E, paragraph 4G or paragraph 5H hereof), Notes held by any holder unless the Company or such Subsidiary or Affiliate shall have offered to prepay or otherwise retire or purchase or otherwise acquire, as the case may be, the same proportion of the aggregate principal amount of Notes held by each other holder of Notes at the time outstanding upon the same terms and conditions. Any Notes so prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of the Subsidiaries or Affiliates shall not be deemed to be outstanding for any purpose under this Agreement except as provided in paragraph 4D hereof. 4G. TENDER OF NOTES IN PAYMENT OF WARRANT EXERCISE PRICE. The Warrant Agreement will provide that the purchase price for the Warrants issuable thereunder may be paid, in whole or in part, by a tender of Notes. The Company shall be deemed to have reacquired a principal amount of Notes equal to the aggregate principal amount of Notes tendered in payment of the Warrant exercise price, and such Notes so deemed to have been reacquired shall not be considered outstanding for any purposes of this Agreement. In the event that less than the entire outstanding principal amount of a Note is tendered in payment of the Warrant exercise price, the Company shall issue and deliver to the holder thereof a new Note equal in principal amount to the outstanding principal amount of the Note so tendered less the portion thereof applied to the Warrant exercise price. 5. AFFIRMATIVE COVENANTS. The Company covenants that on and after the Closing Date, and so long as any Notes are outstanding, it shall comply with the following: 5A. PAYMENT OF TAXES AND CLAIMS. The Company will, and will cause each Subsidiary to, pay before they become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or its Property, and A-9 (ii) all claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons that, if unpaid, will more likely than not 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 in an appropriate manner. 5B. MAINTENANCE OF PROPERTIES AND CORPORATE EXISTENCE. The Company will, and will cause each Subsidiary to, (i) PROPERTY -- maintain its Property in good condition and make all necessary renewals, replacements, additions, betterments and improvements thereto; (ii) INSURANCE -- (a) maintain, with financially sound and reputable insurers, insurance (or maintain self-insurance, including without limitation, insurance with subsidiaries, if that shall be reasonable in the circumstances) with respect to its Property and business against such casualties and contingencies, of such types (including, without limitation, loss or damage, public liability, business interruption, larceny, embezzlement or other criminal misappropriation) and in such amounts as is reasonably appropriate for the risks associated with the business of the Company and the Subsidiaries; and (b) at your request, deliver to you for examination, as soon as practicable, policies or certificates of insurance or self-insurance or certificates of insurance brokers evidencing compliance with the provisions of this clause (ii); (iii) FINANCIAL RECORDS -- keep true books of records and accounts in which full and correct entries shall be made of all its business transactions so that the financial statements required by paragraph 5D hereof may be prepared in accordance with generally accepted accounting principles; (iv) CORPORATE EXISTENCE AND RIGHTS -- maintain, preserve and renew the Company's existence as a corporation organized under the laws of a state of the United States of America; and (v) COMPLIANCE WITH LAW -- not be in violation of any law, ordinance or governmental rule or regulation to which it is subject (including, without limitation, laws, ordinances, rules or regulations relating to environmental matters) and not fail to obtain any license, permit, franchise or other governmental authorization necessary to the ownership of its Properties or to the conduct of its business, which violation or failure to obtain will, more likely than not, materially adversely affect the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes. A-10 5C. PAYMENT OF NOTES AND MAINTENANCE OF OFFICE. The Company will punctually pay, or cause to be paid, the principal and interest (and premium, if any) to become due in respect of the Notes according to the terms thereof and shall maintain an office at the address of the Company set forth in paragraph 11 hereof where notices, presentations and demands in respect of this Agreement or the Notes may be made upon it. Such office shall be maintained at such address until such time as the Company shall notify the holders of the Notes of any change of location of such office. 5D. FINANCIAL REPORTING AND NOTICES. (i) FINANCIAL REPORTING. The Company will deliver to each holder of Notes in duplicate: (a) as soon as practicable and in any event within sixty (60) days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, consolidated statements of income and cash flows of the Company and the Subsidiaries for such period and for the period from the beginning of the current fiscal year to the end of such quarterly period, and a consolidated balance sheet of the Company and the Subsidiaries as at the end of such quarterly period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year, accompanied by additional financial statements containing the same information prepared in accordance with generally accepted accounting principles as then in effect if the accounting principles applied by the Company in the preparation of the financial statements first described in this clause (a) differ in any material respect from generally accepted accounting principles as then in effect, in both cases in reasonable detail and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments; provided, however, that so long as the accounting principles applied by the Company in the preparation of the financial statements first described in this clause (a) do not differ in any material respect from generally accepted accounting principles as then in effect, delivery pursuant to clause (c) below of copies of the Quarterly Report on Form 10-Q of the Company for such quarterly period filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (a) (provided that such Form 10-Q is accompanied by any other financial information incorporated by reference in such Form 10-Q, and provided further, that the Company provide to each holder who so requests in writing any document incorporated by reference in such Form 10-Q); (b) as soon as practicable and in any event within ninety (90) days after the end of each fiscal year, consolidating and consolidated statements of income and cash flows of the Company and the Subsidiaries for such year, and consolidating and consolidated balance sheets of the Company and the Subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding figures from the preceding annual audit, accompanied by additional financial statements containing the same information prepared in accordance with generally accepted accounting principles as then in effect if the accounting principles applied by the Company in the preparation of the financial statement first described in this clause (b) differ in any material respect from generally accepted accounting principles as then in effect, in both cases all in reasonable detail and satisfactory in scope to the Required Holders and, as to the consolidated statements A-11 prepared under generally accepted accounting principles as then in effect, certified to the Company by independent public accountants of recognized standing selected by the Company whose certificate shall be in scope and substance satisfactory to the Required Holders in their reasonable judgment, and, as to the consolidating statements and financial statements not certified by such independent public accountants, certified by an authorized financial officer of the Company; provided, however, that so long as the accounting principles applied by the Company in the preparation of the financial statements first described in this clause (b) do not differ in any material respect from generally accepted accounting principles as then in effect, delivery pursuant to clause (c) below of copies of the Annual Report on Form 10-K of the Company for such fiscal year filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (b) (provided that such Form 10-K is accompanied by any other financial information incorporated by reference in such Form 10-K, and provided further, that the Company provide to each holder who so requests in writing any document incorporated by reference in such Form 10-K); (c) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports that it sends to its public stockholders and copies of all registration statements (without exhibits) and all reports that it files with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission); and (d) copies of all agreements governing and instruments evidencing Debt (other than Debt of a type described in subsection (vi) of the definition of Debt) of the Company or any Consolidated Subsidiary containing any Financial Covenant, and all agreements amending, modifying or supplementing any such agreement or instrument affecting, adding or deleting any Financial Covenant, in each case, entered into on or after the First Amendment Date; (e) all certificates and notices delivered or required to be delivered to the holders of any other Debt of the Company or any Consolidated Subsidiary on or after the First Amendment Date, in each case, in connection with the compliance by the Company or any Consolidated Subsidiary with any Financial Covenant; and (f) with reasonable promptness, such other financial data as such holder of Notes may reasonably request. (ii) DEFAULT NOTICES. The Company also covenants that immediately upon any Senior Officer of the Company obtaining knowledge of an Event of Default or Default, it will deliver to each holder of Notes an Officer's Certificate specifying the nature and period of existence thereof and what action the Company proposes to take with respect thereto. 5E. INSPECTION OF PROPERTY. The Company will permit any Person designated in writing by any holder of Notes, at such holder's expense, to visit and inspect any of the Properties of the Company and the Subsidiaries, to examine the corporate books and financial records of the Company and the Subsidiaries and make copies thereof or extracts therefrom, all at such reasonable times and as often as such holder may reasonably request. In addition, so long as (i) a Default or an Event of Default shall have occurred and be continuing, (ii) in the A-12 reasonable judgment of any holder of Notes, a material adverse change shall have occurred with respect to the business or financial condition of the Company and the Subsidiaries taken as a whole, or (iii) any holder shall have a reasonable basis for questioning the validity of any line item in any financial statement of the Company or the validity of such financial statement as a whole, the Company will permit any Person designated in writing by any holder to discuss the affairs, finances and accounts of any of such corporations with the principal officers of the Company and its independent public accountants, all at such reasonable times and as often as such holder may reasonably request. 5F. COVENANT TO SECURE NOTE EQUALLY. The Company covenants that, if it or any Subsidiary shall create or assume any Lien upon any of its Property, whether now owned or hereafter acquired, other than Liens permitted by the provisions of paragraph 6A hereof or any similar provision incorporated herein by reference (unless prior written consent to the creation or assumption thereof shall have been obtained pursuant to paragraph 11C hereof), it will make or cause to be made effective provision whereby the Notes will be secured by such Lien equally and ratably with any and all other Debt thereby secured so long as any such other Debt shall be so secured. 5G. ERISA COMPLIANCE. Neither the Company nor any Subsidiary will cause any Plan maintained or participated in by it to engage in any "prohibited transaction," as such term is defined in Section 4975 of the IRC. 5H. INVOLUNTARY PREPAYMENT. (i) Upon the occurrence of any Prepayment Event, the Company shall make an offer to the holders of Notes to repurchase the Notes as set forth in this paragraph 5H. Immediately upon the occurrence of the Prepayment Event but in any event within five (5) Business Days thereafter, the Company shall give each holder of the Notes substantially simultaneous written notice thereof describing such Prepayment Event in reasonable detail including, without limitation, a description of the issue of Debt giving rise to such Prepayment Event, the facts and circumstances surrounding the occurrence thereof, the manner of the prepayment, redemption or defeasance of such other Debt in connection therewith and the manner specified in this paragraph 5H of accepting or rejecting such offer by the holder. Such notice shall also contain the Company's offer (the "Prepayment Offer") to purchase from each such holder of Notes a principal amount of the Notes held by such holder equal to its Noteholder Share of the Ratable Prepayment Amount at a purchase price equal to the Agreed Put Consideration. (ii) A holder of Notes may accept the Prepayment Offer, in whole or in part, through a written acceptance (the "Noteholder Acceptance") delivered to the Company within forty-five (45) days of such holder's receipt of the Prepayment Offer (the "Offer Period"). Promptly after (and, in any event, within two (2) Business Days of) its receipt of any Noteholder Acceptance, the Company shall give substantially simultaneous written notice thereof to all other holders of Notes. (iii) If such holder shall accept the offer, the Company shall purchase that portion (the "Prepayment Portion"), expressed as a percentage, of the principal amount of Notes held by such holder specified in its Noteholder Acceptance, provided that the A-13 principal amount of Notes the Company is required to purchase shall not exceed such holder's Noteholder Share of the Ratable Prepayment Amount. Such purchase shall be made on the fifteenth (15th) day after the expiration of the Offer Period or, if later, the first day on which any holder of any other issue of Debt would receive a prepayment in respect of such Prepayment Event but in no event later than sixty (60) days after the expiration of the Offer Period. On the date of purchase, such holder shall sell the Prepayment Portion of such Notes to the Company without recourse, representation or warranty (other than as to such holder's full right, title and interest to the Prepayment Portion of such Notes free of any adverse claim created by such holder therein), at a price, payable in immediately available funds by wire transfer to the account specified pursuant to paragraph 11 hereof or to such other account as may be specified in such notice, equal to the Agreed Put Consideration. (iv) Upon any partial prepayment of a Note pursuant to this paragraph 5H, such Note may, at the option of the holder thereof, be: (a) surrendered to the Company, in which case the Company shall promptly execute and issue to the holder thereof a new Note in a principal amount equal to the principal amount remaining unpaid on the surrendered Note after giving effect to such prepayment; or (b) made available to the Company for notation thereon of the portion of the principal so prepaid. In case the entire principal amount of any Note is prepaid, such Note shall be surrendered to the Company for cancellation and shall not be reissued, and no Note shall be issued in lieu of the prepaid principal amount of any Note. (v) If the occurrence of any Prepayment Event causes the Company or any Subsidiary to defease, repay, repurchase or have a reduction in the available commitment under any issue of Debt prior to the time that any Notes would be repurchased hereunder, then simultaneously with such defeasance, repayment, repurchase or reduction in respect of such other Debt, the Company shall pay to each holder an amount equal to its Noteholder Share of the Ratable Prepayment Amount at a purchase price equal to the Agreed Put Consideration, which payment shall satisfy all obligations of the Company to the holders in respect of clauses (i) through (iii), inclusive, of this paragraph 5H. At the time of the making of such payment, the Company shall notify the holder of such payment in writing, which notice shall state that such payment is being made pursuant to this paragraph 5H(v), shall contain a description of the issue of Debt giving rise to such Prepayment Event, the facts and circumstances surrounding the occurrence thereof and the manner of the prepayment, redemption or defeasance of such other Debt in connection therewith (unless such information shall have been contained in a previously delivered notice pursuant to paragraph 5H(i) with respect to such Prepayment Event) and describe the procedure detailed in this paragraph 5H(v) pursuant to which a holder may elect to rescind such payment. In the event that a holder of Notes receiving a payment pursuant to this paragraph 5H(v) elects to rescind the prepayment arising from such Prepayment Event A-14 with respect to all Notes or any portion of the Notes held by such holder, such holder shall deliver to the Company, within forty-five (45) days of such holder's receipt of the notice specified in this paragraph 5H(v), written notice of such recision, and shall contemporaneously pay to the Company in immediately available funds an amount equal to the amount so paid such holder pursuant to this paragraph 5H(v) or, in the case of a recision with respect to only a portion of the prepayment made to such holder, an amount equal to that portion of such prepayment which such holder wishes to rescind. (vi) Each holder of Notes shall have the rights specified in this paragraph 5H with respect to each Prepayment Event which shall occur, regardless of any act or omission to act with respect to any previous Prepayment Event. In the event that the Prepayment Event is also a Designated Event subject to paragraph 4 of this Agreement, the Company shall comply with the provisions of clause (v) of this paragraph 5H with respect to the matters contained therein; in all other respect such Designated Event will be treated as a Designated Event and not as a Prepayment Event, and the Company will be required to comply with paragraph 4E in connection therewith. In the event that the Prepayment Event would also be an event which results in an Event of Default, this paragraph 5H shall not be deemed to in any respects limit the rights and remedies of the holders under paragraph 7. (vii) Prepayments made pursuant to this paragraph 5H shall be applied ratably to the obligations of the Company to make required prepayments in respect of the Notes pursuant to paragraph 4A hereof and to pay the remaining principal amount thereof at maturity. 6. NEGATIVE COVENANTS. The Company covenants that on and after the Closing Date, and so long as any Notes are outstanding, it shall comply with the following: 6A. LIMITATIONS ON LIENS. (i) NEGATIVE PLEDGE. The Company will not, and will not permit any Subsidiary to, create, assume, or suffer to exist any Lien upon any of the Property of the Company or any Subsidiary, whether now owned or hereafter acquired, except: (a) Liens securing Debt and other obligations in an aggregate principal amount at any time not exceeding ten percent (10%) of Consolidated Tangible Net Worth at such time, provided, however, that neither the Company nor any Subsidiary shall create, assume or otherwise incur any Lien upon any of its respective Properties unless the Company is in compliance with paragraph 6R of this Agreement; (b) Liens arising out of transactions contemplated by the terms of the Trade Receivables Agreement; (c) Purchase Money Mortgages if, after giving effect thereto and to any concurrent transactions: A-15 (I) each such Purchase Money Mortgage secures an amount not exceeding one hundred percent (100%) of the cost of the particular Property to which it relates (or, in the case of a Lien existing on any Property of any corporation at the time it becomes a Subsidiary, the Fair Market Value of such Property at such time); (II) such Purchase Money Mortgage encumbers only Property (A) purchased after the Closing Date and (B) acquired with the proceeds of the Debt secured thereby; and (III) such Property was acquired in the ordinary course of business of the corporation acquiring such Property, provided, however, that neither the Company nor any Subsidiary shall create, assume or otherwise incur any Purchase Money Mortgage unless the Company is in compliance with paragraph 6R of this Agreement; (d) Liens incurred in connection with Lease Transactions to the extent that such Liens encumber Property covered by such Lease Transactions; provided, however, that neither the Company nor any Subsidiary shall create, assume or otherwise incur any such Liens unless the Company is in compliance with paragraph 6R of this Agreement, and provided further that, immediately after giving effect to the investment of the Company or the Subsidiary in such Lease Transaction, the aggregate amount of the investments then outstanding of the Company and the Subsidiaries in all Lease Transactions does not exceed Fifty Million Dollars ($50,000,000), it being agreed that for the purpose of such calculation the amount of each investment shall be determined on a Net After-Tax Cash Basis; (e) Liens upon San Marcos Bonds, and the proceeds thereof, which have been repurchased upon tender by the holders thereof in accordance with the terms of the indenture governing such San Marcos Bonds, until, but only until, the trustee with respect to such San Marcos Bonds has received the purchase price therefor upon the remarketing thereof and the issuer of the letter of credit that was drawn in connection with such tender has been reimbursed for such amounts drawn; provided, however, that the Company shall actively seek to remarket such bonds pursuant to the provisions of the IDB Financing of the Company's San Marcos, Texas facility or, to the extent necessary in connection with any termination of any outstanding letter of credit relating to such facility, to modify the structure of such IDB Financing to the extent necessary to permit a long-term reissuance of the repurchased San Marcos Bonds; and (f) unless, at the time of incurrence thereof, a Default or an Event of Default shall occur or be continuing, Liens incurred in connection with the deposit of cash collateral to secure reimbursement obligations of the Company relating to the San Marcos Bonds, but only in connection with the extension of an outstanding letter of credit relating to such facility and only in an amount of cash collateral not exceeding the maximum amount which may be drawn under such A-16 letter of credit; provided, however, that the Company shall actively seek to obtain a replacement letter of credit that does not require cash collateralization (and thus relieves the Company of any requirement to deposit cash collateral or to secure such reimbursement obligations); it being understood that each such Lien may be allocated by the Company to any one of the preceding categories in which it may, by the terms of such category, be included. (ii) FINANCING STATEMENTS. The Company will not, and will not permit any Subsidiary to, sign or file a financing statement under the Uniform Commercial Code of any jurisdiction that names the Company or such Subsidiary as debtor, or sign any security agreement authorizing any secured party thereunder to file any such financing statement, except, in any such case, a financing statement filed or to be filed to perfect or protect a Lien that the Company or such Subsidiary is entitled to create, assume or incur, or permit to exist, under the foregoing provisions of this paragraph 6 or to evidence for informational purposes a lessor's interest in Property leased to the Company or any such Subsidiary. 6B. LIMITATIONS ON LEASES. (i) LIMITATIONS ON LEASES. The Company will not, and will not permit any Subsidiary to, at any time be or become liable at any time as lessee under any lease (other than a lease giving rise to a Capitalized Lease Obligation) having an original (or then unexpired) term of one year or more if: (a) the aggregate Net Rentals payable in any period of twelve (12) consecutive calendar months following such time under such lease and all other such leases under which the Company or a Subsidiary is lessee, minus (b) all amounts of a similar nature due from sub-lessees under such leases that are reasonably expected to be collected during the same period, would exceed ten percent (10%) of Consolidated Tangible Net Worth at such time. (ii) SUBSIDIARY. Any corporation that becomes a Subsidiary after the Closing Date shall be deemed to have become liable as lessee, at the time it becomes a Subsidiary, under all leases (under which it is liable as lessee) of such corporation existing immediately after it becomes a Subsidiary. 6C. LIMITATIONS ON INDEBTEDNESS. The Company will not, and will not permit any Subsidiary to, create, issue, assume or guarantee any Debt (other than Intercompany Debt) except that: (i) on or prior to April 26, 1997: (a) the Company may incur Debt under the Credit Agreement or an Acceptable Replacement Credit Facility; A-17 (b) the Company may incur the 1994 Senior Debt and the 1994 Subordinated Debt; (c) the Company and the Subsidiaries may incur unsecured Debt, in an aggregate principal amount not to exceed $10,000,000 at any time outstanding; provided, however, that no more than $5,000,000 of such amount may be Debt of Subsidiaries; (d) the Subsidiaries may incur Debt under revolving credit facilities so long as the aggregate amount of all such Debt outstanding at any time shall not exceed $5,000,000; (e) the Company and the Subsidiaries may incur Debt described in clause (vi) of the definition of "Debt" contained in paragraph 10B; (f) Debt incurred in connection with the resale or remarketing of San Marcos Bonds, but only to the extent that: (I) San Marcos Bonds in an aggregate principal amount of Sixteen Million Five Hundred Thousand Dollars ($16,500,000) were issued and outstanding and held and owned by Persons other than the Company, any Subsidiary or any Affiliate on May 10, 1994; and (II) the San Marcos Bonds to be resold or remarketed were repurchased by the Company upon tender by the holders thereof after May 10, 1994 in accordance with the terms of the indenture governing the San Marcos Bonds; and (g) replacement unsecured San Marcos Bonds, in an aggregate principal amount not exceeding Sixteen Million Five Hundred Thousand Dollars ($16,500,000), if, and only if, Sixteen Million Five Hundred Thousand Dollars ($16,500,000) in aggregate amount of San Marcos Bonds were redeemed in full as a result of the failure of the bank which has issued any letter of credit relating to the San Marcos Bonds to extend or renew such outstanding letter of credit (for the avoidance of doubt, the aggregate principal amount of San Marcos Bonds and replacement San Marcos Bonds, whether outstanding on the date hereof or thereafter issued pursuant to clause (f) or clause (g) of this paragraph 6C(i), shall not exceed Sixteen Million Five Hundred Thousand Dollars ($16,500,000) at any time); in each case, so long as after the incurrence thereof, and after giving effect thereto, no Default or Event of Default (including any Default or Event of Default arising out of any breach of paragraph 6L hereof) shall have occurred or be continuing; and A-18 (ii) on or after April 27, 1997, and at any time during any period set forth in the tables below, the Company or any Subsidiary may incur Debt if, immediately after giving effect to such incurrence of Debt: (a) Consolidated Senior Debt would not exceed the percentage applicable to such period of the sum of Consolidated Total Debt plus Consolidated Tangible Net Worth, all as set forth in the table immediately below: If such time occurs during the period: Percentage: ------------------------------------- ---------- From April 27, 1997 through and including July 31, 1998 38.00% At all times on or after August 1, 1998 35.00%; and (b) Combined Subsidiary Debt would not exceed five percent (5%) of Consolidated Tangible Net Worth; and so long as after the incurrence thereof, and after giving effect thereto, no Default or Event of Default (including any Default or Event of Default arising out of any breach of paragraph 6L or paragraph 6R hereof) shall have occurred or be continuing. 6D. LIMITATIONS ON MERGERS AND SALES OF ASSETS. The Company will not, and will not permit any Subsidiary to (whether in a single transaction or a series of transactions), consolidate with, merge into or transfer substantially all of its Property (whether now owned or hereafter acquired) to any other Person, or permit any other Person to consolidate with, merge into, or transfer substantially all of its Property to, the Company, except that any Subsidiary may merge or consolidate with or into, or transfer substantially all of its Property to, or acquire substantially all of the Property of, any other Person and the Company may merge or consolidate with or into, or acquire substantially all of the Property of, any other Person, if: (i) in the case of any merger or consolidation involving the Company, the corporation that results from such merger or consolidation is organized under the laws of the United States of America or any jurisdiction thereof and such corporation expressly assumes in writing the due and punctual payment of the principal of, and Yield-Maintenance Premium, if any, and interest on, all of the Notes, according to their tenor, and the due and punctual performance and observance of all the covenants in the Notes and this Agreement to be performed or observed by the Company, all in an agreement or instrument satisfactory in form and substance to the Required Holders; (ii) immediately after the consummation of the transaction, and after giving effect thereto, the Company, the corporation that results from any such merger or consolidation with the Company or the Person that acquires such Property from the Company, and in each case, its Subsidiaries shall be engaged principally in the businesses of either or both of manufacturing and distributing aerospace products or technically related products and of providing services related to such products; A-19 (iii) immediately after the consummation of the transaction, and after giving effect thereto, no Event of Default or Default would exist; and (iv) immediately after the consummation of the transaction, and after giving effect thereto, the Company could incur at least One Dollar ($1.00) of additional Debt pursuant to paragraph 6 hereof. 6E. ADJUSTED CONSOLIDATED TANGIBLE NET WORTH MAINTENANCE. The Company will maintain at all times Adjusted Consolidated Tangible Net Worth of not less than the sum of: (i) $125,000,000; plus (ii) the sum of the Fiscal Quarter Net Worth Increase Amounts for each fiscal quarter of the Company ended after July 31, 1994; plus (iii) the aggregate amount of all capital contributions (which amount shall include, without limitation, all amounts attributable to the conversion of debt of the Company to equity of the Company, valued at the amount added to stockholders' equity in accordance with GAAP) received by the Company or any Consolidated Subsidiary (in each case, other than contributions originally made by the Company or any Consolidated Subsidiary) in cash, in Property other than cash or by conversion of Debt of the Company at any time after the Third Amendment Date. 6F. LIMITATIONS ON DISTRIBUTIONS. (i) LIMIT ON DISTRIBUTIONS. The Company will not, and will not permit any Subsidiary to, at any time declare or make or incur any liability to declare or make any Distribution; provided, however, that: (a) the Company may, repurchase, purchase, redeem or otherwise acquire shares of its common stock or warrants, rights or options to acquire such stock issued pursuant to Restricted Stock Plans, Stock Option Plans, Stock Incentive Plans, the Rights Agreement, the ESOP, or Non-Employee Directors Stock-Option Plans; (b) the Company may declare or make any Distribution if, immediately after giving effect to such Distribution, (I) the Debt Ratio would not exceed 2.50:1.00; (II) the Company could incur $1.00 of additional Debt pursuant to paragraph 6 hereof; (III) if the time of declaration or making, as the case may be, of such Distribution is on or prior to April 26, 1997, Consolidated Senior Debt at such time would not exceed thirty- eight percent (38%) of the sum of A-20 Consolidated Total Debt plus Consolidated Tangible Net Worth at such time; and (IV) after giving effect to such transactions, no Event of Default or Default would then exist; and (c) the Company may declare or make any Permitted Preferred Dividend if, prior to and immediately after giving effect to such Permitted Preferred Dividend, no Default or Event of Default shall exist. (ii) TIME OF PAYMENT. The Company will not authorize a Distribution on its capital stock which is not payable within sixty (60) days of authorization. 6G. LIMITATIONS ON CAPITAL EXPENDITURES. The Company will not, and will not permit any Subsidiary to, make, on or before April 26, 1997, any expenditures for fixed or capital assets which would cause the aggregate of all such expenditures made by the Company and the Subsidiaries in any period of four full consecutive fiscal quarters to exceed the sum of the amounts set forth below opposite such four fiscal quarters:
Fiscal Quarters Amount --------------- ----------- Each Fiscal Quarter 1994 $4,500,000 Each Fiscal Quarter 1995 $6,000,000 Each Fiscal Quarter 1996 $7,500,000 Each Fiscal Quarter 1997 $7,500,000.
6H. PRIVATE OFFERING. The Company will not, and will not permit anyone acting on its behalf to, 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. 6I. TRANSACTIONS WITH AFFILIATES. (i) EXCHANGE LISTING. During any period that the Company does not have common stock listed on the New York Stock Exchange or the American Stock Exchange, the Company will not, and will not permit any Subsidiary to, sell or transfer any Property to, or purchase or acquire any Property of, or otherwise engage in any other transaction with, any Affiliate, except at prices and on terms and conditions not less favorable to the Company or such Subsidiary than could be obtained on an arms' length basis from unrelated third parties. (ii) CONTROL PERSONS. During any period that the Company has common stock listed on the New York Stock Exchange or the American Stock Exchange, the Company will not, and will not permit any Subsidiary to, sell or transfer any Property to, or purchase or acquire any Property of, or otherwise engage in any other transaction with, any Control Person, except at prices and on terms and conditions not less favorable to the Company or such Subsidiary than could be obtained on an arms' length basis from unrelated third parties. A-21 6J. LINE OF BUSINESS. The Company shall not, nor shall it permit any Subsidiary to, make any change in the nature of its business if such change would constitute a material change in the nature of the business of the Company and the Subsidiaries taken as a whole as conducted on the Closing Date, or commence or permit any Subsidiary to commence any major project for the development of a new line of products or services other than aerospace products or technically related products or services related to such products; provided that the Company or any Subsidiary may commence any project for the development of such new line of products or services if, and only if, the aggregate costs and expenses related to all such projects (including, without limitation, budgeted costs (determined from time to time) for such new project minus any reasonably budgeted reimbursements for such costs due from parties other than the Company or the Subsidiaries) shall not exceed ten percent (10%) of Consolidated Tangible Net Worth at the time each such project is commenced. 6K. FIXED CHARGE COVERAGE. The Company will maintain for each day a ratio of Consolidated Net Income Available for Fixed Charges for the period of 365 consecutive days (or 366 consecutive days for any such period that includes February 29) ending on such day to Consolidated Fixed Charges for such period, of not less than the ratio set forth in the chart below opposite the period set forth below in which such day occurs:
Period Ratio ------ ----- Fiscal Year 1994 1.40 to 1.00 Fiscal Year 1995 1.55 to 1.00 Fiscal Year 1996 1.90 to 1.00 Fiscal Year 1997 and thereafter 2.00 to 1.00;
6L. DEBT RATIO. The Company shall not permit the Debt Ratio for any day to be greater than the ratio set forth opposite the period set forth in the chart below in which such day occurs:
Fiscal Year Ratio ----------- ----- 1994 5.60 to 1.00 1995 5.00 to 1.00 1996 4.10 to 1.00 1997 3.20 to 1.00 1998 2.80 to 1.00 1999 and thereafter 2.50 to 1.00.
6M. INCORPORATION OF NEGATIVE COVENANTS. (i) During all such times as both the Credit Agreement shall remain in force, and either any Debt shall be outstanding thereunder or the lenders party thereto shall have any obligation to lend or make advances thereunder: (a) the provisions of paragraph 6A (except for clauses (i)(e) and (i)(f) thereof, to the extent provided in paragraph 6M(i)(c) below) and paragraph 6B of this Agreement shall be of no force and effect; A-22 (b) the provisions of Sections 5.02(b), 5.02(c), 5.02(d), 5.02(e), 5.02(g), 5.02(h) and 5.02(i) of the Credit Agreement, as in effect on the Third Amendment Date (after giving effect to the Seventh Amendment to the Credit Agreement), but without amendment, supplement or modification (except as set forth in paragraph 6M(ii) hereof), and together with all relevant definitions pertaining thereto, shall be incorporated herein by reference, mutatis mutandis; (c) the Company shall not, nor shall it permit any Subsidiary to, create, assume or suffer to exist any Lien securing any Debt existing on the date hereof or incurred thereafter in connection with any IDB Financing, except for such Liens as are expressly permitted by the provisions of clause (e) or clause (f) of paragraph 6A(i) hereof; provided, however, that at all times during which either the Credit Agreement shall be of no force or effect, or there shall be no Debt outstanding thereunder and no obligation on the part of the lenders thereto to lend or make any advance thereunder, the provisions of paragraph 6A and paragraph 6B of this Agreement shall be in full force and effect. (ii) If at any time: (a) after the Third Amendment Date, the Credit Agreement is amended, supplemented or modified to provide Financial Covenants in addition to, or which are more restrictive of the Company or the Consolidated Subsidiaries than, the provisions of the Credit Agreement, as in effect on the Third Amendment Date (after giving effect to the Seventh Amendment to the Credit Agreement dated as of such date); (b) after the First Amendment Date, the Company enters into any other agreement governing, or executes any other instrument evidencing, any Debt (or any commitment to lend), other than Debt or commitments solely among the Company and/or one or more Consolidated Subsidiaries; or (c) after the First Amendment Date, the Company enters into any amendment, supplement or modification of any agreement governing, or any instrument evidencing, any Debt (or any commitment to lend), other than Debt or commitments solely among the Company and/or one or more Consolidated Subsidiaries; then, and in each such case, each Financial Covenant set forth in such amendment, supplement, modification or other agreement or instrument shall be incorporated by reference herein for the remaining term of such agreement or instrument, but only to the extent that such covenant is more restrictive of the Company or the Consolidated Subsidiaries than the corresponding provision of this Agreement. (iii) In the event that any Financial Covenant contained in any other agreement governing, or instrument evidencing, any Debt (or commitment to lend), which Financial Covenant has been or is incorporated into this Agreement pursuant to the provisions of paragraph 6M(ii) hereof, is amended, supplemented or modified to make such Financial A-23 Covenant less restrictive of the Company or the Consolidated Subsidiaries than the incorporated Financial Covenant, the more restrictive incorporated Financial Covenant shall continue to be incorporated herein for the remaining term of such agreement or instrument notwithstanding such amendment, supplement or modification. Notwithstanding the foregoing sentence, if the provisions of such incorporated Financial Covenant were expressed when incorporated to be more restrictive on a temporary basis, or more restrictive only for a prescribed period, such more restrictive provision shall be incorporated herein only on such temporary basis or only for such prescribed period, as the case may be. (iv) No Financial Covenant incorporated herein by virtue of paragraph 6M(ii) or paragraph 6M(iii) hereof shall supersede, replace, amend, supplement or modify any other provision of this Agreement, including any covenant contained herein which addresses a subject matter similar to that of such incorporated Financial Covenant. 6N. MAINTENANCE OF SENIOR STATUS. The Company will not take any action at any time to amend, modify or supplement any subordination provision (or any definition of any defined term as used in any such provision) in the Existing Subordinated Notes, the 1994 Subordinated Notes or any indenture governing the provisions of any thereof, or otherwise take any action which would result in any of the Existing Subordinated Notes or 1994 Subordinated Notes not being junior or subordinated in right of payment to the Notes to the same extent such Existing Subordinated Notes or 1994 Subordinated Notes, as the case may be, are subordinated to the Notes on the Third Amendment Date (after giving effect to the issuance of the 1994 Subordinated Notes). The Company shall not take any action which would result in the Notes not constituting, or not being fully entitled to the benefits of, "Senior Indebtedness" and "Designated Senior Indebtedness" as defined in the indenture governing the 1994 Subordinated Notes. 6O. CERTAIN AMENDMENTS. The Company shall not, nor shall it permit any Consolidated Subsidiary to, consent to any amendment, modification, supplement or waiver of: (i) any of the provisions of any of Sections 3.02, 3.03, 3.04 or 3.05 of the Credit Agreement, as in effect on the Third Amendment Date (after giving effect to the Seventh Amendment to the Credit Agreement), or any other provision referred to therein or any defined term as used therein, other than a waiver by the banks party thereto of any condition set forth therein; or (ii) any other provision of the Credit Agreement or, prior to April 25, 1997, any Acceptable Replacement Credit Facility, to the extent that such amendment, modification, supplement or waiver would have the effect of: (a) reducing the amount or availability of credit thereunder, changing the timing of or reducing the commitments of the lenders thereunder to lend or make credits available pursuant thereto; (b) making more restrictive upon the Company any condition precedent to the funding of the credits available thereunder; A-24 (c) requiring the Company or any Subsidiary to grant any lender thereunder any Lien securing the obligations thereunder; or (d) requiring the Company or any Subsidiary to maintain any deposit accounts in any minimum amount, compensating balances, cash management or clearing house relationship or similar arrangements, with the lenders thereunder; in each case, without the prior written consent of the Required Holders. 6P. SALES OF ASSETS. The Company will not, and will not permit any Consolidated Subsidiary to, at any time after the First Amendment Date, sell, lease, transfer or otherwise dispose of any Property (except for sales of inventory and of obsolete or surplus Property in the ordinary course of business, sales of accounts receivable, the issuance of director's qualifying shares and sales, leases, transfers or other dispositions of Property to the Company or a Consolidated Subsidiary (collectively, "Excepted Property")); provided, however, that the foregoing restrictions shall not apply to the sale, lease, transfer or other disposition of any such Property to any Person if all of the following conditions are met: (i) the book value of all such Property then being sold, leased, transferred or otherwise disposed of, together with the book value of all other Property (other than Excepted Property) sold, leased, transferred or otherwise disposed of by the Company and the Consolidated Subsidiaries since the First Amendment Date shall not, in the aggregate, exceed ten percent (10%) of Consolidated Tangible Assets, determined as of the end of the then most recently ended fiscal quarter of the Company; (ii) in the case of the sale, lease, transfer or other disposition of a Consolidated Subsidiary (whether by disposition of any capital stock of such Consolidated Subsidiary, the Property thereof or otherwise) or a line or segment of business of the Company or a Consolidated Subsidiary, in either case, substantially as an entirety (except with respect to the sale, lease, transfer or other disposition of capital stock of a Consolidated Subsidiary), the sum of: (A) that portion, expressed as a percentage, of Gross Operating Income attributable to or contributed by all Property of a type described in this paragraph 6P(ii) and then being sold, leased, transferred or otherwise disposed of, for the period of eight (8) full consecutive fiscal quarters most recently ended on or prior to the date of such sale, lease, transfer or other disposition; plus (B) with respect to each other sale, lease, transfer or other disposition of Property of a type described in this paragraph 6P(ii) occurring during the period beginning on the later of the First Amendment Date and the beginning of the eight full (8) fiscal quarters of the Company most recently ended prior to the consummation of the transaction referred to in clause (A) above, and ending on the date of the transaction referred to in clause (A) above, that portion, expressed as a percentage, of Gross Operating Income attributable to or contributed by such Property described in this clause (B) for the period of eight (8) full consecutive fiscal quarters most recently ended on or prior to the date of such sale, lease, transfer or other disposition thereof; A-25 shall not exceed ten percent (10%); (iii) in the good faith opinion of the board of directors of the Company (or a committee of such board to whom such matter has been properly delegated), the sale, lease, transfer or other disposition is for Fair Market Value and is in the best interests of the Company; and (iv) immediately after the consummation of such sale, lease, transfer or other disposition, and after giving effect thereto, no Default or Event of Default would exist. Sales and other dispositions of accounts receivable shall be subject to paragraph 6Q of this Agreement. Sales of all or any portion of the capital stock of a Consolidated Subsidiary shall, for purposes of determining the book value thereof in clause (i) above, be deemed to be the sale of all or such portion of the book value of the assets of the Consolidated Subsidiary which shall have issued such capital stock. Sales of all or a portion of the capital stock of any Consolidated Subsidiary shall, for purposes of determining its contribution to Gross Operating Income in clause (ii) above, be deemed to have contributed all or such portion of that proportion of Gross Operating Income attributable to the Consolidated Subsidiary which shall have issued such capital stock. As used in this paragraph 6P, the term `lease' shall mean an original lease, as lessor, by the Company or any Consolidated Subsidiary, and the continuance, extension or renewal of any existing lease shall not be treated as a lease pursuant to, or restricted by, this paragraph 6P. 6Q. SALE OF RECEIVABLES. The Company covenants that it will not, and will not permit any Consolidated Subsidiary to, sell with recourse or otherwise sell for less than the face value thereof, any of its notes or accounts receivable, except pursuant to the Trade Receivables Agreement; provided, however, that the Company and any Consolidated Subsidiary may sell for book value the accounts receivable owing from any Person (i) that has commenced a voluntary case under the Bankruptcy Law of the United States or any proceedings under the Bankruptcy Law of any other jurisdiction, or (ii) against whom any such case or proceedings have been commenced and have remained undismissed for a period of at least sixty (60) days. 6R. LIMITATION ON CERTAIN OBLIGATIONS. The Company will not at any time permit the sum of (w) obligations secured by Liens allocated by the Company to the category described in paragraph 6A(i)(a) hereof, (x) obligations secured by Liens allocated by the Company to the category described in paragraph 6A(i)(c) hereof, (y) obligations secured by Liens allocated by the Company to the category described in paragraph 6A(i)(d) hereof which obligations were incurred on or subsequent to the Closing Date, and (z) Combined Subsidiary Debt, in each case at such time, to exceed fifteen percent (15%) of Consolidated Tangible Net Worth at such time. 7. EVENTS OF DEFAULT. 7A. ACCELERATION. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise): A-26 (i) the Company defaults in the payment of any principal of or premium on any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or (ii) the Company defaults in the payment of any interest on any Note for more than ten (10) days after the date due; or (iii) the Company or any Subsidiary defaults in any payment of principal of or interest on any obligation for money borrowed (or any Capitalized Lease Obligation, any obligation under a conditional sale or other title retention agreement, any obligation issued or assumed as full or partial payment for Property whether or not secured by a Purchase Money Mortgage or any obligation under notes payable or drafts accepted representing extensions of credit) beyond any period of grace provided with respect thereto, or the Company or any Subsidiary fails to perform or observe any other agreement, term or condition contained in any agreement under which any such obligation is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such obligation (or a trustee on behalf of such holder or holders) to cause, such obligation to become due prior to any originally stated maturity, or to be repurchased by the Company or any Subsidiary, provided that the aggregate amount of all obligations as to which such a payment default shall occur and be continuing or such a failure or other event causing or permitting acceleration shall occur and be continuing exceeds Fifteen Million Dollars ($15,000,000), and provided, further, that obligations for the deferred purchase price of goods or services (including, without limitation, Capitalized Lease Obligations and Purchase Money Mortgages) shall be excluded from the operation of this clause (iii) so long as such obligations are being contested in good faith by appropriate proceedings and adequate reserves have been established therefor; or (iv) any representation or warranty made by the Company herein, in the First Amendment, the Second Amendment, the Third Amendment or any other amendment, modification or supplement hereto, or in the Warrant Agreement, or by the Company or any of its officers in any writing furnished in connection with or pursuant to this Agreement (including, without limitation, the certificates furnished by the Company at the closing) shall be false in any material respect on the date as of which made; or (v) the Company or any Subsidiary shall fail to perform or observe any covenant contained in paragraph 6 hereof, paragraph 4E hereof, paragraph 5D(ii) or paragraph 5H hereof; or (vi) the Company fails to perform or observe any other agreement, term or condition contained herein, in the First Amendment, the Second Amendment, the Third Amendment or in the Warrant Agreement or the Warrants, and such failure shall not be remedied within thirty (30) days after the occurrence of such failure first becomes known to any Senior Officer of the Company; or A-27 (vii) the Company or any Subsidiary makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due as such phrase is defined in Section 303(h)(1) of the Bankruptcy Code of 1978; or (viii) any decree or order for relief in respect of the Company or any Subsidiary is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (the "Bankruptcy Law"), of any jurisdiction; or (ix) the Company or any Subsidiary petitions or applies to any tribunal for, or consents to, the appointment of, or the taking of possession by, a trustee, receiver, custodian, liquidator or similar official, of the Company or any Subsidiary, or of any substantial part of the assets of the Company or any Subsidiary, or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings (other than proceedings for the voluntary liquidation and dissolution of a Subsidiary) relating to the Company or any Subsidiary under the Bankruptcy Law of any other jurisdiction; or (x) any such petition or application is filed, or any such proceedings are commenced, against the Company or any Subsidiary and the Company or such Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (xi) any order, judgment or decree is entered in any proceeding against the Company decreeing the dissolution of the Company and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (xii) any order, judgment or decree is entered in any proceedings against the Company or any Subsidiary decreeing a split-up of the Company or such Subsidiary that requires the divestiture of Properties representing at least ten percent (10%), or the divestiture of the stock of a Subsidiary whose assets represent at least ten percent (10%), of the consolidated assets of the Company and the Subsidiaries (determined in accordance with generally accepted accounting principles) or that requires the divestiture of assets, or stock of a Subsidiary, that shall have contributed at least ten percent (10%) to Consolidated Net Income for any of the three (3) fiscal years most recently ended as of the date such order, judgment or decree shall be entered, and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (xiii) a final judgment in an amount in excess of Fifteen Million Dollars ($15,000,000) is rendered against the Company or any Subsidiary and, within sixty (60) days after entry thereof, such judgment is not discharged or execution thereof stayed pending appeal, or within sixty (60) days after the expiration of any such stay, such judgment is not discharged; or (xiv) any lender under the Credit Agreement or any Acceptable Replacement Credit Facility fails or refuses, or announces its intention to fail or refuse, to make any A-28 required advance under such Credit Agreement or any Acceptable Replacement Credit Facility, or refuses to lend due to or as a result of any material adverse change in the business, Properties, profits or condition (financial or otherwise) of the Company; or (xv) there shall occur any "Change of Control" as defined in the indenture relating to the 1994 Subordinated Debt; then (a) if such event is an Event of Default specified in clause (viii), clause (ix) or clause (x) of this paragraph 7.A with respect to the Company, all of the Notes at the time outstanding shall automatically become immediately due and payable at par together with interest accrued thereon, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Company, and (b) if such event is any other Event of Default, the Required Holders may at their option, by notice in writing to the Company, declare all of the Notes to be, and all of the Notes shall thereupon be and become, immediately due and payable together with interest accrued thereon and together with the Yield-Maintenance Premium, if any, with respect to each Note, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company, provided that the Yield- Maintenance Premium, if any, with respect to each Note shall be due and payable upon such declaration only if (I) such event is an Event of Default specified in any of clause (i) to clause (vi), inclusive, of this paragraph 7.A, (II) the Required Holders shall have given to the Company, at least ten (10) Business Days before such declaration, written notice stating its or their intention so to declare the Notes to be immediately due and payable and identifying one or more such Events of Default whose occurrence on or before the date of such notice permits such declaration and (III) one or more of the Events of Default so identified shall be continuing at the time of such declaration. 7B. ACCELERATION ON PAYMENT DEFAULT. (i) ACCELERATION ON PAYMENT DEFAULT. During the existence of an Event of Default described in paragraph 7.A(i) hereof or paragraph 7.A(ii) hereof, and irrespective of whether the Required Holders shall have declared all the Notes to be due and payable pursuant to paragraph 7.A, any holder of Notes may, at his or its option, by notice in writing to the Company, declare the Notes then held by such holder to be, and such Notes shall thereupon become, immediately due and payable together with all interest accrued thereon, without any presentment, demand, protest or other notice of any kind (other than as provided above), all of which are hereby expressly waived, and the Company shall immediately pay to such holder the entire principal of and interest accrued on such Notes and the Yield-Maintenance Premium due at such time with respect to such Notes in accordance with the provisions of paragraph 7.A(b) hereof (provided A-29 that the requirement of paragraph 7.A(b)(II) that the Required Holders give notice may be satisfied by such holder giving such notice so long as the other requirements of paragraph 7.A(b) hereof with respect to such notices have been satisfied). (ii) ANNULMENT OF ACCELERATION OF NOTES. If a declaration is made pursuant to clause (i) of this paragraph 7.B by any holder or holders of Notes, then and in every such case, the Required Holders may, by written instrument filed with the Company and such holder or holders, rescind and annul such declaration, and the consequences thereof, provided that at the time such declaration is annulled and rescinded: (a) no judgment or decree shall have been entered for the payment of any moneys due on or pursuant to the Notes or this Agreement; (b) all arrears of interest upon all the Notes and all other sums payable under the Notes and under this Agreement (except any principal of, or interest or Yield-Maintenance Premium on, the Notes that shall have become due and payable by reason of such declaration under clause (i) of this paragraph 7.B) shall have been duly paid; and (c) each and every other Default and Event of Default shall have been waived pursuant to paragraph 11.C hereof or otherwise made good or cured. No such rescission and annulment shall extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon. 7C. OTHER REMEDIES. If any Event of Default or Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise. 8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents, covenants and warrants: 8A. SUBSIDIARIES. Annex 2 to this Agreement states, (i) the name of each of the Subsidiaries, its jurisdiction of incorporation and the percentage of its Voting Stock owned by the Company and each other Subsidiary, and (ii) the name of each of the Company's joint ventures and the nature thereof. Each of the Company and the Subsidiaries has good and marketable title to all of the shares it purports to own of the stock of each Subsidiary, free and clear in each case of any Lien. All such shares have been duly issued and are fully paid and nonassessable. A-30 8B. CORPORATE ORGANIZATION AND AUTHORITY. The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, (ii) has all requisite legal and corporate power and authority to own and operate its Properties and to carry on its business as now conducted and as presently proposed to be conducted, (iii) has all necessary licenses, certificates and permits to own and operate its Properties and to carry on its business as now conducted and as presently proposed to be conducted, except where the failure to have any such licenses, certificates and permits, together with all other such failures, would not be likely to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes, and (iv) has duly qualified or has been duly licensed, and is authorized to do business and is in good standing as a foreign corporation, except where the failure to be so qualified, licensed and authorized in any jurisdiction, together with all such other failures, would not be likely to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes. The revenues and net income of the Company for the year ended July 31, 1989, and the total assets of the Company as of July 31, 1989, exceed eighty- five percent (85%) of the consolidated revenues, consolidated net income, and consolidated assets of the Company and the Subsidiaries for such period and at such time. 8C. FINANCIAL STATEMENTS. The Company has furnished you with the following financial statements, identified by a principal financial officer of the Company: (i) a consolidated balance sheet of the Company and the Subsidiaries as at July 31 in each of the years 1987 to 1993 inclusive, and consolidated statements of earnings and changes in financial condition or cash flows, as the case may be, of the Company and the Subsidiaries for the year ended July 31 in each of the years 1987 to 1993, inclusive, all certified by Deloitte & Touche; and (ii) a consolidated balance sheet of the Company and the Subsidiaries as at January 30, 1994 and January 31, 1993, and consolidated statements of earnings and cash flows for the three (3) month periods ended on January 30, 1994 and on January 31, 1993 prepared by the Company. Such financial statements (including all related schedules and notes, subject, as to interim statements, to changes resulting from audits and year-end adjustments) have been prepared in accordance with generally accepted accounting principles consistently followed throughout the periods involved (except as otherwise noted therein) and fairly present all liabilities, direct and contingent, of the Company and the Subsidiaries required to be shown in accordance with such A-31 principles. The balance sheets fairly present the condition of the Company and the Subsidiaries as at the dates thereof, and the statements of earnings and changes in financial condition or cash flows, as the case may be, fairly present the results of the operations of the Company and the Subsidiaries for the periods indicated. There has been no material adverse change in the business or financial condition of the Company and the Subsidiaries, taken as a whole, since July 31, 1993, except for charges in the third Fiscal Quarter of Fiscal Year 1994 to shareholders' equity in connection with the increases in the underfunded status of the Company's pension plans, and to income in connection with the expensing of unamortized pension benefit past service costs, each as described in the Company's Quarterly Report on Form 10-Q for Fiscal Quarter ended January 30, 1994. 8D. ACTIONS PENDING. There is no action, suit, investigation or proceeding or group of similar actions, suits, investigations or proceedings (including, as such a group, without limitation, all actions, suits, investigations or proceedings arising out of federal or state environmental protection laws), pending, or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries, or any Properties or rights of the Company or any of the Subsidiaries, by or before any court, arbitrator or administrative or governmental body that would be more likely than not to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes. 8E. OUTSTANDING DEBT. Neither the Company nor any of the Subsidiaries has outstanding any Debt except as permitted by paragraph 6.C hereof. There exists no default under the provisions of any instrument evidencing such Debt or of any agreement relating thereto. 8F. TITLE TO PROPERTIES. Each of the Company and the Subsidiaries has good and indefeasible title to its respective real Properties (other than Properties that it leases) and good title to all of its other respective Properties, including the Properties reflected in the balance sheet as at January 30, 1994 referred to in paragraph 8.C hereof (other than Properties disposed of in the ordinary course of business), subject to no Lien of any kind except Liens permitted by paragraph 6.A hereof. All leases necessary in any material respect for the conduct of the respective businesses of the Company and the Subsidiaries are valid and subsisting and are in full force and effect. 8G. PATENTS, TRADEMARKS, LICENSES, ETC. Each of the Company and the Subsidiaries owns or possesses all of the patents, trademarks, service marks, trade names, copyrights, licenses, and rights with respect thereto, necessary for the present conduct of its business, without any known conflict with the rights of others. 8H. TAXES. Each of the Company and the Subsidiaries has filed all Federal, State and other income tax returns that, to the best knowledge of the officers of the Company, are required to be filed, and each has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with generally accepted accounting principles. A-32 8I. CONFLICTING AGREEMENTS AND OTHER MATTERS. (i) RESTRICTIONS. Neither the Company nor any of the Subsidiaries is subject to any charter or by-law restriction that would, in the aggregate with all other such charter or by-law restrictions, be more likely than not to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes. (ii) CONFLICTS. Neither the execution nor delivery of this Agreement or the Notes, nor the offering, issuance and sale of the Notes, nor the fulfillment of nor the compliance with the terms and provisions hereof and of the Notes will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the Properties of the Company or any of the Subsidiaries pursuant to, the charter or by-laws of the Company or any of the Subsidiaries, any award of any arbitrator or any agreement (including any agreement with stockholders), instrument, order, judgment, decree, statute, law, rule or regulation to which the Company or any of the Subsidiaries is subject. (iii) RESTRICTIONS ON DEBT. Neither the Company nor any of the Subsidiaries is a party to, or otherwise subject to any provision contained in, any instrument evidencing indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other contract or agreement (including its charter) that limits the amount of, or otherwise imposes restrictions on the incurring of, Debt of the Company of the type to be evidenced by the Notes except as set forth in the agreements listed in Annex 3 attached hereto. (iv) SALE IS LEGAL AND AUTHORIZED. Each of 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) is within the corporate powers of the Company and each Subsidiary; and (b) is legal and does not conflict with, result in any breach of any of the provisions of, constitute a default under, 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, bylaw or other instrument to which it is a party or by which it or any of its Property may be bound. (v) NOTES ARE ENFORCEABLE. The obligations of the Company under this Agreement and the Notes are valid, binding and enforceable in accordance with the terms of this Agreement and the Notes, except the enforceability hereof or thereof, as the case may be, may be: (a) limited by bankruptcy, insolvency or other similar laws affecting the enforceability of creditors' rights generally; and (ii) subject to the availability of equitable remedies. 8J. OFFERING OF NOTES. Neither the Company nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Company for sale to, or A-33 solicited any offers to buy the Notes or any similar security of the Company from, or otherwise approached or negotiated with respect thereto with, any Person other than institutional investors, and neither the Company nor any agent acting on its behalf has taken or will take any action that would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction. 8K. REGULATION G, ETC. Neither the Company nor any Subsidiary owns or has any present intention of acquiring any "margin stock" as defined in Regulation G (12 CFR Part 207) of the Board of Governors of the Federal Reserve System ("margin stock"). The proceeds of sale of the Notes will be used for general corporate purposes. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any margin stock or for the purpose of maintaining, reducing or retiring any indebtedness that was originally incurred to purchase or carry any stock that is currently a margin stock or for any other purpose that might constitute this transaction a "purpose credit" within the meaning of such Regulation G. Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this agreement or the Notes to violate Regulation G, Regulation T or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, as amended, in each case as in effect now or as the same may hereafter be in effect. 8L. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any Subsidiary, nor 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 offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body (other than routine filings after the Closing Date with either or both of the Securities and Exchange Commission and state Blue Sky authorities) in connection with the execution and delivery of this Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof or of the Notes. 8M. DISCLOSURE. Neither this Agreement nor any other document, certificate or statement furnished to you by or on behalf of the Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company or any of the Subsidiaries that in the future (so far as the Company can now foresee) would, in the aggregate with all other such facts, be more likely than not to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes and that has not been set forth in this Agreement or in the other documents, certificates and statements furnished to you by or on behalf of the Company prior to the date hereof in connection with the transactions contemplated hereby. 8N. COMPLIANCE WITH LAW. Neither the Company nor any Subsidiary: (i) is in violation of any law, ordinance, governmental rule or regulation to which it is subject; or A-34 (ii) has failed to obtain any license, certificate, permit, franchise or other governmental authorization necessary to the ownership of its Property or to the conduct of its business; which violation or failure to obtain is more likely than not to have, in the aggregate with all other such violations or failures, a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes. 8O. CERTAIN LAWS. (i) INVESTMENT COMPANY ACTS. The Company is not, and is not directly or indirectly controlled by, or acting on behalf of any Person which is, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (ii) ABSENCE OF FOREIGN OR ENEMY STATUS. The Company is not (a) an "enemy" or an "ally of the enemy" within the meaning of Section 2 of the Trading with the Enemy Act, as amended, or any executive orders or regulations issued or promulgated pursuant thereto, (b) a "national" of any "designated enemy country" as such terms are defined in Executive Order No. 9095, as amended, of the President of the United States of America, or (c) a "national" of any "designated foreign country" within the meaning of the Foreign Assets Control Regulations of the United States of America (Code of Federal Regulations, Title 31, Chapter V, Part 500 to 543). (iii) HOLDING COMPANY STATUS. The Company is not a "holding company" or an "affiliate" of a "holding company," or a "subsidiary company" of a "holding company," or a "public utility" within the meaning of the Public Utilities Holding Company Act of 1935, as amended. 9. REPRESENTATIONS OF THE PURCHASER. You represent, and in making this sale to you it is specifically understood and agreed, that you are not acquiring the Notes to be purchased by you hereunder with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the lawful disposition of your Property shall at all times be and remain within your control. You also represent that no part of the funds being used by you to pay the purchase price of the Notes being purchased by you hereunder constitutes assets allocated to any separate account maintained by you in which any employee benefit plan, other than employee benefit plans identified on a list which has been furnished by you to the Company, participates to the extent of five percent (5%) or more. For the purpose of this paragraph 9, the terms "separate account" and "employee benefit plan" shall have the respective meanings specified in Section 3 of ERISA. 10. DEFINITIONS. For the purpose of this Agreement the following terms shall have the meanings specified with respect thereto below: A-35 10A. YIELD-MAINTENANCE TERMS. "CALLED PRINCIPAL" means, with respect to any Note, the principal of such Note that is to be prepaid or purchased pursuant to paragraph 4.B, paragraph 4.E or paragraph 5H hereof (any partial prepayment being applied in satisfaction of required payments of principal in inverse order of their scheduled due dates) or is declared to be immediately due and payable pursuant to paragraph 7.A hereof, as the context requires. "DISCOUNTED VALUE" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on a semiannual basis) equal to the Reinvestment Yield with respect to such Called Principal. "REINVESTMENT YIELD" means, with respect to the Called Principal of any Note, the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the Business Day next preceding the Settlement Date with respect to such Called Principal, on the display designated as "Page 678" on the Telerate Service (or such other display as may replace Page 678 on the Telerate Service) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or if such yields shall not be reported as of such time or the yields reported as of such time shall not be ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for the latest day for which such yields shall have been so reported as of the Business Day next preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release # H15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield shall be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between reported yields. Reinvestment Yield calculated as aforesaid shall be increased by twenty-five one-hundredths percent (0.25%) per annum in the case of any Settlement Date occurring after January 29, 1996. "REMAINING AVERAGE LIFE" means, with respect to the Called Principal of any Note, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying A-36 (a) each Remaining Scheduled Payment of such Called Principal (but not of interest thereon) by (b) the number of years (calculated to the nearest one- twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. "REMAINING SCHEDULED PAYMENTS" means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date. "SETTLEMENT DATE" means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid or purchased pursuant to paragraph 4.B, paragraph 4.E or paragraph 5H hereof or is declared to be immediately due and payable pursuant to paragraph 7.A hereof, as the context requires. "YIELD-MAINTENANCE PREMIUM" means, with respect to any Note, a premium equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal, plus (ii) interest accrued thereon as of (including interest due on) the Settlement Date with respect to such Called Principal. The Yield-Maintenance Premium shall in no event be less than zero. 10B. OTHER TERMS. "1994 SENIOR DEBT" shall mean the Company's Senior Notes Due 2003, in the aggregate principal amount of One Hundred Million Dollars ($100,000,000) on substantially the terms and conditions set forth under the heading "DESCRIPTION OF SENIOR NOTES" in Amendment No. 1 to the Registration Statement on Form S-3 of the Company, as filed with the Securities and Exchange Commission on April 19, 1994, relating thereto. "1994 SUBORDINATED DEBT" shall mean the Company's Convertible Subordinated Notes Due 2004, in the aggregate principal amount of up to Fifty-Seven Million Five Hundred Thousand Dollars ($57,500,000) and which are subordinated to payment of principal, interest and Yield-Maintenance Premium in respect of the Notes, and all other obligations under this Agreement, on substantially the terms and conditions set forth under the heading "DESCRIPTION OF SUBORDINATED NOTES" in Amendment No. 2 to the Registration Statement on Form S-3 of the Company, as filed with the Securities and Exchange Commission on April 19, 1994 relating thereto. A-37 "ACCEPTABLE AVAILABILITY" shall mean, at any time on or after the date shown in the first column of the chart below, and on or prior to the date shown in the second column of the chart below, the availability under the Credit Agreement at such time reflected in the third column of the chart below:
====================================================================== ON AND AFTER: TO AND INCLUDING: ACCEPTABLE AVAILABILITY: ====================================================================== Third Amendment Date October 24, 1995 $110,000,000 - - ---------------------------------------------------------------------- October 25, 1995 April 24, 1996 $100,000,000 - - ---------------------------------------------------------------------- April 25, 1996 October 24, 1996 $ 90,000,000 - - ---------------------------------------------------------------------- October 25, 1996 April 24, 1997 $ 80,000,000 - - ---------------------------------------------------------------------- April 25, 1997 and thereafter $ 0 ======================================================================
"ACCEPTABLE REPLACEMENT CREDIT FACILITY" shall mean, with respect to any replacement, refunding or refinancing of the Credit Agreement, a revolving credit facility: (i) making available to the Company at least the Acceptable Availability: (ii) which, if such facility provides for extension of credit in forms (including, without limitation, letters of credit or banker's acceptances) other than cash, provides that, at the option of the Company, at least the Acceptable Availability shall be available to the Company in cash; provided, however, that, should the Company actually draw credit in forms other than cash (including, without limitation, the issuance of one or more letters of credit), the amount of cash available under such facility may be reduced by the aggregate amount of such credits for so long as such credits are outstanding, so that the aggregate amount available need not exceed the Acceptable Availability at such time; (iii) which shall not require the maintenance of any compensating balance or other similar arrangement in any amount greater than the difference between the aggregate amount of cash available under such facility minus the Acceptable Availability; (iv) which shall not contain, at the time of the effectiveness of such facility: (a) any financial covenants, events of default or other conditions with which the Company would not be able to comply at such time, based on the most recent business plan presented to the Board of Directors (including updates thereto through the date of effectiveness of such facility) of the Company at such time or, prior to January 25, 1997, that were more onerous than those contained in the Credit Agreement at the time of the effectiveness of such facility; and A-38 (b) any borrowing base provision or similar lending constraints; or (c) any conditions precedent to making advances thereunder that would, based on the most recent business plan presented to the Board of Directors (and updates thereto) of the Company at such time, be reasonably likely to prevent the Company from fully utilizing the Acceptable Availability to it under such credit facility at any time during the term of such credit facility or, prior to January 25, 1997, that were more onerous than those contained in the Credit Agreement at the time of the effectiveness of such facility ; (v) which shall not have a maturity date earlier than that of the Credit Agreement immediately prior to giving effect to such replacement, refunding or refinancing; and (vi) which shall be unsecured and shall not rank senior in right of payment in any respect to the Notes. "ADJUSTED CONSOLIDATED DEBT" shall mean and include all Debt of the Company and the Consolidated Subsidiaries. "ADJUSTED CONSOLIDATED NET INCOME" shall mean for any period (i) the gross revenues of the Company and the Consolidated Subsidiaries for such period, determined on a consolidated basis; less (ii) all operating and non-operating expenses of the Company and the Consolidated Subsidiaries for such period, including all charges of a proper character (including, without limitation, current and deferred taxes on income, provision for taxes on unremitted foreign earnings which are included in gross revenues, and current additions to reserves), determined on a consolidated basis; but not including in such gross revenues (i) any gains (net of expenses and taxes applicable thereto) in excess of losses arising from the sale, conversion or other disposition of capital assets, other than gains arising out of any transaction or series of related transactions in which such gains do not exceed One Hundred Thousand Dollars ($100,000); (ii) any gain arising from any write-up of assets subsequent to July 31, 1992; (iii) earnings of any Consolidated Subsidiary accrued prior to the date it became a Consolidated Subsidiary; A-39 (iv) earnings of any Person, substantially all the assets of which have been acquired in any manner, realized by such Person prior to the date of such acquisition; (v) net earnings or net losses of any Person in which the Company or any Consolidated Subsidiary shall have an ownership interest unless, in the case of net earnings, such net earnings shall have actually been received by the Company or such Consolidated Subsidiary in the form of cash distributions; (vi) any portion of the net earnings of any Consolidated Subsidiary which for any reason is unavailable for payment of dividends to the Company or any other Consolidated Subsidiary; (vii) the earnings of any Person to which assets of the Company shall have been sold, transferred or disposed of, or into which the Company shall have merged, prior to the date of such transaction; (viii) any gain arising from the acquisition of any Securities of the Company or any Consolidated Subsidiary; (ix) any portion of the net earnings of the Company that cannot be freely converted into United States dollars; and (x) any deferred credit representing the excess of equity in any Consolidated Subsidiary at the date of acquisition over the cost of investment in such Consolidated Subsidiary. "ADJUSTED CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time the excess of total assets of the Company and the Consolidated Subsidiaries at such time, determined on a consolidated basis, over total liabilities of the Company and the Consolidated Subsidiaries at such time, determined on a consolidated basis, in each case determined in accordance with generally accepted accounting principles, excluding, however, from the determination of total assets (i) all assets that would be classified as intangible assets under such generally accepted accounting principles, including, without limitation, goodwill (whether representing the excess of cost over book value of assets acquired or otherwise), patents, trademarks, trade names, copyrights, franchises, unamortized debt discount and expense, organization costs, research and development costs and other deferred charges (other than prepaid insurance and taxes and pre- production and production costs including, but not limited to, engineering and tooling costs, that are amortized over anticipated deliveries), (ii) treasury stock and minority interests in any Person, (iii) cash, Securities or other Property set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of capital stock, A-40 (iv) to the extent not already deducted from total assets, reserves for depreciation, depletion, obsolescence or amortization of Properties and all other reserves or appropriations of retained earnings that, in accordance with such generally accepted accounting principles, should be established in connection with the business conducted by the relevant corporation, and (v) any revaluation or other write-up in book value of assets subsequent to July 31, 1992. Notwithstanding the foregoing, (A) net deferred income tax assets recorded in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109") shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition) and shall be calculated without regard to any valuation allowance with respect to such net deferred tax asset recorded by the Company in accordance with SFAS 109, and (B) any asset established pursuant to Statement of Financial Accounting Standards No. 87, Employers Accounting for Pensions ("SFAS 87") which corresponds to an additional minimum pension liability recorded pursuant to SFAS No. 87 and any prepaid pension asset which arises from amounts funded by the Company in accordance with Internal Revenue Service regulations (but not in excess of the minimum amounts required to be contributed thereunder) in excess of amounts expensed in accordance with SFAS 87, shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition). "AFFILIATE" shall mean any Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the Company, except a Subsidiary. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. "AGREED PUT CONSIDERATION" shall mean as of the date of prepayment by the Company upon the exercise by any holder of Notes of its Right to Put or option to be repaid pursuant to paragraph 5H, the sum of (i) the principal amount of the Notes held by such holder subject to the prepayment on such date, plus (ii) all accrued and unpaid interest to such date on such Notes, plus (iii) the Yield-Maintenance Premium as of such date with respect to such Notes. "AGREEMENT" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. "BANK LENDERS" shall mean the Lenders as defined in the Credit Agreement. A-41 "BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of paragraph 7A. "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed. "CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which, under generally accepted accounting principles, would be required to be capitalized on the books of the Company or any Subsidiary, taken at the amount thereof accounted for as indebtedness (net of interest expense) in accordance with such principles. "CLOSING" shall have the meaning assigned to such term in paragraph 2 of this Agreement. "CLOSING DATE" shall have the meaning assigned to such term in paragraph 2 of this Agreement. "COMBINED SUBSIDIARY DEBT" shall mean at any time all unsecured Debt of the Subsidiaries at such time (after eliminating intercompany transactions among the Subsidiaries). "COMPANY" shall have the meaning specified in the introductory paragraph of this Agreement. "CONFIDENTIAL INFORMATION" shall mean any information furnished to any holder of Notes by the Company or any agent of the Company in connection with this Agreement (including, without limitation, any information furnished to you pursuant to paragraph 5D hereof) or obtained by any holder of Notes in connection with an inspection made pursuant to paragraph 5G hereof, that is about the Company (or in respect of which the Company has a confidentiality obligation) and that is marked by the Company as being confidential, other than any such information, (i) that was publicly known, or otherwise known to you, at the time the information was furnished to you, (ii) that subsequently becomes publicly known through no act or omission by you, or (iii) that otherwise becomes known to you, other than through disclosure by the Company or any Subsidiary. "CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum, without duplication, of (i) interest expense related to Debt of the Company and the Consolidated Subsidiaries, A-42 (ii) amortization expense related to Debt of the Company and the Consolidated Subsidiaries issued at a discount, (iii) dividends in respect of preferred stock of Consolidated Subsidiaries, (iv) dividends in respect of Permitted Preferred Stock to the extent paid to Persons other than the Company or any wholly-owned Consolidated Subsidiary, plus (v) rentals payable in respect of Capitalized Lease Obligations of the Company and the Consolidated Subsidiaries, in each case calculated for such period on a consolidated basis in accordance with generally accepted accounting principles. "CONSOLIDATED NET INCOME" shall mean for any period (i) the gross revenues of the Company and the Subsidiaries for such period, determined on a consolidated basis; less (ii) all operating and non-operating expenses of the Company and the Subsidiaries for such period, including all charges of a proper character (including, without limitation, current and deferred taxes on income, provision for taxes on unremitted foreign earnings which are included in gross revenues, and current additions to reserves), determined on a consolidated basis; but not including in such gross revenues (i) any gains (net of expenses and taxes applicable thereto) in excess of losses arising from the sale, conversion or other disposition of capital assets, other than gains arising out of any transaction or series of related transactions in which such gains do not exceed One Hundred Thousand Dollars ($100,000); (ii) any gain arising from any write-up of assets subsequent to July 31, 1992; (iii) earnings of any Subsidiary accrued prior to the date it became a Subsidiary; (iv) earnings of any Person, substantially all the assets of which have been acquired in any manner, realized by such Person prior to the date of such acquisition; (v) net earnings or net losses of any Person in which the Company or any Subsidiary shall have an ownership interest unless, in the case of net earnings, such net earnings shall have actually been received by the Company or such Subsidiary in the form of cash distributions; A-43 (vi) any portion of the net earnings of any Subsidiary which for any reason is unavailable for payment of dividends to the Company or any other Subsidiary; (vii) the earnings of any Person to which assets of the Company shall have been sold, transferred or disposed of, or into which the Company shall have merged, prior to the date of such transaction; (viii) any gain arising from the acquisition of any Securities of the Company or any Subsidiary; (ix) any portion of the net earnings of the Company that cannot be freely converted into United States dollars; and (x) any deferred credit representing the excess of equity in any Subsidiary at the date of acquisition over the cost of investment in such Subsidiary. "CONSOLIDATED NET INCOME AVAILABLE FOR FIXED CHARGES" shall mean, for any period, the sum of (i) Adjusted Consolidated Net Income for such period, plus (ii) the aggregate amount of (a) Consolidated Fixed Charges, (b) provisions for taxes on earnings, (c) depreciation expense, (d) the Special Charge; (e) in the case of any such period that includes the fiscal month ending May 2, 1993, the cumulative effect through May 2, 1993 of the accounting changes adopted by the Company, effective as of August 1, 1992, as described in the Company's Form 10-Q filed with the Securities and Exchange Commission for the third quarter of its 1993 Fiscal Year; (f) in the case of any such period that includes the fiscal month ending May 2, 1993, the provisions and charges, not in excess of $38,000,000 in the aggregate, established by the Company in the third quarter of its 1993 Fiscal Year; and (g) the Tax Adjustment Amount; A-44 in each case to the extent, and only to the extent, reflected in the computation of Adjusted Consolidated Net Income for such period. As used in this definition, `Special Charge' shall mean that certain special provision of Fifty Million Dollars ($50,000,000) taken by the Company during the third quarter of its 1992 Fiscal Year;" and `Tax Adjustment Amount' shall mean, for any period, the lesser of (i) accrued interest expense on taxes on earnings for such period minus any interest income on tax refunds for such period and (ii) Three Hundred Thirty-Three Thousand Dollars ($333,333) multiplied by the number of fiscal months in such period; provided, however, that, notwithstanding the foregoing, to the extent that such period includes one or more fiscal months of the Company during the third quarter of the Company's 1992 Fiscal Year, "Tax Adjustment Amount" shall be deemed to mean an amount equal to Six Million One Hundred Thousand Dollars ($6,100,000) for each such fiscal month. "CONSOLIDATED SENIOR DEBT" shall mean at any time Senior Debt at such time, determined on a consolidated basis, minus Non-Recourse Debt of the Company and the Subsidiaries at such time, determined on a consolidated basis. "CONSOLIDATED SUBSIDIARY" shall mean any corporation more than fifty percent (50%) of the total combined voting power of all classes of Voting Stock of which shall, at the time as of which any determination is being made, be owned, directly or indirectly, by the Company. "CONSOLIDATED TANGIBLE ASSETS" shall mean, at any time, the sum of: (i) Adjusted Consolidated Tangible Net Worth at such time; plus (ii) the total amount of all liabilities of the Company and the Consolidated Subsidiaries on a consolidated basis at such time. "CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time the excess of total assets of the Company and the Subsidiaries at such time, determined on a consolidated basis, over total liabilities of the Company and the Subsidiaries at such time, determined on a consolidated basis, in each case determined in accordance with generally accepted accounting principles, excluding, however, from the determination of total assets: (i) all assets that would be classified as intangible assets under such generally accepted accounting principles, including, without limitation, goodwill (whether representing the excess of cost over book value of assets acquired or otherwise), patents, trademarks, trade names, copyrights, franchises, unamortized debt discount and expense, organization costs, research and development costs A-45 and other deferred charges (other than prepaid insurance and taxes and pre-production and production costs including, but not limited to, engineering and tooling costs, that are amortized over anticipated deliveries); (ii) treasury stock and minority interests in Subsidiaries; (iii) cash, Securities or other Property set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of capital stock; (iv) to the extent not already deducted from total assets, reserves for depreciation, depletion, obsolescence or amortization of Properties and all other reserves or appropriations of retained earnings that, in accordance with such generally accepted accounting principles, should be established in connection with the business conducted by the relevant corporation; and (v) any revaluation or other write-up in book value of assets subsequent to July 31, 1992. Notwithstanding the foregoing, (A) net deferred income tax assets recorded in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109") shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition) and shall be calculated without regard to any valuation allowance with respect to such net deferred tax asset recorded by the Company in accordance with SFAS 109, and (B) any asset established pursuant to Statement of Financial Accounting Standards No. 87, Employers Accounting for Pensions ("SFAS 87") which corresponds to an additional minimum pension liability recorded pursuant to SFAS No. 87 and any prepaid pension asset which arises from amounts funded by the Company in accordance with Internal Revenue Service regulations (but not in excess of the minimum amounts required to be contributed thereunder) in excess of amounts expensed in accordance with SFAS 87, shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition). "CONSOLIDATED TOTAL DEBT" shall mean, at any time, Debt of the Company and the Subsidiaries at such time minus Non-Recourse Debt of the Company and the Subsidiaries at such time, determined on a consolidated basis. "CONTROL PERSON" shall mean a Person who possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. "CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of April 26, 1989, among the Company and the lenders party thereto and the agent thereunder, as such Credit Agreement may be amended or supplemented from time to time. A-46 "DEBT" shall mean, without duplication, (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments (as such term is defined in Article 9 of the Uniform Commercial Code as from time to time in effect in the State of New York), (iii) obligations to pay the deferred purchase price of Property or services (excluding advances, deposits or partial or progress payments, unpaid wages and related employee obligations and excluding trade payables), (iv) obligations as lessee under Capitalized Lease Obligations, (v) obligations under Guaranties of indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above, (vi) obligations under Title IV of ERISA for each Plan and Multiemployer Plan, in respect of unfunded accrued liabilities for such plans, if any, as of the first day of the plan year as shown in the annual actuarial report most recently delivered to the obligor in respect of such obligations by the actuary for each such Plan and Multiemployer Plan, and (vii) in the case of any Consolidated Subsidiary, all preferred stock of such Consolidated Subsidiary held by Persons other than the Company or a wholly-owned Consolidated Subsidiary, such preferred stock to be valued at the aggregate liquidation preference thereof. "DEBT RATIO" shall mean, at any time, the ratio of Adjusted Consolidated Debt to Adjusted Consolidated Tangible Net Worth. "DEFAULT" shall mean any event or condition that, with notice or the passage of time, or both, would become an Event of Default. "DE MINIMUS PAYMENTS" shall mean, with respect to any Debt of the Company or any Subsidiary (other than Debt governed or evidenced by the Notes, the 9.33% Senior Notes due December 15, 2002, the Credit Agreement, any Acceptable Replacement Credit Facility, the 1994 Senior Notes, the 1994 Subordinated Notes or the Existing Subordinated Notes of either Series), payments, prepayments, defeasances and redemptions (in each case, other than Originally Scheduled Payments) in respect of any such Debt aggregating not more than Five Hundred Thousand Dollars ($500,000) in any Fiscal Year. "DESIGNATED EVENT" shall mean the occurrence of any one or more of the following after the Closing Date: (i) the direct or indirect acquisition by any person (as such term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act), or related A-47 persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act), of (i) beneficial ownership of issued and outstanding shares of Voting Stock of the Company the result of which acquisition is that such person or such group possesses in excess of fifty percent (50%) of the combined voting power of all then issued and outstanding Voting Stock of the Company or (ii) within any period of three-hundred sixty-five (365) consecutive days, all or substantially all of the assets of the Company; or (ii) following the election or removal of directors, a majority of the Company's board of directors consists of individuals who were not members of the Company's board of directors two years before such election or removal, unless the election of each director who was not a director at the beginning of such two-year period has been approved in advance by directors representing at least a majority of the directors then in office who were directors at the beginning of the two-year period; or (iii) the consolidation with, or merger into, any Person by the Company in a transaction in which more than thirty percent (30%) by number of votes of the Voting Stock of the Company is exchanged (the calculation of which shall be made by dividing the number of votes attributable to the Voting Stock so exchanged by the aggregate number of votes attributable to the Voting Stock immediately prior to such transaction); or (iv) (a) any transaction or series of transactions (whether related or unrelated) in which the Company repurchases or otherwise retires in the aggregate, within any period of three hundred sixty-five (365) consecutive days, thirty percent (30%) or more (by number) of the Company's outstanding common stock (the calculation of which shall be made by dividing the number of shares outstanding immediately after giving effect to each such repurchase or retirement, other than any such shares owned by a Subsidiary, by the highest number of shares outstanding at any time during the period of three hundred sixty-five (365) consecutive days ending on (and including) the date of such repurchase or retirement (adjusting in each case for stock splits, stock dividends and other similar transactions, excluding in each case shares held in treasury, and assuming in each case that all securities then convertible into, or representing then effective rights to purchase, common stock have been exercised at such time), or (b) any Distribution made by the Company the Fair Market Value of which, together with the aggregate Fair Market Value of all other Distributions made by the Company during the period of three hundred sixty-five (365) days ending on (and including) the date of such Distribution (each Distribution being valued on the date it is made), equals or exceeds thirty percent (30%) of the Fair Market Value the Company's outstanding common stock (determined at the commencement of such period); in each case if as a result of such event or events Consolidated Total Debt shall, at any time during the period beginning on the date of such transaction (or the date of the A-48 completion of such series of transactions, as the case may be) and ending three hundred sixty-five (365) days thereafter, equal or exceed seventy- five percent (75%) of the sum of Consolidated Total Debt plus Consolidated Tangible Net Worth at such time. "DISTRIBUTION" shall mean: (i) dividends or other distributions on or in respect of the capital stock of the Company or any Subsidiary (except distributions solely in such stock or in Rights, as such term is defined in the Rights Agreement and except to the extent made to the Company or any Wholly-Owned Subsidiary); (ii) the repurchase, purchase, redemption or acquisition of capital stock of the Company or any Subsidiary, or of warrants, rights or other options to purchase such stock (except when solely in exchange for such stock and except to the extent made from the Company or a Wholly-Owned Subsidiary) unless made, contemporaneously, from the net proceeds of a sale of such stock; and (iii) all payments in respect of Subordinated Debt (other than mandatory scheduled payments and prepayments), including optional or voluntary prepayments and including all payments made to acquire Subordinated Debt (except to the extent such payment is made to the Company or a Wholly-Owned Subsidiary). "EQUITY ISSUANCE ACQUISITIONS" shall mean the acquisition by the Company of Debt (including, without limitation, Notes, the 1994 Subordinated Notes, the Company's 9.35% Senior Notes due January 29, 2000 or the Company's 7% Convertible Subordinated Debentures due 2012), or any portion thereof, for consideration consisting solely of common stock of the Company and in connection with tenders of such Debt by the holders thereof in payment of the exercise or purchase price of any rights, warrants or options to acquire such common stock, or upon conversion of such Debt into such common stock. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "ERISA AFFILIATE" shall mean any corporation or trade or business that (i) is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the IRC) as the Company, or (ii) is under common control (within the meaning of Section 414(c) of the IRC) with the Company. "ESOP" shall mean the Salaried Employees Stock Ownership Plan, effective August 1, 1983, as amended from time to time. "EVENT OF DEFAULT" shall mean any of the events specified in paragraph 7A hereof. A-49 "EXCEPTED PROPERTY" shall have the meaning set forth in paragraph 6P of this Agreement. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. "EXISTING SUBORDINATED NOTES" shall mean and include: (i) the Company's 9.25% Subordinated Debentures due 2017; and (ii) the Company's 7% Convertible Subordinated Debentures due 2012; and the Existing Subordinated Notes of each such series (but not the Existing Subordinated Notes of the other series) shall be referred to collectively as a "SERIES" of Existing Subordinated Notes. "FAIR MARKET VALUE" shall mean at any time 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, under no compulsion to buy or sell, respectively. "FINANCIAL COVENANT" shall mean any covenant, agreement or provision (including, without limitation, the definitions applicable thereto) of or applicable to the Company or any Consolidated Subsidiary contained in any agreement governing, or instrument evidencing, any Debt (or commitment to lend), other than Debt or a commitment to lend among the Company and one or more Consolidated Subsidiaries, of the Company or any Consolidated Subsidiary in an aggregate principal amount greater than $5,000,000, which covenant, agreement or provision: (i) requires the Company or any Consolidated Subsidiary to maintain specified financial amounts or ratios or to meet other financial tests; (ii) restricts the ability of the Company or any Consolidated Subsidiary to: (a) make Distributions, investments, capital expenditures or operating expenditures of any kind; (b) incur, create or maintain any Debt (or other obligations) or Liens; (c) merge, consolidate or acquire or be acquired by any Person; (d) sell, lease, transfer or dispose of any Property (other than restrictions imposed solely upon collateral, and not upon Property of the Company or any Consolidated Subsidiary generally, by holders of Liens thereon which are permitted by this Agreement; or A-50 (e) issue or sell any capital stock of any kind; (iii) is similar to any provision in paragraph 6 of this Agreement; or (iv) provides that a default or event of default shall occur, or that the Company or any Consolidated Subsidiary shall be required to prepay, redeem or otherwise acquire for value any Debt or security as a result of its failure to comply with any provision similar to any of those set forth in any of the foregoing clauses (i), (ii) or (iii). "FIRST AMENDMENT" shall mean the Amendment Agreement, entered into as of June 30, 1993, between the Company and the holders of Notes named therein. "FIRST AMENDMENT DATE" shall mean the "Effective Date," as such term is defined in the First Amendment. "FISCAL YEAR" shall mean any fiscal year of the Company ending on July 31 . "FISCAL QUARTER NET WORTH INCREASE AMOUNTS" shall mean for any fiscal quarter of the Company, the greater of (i) Zero Dollars ($0) and (ii) fifty percent (50%) of Adjusted Consolidated Net Income for such fiscal quarter. "FUJI" shall mean The FUJI Bank, Limited. "GROSS OPERATING INCOME" shall mean for any period, sales minus costs and expenses (other than depreciation and amortization), in each case, as reflected as a line item on the consolidated statements of earnings and cash flows of the Company and the Consolidated Subsidiaries for such period. "GUARANTIES" shall mean, with respect to any Person (the "Guarantor"), any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of the Guarantor guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person (the "Primary Obligor") in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Guarantor: (i) to purchase such indebtedness or obligation or any Property constituting security therefor; (ii) to loan, advance or supply funds, make any capital contribution or purchase Property from any Person (a) for the purpose of payment of such indebtedness or obligation, or (b) to maintain working capital or other balance sheet condition or any income statement condition of the Primary Obligor or otherwise to A-51 advance or make available funds for the purchase or payment of such indebtedness or obligation; or (iii) to lease Property or to purchase Securities or other Property or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of the Primary Obligor to make payment of the indebtedness or obligation or, in the case of any such lease, under terms providing that the obligation to make payments thereunder is absolute and unconditional under conditions not customarily found in commercial leases then in general use; (iv) to contract or agree to purchase any Property or services if such contract or agreement requires that payment for such Property or services (a) shall be made regardless of whether delivery of such Property or services is ever made or tendered or (b) shall be subordinated to any indebtedness (of the purchaser or user of such Property or the Person entitled to the benefit of such services) owed or to be owed to any Person; or (v) otherwise to assure the owner of the indebtedness or obligation of the Primary Obligor against loss in respect thereof. "IDB FINANCING" shall mean any industrial development bond or similar financing in which a state or other governmental authority incurs Debt to construct, improve or acquire (or, in the case of the San Marcos Bonds, to refinance the construction, improvement or acquisition of) fixed assets for use primarily by the Company or a Subsidiary under a lease or similar arrangement of at least five years' duration and in connection with which the Company or such Subsidiary is obligated (directly or indirectly), under such lease or other arrangement, to make payments to such state or other governmental authority which are used to service such Debt. "INSTITUTIONAL INVESTOR" shall mean (i) any original purchaser of any of the Notes, (ii) the subsidiaries and affiliates of any such purchaser and nominees controlled by any such purchaser, and (iii) any insurance company, pension fund, mutual fund, investment company, bank, savings bank, savings and loan association, investment banking company, trust company, finance or credit company, any portfolio or any investment fund managed by any of the foregoing, and any other institutional investor, and any nominee of the foregoing controlled by any such Person, provided that in each case such Person has assets of at least Five Hundred Million Dollars ($500,000,000). "INTERCOMPANY DEBT" shall mean Debt owed by the Company or any Subsidiary to the Company or any Subsidiary. A-52 "IRC" shall mean the Internal Revenue Code of 1986, as amended from time to time. "LEASE TRANSACTION" shall mean a transaction (including, without limitation, a transaction with respect to qualified leased Property meeting the requirements of Section 168(f)(8) of the IRC) pursuant to which the Company or any Subsidiary makes an investment (as a lessor as contemplated by said Section 168(f)(8) or on an equity basis with the meaning of Section 4(1) of Revenue Procedure 75-21, 1975-1 C.B. 715, as amended or supplemented), in all or part of the purchase price of Property, which Property, concurrently with the purchase thereof, is leased under a Capitalized Lease Obligation by the Company or such Subsidiary (acting directly or through either or both of a trust or partnership and with or without other investors) to a lessee, provided that such investment is made in part for the purpose of saving or deferring Federal income tax liability and that the Company or such Subsidiary incurs no obligation, and creates no Lien in connection with such transaction except that: (i) the Company or such Subsidiary, directly or indirectly (a) may borrow part of the funds necessary to pay the purchase price of such Property (and any related leases, contract rights, general intangibles or accounts), and (b) may secure such borrowings by Liens provided that such Liens do not extend to or cover any Property other than Property referred to in subclause (a) above and do not secure any obligations other than those incurred in connection with such purchase and lease transaction, and (ii) the Company or such Subsidiary may incur other obligations in connection with such transaction (and the Company may guarantee any such obligation of a Subsidiary) provided that such obligations and guarantee (a) constitute Non-Recourse Debt, (b) are incidental and necessary to effect such transaction, and (c) are of the type frequently incurred by lessors or equity investors in connection with the business of leasing Property. "LETTER OF CREDIT PREPAYMENT EVENT" shall mean either: (i) the redemption, reacquisition or repurchase of any San Marcos Bonds (other than in connection with a Permitted IDB Acquisition); or (ii) any deposit after November 30, 1994, of cash collateral to secure reimbursement obligations of the Company relating to the San Marcos Bonds or any letter of credit relating thereto; A-53 in either case, solely as result of and in response to the failure of the bank which has issued any letter of credit relating to the San Marcos Bonds to extend or renew such outstanding letter of credit; provided, however, that prior to effecting such redemption, reacquisition, repurchase or cash collateralization the Company shall have used its best efforts to retain such letter of credit. The Company covenants, in connection with any Letter of Credit Prepayment Event described in clause (i) above, to actively seek to remarket the redeemed, reacquired or repurchased San Marcos Bonds or, to the extent necessary, to modify the structure of such IDB Financing to the extent necessary to permit a long-term reissuance of the repurchased San Marcos Bonds, and, in connection with any Letter of Credit Prepayment Event described in clause (ii) above, to continue to seek to obtain an unsecured letter of credit not requiring such cash collateralization. "LIEN" shall mean any mortgage, pledge, security interest, encumbrance, lien (statutory or otherwise) or charge of any kind (including any agreement to give any of the foregoing (but excluding negative pledge clauses in agreements related to the borrowing of money), any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction (but excluding informational filings made in respect of leases)) or any other type of preferential arrangement for the purpose, or having the effect, of protecting a creditor against loss or securing the payment or performance of an obligation. "MAXIMUM PENSION CONTRIBUTION" shall mean, for any fiscal year of the Company, a contribution to any or all Plans or Multiemployer Plans not exceeding the greater of: (i) the sum of: (a) the amount set forth in the chart below under the heading "Base Contribution" for such fiscal year; plus (b) the lesser of: (I) the amount set forth in the chart below under the heading "Maximum Additional Contribution" for such fiscal year; and (II) the amount, if positive, by which cash provided by operating activities of the Company and the Subsidiaries (calculated in a manner consistent with the preparation of the projections contained in the Company's February 28, 1994, financial plan, as provided to the Purchasers) for such fiscal year exceeds the amount set forth in the chart below under the heading "Projected Cash Flow" for such fiscal year, so long as, but only so long as, for a period of not less than thirty (30) days prior to and thirty (30) days following each date on which any contribution made by the Company and the Subsidiary would cause the aggregate amount of contributions during such fiscal year to exceed the "Base Contribution" set forth in the chart below for such A-54 fiscal year, the amount of Debt outstanding under the Credit Agreement (or any replacement, renewal or refinancing thereof) is Zero Dollars ($0); and (ii) the minimum contribution permitted during such fiscal year pursuant to ERISA, the IRC and the rules and regulations under ERISA and the IRC. A contribution to a Plan or Multiemployer Plan permitted by clause (b) of this definition may be made within a period of ninety (90) days immediately following the end of such fiscal year.
=================================================================== MAXIMUM PROJECTED ADDITIONAL CASH FISCAL YEAR BASE CONTRIBUTION CONTRIBUTION PROVIDED BY OPERATIONS =================================================================== 1994 $17,000,000 $ 0 $36,700,000 - - ------------------------------------------------------------------- 1995 $36,000,000 $ 3,200,000 $15,600,000 - - ------------------------------------------------------------------- 1996 $37,000,000 $ 6,900,000 $46,100,000 - - ------------------------------------------------------------------- 1997 $30,000,000 $10,500,000 $64,900,000 - - ------------------------------------------------------------------- 1998 $23,000,000 $18,200,000 $53,400,000 ===================================================================
"MOODY'S" means Moody's Investors Service, Inc. "MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA) in respect of which the Company or any ERISA Affiliate is an "employer" (as such term is defined in Section 3 of ERISA). "MULTIPLE EMPLOYER PLAN" shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA other than a Multiemployer Plan, subject to Title IV of ERISA, to which the Company or any ERISA Affiliate and an employer (as such term is defined in Section 3 of ERISA) other than an ERISA Affiliate or the Company contribute. "NET AFTER-TAX CASH BASIS" shall mean at any time in respect of any investment made in connection with a Lease Transaction, the initial amount of such investment made by the Company or any Subsidiary in such Lease Transaction, less (i) the net aggregate amount (on a cash basis) received by or distributed to the Company or such Subsidiary, on or prior to such time, after payment and deduction of all expenses (including but not limited to insurance and trustee's fees and after payment of interest and principal on any loan incurred in such Lease Transaction) to the extent all such expenses are related to and incurred in connection with such Lease Transaction, and, A-55 (ii) the net aggregate amount (on a cash basis), on account of reductions in the Company's quarterly estimated tax payments to the United States and to the State of California, on or prior to such time, as such shall be adjusted at year-end to reflect the actual tax benefits obtained on account of reduced taxes payable by virtue of such Lease Transaction. In computing quarterly estimated tax payments, the Company shall take into consideration, on a consolidated basis, the full taxable year's anticipated benefits of the Lease Transaction, including allowable depreciation and interest, expenses, deductions, investment and other tax credits, and net rental income. "NET RENTALS" shall mean, with respect to any period, all fixed payments that the lessee is required to make during such period by the terms of any lease having an original term of one year or more, but shall not include amounts required to be paid in respect of maintenance, repairs, income taxes, property taxes, insurance, assessments or other similar charges or additional rentals (in excess of fixed minimums) based upon a percentage of gross receipts. "NON-EMPLOYEE DIRECTORS STOCK-OPTION PLANS" shall mean the Company's 1988 Non-Employee Directors Stock-Option Plan and any other comparable future plan. "NON-RECOURSE DEBT" shall mean, as to any Person, in connection with a Lease Transaction, all indebtedness and other obligations of such Person (i) incurred in connection with such Lease Transaction and (ii) of the type described in clause (i) of the definition of Lease Transaction; provided, that the obligations of such Person to repay borrowed money shall be expressly limited as to recourse solely to (A) the property subject to such Lease Transaction (including the proceeds of such property) and (B) the amounts payable by or on behalf of the lessee under or in connection with such Lease Transaction. "NOTEHOLDER ACCEPTANCE" shall have the meaning set forth in paragraph 5H(ii) of this Agreement. "NOTEHOLDER SHARE" shall mean, in respect of any holder of Notes and any Ratable Prepayment Amount, such holder's ratable share of such Ratable Prepayment Amount, such ratable share being determined by reference to the outstanding principal amount of Notes held by such holder as a percentage of the outstanding principal amount of all Notes. "NOTICE OF SALE" shall have the meaning specified in clause (ii) of paragraph 4.E hereof. "OFFER PERIOD" shall have the meaning set forth in paragraph 5I(ii) of this Agreement. "OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the Company by its President, one of its Vice Presidents, its Chief Financial Officer, its Controller, its Secretary or its Treasurer. A-56 "ORIGINALLY SCHEDULED PAYMENTS" shall mean and include: (i) payment of any Debt at scheduled maturity; (ii) with respect to any Debt, originally scheduled prepayments, originally scheduled redemptions, originally scheduled sinking fund payments or originally scheduled reductions in maximum commitments thereof; and (iii) payments in respect of any revolving credit agreement, including, without limitation, the Credit Agreement, which do not result in a permanent reduction of the original commitment thereunder. As used in the preceding sentence, "original" or "originally scheduled" means the maturity, payments, prepayments, or reductions in commitment established as of the Third Amendment Date, or, if later, at the time of execution of the relevant credit facility but does not include any payments, prepayments or reductions in commitment which result from the occurrence of any contingency, even if the provision requiring such payment, prepayment or reduction as a result of such contingency was originally contained in the agreements governing such Debt, and even if the occurrence of such contingency was foreseeable, at the time of the execution of the documentation of such issue of Debt. "OTHER NOTE AGREEMENT" shall have the meaning assigned to such term in paragraph 2 of this Agreement. "OTHER PURCHASERS" shall have the meaning assigned to such term in paragraph 2 of this Agreement. "PERMITTED EXISTING SUBORDINATED DEBT ACQUISITIONS" shall mean, with respect to either Series of Existing Subordinated Notes, the purchase or acquisition by the Company or any Subsidiary of Existing Subordinated Notes of such Series in anticipation of satisfying an Originally Scheduled Payment thereof; provided, however, that all of the following conditions are met: (i) no Existing Subordinated Notes may be acquired more than three hundred sixty-four (364) days prior to the date of any such Originally Scheduled Payment thereof; (ii) the Company or any Subsidiary, more than one hundred eighty (180) days, but not more than three hundred sixty-four (364) days, prior to the date of the next succeeding Originally Scheduled Payment thereof, may acquire no more than fifty percent (50%) of the aggregate principal amount of Existing Subordinated Notes of such Series required to be prepaid or redeemed on the date of the next succeeding Originally Scheduled Payment; (iii) the Company or any Subsidiary, not more than one hundred eighty (180) days prior to the date of the next succeeding Originally Scheduled Payment thereof, may acquire an aggregate principal amount of Existing Subordinated Notes of such Series not exceeding (together with any Existing Subordinated A-57 Notes of such Series acquired more than one hundred eighty (180) days, but not more than three hundred sixty-four (364) days, prior to the date of the next succeeding Originally Scheduled Payment thereof) one hundred percent (100%) of the aggregate principal amount of Existing Subordinated Notes of such Series required to be prepaid or redeemed on the date of the next succeeding Originally Scheduled Payment; (iv) at the time of such acquisition: (a) no Default or Event of Default shall be continuing; (b) the Company shall not reasonably foresee the occurrence of any Default or Event of Default at any time prior to the date of the next succeeding Originally Scheduled Payment thereof; (c) the Debt Ratio would not exceed 2.50:1.00; and (d) the Company could incur $1.00 of additional Debt; (v) the purchase price paid by the Company and the Subsidiaries in respect of such acquisition of Existing Subordinated Notes shall be less than one hundred percent (100%) of the principal amount of Existing Subordinated Notes so acquired; and (vi) the Company, on the date of each Originally Scheduled Payment in respect of the Existing Subordinated Notes, shall actually apply, in accordance with the provisions of such Existing Subordinated Notes, all Existing Subordinated Notes of such Series acquired by the Company and the Subsidiaries to the prepayment or redemption of such Existing Subordinated Notes required to be prepaid or redeemed on such date. "PERMITTED IDB ACQUISITIONS" shall mean: (i) prepayments or repurchases of San Marcos Bonds upon tender by the holders thereof after May 10, 1994 in accordance with the terms of the indenture governing the San Marcos Bonds; provided, however, that San Marcos Bonds in an aggregate principal amount of Sixteen Million Five Hundred Thousand Dollars ($16,500,000) shall have been issued, outstanding and held and owned by Persons other than the Company, any Subsidiary or any Affiliate on May 10, 1994 (whether or not subsequently repurchased by the Company); and provided, further, that the Company shall be actively seeking to either remarket the San Marcos Bonds that were so prepaid or repurchased pursuant to the provisions of the IDB Financing of the Company's San Marcos, Texas facility or, to the extent necessary in connection with any termination of any outstanding letter of credit relating to such facility, to modify the structure of such IDB Financing to the extent necessary to permit a long-term reissuance of the repurchased San Marcos Bonds; and A-58 (ii) the redemption in full on or before June 1, 1994 of all the San Marcos Bonds, but solely as result of and in response to the failure of FUJI to extend or renew its outstanding letter of credit relating to the IDB Financing of the Company's San Marcos, Texas facility; provided, however, that: (a) prior to effecting such redemption, the Company shall have used its best efforts to retain such letter of credit by offering to deposit cash collateral to secure its obligations to FUJI under the Reimbursement Agreement, dated as of May 1, 1990, with the Company relating to such IDB Financing; (b) following the making of such redemption, the Company shall use its best efforts to obtain a replacement unsecured letter of credit to issue replacement unsecured San Marcos Bonds, and shall thereafter use its best efforts to market or sell such San Marcos Bonds. "PERMITTED INVESTMENTS" means any of the following, to the extent owned by the Company free and clear of all Liens (except such Liens as are permitted by the terms of this Agreement): (i) marketable direct obligations issued or unconditionally guaranteed by the United States government or issued by an agency or instrumentality thereof and backed by the full faith and credit of the United States, in each case maturing within one year after the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 180 days after the date of acquisition thereof and, at the time of acquisition, having a rating of A or higher from either S&P or Moody's (or, if at any time neither S&P nor Moody's shall be rating such obligations, then one of the three highest ratings from another nationally recognized rating service reasonably acceptable to the Required Holders) and not listed in the Credit Watch published by S&P; (iii) commercial paper (other than commercial paper issued by the Company or any Affiliate or Consolidated Subsidiary) maturing no more than 180 days after the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 or P-1 from either S&P or Moody's (or, if at any time neither S&P nor Moody's shall be rating such obligations, then the highest rating from other nationally recognized rating services reasonably acceptable to the Required Holders); (iv) domestic and Eurodollar certificates of deposit or time deposits, bankers' acceptances or bank notes maturing within one year after the date of acquisition thereof issued by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia having a rating of A or higher from S&P or Moody's; A-59 (v) money market funds having an average portfolio maturity, at the time of acquisition thereof, of not more than 180 days, which money market funds either: (a) have a rating from a nationally recognized rating service reasonably acceptable to the Required Holders which is equivalent to a rating of either AAAm-G or AAAm from S&P or a rating of Prime-1 from Moody's; or (b) are required to invest at least 95% of their assets in instruments described in other clauses of this definition; (vi) repurchase obligations with a term of not more than 30 days for instruments described in clauses (i) and (ii) of this definition; (vii) investments made in connection with the Citibank, N.A., overnight Nassau Sweep Account; and (viii) repurchase obligations having Kidder, Peabody & Co., Inc., or any other investment bank organized under the laws of any state of the United States and approved by the Required Holders as the counterparty, with a term of not more than 45 days for whole loans secured by commercial or residential real estate mortgages. "PERMITTED PREFERRED DIVIDEND" shall mean dividends in respect of any Permitted Preferred Stock in an aggregate amount not to exceed in any period of 365 days (or 366 days in any year in which there is a February 29th) the product of (i) the lesser of: (a) an amount equal to 100 basis points in excess of the yield on the U.S. Treasury security with a constant maturity of 30 years on the date of issuance of the Permitted Preferred Stock; and (b) 10% per annum, times (ii) the aggregate cash consideration paid to the Company in consideration of the issuance of the Permitted Preferred Stock. "PERMITTED PREFERRED STOCK" shall mean any issue of preferred stock of the Company which is not required to be redeemed, repurchased or otherwise acquired or retired, in whole or in part, for value by the Company, upon the occurrence of any contingency or otherwise, prior to July 1, 2003. A-60 "PERSON" shall mean an individual, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. "PLAN" shall mean at any time any "employee pension benefit plan" (as such term is defined in Section 3 of ERISA) maintained by the Company or any ERISA Affiliate for employees of the Company or such ERISA Affiliate, excluding any Multiemployer Plan, but including, without limitation, any Multiple Employer Plan. "PREPAYMENT EVENT" shall mean any Letter of Credit Prepayment Event, any mandatory or optional defeasance, prepayment or repurchase, in whole or in part, of any issue of Debt (other than Debt owing solely to the Company or any Wholly-Owned Subsidiary), or reduction in commitment in any credit facility, of the Company or any Subsidiary, or any event which occurs that gives rise to an obligation of the Company or any Subsidiary to make any such defeasance, prepayment, repurchase or reduction, in each case, other than: (i) Originally Scheduled Payments; (ii) Permitted Existing Subordinated Debt Acquisitions; (iii) Permitted IDB Acquisitions; (iv) Equity Issuance Acquisitions; and (v) De Minimus Payments. In connection with any Debt described in clause (vi) of the definition of "Debt," payments in respect of contributions of amounts not exceeding, during any fiscal year of the Company, the Maximum Pension Contribution for such fiscal year to any Plan or Multiemployer Plan shall not give rise to a Prepayment Event, but a Prepayment Event will result from the payment or contribution to any such Plan or Multiemployer Plan of any amount in excess of the Maximum Pension Contribution during any fiscal year. "PREPAYMENT OFFER" shall have the meaning set forth in paragraph 5H(i) of this Agreement. "PREPAYMENT PORTION" shall have the meaning set forth in paragraph 5I(iii) of this Agreement. "PROPERTY" shall mean any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible. "PURCHASE MONEY MORTGAGES" shall mean a Lien held by any Person (whether or not the seller of such assets) on tangible assets (other than assets acquired to replace, repair, upgrade or alter assets owned by the Company or any Subsidiary on the Closing Date) acquired, improved or constructed by the Company or any Subsidiary after the Closing Date, which Lien secures all or a portion of the related purchase price or A-61 improvement or construction costs of such assets (or Debt incurred to pay such purchase price or costs), or any Lien existing on any tangible assets of any corporation at the time it becomes a Subsidiary, and extensions (as to time), renewals and replacements of any such Lien or the Debt secured thereby, provided that, in each such case such Lien does not extend to any other asset of the Company or any Subsidiary; provided, further, that any Lien on acquired Property, or on Property of a corporation at the time it becomes a Subsidiary, was not created in contemplation of such acquisition or such corporation becoming a Subsidiary, as the case may be. "PURCHASERS" shall mean you and the Other Purchasers. "RATABLE PREPAYMENT AMOUNT" shall mean, in respect of the Notes: (i) in connection with any Letter of Credit Prepayment Event, an amount equal to the product of: (a) the aggregate principal amount of San Marcos Bonds redeemed, reacquired or repurchased, or with respect to which cash collateral has been deposited to secure reimbursement obligations of the Company relating to the San Marcos Bonds or any letter of credit relating thereto, as the case may be, by the Company; times (b) the quotient of: (I) the aggregate amount of Notes then outstanding; divided by (II) the aggregate amount of the Notes and the 9.33% Senior Notes due December 15, 2002 of the Company then outstanding; and (ii) with respect to each other Prepayment Event, a principal amount of the Notes equal to the product of: (a) the highest percentage of any issue of Debt being prepaid, or as to which any offer to prepay shall apply, as a result of the occurrence of such Prepayment Event, multiplied by (b) the outstanding principal amount of the Notes. "REQUIRED HOLDERS" shall mean at any time the holder or holders of at least sixty-six and two-thirds percent (66 2/3%) of the aggregate principal amount of the Notes outstanding at such time, provided that Notes owned by the Company, any Subsidiary or any Affiliate at such time shall be deemed not to be outstanding for purposes of determining such percentage. A-62 "RESPONSIBLE OFFICER" shall mean the chief executive officer, chief operating officer, chief financial officer or chief accounting officer of the Company or any other officer of the Company involved principally in its financial administration or its controllership function. "RESTRICTED STOCK PLANS" shall mean the 1969, 1970, 1972, 1974 and 1984 Restricted Stock Plans of the Company and any other comparable future plan. "RIGHT TO PUT" shall have the meaning specified in clause (i) of paragraph 4.E hereof. "RIGHTS AGREEMENT" shall mean the Rights Agreement dated as of August 15, 1986, between the Company and The First National Bank of Chicago, as in effect on December 21, 1992. "S&P" means Standard & Poor's Corporation. "SAN MARCOS BONDS" shall mean bonds originally issued in connection with the IDB Financing of Company's San Marcos, Texas facility, or replacement bonds issued on substantially the same terms as the originally issued bonds. "SECOND AMENDMENT" shall mean the Second Amendment Agreement entered into as of September 24, 1993, between the Company and the holder of Notes named therein. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. "SECURITY" shall have the meaning specified in Section 2(1) of the Securities Act. "SENIOR DEBT" shall mean all Debt of Subsidiaries, all Debt of the Company secured by any Lien and all other Debt ranking senior to or pari passu with the Notes with respect to distributions of the Company's Property in any bankruptcy proceeding. "SENIOR OFFICER" shall mean with respect to any corporation each of the Chairman, President, any Vice-President, the Chief Financial Officer, the Secretary, and the Treasurer of such corporation. "STOCK INCENTIVE PLANS" shall mean the 1989 Stock Incentive Plan of the Company and any other future comparable plan. "STOCK OPTION PLANS" shall mean the 1972, 1973, 1974, 1982 and 1984 Stock Option Plans of the Company and any other future comparable plan. "SUBSIDIARY" shall mean any corporation organized under the laws of any state of the United States of America, Canada, or any province of Canada, that has the majority of its Property located in and makes the major portion of its sales to Persons located in the United States of America or Canada, and more than fifty percent (50%) of the total A-63 combined voting power of all classes of Voting Stock of which shall, at the time as of which any determination is being made, be owned, directly or indirectly, by the Company. "THIRD AMENDMENT" shall mean the Third Amendment Agreement entered into as of May 10, 1994, between the Company and the holder of Notes named therein. "THIRD AMENDMENT DATE" shall mean the "Effective Date," as such term is defined in the Third Amendment. "TRADE RECEIVABLES AGREEMENT" shall mean (i) the Amended and Restated Trade Receivables Purchase and Sale Agreement dated as of January 26, 1990 and as amended thereafter among the Company, Corporate Asset Funding Company, Inc., Citibank, N.A. and Citicorp North America, Inc., individually and as agent, (ii) the Amended and Restated Trade Receivables Purchase and Sale Agreement dated as of January 26, 1990 and as amended thereafter among the Company, Citibank, N.A. and Citicorp North America, Inc., individually and as agent, and (iii) other agreements for the sale of receivables, or other amounts payable to the Company on account of any pre-production costs, by the Company or any Subsidiary, with recourse to the Company or such Subsidiary no greater than as set forth in the agreement referred to in clause (i) of this definition, provided that in no event shall (a) the Company or any Subsidiary sell Property (or subject Property to any Liens) under any such agreements other than Property of the type that may be sold under any such agreements in accordance with the terms of any such agreements as in effect on the Closing Date, and in no event shall such sales be made unless they are sales of interests in accounts and general intangibles as such terms are defined by the Uniform Commercial Code as in effect in New York, (b) at any time the aggregate amount of claims (whether or not asserted at such time) against any one or more of the Company or the Subsidiaries, or assets of any of them, arising out of such agreements (but only that portion of such claims that represents principal) exceed the greater of, (I) thirty-five percent (35%) of Adjusted Consolidated Tangible Net Worth, or (II) Sixty Million Dollars ($60,000,000), and (c) for any period of ten consecutive Business Days, the aggregate amount of claims (whether or not asserted at such time) against any one or more of the Company or the Subsidiaries, or assets of any of them, arising out of such A-64 agreements (but only that portion of such claims that represents principal) exceed ninety-one percent (91%) of the aggregate face amount of the receivables and general intangibles with respect to which the Company may or has sold interests under any such agreements and which receivables and general intangibles are outstanding at such time. "TRANSFEREE" shall mean any direct or indirect transferee of all or any part of any Note purchased by any Purchaser under this Agreement. "VOTING STOCK" shall mean, with respect to any corporation, any shares of stock of such corporation whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). "WARRANT AGREEMENT" shall mean that certain Warrant Agreement entered into among the Company and holders of the Notes and certain other Debt of the Company on or after the Amendment Date in compliance with the provisions of paragraph 7A of the Amendment. "WARRANTS" shall mean warrants to purchase shares of the common stock of the Company issued pursuant to the Warrant Agreement. "WHOLLY-OWNED SUBSIDIARY" shall mean any Subsidiary one hundred percent (100%) of the capital stock of which (other than directors' qualifying shares) is held of record and beneficially owned by the Company or any other Wholly-Owned Subsidiary. 11. MISCELLANEOUS. 11A. NOTE PAYMENTS. The Company agrees that, so long as you shall hold any Note, it will make payments of principal thereof, premium, if any, Agreed Put Consideration, and interest thereon, by wire transfer of immediately available funds for credit to your account or accounts as specified in the Purchaser Schedule attached hereto, or such other account or accounts in the United States as you may designate in writing, notwithstanding any contrary provision herein or in any Note with respect to the place of payment. You agree that, before disposing of any Note, you will make a notation thereon (or on a schedule attached thereto) of all principal payments previously made thereon and of the date to which interest thereon has been paid. The Company agrees to afford the benefits of this paragraph 11.A to any Transferee that shall have made the same agreement as you have made in this paragraph 11.A. 11B. EXPENSES. The Company agrees, whether or not the transactions contemplated hereby shall be consummated, to pay, and save you and any Transferee harmless against liability for the payment of all out-of-pocket expenses arising in connection with such transactions, including (i) all document production and duplication charges and the fees and expenses of any special counsel engaged by you or any Transferee in connection with this Agreement, the transactions contemplated hereby and any subsequent proposed A-65 modification of, or proposed consent under, this Agreement, whether or not such proposed modification shall be effected or proposed consent granted, and (ii) the costs and expenses, including attorneys' fees, incurred by you or any Transferee 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 or by reason of you or any Transferee having acquired any Note, including without limitation costs and expenses incurred in any bankruptcy case, provided that the Company shall be required to pay for such attorney's fees only to the extent that such attorneys are retained by the Required Holders to represent, as a group, the Required Holders and all other holders of Notes which shall consent to such representation. The obligations of the Company under this paragraph 11.B shall survive the transfer of any Note or portion thereof or interest therein by you or any Transferee and the payment of any Note. 11C. CONSENT TO AMENDMENTS. This Agreement and the Note may be amended, and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, if the Company shall obtain the written consent to such amendment, action or omission to act, of the Required Holder(s) except that, without the written consent of the holder or holders of all Notes at the time outstanding, no amendment to this Agreement shall change the maturity of any Note, or change the principal of, or the rate or time of payment of interest or any premium payable with respect to any Note, or affect the time, amount or allocation of any required prepayments, or reduce the proportion of the principal amount of the Notes required with respect to any consent. With respect to waivers or consents to amendments to or concerning the provisions of paragraph 5H hereof, the provisions of such paragraph and (except as set forth in this sentence) the definitions used therein (as used therein) may not be waived, amended or supplemented without the consent of each holder of Notes, but waivers concerning the occurrence of any Prepayment Event, and waivers and consents to amendments or supplements to the definition of Prepayment Event, may be given by the Required Holders. Each holder of any Note at the time or thereafter outstanding shall be bound by any consent authorized by this paragraph 11.C, whether or not such Note shall have been marked to indicate such consent, but any Notes issued thereafter may bear a notation referring to any such consent. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. 11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The Notes are issuable as registered notes without coupons in denominations of at least One Million Dollars ($1,000,000), except as may be necessary to reflect any principal amount not evenly divisible by, One Million Dollars ($1,000,000). The Company shall keep at its principal office a register in which the Company shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of the Transferee or Transferees so long as any such Transferee or Transferees are Institutional Investors. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized A-66 denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Company. Whenever any Notes are so surrendered for exchange, the Company shall, at its expense, execute and deliver the Notes that the holder making the exchange is entitled to receive. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue that were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's unsecured indemnity agreement, or in the case of any such mutilation, upon surrender and cancellation of such Note, the Company will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. 11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for registration of transfer, the Company may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of and premium, if any, and interest on such Note and for all other purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to the preceding sentence, the holder of any Note may from time to time grant participations in all or any part of such Note to any Institutional Investor on such terms and conditions as may be determined by such holder in its sole and absolute discretion, it being understood that such holder's obligations under this Agreement shall remain unchanged and that such holder shall remain solely responsible to the other parties hereto for the performance of such obligations, and in addition, that you agree that you shall only grant such participations in compliance with any applicable provisions of the Securities Act. 11F. ACCOUNTING TERMS. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements contained in the Company's Quarterly Report on Form 10-Q for fiscal quarter ended May 2, 1993. If any change in accounting principles from those used in the preparation of such financial statements hereafter occasioned by the promulgation of rules and regulations by or required by the Financial Accounting Standards Board, the Cost Accounting Standards Board or the Securities and Exchange Commission (or successors thereto or agencies with similar functions) result in a material change in the accounting principles used to prepare the financial statements contained in the Company's Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q, the Company and the holders of Notes agree, upon notification of such change by the Company to the holders of Notes or by a holder of Notes to the Company, to enter into negotiations in order to amend paragraph 6 and the Financial Covenants incorporated by reference herein, as applicable, so as to equitably reflect such change with the desired result that the criteria for evaluating the Company's financial condition shall be the same after such change as if such change had not been made. 11G. DIRECTLY OR INDIRECTLY. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether 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. A-67 11H. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein or made in writing by or on behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by you of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf of you or any Transferee. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof. 11I. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this Agreement contained by or on behalf of either of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not. 11J. DISCLOSURE TO OTHER PERSONS. You agree to use your best efforts to hold in confidence and not to disclose any Confidential Information, provided, that you will be free, after notice to the Company, to correct any false or misleading information that may become public concerning your relationship to the Company and the Subsidiaries or to the transactions contemplated by this Agreement. Notwithstanding the foregoing, the Company acknowledges that the holder of any Note may deliver copies of any financial statements and other documents delivered to such holder, and disclose any other information disclosed to such holder (including, without limitation, Confidential Information), by or on behalf of the Company or any Subsidiary in connection with or pursuant to this Agreement, to (i) such holder's directors, officers, employees, agents and professional consultants, (ii) any other holder of any Note, (iii) any Institutional Investor to which such holder sells or offers to sell such Note or any part thereof, provided that such Institutional Investor signs a written agreement to comply with the confidentiality provisions of this Agreement, regardless of whether or not such offeree purchases any Notes, and provided further that no such agreement shall be required so long as such Institutional Investor is furnished only with information that is not Confidential Information, (iv) any Institutional Investor to which such holder sells or offers to sell a participation in all or any part of such Note, provided that such Institutional Investor signs a written agreement to comply with the confidentiality provisions of this Agreement, regardless of whether or not such offeree purchases any Notes, and provided further that no such agreement shall be required so long as such Institutional Investor is furnished only with information that is not Confidential Information, (v) any federal or state regulatory authority having jurisdiction over such holder, (vi) the National Association of Insurance Commissioners or any similar organization or A-68 (vii) any other Person to which such delivery or disclosure may be necessary, (a) in compliance with any law, rule, regulation or order applicable to such holder, (b) in response to any subpoena or other legal process, or (c) in connection with any litigation to which such holder is a party. 11K. NOTICES. All written communications provided for hereunder shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid), and (i) if to you, addressed to you at the address specified for such communications in the Purchaser Schedule attached hereto, or at such other address as you shall have specified to the Company in writing, (ii) if to any other holder of any Note, addressed to such other holder at such address as such other holder shall have specified to the Company in writing or, if any such other holder shall not have so specified an address to the Company, then addressed to such other holder in care of the last holder of such Note which shall have so specified an address to the Company, and (iii) if to the Company, addressed to it at Rohr, Inc. Foot of H Street Chula Vista, CA 92012 Attention: Treasurer copy to: General Counsel or at such other address as the Company shall have specified to the holder of each Note in writing; provided, however, that any such communication to the Company may also, at the option of the holder of any Note, be delivered by any other means either to the Company at its address specified above or to any officer of the Company. Any written communication sent in accordance with the first sentence of this paragraph 11K, other than in accordance with the proviso thereto, shall be deemed to have been received when sent; any written communication delivered in accordance with such proviso shall be deemed to have been received when delivered. 11L. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement, 11M. SATISFACTION REQUIREMENT. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to you or to the Required Holders, the determination of such satisfaction shall be made by you or the Required Holders, as the case may be, in the sole and exclusive judgment (exercised in good faith) of the Person or Persons making such determination. A-69 11N. GOVERNING LAW. THIS AGREEMENT 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. 11O. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such Business Day. 11P. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterpart of this letter and return the same to the Company, whereupon this letter shall become a binding agreement between you and the Company. Very truly yours, ROHR, INC. By: ----------------------------------- Name: Title: A-70 The foregoing Agreement is hereby accepted as of the date first above written. [NAME OF PURCHASER] By: ----------------------------- Name: Title: A-71 EX-4.4.1 4 2ND AMENDMENT AGREEMENT (9.33%) Exhibit 4.4.1 SECOND AMENDMENT AGREEMENT SECOND AMENDMENT AGREEMENT (this "Amendment"), dated as of September 24, 1993, among ROHR, INC. (together with its successors and assigns, the "Company"), and each of the holders of Notes whose name appears on the signature pages hereof (individually, a "Holder" and, collectively, the "Holders"). RECITALS: WHEREAS, the Company issued its 9.33% Senior Notes due December 15, 2002, pursuant to that certain Note Agreement, dated as of December 21, 1992, between the Company and the Purchasers identified on Annex 1 thereto; and WHEREAS, such Note Agreement was amended by that certain Amendment Agreement, dated as of June 30, 1993 (such Note Agreement, as amended by such Amendment Agreement, being the "Existing Note Agreement"); and WHEREAS, the Company has requested the Holders to modify certain terms of the Existing Note Agreement; and WHEREAS, the Holders are agreeable to such modifications and such amendments, on the terms and conditions hereinafter set forth; NOW THEREFORE, in consideration of the premises and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. DEFINITIONS. Capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings ascribed to them in the Existing Note Agreement. 2. AMENDMENTS. Paragraph 10B of the Existing Note Agreement shall be amended by amending and restating Subparagraph (ii)(f) of the definition of "Consolidated Net Income Available for Fixed Charges" to read as follows: "(f) in the case of any such period that includes the fiscal month ending May 2, 1993, the provisions and charges, not in excess of $38,000,000 in the aggregate, established by the Company in the third quarter of Fiscal Year 1993; and". 1 3. CONDITIONS TO EFFECTIVENESS. The amendment set forth in Paragraph 2 shall become effective only upon the satisfaction in all respects of the conditions set forth below: 3A. The Required Holders and the Company shall have executed and delivered to each other this Amendment and the Existing Note Agreement, as amended hereby, shall be in full force and effect. 3B. The definition of "Consolidated Net Income Available for Fixed Charges" in each of the Note Agreements, dated as of January 15, 1990, between the Company and the note holder party thereto, as amended through June 30, 1993, shall have been amended in substantially the same manner as set forth in Paragraph 2 hereof. 3C. The definition of "Net Income Available for Fixed Charges" in the Credit Agreement, dated as of April 26, 1989, between the Company and the other parties thereto, as amended through July 9, 1993 (the "Credit Agreement"), shall have been amended in substantially the same manner as set forth in Paragraph 2 hereof. 3D. The definition of "Net Income Available for Fixed Charges" incorporated from the Credit Agreement into the Sublease Agreement, dated as of September 14, 1992, between the Company and State Street Bank and Trust Company of California, National Association, and W. Jeffrey Kramer, not in an individual capacity but solely as owner trustees under a trust for the benefit of General Electric Capital Corporation, as amended through July 9, 1993, shall have been effectively amended in substantially the same manner as set forth in Paragraph 2 hereof. 4. COSTS AND EXPENSES. The Company shall pay all out-of-pocket expenses of the Holders in connection with the negotiation, preparation, execution and delivery of this Amendment, including, without limitation, all the fees and expenses of special counsel engaged by the Holders in connection therewith. 5. MISCELLANEOUS. 5A. All provisions of this Amendment by or for the benefit of the parties hereto shall bind and inure to the benefit of their respective successors and assigns hereunder. 5B. This Amendment may be executed in one or more counterparts, all of which taken together shall constitute a single instrument. 2 5C. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK. 5D. Except as expressly provided herein, (i) no other terms and provisions of the Existing Note Agreement shall be modified or changed by this Amendment and (ii) the terms and provisions of the Existing Note Agreement shall continue in full force and effect. The Company hereby acknowledges and reaffirms all of its obligations and duties under the Existing Note Agreement, as amended by this Amendment, and under the Notes, as amended to date, issued thereunder. 5E. Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 5F. This Amendment may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year fist above written. ROHR, INC. By: /s/ R.W. Madsen --------------------------- Name: R. W. Madsen Title: Vice President, General Counsel and Secretary THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /s/ Dennis B. Murphy --------------------------- Name: Title: 3 MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By: /s/ Richard C. Morrison --------------------------- Name: Title: PRINCIPAL MUTUAL LIFE INSURANCE COMPANY By: ---------------------------- Name: Title: By ---------------------------- Name: Title: 4 EX-4.4.2 5 3RD AMENDMENT AGREEMENT (9.33%) - - ------------------------------------------------------------------------------- ROHR, INC. ------------------------- THIRD AMENDMENT AGREEMENT ------------------------- DATED AS OF MAY 10, 1994 9.33% SENIOR NOTES DUE DECEMBER 15, 2002 - - -------------------------------------------------------------------------------- THIRD AMENDMENT AGREEMENT THIRD AMENDMENT AGREEMENT (this "Third Amendment"), dated as of May 10, 1994, among ROHR, INC. (together with its successors and assigns, the "Company"), and each of the holders of Notes (as such term is defined below) whose name appears on the signature pages hereof (individually, a "Holder" and, collectively, the "Holders"). RECITALS: WHEREAS, the Company entered into that certain Note Agreement, dated as of December 21, 1992, between the Company and the Purchasers identified on Annex 1 thereto, as previously amended by that certain Amendment Agreement (the "First Amendment"), dated June 30, 1993, and that certain Second Amendment Agreement, dated September 24, 1993 (collectively, as in effect immediately prior to the Third Amendment Date, the "Existing Note Agreement," and, as further amended and restated by this Third Amendment, the "Amended Note Agreement"), pursuant to which the Company has issued its 9.33% Senior Notes due December 15, 2002, as amended by the First Amendment (the "Existing Notes"); and WHEREAS, each of the Holders is a holder of the Existing Notes; WHEREAS, the Company has requested the Holders to consent to certain transactions by the Company and to amend and restate in full the Existing Note Agreement; WHEREAS, the Holders are willing to give such consent, and to enter into such amendment and restatement, on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. DEFINITIONS Capitalized terms used in this Third Amendment and not otherwise defined herein shall have the respective meanings ascribed to them in the Amended Note Agreement attached hereto as Exhibit A. 2. AMENDMENTS TO EXISTING NOTE AGREEMENT The Existing Note Agreement is hereby amended and restated in its entirety to read as set forth in the form attached hereto as Exhibit A. 3. CONSENT TO CERTAIN TRANSACTIONS. Each of the undersigned Holders hereby consents to the following transactions by the Company: (i) the sale of the shares of or substantially all of the assets of Rohr Aero Services, Inc. and Rohr Aero Services Europe; (ii) the sale of assets relating to the business jet product line; (iii) the sale of the Company's facilities located in Hagerstown, Maryland and related assets; and (iv) the sale of the Company's facilities located in Auburn, Washington. Each of the undersigned Holders hereby agrees that the aforementioned transactions shall not be deemed a Default or Event of Default pursuant to paragraph 7A(v) or paragraph 7A(vi) of the Amended Note Agreement resulting from the failure of the Company to comply with the provisions of paragraph 6D or paragraph 6Q of the Amended Note Agreement or paragraph 6M of the Amended Note Agreement (as it incorporates by reference Section 5.02(d) of the Credit Agreement) with respect to the above transactions. Notwithstanding the foregoing, sales of any of the Property described in clauses (i) through (iv), inclusive, of this paragraph 3 shall be deemed to be sales of Property subject to paragraph 6Q(i) of the Amended Note Agreement for the purpose of determining the compliance by the Company with paragraph 6Q in connection with any other sale, lease, transfer or other disposition of Property of the Company or any Consolidated Subsidiary. In addition, each of the undersigned Holders, as a holder of Warrants and Registrable Securities (as such term is defined in the Warrant Agreement) hereby waives any default under, or violation of, the provisions of paragraph 8B(ii) of the Warrant Agreement that may have resulted by virtue of any failure of the notice of the registration of the 1994 Subordinated Notes (provided to such Holders pursuant to paragraph 8B(i) of the Warrant Agreement) to contain the Company's agreement to use its best efforts, if requested to do so, to arrange for such underwriters to include in such underwriting any Registrable Securities that the Company was requested to register pursuant to paragraph 8B(i) of the Warrant Agreement, and hereby waives (without prejudice to the right of such Holder to participate in any future registration of Securities of the Company) any right to participate in the registration or sale of the 1994 Subordinated Notes. 4. CONDITIONS TO EFFECTIVENESS. The amendment and restatement of the Existing Note Agreement set forth in paragraph 2 and the consent by the Holders set forth in paragraph 3 shall become effective only upon the satisfaction in all respects of the conditions set forth below. The first date upon which all such conditions shall have been satisfied is herein referred to as the "Effective Date." 4A. Each of the Holders and the Company shall have executed and delivered to each other this Third Amendment, and the Amended Note Agreement shall be in full force and effect. 4B. Each of the Holders shall have received a legal opinion of: (i) Gibson, Dunn & Crutcher, special counsel to the Company, dated the Effective Date and substantially in the form set forth in Exhibit B1 attached hereto; and (ii) Richard Madsen, Esq, general counsel to the Company, dated the Effective Date and substantially in the form set forth in Exhibit B2 attached hereto; and 2 (iii) Hebb & Gitlin, special counsel to the holders of the Existing Notes, dated the Effective Date and substantially in the form set forth in Exhibit B3 attached hereto. 4C. The representations and warranties set forth in paragraph 5 hereof shall be true and correct as of the date hereof and as of the Effective Date; no Default or Event of Default pursuant to the Existing Note Agreement shall have occurred and be continuing on the Effective Date; and each of the Holders shall have received a written certificate, in the form of Exhibit C hereto, signed by a duly authorized officer of the Company to such effect. Each of the Holders shall have received a certificate of the Secretary or an Assistant Secretary of the Company, substantially in the form of Exhibit D hereto, with respect to the matters therein set forth. 4D. On or before the Effective Date, the Company shall have paid to each Holder in immediately available funds an amendment fee equal to the product of (i) twenty-five one-hundredths of one percent (0.25%) times (ii) the outstanding principal amount of Existing Notes held by such Holder on the Effective Date. 4E. On or before the Effective Date, the Company shall have paid to each Holder in immediately available funds, in exchange for such holder's consent to the Company's issuance of $100,000,000 of additional pari passu Debt, a consent fee equal to the product of (i) thirty-eight one-hundredths of one percent (0.38%) times (ii) the outstanding principal amount of Existing Notes held by such Holder on the Effective Date. 4F. On or before the Effective Date, the Company shall have closed on the issuance of the Company's 1994 Senior Debt on terms and conditions acceptable to the Holders in all respects. 4G. On or before the Effective Date, the Company shall have closed on the issuance of Company's 1994 Subordinated Debt on terms and conditions acceptable to the Holders in all respects. 4H. The Company shall have paid all amounts which are payable pursuant to paragraph 6 hereof and paragraph 11B of the Amended Note Agreement. 4I. The holders of the 9.35% Senior Notes due January 29, 2000 of the Company (the "Other Notes") shall have entered into an amendment of those certain several identical Note Agreements, each dated as of January 15, 1990, between the Company and the Purchasers identified on Annex 1 thereto, as previously amended (collectively, the "Other Note Agreement"), further amending such Other Note Agreement and the notes issued thereunder in a manner consistent with paragraph 2 of this Third Amendment and consenting to certain transactions by the Company in a manner consistent with paragraph 3 of this Agreement. Each Holder shall have received a copy of the amendment agreement for such Other Note Agreement, and the terms thereof shall be satisfactory to the Holders in all respects. 4J. The Credit Agreement and the Sublease Agreement between the Company and the trustees named therein for the benefit of General Electric Capital Corporation, shall have been amended in form and substance satisfactory to the Holders, which amendments shall be consistent with the amendments provided for herein and permit the transactions contemplated by paragraph 3 of this Third Amendment. Each Holder shall have received copies of said 3 amendment documents and all agreements, instruments or other documents containing any substantive agreement of the Company or any Consolidated Subsidiary, executed or delivered in connection therewith, other than that certain letter agreement (the "Agency Letter") between the Company and the agent under the Credit Agreement relating to the agency fee paid to such agent, which letter relates solely to the fee payable to the agent under the Credit Agreement for acting in such capacity. 4K. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to such Holder, and such Holder shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request. 5. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to each of the Holders as follows: 5A. The Company: (i) is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation, (ii) has all requisite power and authority and all necessary licenses and permits to own and operate its Properties and to carry on its business as now conducted and presently proposed to be conducted, and (iii) is duly qualified and is authorized to do business 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. 5B. The Company has the corporate power and authority: (i) to authorize, execute, deliver and enter into this Third Amendment; and (ii) to perform its obligations under this Third Amendment and the Amended Note Agreement. 5C. This Third Amendment has been duly authorized by the Company. This Third Amendment and the Amended Note Agreement constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as such enforceability may be: (i) limited by bankruptcy, insolvency or other similar laws affecting the enforceability of creditors' rights generally; and (ii) subject to the availability of equitable remedies. The holders of the Existing Notes are entitled to the benefits of the Amended Note Agreement. 4 5D. The authorization, execution and delivery by the Company of this Third Amendment is not, and the performance by the Company of its obligations under the Amended Note Agreement will not be, inconsistent with its certificate of incorporation or by-laws, does not and will not contravene any law, governmental rule or regulation, violate any judgment, order or award of any arbitrator applicable to the Company, does not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument to which the Company is a party or by which any of its Property is bound, and will not result in the imposition of a Lien upon any Property of the Company. 5E. No consent or approval of, giving of notice to, registration with, or taking of any other action in respect of or by, any federal, state or local governmental authority or agency, or other Person (except for actions that will have occurred by the Effective Date), is required with respect to: (i) the authorization, execution and delivery by the Company of this Third Amendment, or (ii) the performance by the Company of its obligations under the Amended Note Agreement. 5F. After giving effect to this Third Amendment, the Seventh Amendment to the Credit Agreement and the issuance and sale of the 1994 Senior Notes and the 1994 Subordinated Notes, no Default or Event of Default will exist and no default or event of default exists under: (i) the Other Note Agreement, as amended as contemplated pursuant to paragraph 4I hereof; (ii) the Credit Agreement; (iii) the SubLease Agreement between the Company and the trustees named therein acting for the benefit of General Electric Capital Credit Corporation; (iv) the 1994 Senior Notes or the indenture governing such 1994 Senior Notes; or (v) the 1994 Subordinated Notes or the indenture governing such 1994 Subordinated Notes. After giving effect to this Third Amendment, the Seventh Amendment to the Credit Agreement and the issuance and sale of the 1994 Senior Notes and the 1994 Subordinated Notes, the Company will be able to satisfy all conditions necessary pursuant to the terms of the Credit Agreement to draw an amount, when added to the amount of drawings and letter of credits then outstanding under the Credit Agreement, equal to the full maximum commitment of One Hundred Ten Million Dollars ($110,000,000) available under the Credit Agreement. 5G. Except as set forth on Annex 2 hereto, as of the Effective Date, each of the warranties and representations contained in the Amended Note Agreement are true, correct and 5 complete in all material respects, and such warranties and representations are hereby incorporated by reference with the same effect as though set forth in their entirety herein. 5H. There is no agreement between the Company and any of the banks which are parties to the Credit Agreement with respect to the matters described in paragraph 4J of this Third Amendment other than as set forth in the documents delivered to the Holders pursuant to paragraph 4J of this Third Amendment. Other than as set forth on Annex 2 hereto, there is no agreement between the Company or any Consolidated Subsidiary and any other holder of Debt of the Company or any Consolidated Subsidiary which provides for any compensation, fees or other financial consideration in exchange or partial exchange for any amendment, waiver or consent referred to in paragraph 4J. Copies of all agreements and documents relating to such agreements have been provided to you pursuant to paragraph 4J of this Third Amendment. 5I. Except as disclosed to you on Annex 2 hereto, it is not reasonably foreseeable that any action, suit, investigation or proceeding or group of similar actions, suits, investigations or proceedings (including, as such a group, without limitation, all actions, suits, investigations or proceedings arising out of federal or state environmental protection laws), pending or, to the knowledge of the Company, threatened against the Company or any of the Consolidated Subsidiaries, or any properties or rights of the Company or any of the Consolidated Subsidiaries, by or before any court, arbitrator or administrative or governmental body would result in any material adverse change in the business, condition (financial or otherwise) or operations of the Company and the Consolidated Subsidiaries taken as a whole. 6. COSTS AND EXPENSES. Whether or not the conditions to effectiveness set forth in paragraph 3 of this Third Amendment are satisfied, the Company shall pay all out-of-pocket expenses of the Holders in connection with the negotiation, preparation, execution and delivery of this Third Amendment, including, without limitation, all the fees and expenses of special counsel engaged by the Holders in connection therewith. Without limiting the generality of the foregoing, the Company will pay, on the date of the Third Amendment, the fees and disbursements of Holder's special counsel presented on such date, and shall also pay, upon receipt of any statement thereof, each additional statement for reasonable fees and disbursements of Holder's special counsel rendered after the date of this Third Amendment in connection with this Third Amendment. 7. MISCELLANEOUS. 7A. All the provisions of this Third Amendment by or for the benefit of the parties hereto shall bind and inure to the benefit of their respective successors and assigns hereunder. 7B. This Third Amendment may be executed in one or more counterparts, all of which taken together shall constitute a single instrument. 7C. THIS THIRD AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK. 6 7D. The Company hereby acknowledges and reaffirms all of its obligations and duties under the Amended Note Agreement and under the Existing Notes. 7E. Any provision of this Third Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7F. This Third Amendment constitutes the final written expression of all of the terms hereof and is a complete and exclusive statement of those terms. [THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 7 IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed by their respective authorized officers as of the day and year first above written. ROHR, INC. By: /s/ R.M. MILLER ---------------------------------------- Name: R. M. Miller Title: Vice President and Treasurer THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /s/ THOMAS KLAMKA ---------------------------------------- Name: Thomas Klamka Title: Vice President PRINCIPAL MUTUAL LIFE INSURANCE COMPANY By: /s/ LEANNE M. SWENSON ---------------------------------------- Name: Leanne M. Swenson Title: Counsel By: /s/ JOSEPH P. McLAUGHLIN ---------------------------------------- Name: Joseph P. McLaughlin Title: Counsel MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By: /s/ RICHARD C. MORRISON ---------------------------------------- Name: Richard C. Morrison Title: Vice President Signature Page 1 to the THIRD AMENDMENT AGREEMENT among ROHR, INC. and the holders of Notes named therein. 8 EXHIBIT A FORM OF AMENDED AND RESTATED NOTE AGREEMENT ROHR, INC. -------------------------- AMENDED AND RESTATED NOTE AGREEMENT -------------------------- DATED AS OF MAY 10, 1994 $62,000,000 9.33% SENIOR NOTES DUE DECEMBER 15, 2002 A-2 TABLE OF CONTENTS (NOT PART OF AGREEMENT)
PAGE ---- 1. AUTHORIZATION OF ISSUE OF NOTE....................................... A-5 2. PURCHASE AND SALE OF NOTES........................................... A-5 3. CONDITIONS OF CLOSING................................................ A-6 3A. Opinion of Purchasers' Special Counsel...................... A-6 3B. Opinion of Company's Counsel................................ A-6 3C. Representations and Warranties; No Default.................. A-6 3D. Purchase Permitted By Applicable Laws....................... A-6 3E. Proceedings................................................. A-6 3F. Sale of Notes to Other Purchasers........................... A-6 3G. Closing Expenses............................................ A-7 4. PREPAYMENTS.......................................................... A-7 4A. Required Prepayments........................................ A-7 4B. Optional Prepayment With Yield-Maintenance Amount........... A-7 4C. Notice of Optional Prepayment............................... A-7 4D. Partial Payments Pro Rata................................... A-7 4E. Right to Put................................................ A-8 4F. Retirement of Notes......................................... A-8 4G. Tender of Notes in Payment of Warrant Exercise Price........ A-8 5. AFFIRMATIVE COVENANTS................................................ A-9 5A. Payment of Taxes and Claims................................. A-9 5B. Maintenance of Properties and Corporate Existence; Other Matters............................................. A-9 5C. Payment of Notes and Maintenance of Office.................. A-10 5D. Financial Statements........................................ A-10 5E. Default Notices............................................. A-13 5F. Information Required by Rule 144A........................... A-13 5G. Inspection of Property...................................... A-13 5H. Covenant to Secure Note Equally............................. A-13 5I. Involuntary Prepayment...................................... A-14 6. NEGATIVE COVENANTS................................................... A-16 6A. Limitations on Liens........................................ A-16 6B. Limitations on Leases....................................... A-18 6C. Limitations on Indebtedness................................. A-18 6D. Limitations on Mergers and Sales of Assets.................. A-20 6E. Adjusted Consolidated Tangible Net Worth Maintenance........ A-20 6F. Limitations on Distributions................................ A-21 6G. Fixed Charge Coverage....................................... A-22 6H. Limitations on Capital Expenditures......................... A-22 6I. Private Offering............................................ A-22 6J. Transactions with Affiliates................................ A-22
A-3 TABLE OF CONTENTS (CONTINUED) (NOT PART OF AGREEMENT)
PAGE ---- 6K. Line of Business...................................... A-22 6L. Limitation on Certain Obligations..................... A-23 6M. Incorporation of Negative Covenants................... A-23 6N. Maintenance of Senior Status.......................... A-24 6O. Certain Amendments.................................... A-25 6P. Sales of Assets....................................... A-25 6Q. Sale of Receivables................................... A-27 6R. Debt Ratio............................................ A-27 7. EVENTS OF DEFAULT.............................................. A-27 7A. Acceleration.......................................... A-27 7B. Rescission of Acceleration............................ A-30 7C. Notice of Acceleration or Rescission.................. A-30 7D. Other Remedies........................................ A-30 8. REPRESENTATIONS AND WARRANTIES................................. A-31 8A. Subsidiaries.......................................... A-31 8B. Corporate Organization and Authority.................. A-31 8C. Financial Statements.................................. A-32 8D. Actions Pending....................................... A-32 8E. Outstanding Debt...................................... A-32 8F. Title to Properties................................... A-32 8G. Patents, Trademarks, Licenses, etc.................... A-33 8H. Taxes................................................. A-33 8I. Conflicting Agreements and Other Matters.............. A-33 8J. Offering of Notes..................................... A-34 8K. Use of Proceeds....................................... A-34 8L. ERISA................................................. A-34 8M. Governmental Consent.................................. A-35 8N. Environmental Compliance.............................. A-35 8O. Disclosure............................................ A-35 8P. Compliance with Law................................... A-36 8Q. Certain Laws.......................................... A-36 9. REPRESENTATIONS OF EACH PURCHASER.............................. A-36 9A. Nature of Purchase.................................... A-36 9B. Source of Funds....................................... A-37 10. DEFINITIONS.................................................... A-37 10A. Yield-Maintenance Terms............................... A-37 10B. Other Terms........................................... A-38 11. MISCELLANEOUS.................................................. A-66 11A. Note Payments......................................... A-66 11B. Expenses.............................................. A-67
A-4 TABLE OC CONTENTS (CONTINUED) (NOT PART OF AGREEMENT)
PAGE ---- 11C. Consent to Amendments................................... A-67 11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes............................................ A-68 11E. Persons Deemed Owners; Participations................... A-68 11F. Accounting.............................................. A-68 11G. Directly or Indirectly.................................. A-69 11H. Survival of Representations and Warranties; Entire Agreement...................................... A-69 11I. Successors and Assigns.................................. A-69 11J. Disclosure to Other Persons............................. A-69 11K. Notices................................................. A-70 11L. Payments Due on Non-Business Days....................... A-71 11M. Satisfaction Requirement................................ A-71 11N. Governing Law........................................... A-71 11O. Severability............................................ A-71 11P. Descriptive Headings.................................... A-71 11Q. Counterparts............................................ A-71 11R. Severalty of Obligations................................ A-71 Annex 1 -- Purchaser Schedule Annex 2 -- Payment Instructions at Closing Annex 3 -- Information as to Company Exhibit A -- Form of 9.33% Senior Note Due December 15, 2002 Exhibit B1 -- Form of Purchasers' Special Counsel's Opinion Exhibit B2 -- Form of Company's General Counsel Opinion Exhibit C -- Form of Officers' Certificate Exhibit D -- Form of Secretary's Certificate Exhibit E -- Form of Notice of Sale
A-5 ROHR, INC. FOOT OF H STREET CHULA VISTA, CALIFORNIA 92012 ------------------- AMENDED AND RESTATED NOTE AGREEMENT ------------------- $62,000,000 9.33% SENIOR NOTES DUE DECEMBER 15, 2002 Dated as of May 10, 1994 [Insert Name and Address of Each Purchaser] Ladies and Gentlemen: The undersigned, Rohr, Inc. (herein called, together with its successors, the "Company"), hereby agrees with the purchasers named in the Purchaser Schedule attached hereto as Annex 1 (herein called the "Purchasers") as follows: 1. AUTHORIZATION OF ISSUE OF NOTES. The Company has authorized the issuance of its senior promissory notes in the aggregate principal amount of $62,000,000, dated the date of issue thereof, to mature December 15, 2002, bearing interest on the unpaid balance thereof from the date thereof until the principal thereof shall have become due and payable at the rate of nine and thirty-three one-hundredths percent (9.33%) per annum and on overdue payments at the rate specified therein, which senior promissory notes have been amended pursuant to the First Amendment and, as amended, are substantially in the form of Exhibit A attached hereto. The term "Notes" as used herein shall include each such senior promissory note delivered pursuant to any provision of this Agreement and each such senior promissory note delivered in substitution or exchange for any other Note pursuant to any such provision. 2. PURCHASE AND SALE OF NOTES. The Company sold to each Purchaser and, subject to the terms and conditions herein set forth, each Purchaser purchased from the Company the aggregate principal amount of Notes set forth opposite such Purchaser's name in the Purchaser Schedule attached hereto as Annex 1 at one hundred percent (100%) of such aggregate principal amount. On the date of closing, December 22, 1992 (herein called the "Closing Date"), the Company delivered to each Purchaser, at the offices of Hebb & Gitlin, a Professional Corporation, at One State Street, Hartford, Connecticut, one or more Notes registered in such Purchaser's name, evidencing the aggregate principal amount of Notes to be A-6 purchased by such Purchaser and in the denomination or denominations specified with respect to such Purchaser in the Purchaser Schedule attached as Annex 1 hereto against payment of the purchase price thereof by transfer of immediately available funds as directed by the Company on Annex 2 attached hereto. 3. CONDITIONS OF CLOSING. Each Purchaser's obligation to purchase and pay for the Notes to be purchased by such Purchaser hereunder was subject to the satisfaction, on or before the Closing Date, of the following conditions: 3A. OPINION OF PURCHASERS' SPECIAL COUNSEL. Such Purchaser shall have received from Hebb & Gitlin, who is acting as special counsel for the Purchasers in connection with this transaction, a favorable opinion satisfactory to such Purchaser as to such matters incident to the matters herein contemplated as it may reasonably request, substantially in the form of Exhibit B1 attached hereto. 3B. OPINION OF COMPANY'S COUNSEL. Such Purchaser shall have received from Richard Madsen, Esq., general counsel for the Company, a favorable opinion satisfactory to such Purchaser and substantially in the form of Exhibit B2 attached hereto. 3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and warranties contained in paragraph 8 hereof shall be true on and as of the Closing Date, except to the extent of changes caused by the transactions herein contemplated; there shall exist on the Closing Date no Event of Default or Default; and the Company shall have delivered to such Purchaser a certifi-cate dated the Closing Date, substantially in the form of Exhibit C attached hereto, and signed by the officers indicated in such form, to such effect. The Company shall have delivered a certificate dated the Closing Date and signed by the Secretary or an Assistant Secretary of the Company, substantially in the form of Exhibit D attached hereto, with respect to the matters therein set forth. 3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment for the Notes to be purchased by such Purchaser on the Closing Date on the terms and conditions herein provided (including the use of the proceeds of such Notes by the Company) shall not violate any applicable law or governmental regulation (including, without limitation, section 5 of the Securities Act or Regulation G, T or X of the Board of Governors of the Federal Reserve System) and shall not subject such Purchaser to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and such Purchaser shall have received such certificates or other evidence as it may request to establish compliance with this condition. 3E. PROCEEDINGS. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to such Purchaser, and such Purchaser shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request. 3F. SALE OF NOTES TO OTHER PURCHASERS. The Company shall have sold to the other Purchasers the Notes to be purchased by them at the closing and shall have received payment in full therefor. A-7 3G. CLOSING EXPENSES. The Company shall have paid at the closing the statement for fees and disbursements of the special counsel for the Purchasers presented at the closing. 4. PREPAYMENTS. The Notes shall be subject to prepayment with respect to the required prepayments specified in paragraph 4A hereof, prepayment with respect to the optional prepayments permitted by paragraph 4B hereof, repurchase by the Company at the option of each holder as specified in paragraph 4E, paragraph 4G hereof and paragraph 5I hereof. 4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid in full, the Company shall apply to the prepayment of the Notes, without premium, the sum of Eight Million Eight Hundred Fifty Thousand Dollars ($8,850,000) on December 15 in each of the years 1996 to 2001, inclusive, and such principal amounts of the Notes, together with interest thereon to the prepayment dates, shall become due on such prepayment dates. The remaining Eight Million Nine Hundred Thousand Dollars ($8,900,000) in principal amount of the Notes, together with interest accrued thereon, shall become due on the maturity date of the Notes. 4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes shall be subject to prepayment, in whole at any time or from time to time in part (in multiples of $5,000,000), at the option of the Company, at one hundred percent (100%) of the principal amount so prepaid plus interest thereon to the prepayment date and the Yield-Maintenance Amount, if any, with respect to each Note. Any partial prepayment of the Notes pursuant to this paragraph 4B shall be applied in satisfaction of required payments of principal in inverse order of their scheduled due dates. 4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of each Note irrevocable written notice of any prepayment pursuant to paragraph 4B hereof not less than 30, nor more than 60, days prior to the prepayment date, specifying such prepayment date and the principal amount of the Notes, and of the Notes held by such holder, to be prepaid on such date and stating that such prepayment is to be made pursuant to paragraph 4B of this Agreement. Notice of prepayment having been given as aforesaid, the principal amount of the Notes specified in such notice, together with interest thereon to the prepayment date and together with the Yield-Maintenance Amount, if any, with respect thereto, shall become due and payable on such prepayment date. The Company shall, on or before the day on which it gives written notice of any prepayment pursuant to paragraph 4B hereof, give telephonic notice of the principal amount of the Notes to be prepaid and the prepayment date to each Significant Holder which shall have designated a recipient of such notices in the Purchaser Schedule attached hereto or by notice in writing to the Company. In addition, the Company shall, on the day before such prepayment date, deliver, by facsimile, a written notice to such recipient of the amount of the Yield-Maintenance Amount, if any, together with supporting calculations in reasonable detail. 4D. PARTIAL PAYMENTS PRO RATA. Upon any partial prepayment of the Notes pursuant to paragraph 4A or paragraph 4B of this Agreement, the principal amount so prepaid shall be allocated to all Notes at the time outstanding (including, for the purpose of this paragraph 4D only, all Notes prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of the Subsidiaries or Affiliates other than by prepayment pursuant to paragraph 4A, paragraph 4B or paragraph 5I) in proportion to the respective outstanding principal amounts thereof. A-8 4E. RIGHT TO PUT. (I) GRANTING OF PUT. The Company hereby gives and grants to each holder of Notes the option, right and privilege (such option, right and privilege herein collectively referred to as the "Right to Put") to require the Company, upon or after the occurrence of any Designated Event, to purchase from such holder on the terms and conditions hereinafter set forth, and the Company agrees so to purchase from such holder, for an amount equal to the Agreed Put Consideration, all, but not less than all, of the Notes held by such holder. (II) EXERCISE OF PUT. Within ten (10) Business Days after the occurrence of any Designated Event, the Company shall give each holder of Notes substantially simultaneous written notice thereof describing such Designated Event, and the facts and circumstances surrounding the occurrence thereof, in reasonable detail. At any time prior to ninety (90) days after any holder of Notes shall receive such notice, such holder may exercise its Right to Put by delivering to the Company a notice of sale (a "Notice of Sale") substantially in the form of Exhibit E hereto. If a holder of Notes shall deliver a Notice of Sale, the Company shall purchase the Notes then held by such holder on the date specified in such notice (which shall be not less than fifteen (15) days after delivery of such Notice of Sale), and such holder shall sell such Notes to the Company without recourse, representation or warranty (other than as to such holder's full right, title and interest to such Notes free of any adverse claim therein), at a price, payable in immediately available funds by wire transfer to the account specified pursuant to paragraph 11A hereof or to such other account as may be specified in such notice, equal to the Agreed Put Consideration. Promptly after (and, in any event, within two (2) Business Days of) its receipt of any Notice of Sale, the Company shall give substantially simultaneous written notice thereof to all other holders of Notes. Each holder of Notes shall have the rights specified in this paragraph 4E with respect to each Designated Event which shall occur, regardless of any act or omission to act with respect to any previous Designated Event. 4F. RETIREMENT OF NOTES. The Company shall not, and shall not permit any of the Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part prior to their stated final maturity (other than by prepayment pursuant to paragraph 4A or paragraph 4B or upon acceleration of such final maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly or indirectly (other than pursuant to paragraph 4E hereof, paragraph 4G or paragraph 5I hereof), Notes held by any holder unless the Company or such Subsidiary or Affiliate shall have offered to prepay or otherwise retire or purchase or otherwise acquire, as the case may be, the same proportion of the aggregate principal amount of Notes held by each other holder of Notes at the time outstanding upon the same terms and conditions. Any Notes so prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of the Subsidiaries or Affiliates shall not be deemed to be outstanding for any purpose under this Agreement except as provided in paragraph 4D hereof. 4G. TENDER OF NOTES IN PAYMENT OF WARRANT EXERCISE PRICE. The Warrant Agreement will provide that the purchase price for the Warrants issuable thereunder may be paid, in whole or in part, by a tender of Notes. The Company shall be deemed to have reacquired a principal amount of Notes equal to the aggregate principal amount of Notes tendered in payment of the A-9 Warrant exercise price, and such Notes so deemed to have been reacquired shall not be considered outstanding for any purposes of this Agreement. In the event that less than the entire outstanding principal amount of a Note is tendered in payment of the Warrant exercise price, the Company shall issue and deliver to the holder thereof a new Note equal in principal amount to the outstanding principal amount of the Note so tendered less the portion thereof applied to the Warrant exercise price. 5. AFFIRMATIVE COVENANTS. 5A. PAYMENT OF TAXES AND CLAIMS. The Company will, and will cause each Subsidiary to, pay before they become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or its Property, and (ii) all claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons that, if unpaid, will more likely than not 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 in an appropriate manner. 5B. MAINTENANCE OF PROPERTIES AND CORPORATE EXISTENCE; OTHER MATTERS. The Company will, and will cause each Subsidiary to, (I) PROPERTY -- maintain its Property in good condition and make all necessary renewals, replacements, additions, betterments and improvements thereto; (II) INSURANCE -- (a) maintain, with financially sound and reputable insurers, insurance (or maintain self-insurance, including without limitation, insurance with subsidiaries, if that shall be reasonable in the circumstances) with respect to its Property and business against such casualties and contingencies, of such types (including, without limitation, loss or damage, public liability, business interruption, larceny, embezzlement or other criminal misappropriation) and in such amounts as is reasonably appropriate for the risks associated with the business of the Company and the Subsidiaries; and (b) at the request of any Significant Holder, deliver to such Significant Holder for examination, as soon as practicable, policies or certificates of insurance or self-insurance or certificates of insurance brokers evidencing compliance with the provisions of this clause (ii); (III) FINANCIAL RECORDS -- keep true books of records and accounts in which full and correct entries shall be made of all its business transactions so that the financial statements required by paragraph 5D hereof may be prepared in accordance with generally accepted accounting principles as in effect at the time of such preparation; A-10 (IV) CORPORATE EXISTENCE AND RIGHTS -- maintain, preserve and renew the Company's existence as a corporation organized under the laws of a state of the United States of America; (V) COMPLIANCE WITH LAW -- not be in violation of any law, ordinance or governmental rule or regulation to which it is subject (including, without limitation, laws, ordinances, rules or regulations relating to environmental matters) and not fail to obtain any license, permit, franchise or other governmental authorization necessary to the ownership of its Properties or to the conduct of its business, which violation or failure to obtain will, more likely than not, materially adversely affect the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes; (VI) OFFERING OF NOTES -- take no action (and will allow no agent acting on its behalf to take any action) that would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the registration or qualification provisions of any securities or Blue Sky law of any applicable jurisdiction; and (VII) USE OF PROCEEDS -- use the proceeds of sale of the Notes to repay Debt of the Company, to reduce the amount of receivables sold pursuant to the Trade Receivables Agreement and for general corporate purposes. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any "margin stock" as defined in Regulation G (12 CFR Part 207) of the Board of Governors of the Federal Reserve System (herein called "margin stock") or for the purpose of maintaining, reducing or retiring any Debt which was originally incurred to purchase or carry any stock that is currently a margin stock or for any other purpose which might constitute this transaction a "purpose credit" within the meaning of such Regulation G. Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or the Notes to violate Regulation G, Regulation T, Regulation U, Regulation X or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as was in effect on the Closing Date, as is now in effect or as the same may hereafter be in effect. 5C. PAYMENT OF NOTES AND MAINTENANCE OF OFFICE. The Company will punctually pay, or cause to be paid, the principal and interest (and Yield- Maintenance Amount, if any) to become due in respect of the Notes according to the terms thereof and shall maintain an office at the address of the Company set forth in paragraph 11K hereof where notices, presentations and demands in respect of this Agreement or the Notes may be made upon it. Such office shall be maintained at such address until such time as the Company shall notify in writing the holders of the Notes of any change of location of such office. 5D. FINANCIAL STATEMENTS. The Company covenants that it will deliver to each Significant Holder in quadruplicate: (i) as soon as practicable and in any event within sixty (60) days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, consolidated statements of income and cash flows of the Company and the Subsidiaries A-11 for such period and for the period from the beginning of the current fiscal year to the end of such quarterly period, and a consolidated balance sheet of the Company and the Subsidiaries as at the end of such quarterly period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year, accompanied by additional financial statements containing the same information prepared in accordance with generally accepted accounting principles as then in effect if the accounting principles applied by the Company in the preparation of the financial statements first described in this clause (i) differ in any material respect from generally accepted accounting principles as then in effect, in both cases in reasonable detail and satisfactory in form to the Required Holders and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments, provided, however, that so long as the accounting principles applied by the Company in the preparation of the financial statements first described in this clause (i) do not differ in any material respect from generally accepted accounting principles as then in effect, delivery pursuant to clause (iii) below of copies of the Quarterly Report on Form 10-Q of the Company for such quarterly period filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (i) (provided that such Form 10-Q is accompanied by any other financial information incorporated by reference in such Form 10-Q, and provided further, that the Company provide to each holder of Notes who so requests in writing any document incorporated by reference in such Form 10-Q); (ii) as soon as practicable and in any event within 90 days after the end of each fiscal year, consolidating and consolidated statements of income and cash flows and a consolidated statement of stockholders' equity of the Company and the Subsidiar-ies for such year, and a consolidating and consolidated balance sheet of the Company and the Subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit, accompanied by additional financial statements containing the same information prepared in accordance with generally accepted accounting principles as then in effect if the accounting principles applied by the Company in the preparation of the financial statement first described in this clause (ii) differ in any material respect from generally accepted accounting principles as then in effect, in both cases all in reasonable detail and satisfactory in form to the Required Holders and, as to the consolidated statements prepared in accordance with generally accepted accounting principles as then in effect, reported on by independent public accountants of recognized national standing selected by the Company whose report shall be without limitation as to the scope of the audit and satisfactory in form and substance to the Required Holders and, as to the consolidating statements and financial statements not certified by such independent public accountants, certified by an authorized financial officer of the Company, provided, however, that so long as the accounting principles applied by the Company in the preparation of the financial statements first described in this clause (ii) do not differ in any material respect from generally accepted accounting principles as then in effect, delivery pursuant to clause (iii) below of copies of the Annual Report on Form 10-K of the Company for such fiscal year filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (ii) (provided that such Form 10-K is accompanied by any other financial information incorporated by reference in such Form 10-K, and provided further, that the Company provide to each holder of Notes who so requests in writing any document incorporated by reference in such Form 10-K); A-12 (iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its public stockholders and copies of all registration statements (without exhibits) and all reports which it files with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission); (iv) a copy of each other report submitted to the Company or any Subsidiary by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company or any Subsidiary (to be provided to each Significant Holder at such time, if any, as the contents of or analysis contained within any such report is (or becomes likely to be) incorporated into a Form 10-Q or a Form 10-K filing to be made by the Company with the Securities and Exchange Commission); (v) copies of all agreements governing and instruments evidencing Debt (other than Debt of a type described in subsection (vi) of the definition of Debt) of the Company or any Consolidated Subsidiary containing any Financial Covenant, and all agreements amending, modifying or supplementing any such agreement or instrument affecting, adding or deleting any Financial Covenant, in each case, entered into on or after the First Amendment Date; (vi) all certificates and notices delivered or required to be delivered to the holders of any other Debt of the Company or any Consolidated Subsidiary on or after the First Amendment Date, in each case, in connection with the compliance by the Company or any Consolidated Subsidiary with any Financial Covenant; and (vii) with reasonable promptness, such other financial data as such Significant Holder may reasonably request. Together with each delivery of financial statements required by clauses (i) and (ii) above, the Company will deliver to each Significant Holder an Officer's Certificate (a) demonstrating (with computations in reasonable detail, where appropriate) compliance by the Company and the Subsidiaries with the provisions of paragraph 6A through paragraph 6M hereof and paragraph 5I, (b) demonstrating a reconciliation in reasonable detail of the differences between financial statements prepared in accordance with generally accepted accounting principles as then in effect and any other similar financial statements provided contemporaneously therewith prepared other than in accordance with generally accepted accounting principles, (c) stating that there exists no Event of Default or Default, or, if any Event of Default or Default exists, specifying the nature and period of existence thereof and what action the Company proposes to take with respect thereto, and (d) stating whether or not there has been any material change in the self-insurance requirements of the Company. Together with each delivery of financial statements required by clause (ii) above, the Company will deliver to each Significant Holder a certificate of such accountants stating that, in making the audit necessary for their report on such financial statements, they have obtained no knowledge of any Event of Default or Default, or, if they have obtained knowledge of any Event of Default or Default, specifying the nature and period of existence thereof. Such accountants, however, shall not be liable to anyone by reason of their failure to obtain knowledge of any Event A-13 of Default or Default which would not be disclosed in the course of an audit conducted in accordance with generally accepted auditing standards. 5E. DEFAULT NOTICES. The Company covenants that immediately after any Responsible Officer obtains knowledge of an Event of Default or Default, it will deliver to each Significant Holder an Officer's Certificate specifying the nature and period of existence thereof and what action the Company proposes to take with respect thereto. 5F. INFORMATION REQUIRED BY RULE 144A. The Company covenants that it will, upon the request of any Significant Holder, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such Significant Holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to the reporting requirements of sections 13 or 15(d) of the Exchange Act. For the purpose of this paragraph 5F, the term "qualified institutional buyer" shall have the meaning specified in Rule 144A under the Securities Act. 5G. INSPECTION OF PROPERTY. The Company will permit any Person designated in writing by any Significant Holder, at such Significant Holder's expense (or if an Event of Default or a Default shall exist, at the expense of the Company), to visit and inspect any of the Properties of the Company and the Subsidiaries, to examine the corporate books and financial records of the Company and the Subsidiaries and make copies thereof or extracts therefrom, all at such reasonable times and as often as such Significant Holder may reasonably request. In addition, so long as (i) a Default or an Event of Default shall have occurred and be continuing, (ii) in the reasonable judgment of any Significant Holder, a material adverse change shall have occurred with respect to the business or financial condition of the Company and the Subsidiaries taken as a whole, or (iii) any Significant Holder shall have a reasonable basis for questioning the validity of any line item in any financial statement of the Company or the validity of such financial statement as a whole, the Company will permit any Person designated in writing by any Significant Holder to discuss the affairs, finances and accounts of any of such corporations with the principal officers of the Company and its independent public accountants, all at such reasonable times and as often as such Significant Holder may reasonably request. 5H. COVENANT TO SECURE NOTE EQUALLY. The Company covenants that, if it or any Subsidiary shall create or assume any Lien upon any of its Property, whether now owned or hereafter acquired, other than Liens permitted by the provisions of paragraph 6A hereof or any similar provision incorporated herein by reference (unless prior written consent to the creation or assumption thereof shall have been obtained pursuant to paragraph 11C hereof), it will make or cause to be made effective provision whereby the Notes will be secured by such Lien equally and ratably with any and all other Debt thereby secured so long as any such other Debt shall be so secured. A-14 5I. INVOLUNTARY PREPAYMENT. (i) Upon the occurrence of any Prepayment Event, the Company shall make an offer to the holders of Notes to repurchase the Notes as set forth in this paragraph 5I. Immediately upon the occurrence of the Prepayment Event but in any event within five (5) Business Days thereafter, the Company shall give each holder of the Notes substantially simultaneous written notice thereof describing such Prepayment Event in reasonable detail including, without limitation, a description of the issue of Debt giving rise to such Prepayment Event, the facts and circumstances surrounding the occurrence thereof, the manner of the prepayment, redemption or defeasance of such other Debt in connection therewith and the manner specified in this paragraph 5I of accepting or rejecting such offer by the holder. Such notice shall also contain the Company's offer (the "Prepayment Offer") to purchase from each such holder of Notes a principal amount of the Notes held by such holder equal to its Noteholder Share of the Ratable Prepayment Amount at a purchase price equal to the Agreed Put Consideration. (ii) A holder of Notes may accept the Prepayment Offer, in whole or in part, through a written acceptance (the "Noteholder Acceptance") delivered to the Company within forty-five (45) days of such holder's receipt of the Prepayment Offer (the "Offer Period"). Promptly after (and, in any event, within two (2) Business Days of) its receipt of any Noteholder Acceptance, the Company shall give substantially simultaneous written notice thereof to all other holders of Notes. (iii) If such holder shall accept the offer, the Company shall purchase that portion (the "Prepayment Portion"), expressed as a percentage, of the principal amount of Notes held by such holder specified in its Noteholder Acceptance, provided that the principal amount of Notes the Company is required to purchase shall not exceed such holder's Noteholder Share of the Ratable Prepayment Amount. Such purchase shall be made on the fifteenth (15th) day after the expiration of the Offer Period or, if later, the first day on which any holder of any other issue of Debt would receive a prepayment in respect of such Prepayment Event but in no event later than sixty (60) days after the expiration of the Offer Period. On the date of purchase, such holder shall sell the Prepayment Portion of such Notes to the Company without recourse, representation or warranty (other than as to such holder's full right, title and interest to the Prepayment Portion of such Notes free of any adverse claim created by such holder therein), at a price, payable in immediately available funds by wire transfer to the account specified pursuant to paragraph 11.A hereof or to such other account as may be specified in such notice, equal to the Agreed Put Consideration. (iv) Upon any partial prepayment of a Note pursuant to this paragraph 5I, such Note may, at the option of the holder thereof, be: (a) surrendered to the Company, in which case the Company shall promptly execute and issue to the holder thereof a new Note in a principal amount equal to the principal amount remaining unpaid on the surrendered Note after giving effect to such prepayment; or A-15 (b) made available to the Company for notation thereon of the portion of the principal so prepaid. In case the entire principal amount of any Note is prepaid, such Note shall be surrendered to the Company for cancellation and shall not be reissued, and no Note shall be issued in lieu of the prepaid principal amount of any Note. (v) If the occurrence of any Prepayment Event causes the Company or any Subsidiary to defease, prepay, repurchase or have a reduction in the available commitment under any issue of Debt prior to the time that any Notes would be repurchased hereunder, then simultaneously with such defeasance, prepayment, repurchase or reduction in respect of such other Debt, the Company shall pay to each holder an amount equal to its Noteholder Share of the Ratable Prepayment Amount at a purchase price equal to the Agreed Put Consideration, which payment shall satisfy all obligations of the Company to the holders in respect of clauses (i) through (iii), inclusive, of this paragraph 5I. At the time of the making of such payment, the Company shall notify the holder of such payment in writing, which notice shall state that such payment is being made pursuant to this paragraph 5I(v), shall contain a description of the issue of Debt giving rise to such Prepayment Event, the facts and circumstances surrounding the occurrence thereof and the manner of the prepayment, redemption or defeasance of such other Debt in connection therewith (unless such information shall have been contained in a previously delivered notice pursuant to paragraph 5I(i) with respect to such Prepayment Event) and describe the procedure detailed in this paragraph 5I(v) pursuant to which a holder may elect to rescind such payment. In the event that a holder of Notes receiving a payment pursuant to this paragraph 5I(v) elects to rescind the prepayment arising from such Prepayment Event with respect to all Notes or any portion of the Notes held by such holder, such holder shall deliver to the Company, within forty-five (45) days of such holder's receipt of the notice specified in this paragraph 5I(v), written notice of such recision, and shall contemporaneously pay to the Company in immediately available funds an amount equal to the amount so paid such holder pursuant to this paragraph 5I(v) or, in the case of a recision with respect to only a portion of the prepayment made to such holder, an amount equal to that portion of such prepayment which such holder wishes to rescind. (vi) Each holder of Notes shall have the rights specified in this paragraph 5I with respect to each Prepayment Event which shall occur, regardless of any act or omission to act with respect to any previous Prepayment Event. In the event that the Prepayment Event is also a Designated Event subject to paragraph 4 of this Agreement, the Company shall comply with the provisions of clause (v) of this paragraph 5I with respect to the matters contained therein; in all other respect such Designated Event will be treated as a Designated Event and not as a Prepayment Event, and the Company will be required to comply with paragraph 4E in connection therewith. In the event that the Prepayment Event would also be an event which results in an Event of Default, this paragraph 5I shall not be deemed to in any respects limit the rights and remedies of the holders under paragraph 7. A-16 (vii) Prepayments made pursuant to this paragraph 5I shall be applied ratably to the obligations of the Company to make required prepayments in respect of the Notes pursuant to paragraph 4A hereof and to pay the remaining principal amount thereof at maturity. 6. NEGATIVE COVENANTS. 6A. LIMITATIONS ON LIENS. (I) NEGATIVE PLEDGE. The Company will not, and will not permit any Subsidiary to, create, assume, or suffer to exist any Lien upon any of the Property of the Company or any Subsidiary, whether now owned or hereafter acquired, except: (a) Liens securing Debt and other obligations in an aggregate principal amount at any time not exceeding ten percent (10%) of Consolidated Tangible Net Worth at such time, provided, however, that neither the Company nor any Subsidiary shall create, assume or otherwise incur any Lien upon any of its respective Properties unless the Company is in compliance with paragraph 6L of this Agreement; (b) Liens arising out of transactions contemplated by the terms of the Trade Receivables Agreement; (c) Purchase Money Mortgages if, after giving effect thereto and to any concurrent transactions: (I) each such Purchase Money Mortgage secures an amount not exceeding one hundred percent (100%) of the cost of the particular Property to which it relates (or, in the case of a Lien existing on any Property of any corporation at the time it becomes a Subsidiary, the Fair Market Value of such Property at such time); (II) such Purchase Money Mortgage encumbers only Property (A) purchased after the Closing Date and (B) acquired with the proceeds of the Debt secured thereby; and (III) such Property was acquired in the ordinary course of business of the corporation acquiring such Property, provided, however, that neither the Company nor any Subsidiary shall create, assume or otherwise incur any Purchase Money Mortgage unless the Company is in compliance with paragraph 6L of this Agreement; (d) Liens incurred in connection with Lease Transactions to the extent that such Liens encumber Property covered by such Lease Transactions; provided, however, that neither the Company nor any Subsidiary shall create, assume or otherwise incur any such Liens unless the Company is in compliance with paragraph 6L of this Agreement, and provided further that, immediately after A-17 giving effect to the investment of the Company or the Subsidiary in such Lease Transaction, the aggregate amount of the investments then outstanding of the Company and the Subsidiaries in all Lease Transactions does not exceed Fifty Million Dollars ($50,000,000), it being agreed that for the purpose of such calculation the amount of each investment shall be determined on a Net After-Tax Cash Basis; (e) Liens upon San Marcos Bonds, and the proceeds thereof, which have been repurchased upon tender by the holders thereof in accordance with the terms of the indenture governing such San Marcos Bonds, until, but only until, the trustee with respect to such San Marcos Bonds has received the purchase price therefor upon the remarketing thereof and the issuer of the letter of credit that was drawn in connection with such tender has been reimbursed for such amounts drawn; provided, however, that the Company shall actively seek to remarket such bonds pursuant to the provisions of the IDB Financing of the Company's San Marcos, Texas facility or, to the extent necessary in connection with any termination of any outstanding letter of credit relating to such facility, to modify the structure of such IDB Financing to the extent necessary to permit a long-term reissuance of the repurchased San Marcos Bonds; and (f) unless, at the time of incurrence thereof, a Default or an Event of Default shall occur or be continuing, Liens incurred in connection with the deposit of cash collateral to secure reimbursement obligations of the Company relating to the San Marcos Bonds, but only in connection with the extension of an outstanding letter of credit relating to such facility and only in an amount of cash collateral not exceeding the maximum amount which may be drawn under such letter of credit; provided, however, that the Company shall actively seek to obtain a replacement letter of credit that does not require cash collateralization (and thus relieves the Company of any requirement to deposit cash collateral or to secure such reimbursement obligations); it being understood that each such Lien may be allocated by the Company to any one of the preceding categories in which it may, by the terms of such category, be included. (II) FINANCING STATEMENTS. The Company will not, and will not permit any Subsidiary to, sign or file a financing statement under the Uniform Commercial Code of any jurisdiction that names the Company or such Subsidiary as debtor, or sign any security agreement authorizing any secured party thereunder to file any such financing statement, except, in any such case, a financing statement filed or to be filed to perfect or protect a Lien that the Company or such Subsidiary is entitled to create, assume or incur, or permit to exist, under the foregoing provisions of this paragraph 6.A or to evidence for informational purposes a lessor's interest in Property leased to the Company or any such Subsidiary. A-18 6B. LIMITATIONS ON LEASES. (I) LIMITATIONS ON LEASES. The Company will not, and will not permit any Subsidiary to, at any time be or become liable at any time as lessee under any lease (other than a lease giving rise to a Capitalized Lease Obligation) having an original (or then unexpired) term of one year or more if: (a) the aggregate Net Rentals payable in any period of twelve (12) consecutive calendar months following such time under such lease and all other such leases under which the Company or a Subsidiary is lessee, minus (b) all amounts of a similar nature due from sub-lessees under such leases that are reasonably expected to be collected during the same period, would exceed ten percent (10%) of Consolidated Tangible Net Worth at such time. (II) SUBSIDIARY. Any corporation that becomes a Subsidiary after the Closing Date shall be deemed to have become liable as lessee, at the time it becomes a Subsidiary, under all leases (under which it is liable as lessee) of such corporation existing immediately after it becomes a Subsidiary. 6C. LIMITATIONS ON INDEBTEDNESS. The Company will not, and will not permit any Subsidiary to, create, issue, assume or guarantee any Debt (other than Intercompany Debt) except that: (i) on or prior to April 26, 1997: (a) the Company may incur Debt under the Credit Agreement or an Acceptable Replacement Credit Facility; (b) the Company may incur the 1994 Senior Debt and the 1994 Subordinated Debt; (c) the Company and the Subsidiaries may incur unsecured Debt, in an aggregate principal amount not to exceed $10,000,000 at any time outstanding; provided, however, that no more than $5,000,000 of such amount may be Debt of Subsidiaries; (d) the Subsidiaries may incur Debt under revolving credit facilities so long as the aggregate amount of all such Debt outstanding at any time shall not exceed $5,000,000; (e) the Company and the Subsidiaries may incur Debt described in clause (vi) of the definition of "Debt" contained in paragraph 10B; (f) Debt incurred in connection with the resale or remarketing of San Marcos Bonds, but only to the extent that: A-19 (I) San Marcos Bonds in an aggregate principal amount of Sixteen Million Five Hundred Thousand Dollars ($16,500,000) were issued and outstanding and held and owned by Persons other than the Company, any Subsidiary or any Affiliate on May 10, 1994; and (II) the San Marcos Bonds to be resold or remarketed were repurchased by the Company upon tender by the holders thereof after May 10, 1994 in accordance with the terms of the indenture governing the San Marcos Bonds; and (g) replacement unsecured San Marcos Bonds, in an aggregate principal amount not exceeding Sixteen Million Five Hundred Thousand Dollars ($16,500,000), if, and only if, Sixteen Million Five Hundred Thousand Dollars ($16,500,000) in aggregate amount of San Marcos Bonds were redeemed in full as a result of the failure of the bank which has issued any letter of credit relating to the San Marcos Bonds to extend or renew such outstanding letter of credit (for the avoidance of doubt, the aggregate principal amount of San Marcos Bonds and replacement San Marcos Bonds, whether outstanding on the date hereof or thereafter issued pursuant to clause (f) or clause (g) of this paragraph 6C(i), shall not exceed Sixteen Million Five Hundred Thousand Dollars ($16,500,000) at any time); in each case, so long as after the incurrence thereof, and after giving effect thereto, no Default or Event of Default (including any Default or Event of Default arising out of any breach of paragraph 6R hereof) shall have occurred or be continuing; and (ii) on or after April 27, 1997, and at any time during any period set forth in the tables below, the Company or any Subsidiary may incur Debt if, immediately after giving effect to such incurrence of Debt: (a) Consolidated Senior Debt would not exceed the percentage applicable to such period of the sum of Consolidated Total Debt plus Consolidated Tangible Net Worth, all as set forth in the table immediately below:
If such time occurs during the period: Percentage: ------------------------------------- ---------- From April 27, 1997 through and including July 31, 1998 38.00% At all times on or after August 1, 1998 35.00%;
and (b) Combined Subsidiary Debt would not exceed five percent (5%) of Consolidated Tangible Net Worth; A-20 and so long as after the incurrence thereof, and after giving effect thereto, no Default or Event of Default (including any Default or Event of Default arising out of any breach of paragraph 6L or paragraph 6R hereof) shall have occurred or be continuing. 6D. LIMITATIONS ON MERGERS AND SALES OF ASSETS. The Company will not, and will not permit any Subsidiary to (whether in a single transaction or a series of transactions), consolidate with, merge into or transfer substantially all of its Property (whether now owned or hereafter acquired) to any other Person, or permit any other Person to consolidate with, merge into, or transfer substantially all of its Property to, the Company, except that any Subsidiary may merge or consolidate with or into, or transfer substantially all of its Property to, or acquire substantially all of the Property of, any other Person and the Company may merge or consolidate with or into, or acquire substantially all of the Property of, any other Person, if: (i) in the case of any merger or consolidation involving the Company, the corporation that results from such merger or consolidation is organized under the laws of the United States of America or any jurisdiction thereof and such corporation expressly assumes in writing the due and punctual payment of the principal of, and Yield-Maintenance Amount, if any, and interest on, all of the Notes, according to their tenor, and the due and punctual performance and observance of all the covenants in the Notes and this Agreement to be performed or observed by the Company, all in an agreement or instrument satisfactory in form and substance to the Required Holders; (ii) immediately after the consummation of the transaction, and after giving effect thereto, the Company, the corporation that results from any such merger or consolidation with the Company or the Person that acquires such Property from the Company, and in each case, its Subsidiaries shall be engaged principally in the businesses of either or both of manufacturing and distributing aerospace products or technically related products and of providing services related to such products; (iii) immediately after the consummation of the transaction, and after giving effect thereto, no Event of Default or Default would exist; and (iv) immediately after the consummation of the transaction, and after giving effect thereto, the Company could incur at least One Dollar ($1.00) of additional Debt pursuant to paragraph 6.C hereof. 6E. ADJUSTED CONSOLIDATED TANGIBLE NET WORTH MAINTENANCE. The Company will maintain at all times Adjusted Consolidated Tangible Net Worth of not less than the sum of: (i) $125,000,000; plus (ii) the sum of the Fiscal Quarter Net Worth Increase Amounts for each fiscal quarter of the Company ended after July 31, 1994; plus (iii) the aggregate amount of all capital contributions (which amount shall include, without limitation, all amounts attributable to the conversion of debt of the Company to equity of the Company, valued at the amount added to A-21 stockholders' equity in accordance with GAAP) received by the Company or any Consolidated Subsidiary (in each case, other than contributions originally made by the Company or any Consolidated Subsidiary) in cash, in Property other than cash or by conversion of Debt of the Company at any time after the Third Amendment Date. 6F. LIMITATIONS ON DISTRIBUTIONS. (I) LIMIT ON DISTRIBUTIONS. The Company will not, and will not permit any Subsidiary to, at any time declare or make or incur any liability to declare or make any Distribution; provided, however, that: (a) the Company may, repurchase, purchase, redeem or otherwise acquire shares of its common stock or warrants, rights or options to acquire such stock issued pursuant to Restricted Stock Plans, Stock Option Plans, Stock Incentive Plans, the Rights Agreement, the ESOP, or Non-Employee Directors Stock-Option Plans; (b) the Company may declare or make any Distribution if, immediately after giving effect to such Distribution, (I) the Debt Ratio would not exceed 2.50:1.00; (II) the Company could incur $1.00 of additional Debt pursuant to paragraph 6.C hereof; (III) if the time of declaration or making, as the case may be, of such Distribution is on or prior to April 26, 1997, Consolidated Senior Debt at such time would not exceed thirty- eight percent (38%) of the sum of Consolidated Total Debt plus Consolidated Tangible Net Worth at such time; and (IV) after giving effect to such transactions, no Event of Default or Default would then exist; and (c) the Company may declare or make any Permitted Preferred Dividend if, prior to and immediately after giving effect to such Permitted Preferred Dividend, no Default or Event of Default shall exist. (II) TIME OF PAYMENT. The Company will not authorize a Distribution on its capital stock which is not payable within sixty (60) days of authorization. A-22 6G. FIXED CHARGE COVERAGE. The Company will maintain for each day a ratio of Consolidated Net Income Available for Fixed Charges for the period of 365 consecutive days (or 366 consecutive days for any such period that includes February 29) ending on such day to Consolidated Fixed Charges for such period, of not less than the ratio set forth in the chart below opposite the period set forth below in which such day occurs:
Period Ratio ------ ----- Fiscal Year 1994 1.40 to 1.00 Fiscal Year 1995 1.55 to 1.00 Fiscal Year 1996 1.90 to 1.00 Fiscal Year 1997 and thereafter 2.00 to 1.00;
6H. LIMITATIONS ON CAPITAL EXPENDITURES. The Company will not, and will not permit any Subsidiary to, make, on or before April 26, 1997, any expenditures for fixed or capital assets which would cause the aggregate of all such expenditures made by the Company and the Subsidiaries in any period of four full consecutive fiscal quarters to exceed the sum of the amounts set forth below opposite such four fiscal quarters:
Fiscal Quarters Amount --------------- ------ Each Fiscal Quarter 1994 $4,500,000 Each Fiscal Quarter 1995 $6,000,000 Each Fiscal Quarter 1996 $7,500,000 Each Fiscal Quarter 1997 $7,500,000.
6I. PRIVATE OFFERING. The Company will not, and will not permit anyone acting on its behalf to, 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. 6J. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not permit any Subsidiary to, sell or transfer any Property to, or purchase or acquire any Property of, or otherwise engage in any other transaction with, any Affiliate, except at prices and on terms and conditions not less favorable to the Company or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, provided, however, that this paragraph 6J shall not prohibit any transaction between (i) the Company or any Subsidiary and (ii) any Affiliate that is an EEC Affiliate, if such transaction will not have a material, adverse effect on the business, condition (financial or otherwise) or operations of the Company, any Subsidiary or any EEC Affiliate. 6K. LINE OF BUSINESS. The Company shall not, nor shall it permit any Subsidiary to, make any change in the nature of its business if such change would constitute a material change in the nature of the business of the Company and the Subsidiaries taken as a whole as conducted on the Closing Date, or commence or permit any Subsidiary to commence any major project for the development of a new line of products or services other than aerospace products or technically related products or services related to such products; provided that the Company or any Subsidiary may commence any project for the development of such new line of products A-23 or services if, and only if, the aggregate costs and expenses related to all such projects (including, without limitation, budgeted costs (determined from time to time) for such new project minus any reasonably budgeted reimbursements for such costs due from parties other than the Company or the Subsidiaries) shall not exceed ten percent (10%) of Consolidated Tangible Net Worth at the time each such project is commenced. 6L. LIMITATION ON CERTAIN OBLIGATIONS. The Company will not at any time permit the sum of (w) obligations secured by Liens allocated by the Company to the category described in paragraph 6A(i)(a) hereof, (x) obligations secured by Liens allocated by the Company to the category described in paragraph 6A(i)(c) hereof, (y) obligations secured by Liens allocated by the Company to the category described in paragraph 6A(i)(d) hereof which obligations were incurred on or subsequent to the Closing Date, and (z) Combined Subsidiary Debt, in each case at such time, to exceed fifteen percent (15%) of Consolidated Tangible Net Worth at such time. 6M. INCORPORATION OF NEGATIVE COVENANTS. (i) During all such times as both the Credit Agreement shall remain in force, and either any Debt shall be outstanding thereunder or the lenders party thereto shall have any obligation to lend or make advances thereunder: (a) the provisions of paragraph 6A (except for clauses (i)(e) and (i)(f) thereof, to the extent provided in paragraph 6M(i)(c) below) and paragraph 6B of this Agreement shall be of no force and effect; (b) the provisions of Sections 5.02(b), 5.02(c), 5.02(d), 5.02(e), 5.02(g), 5.02(h) and 5.02(i) of the Credit Agreement, as in effect on the Third Amendment Date (after giving effect to the Seventh Amendment to the Credit Agreement), but without amendment, supplement or modification (except as set forth in paragraph 6M(ii) hereof), and together with all relevant definitions pertaining thereto, shall be incorporated herein by reference, mutatis mutandis; (c) the Company shall not, nor shall it permit any Subsidiary to, create, assume or suffer to exist any Lien securing any Debt existing on the date hereof or incurred thereafter in connection with any IDB Financing, except for such Liens as are expressly permitted by the provisions of clause (e) or clause (f) of paragraph 6A(i) hereof; provided, however, that at all times during which either the Credit Agreement shall be of no force or effect, or there shall be no Debt outstanding thereunder and no obligation on the part of the lenders thereto to lend or make any advance thereunder, the provisions of paragraph 6A and paragraph 6B of this Agreement shall be in full force and effect. (ii) If at any time: (a) after the Third Amendment Date, the Credit Agreement is amended, supplemented or modified to provide Financial Covenants in addition to, or which are more restrictive of the Company or the Consolidated Subsidiaries than, the provisions of the Credit Agreement, as in effect on the Third Amendment Date A-24 (after giving effect to the Seventh Amendment to the Credit Agreement dated as of such date); (b) after the First Amendment Date, the Company enters into any other agreement governing, or executes any other instrument evidencing, any Debt (or any commitment to lend), other than Debt or commitments solely among the Company and/or one or more Consolidated Subsidiaries; or (c) after the First Amendment Date, the Company enters into any amendment, supplement or modification of any agreement governing, or any instrument evidencing, any Debt (or any commitment to lend), other than Debt or commitments solely among the Company and/or one or more Consolidated Subsidiaries; then, and in each such case, each Financial Covenant set forth in such amendment, supplement, modification or other agreement or instrument shall be incorporated by reference herein for the remaining term of such agreement or instrument, but only to the extent that such covenant is more restrictive of the Company or the Consolidated Subsidiaries than the corresponding provision of this Agreement. (iii) In the event that any Financial Covenant contained in any other agreement governing, or instrument evidencing, any Debt (or commitment to lend), which Financial Covenant has been or is incorporated into this Agreement pursuant to the provisions of paragraph 6M(ii) hereof, is amended, supplemented or modified to make such Financial Covenant less restrictive of the Company or the Consolidated Subsidiaries than the incorporated Financial Covenant, the more restrictive incorporated Financial Covenant shall continue to be incorporated herein for the remaining term of such agreement or instrument notwithstanding such amendment, supplement or modification. Notwithstanding the foregoing sentence, if the provisions of such incorporated Financial Covenant were expressed when incorporated to be more restrictive on a temporary basis, or more restrictive only for a prescribed period, such more restrictive provision shall be incorporated herein only on such temporary basis or only for such prescribed period, as the case may be. (iv) No Financial Covenant incorporated herein by virtue of paragraph 6M(ii) or paragraph 6M(iii) hereof shall supersede, replace, amend, supplement or modify any other provision of this Agreement, including any covenant contained herein which addresses a subject matter similar to that of such incorporated Financial Covenant. 6N. MAINTENANCE OF SENIOR STATUS. The Company will not take any action at any time to amend, modify or supplement any subordination provision (or any definition of any defined term as used in any such provision) in the Existing Subordinated Notes, the 1994 Subordinated Notes or any indenture governing the provisions of any thereof, or otherwise take any action which would result in any of the Existing Subordinated Notes or 1994 Subordinated Notes not being junior or subordinated in right of payment to the Notes to the same extent such Existing Subordinated Notes or 1994 Subordinated Notes, as the case may be, are subordinated to the Notes on the Third Amendment Date (after giving effect to the issuance of the 1994 Subordinated Notes). The Company shall not take any action which would result in the Notes not constituting, A-25 or not being fully entitled to the benefits of, "Senior Indebtedness" and "Designated Senior Indebtedness" as defined in the indenture governing the 1994 Subordinated Notes. 6O. CERTAIN AMENDMENTS. The Company shall not, nor shall it permit any Consolidated Subsidiary to, consent to any amendment, modification, supplement or waiver of: (i) any of the provisions of any of Sections 3.02, 3.03, 3.04 or 3.05 of the Credit Agreement, as in effect on the Third Amendment Date (after giving effect to the Seventh Amendment to the Credit Agreement), or any other provision referred to therein or any defined term as used therein, other than a waiver by the banks party thereto of any condition set forth therein; or (ii) any other provision of the Credit Agreement or, prior to April 25, 1997, any Acceptable Replacement Credit Facility, to the extent that such amendment, modification, supplement or waiver would have the effect of: (a) reducing the amount or availability of credit thereunder, changing the timing of or reducing the commitments of the lenders thereunder to lend or make credits available pursuant thereto; (b) making more restrictive upon the Company any condition precedent to the funding of the credits available thereunder; (c) requiring the Company or any Subsidiary to grant any lender thereunder any Lien securing the obligations thereunder; or (d) requiring the Company or any Subsidiary to maintain any deposit accounts in any minimum amount, compensating balances, cash management or clearing house relationship or similar arrangements, with the lenders thereunder; in each case, without the prior written consent of the Required Holders. 6P. SALES OF ASSETS. The Company will not, and will not permit any Consolidated Subsidiary to, at any time after the First Amendment Date, sell, lease, transfer or otherwise dispose of any Property (except for sales of inventory and of obsolete or surplus Property in the ordinary course of business, sales of accounts receivable, the issuance of director's qualifying shares and sales, leases, transfers or other dispositions of Property to the Company or a Consolidated Subsidiary (collectively, "Excepted Property")); provided, however, that the foregoing restrictions shall not apply to the sale, lease, transfer or other disposition of any such Property to any Person if all of the following conditions are met: (i) the book value of all such Property then being sold, leased, transferred or otherwise disposed of, together with the book value of all other Property (other than Excepted Property) sold, leased, transferred or otherwise disposed of by the Company and the Consolidated Subsidiaries since the First Amendment Date shall not, in the aggregate, exceed ten percent (10%) of Consolidated Tangible Assets, determined as of the end of the then most recently ended fiscal quarter of the Company; A-26 (ii) in the case of the sale, lease, transfer or other disposition of a Consolidated Subsidiary (whether by disposition of any capital stock of such Consolidated Subsidiary, the Property thereof or otherwise) or a line or segment of business of the Company or a Consolidated Subsidiary, in either case, substantially as an entirety (except with respect to the sale, lease, transfer or other disposition of capital stock of a Consolidated Subsidiary), the sum of: (A) that portion, expressed as a percentage, of Gross Operating Income attributable to or contributed by all Property of a type described in this paragraph 6P(ii) and then being sold, leased, transferred or otherwise disposed of, for the period of eight (8) full consecutive fiscal quarters most recently ended on or prior to the date of such sale, lease, transfer or other disposition; plus (B) with respect to each other sale, lease, transfer or other disposition of Property of a type described in this paragraph 6P(ii) occurring during the period beginning on the later of the First Amendment Date and the beginning of the eight full (8) fiscal quarters of the Company most recently ended prior to the consummation of the transaction referred to in clause (A) above, and ending on the date of the transaction referred to in clause (A) above, that portion, expressed as a percentage, of Gross Operating Income attributable to or contributed by such Property described in this clause (B) for the period of eight (8) full consecutive fiscal quarters most recently ended on or prior to the date of such sale, lease, transfer or other disposition thereof; shall not exceed ten percent (10%); (iii) in the good faith opinion of the board of directors of the Company (or a committee of such board to whom such matter has been properly delegated), the sale, lease, transfer or other disposition is for Fair Market Value and is in the best interests of the Company; and (iv) immediately after the consummation of such sale, lease, transfer or other disposition, and after giving effect thereto, no Default or Event of Default would exist. Sales and other dispositions of accounts receivable shall be subject to paragraph 6Q of this Agreement. Sales of all or any portion of the capital stock of a Consolidated Subsidiary shall, for purposes of determining the book value thereof in clause (i) above, be deemed to be the sale of all or such portion of the book value of the assets of the Consolidated Subsidiary which shall have issued such capital stock. Sales of all or a portion of the capital stock of any Consolidated Subsidiary shall, for purposes of determining its contribution to Gross Operating Income in clause (ii) above, be deemed to have contributed all or such portion of that proportion of Gross Operating Income attributable to the Consolidated Subsidiary which shall have issued such capital stock. As used in this paragraph 6P, the term `lease' shall mean an original lease, as lessor, by the Company or any Consolidated Subsidiary, and the continuance, extension or renewal of any existing lease shall not be treated as a lease pursuant to, or restricted by, this paragraph 6P. A-27 6Q. SALE OF RECEIVABLES. The Company covenants that it will not, and will not permit any Consolidated Subsidiary to, sell with recourse or otherwise sell for less than the face value thereof, any of its notes or accounts receivable, except pursuant to the Trade Receivables Agreement; provided, however, that the Company and any Consolidated Subsidiary may sell for book value the accounts receivable owing from any Person (i) that has commenced a voluntary case under the Bankruptcy Law of the United States or any proceedings under the Bankruptcy Law of any other jurisdiction, or (ii) against whom any such case or proceedings have been commenced and have remained undismissed for a period of at least sixty (60) days. 6R. DEBT RATIO. The Company shall not permit the Debt Ratio for any day to be greater than the ratio set forth opposite the period set forth in the chart below in which such day occurs:
Fiscal Year Ratio ----------- ----- 1994 5.60 to 1.00 1995 5.00 to 1.00 1996 4.10 to 1.00 1997 3.20 to 1.00 1998 2.80 to 1.00 1999 and thereafter 2.50 to 1.00.
7. EVENTS OF DEFAULT. 7A. ACCELERATION. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise): (i) the Company defaults in the payment of any principal of or Yield- Maintenance Amount payable with respect to any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or (ii) the Company defaults in the payment of any interest on any Note for more than five (5) days after the date due; or (iii) the Company or any Subsidiary defaults in any payment of principal of or interest on any obligation for money borrowed (or any Capitalized Lease Obligation, any obligation under a conditional sale or other title retention agreement, any obligation issued or assumed as full or partial payment for Property whether or not secured by a Purchase Money Mortgage or any obligation under notes payable or drafts accepted representing extensions of credit) beyond any period of grace provided with respect thereto, or the Company or any Subsidiary fails to perform or observe any other agreement, term or condition contained in any agreement under which any such obligation is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such obligation (or a trustee on behalf of such holder or holders) to cause, such obligation to become due prior to any originally stated maturity, or to be repurchased by the Company or any Subsidiary, provided that the aggregate A-28 amount of all obligations as to which such a payment default shall occur and be continuing or such a failure or other event causing or permitting acceleration shall occur and be continuing exceeds Fifteen Million Dollars ($15,000,000), and provided, further, that obligations for the deferred purchase price of goods or services (including, without limitation, Capitalized Lease Obligations and Purchase Money Mortgages) shall be excluded from the operation of this clause (iii) so long as such obligations are being contested in good faith by appropriate proceedings and adequate reserves have been established therefor; or (iv) any representation or warranty made by the Company herein, in the First Amendment, the Second Amendment, the Third Amendment or any other amendment, modification or supplement hereto, or in the Warrant Agreement, or by the Company or any of its officers in any writing furnished in connection with or pursuant to this Agreement (including, without limitation, the certificates furnished by the Company at the closing) shall be false in any material respect on the date as of which made; or (v) the Company or any Subsidiary shall fail to perform or observe any covenant contained in paragraph 6 hereof, in paragraph 4E hereof, paragraph 5E hereof or paragraph 5I hereof; or (vi) the Company fails to perform or observe any other agreement, term or condition contained herein, in the First Amendment, the Second Amendment, the Third Amendment or in the Warrant Agreement or the Warrants, and such failure shall not be remedied within thirty (30) days after the occurrence of such failure first becomes known to any Senior Officer of the Company; or (vii) the Company or any Subsidiary makes an assignment for the benefit of creditors; or (viii) any decree or order for relief in respect of the Company or any Subsidiary is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the "Bankruptcy Law"), of any jurisdiction; or (ix) the Company or any Subsidiary petitions or applies to any tribunal for, or consents to, the appointment of, or the taking of possession by, a trustee, receiver, custodian, liquidator or similar official of the Company or any Subsidiary, or of any substantial part of the assets of the Company or any Subsidiary, or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings (other than proceedings for the voluntary liquidation and dissolution of a Subsidiary) relating to the Company or any Subsidiary under the Bankruptcy Law of any other jurisdiction; or (x) any such petition or application is filed, or any such proceedings are commenced, against the Company or any Subsidiary and the Company or such Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, A-29 and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (xi) any order, judgment or decree is entered in any proceedings against the Company decreeing the dissolution of the Company and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (xii) any order, judgment or decree is entered in any proceedings against the Company or any Subsidiary decreeing a split-up of the Company or such Subsidiary that requires the divestiture of Properties representing at least ten percent (10%), or the divestiture of the stock of a Subsidiary whose assets represent at least ten percent (10%), of the consolidated assets of the Company and the Subsidiaries (determined in accordance with generally accepted accounting principles) or that requires the divestiture of assets, or stock of a Subsidiary, that shall have contributed at least ten percent (10%) to Consolidated Net Income for any of the three (3) fiscal years most recently ended as of the date such order, judgment or decree shall be entered, and such order, judgment or decree remains unstayed and in effect for more than sixty (60) days; or (xiii) a final judgment in an amount in excess of Fifteen Million Dollars ($15,000,000) is rendered against the Company or any Subsidiary and, within sixty (60) days after entry thereof, such judgment is not discharged or execution thereof stayed pending appeal, or within sixty (60) days after the expiration of any such stay, such judgment is not discharged; or (xiv) the Company or any Subsidiary is generally not paying its debts as such debts become due; or (xv) the Company or any ERISA Affiliate, in its capacity as an employer under a Multiemployer Plan, makes a complete or partial withdrawal from such Multiemployer Plan resulting in the incurrence by such withdrawing employer of a withdrawal liability in an amount exceeding Ten Million Dollars ($10,000,000); or (xvi) any lender under the Credit Agreement or any Acceptable Replacement Credit Facility fails or refuses, or announces its intention to fail or refuse, to make any required advance under such Credit Agreement or any Acceptable Replacement Credit Facility, or refuses to lend due to or as a result of any material adverse change in the business, Properties, profits or condition (financial or otherwise) of the Company; or (xvii) there shall occur any "Change of Control" as defined in the indenture relating to the 1994 Subordinated Debt; then (a) if such event is an Event of Default specified in clause (i) or (ii) of this paragraph 7A, the holder of any Note (other than the Company or any of the Subsidiaries or Affiliates) may at its option, by notice in writing to the Company, declare such Note to be, and such Note shall thereupon be and become, immediately due and payable at par A-30 together with interest accrued thereon, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company, (b) if such event is an Event of Default specified in clause (vii), (viii), (ix) or (x) of this paragraph 7A with respect to the Company, all of the Notes at the time outstanding shall automatically become immediately due and payable at par together with interest accrued thereon, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Company, and (c) if such event is not an Event of Default specified in clause (vii), (viii), (ix) or (x) of this paragraph 7A with respect to the Company, the Required Holders may at its or their option, by notice in writing to the Company, declare all of the Notes to be, and all of the Notes shall thereupon be and become, immediately due and payable together with interest accrued thereon and together with the Yield-Maintenance Amount, if any, with respect to each Note, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company, provided that the Yield-Maintenance Amount, if any, with respect to each Note shall be due and payable upon such declaration only if (x) such event is an Event of Default specified in any of clauses (i) to (vi), inclusive, of this paragraph 7A, (y) the Required Holders shall have given to the Company, at least ten (10) Business Days before such declaration, written notice stating its or their intention so to declare the Notes to be immediately due and payable and identifying one or more such Events of Default whose occurrence on or before the date of such notice permits such declaration and (z) one or more of the Events of Default so identified shall be continuing at the time of such declaration. 7B. RESCISSION OF ACCELERATION. At any time after any or all of the Notes shall have been declared immediately due and payable pursuant to paragraph 7A hereof, the Required Holders may, by notice in writing to the Company, rescind and annul such declaration and its consequences if (i) the Company shall have paid all overdue interest on the Notes, the principal of and Yield-Maintenance Amount, if any, payable with respect to any Notes which have become due otherwise than by reason of such declaration, and interest on such overdue interest and overdue principal and Yield-Maintenance Amount at the rate specified in the Notes, (ii) the Company shall not have paid any amounts which have become due solely by reason of such declaration, (iii) all Events of Default and Defaults, other than non-payment of amounts which have become due solely by reason of such declaration, shall have been cured or waived pursuant to paragraph 11C hereof, and (iv) no judgment or decree shall have been entered for the payment of any amounts due pursuant to the Notes or this Agreement. No such rescission or annulment shall extend to or affect any subsequent Event of Default or Default or impair any right arising therefrom. 7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be declared immediately due and payable pursuant to paragraph 7A hereof or any such declaration shall be rescinded and annulled pursuant to paragraph 7B hereof, the Company shall forthwith give written notice thereof to the holder of each Note at the time outstanding. 7D. OTHER REMEDIES. If any Event of Default or Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under A-31 applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise. 8. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants as follows: 8A. SUBSIDIARIES. Annex 2 to this Agreement accurately states, (i) the name of each of the Subsidiaries, its jurisdiction of incorporation and the percentage of its Voting Stock owned by the Company and each other Subsidiary, and (ii) the name of each of the Company's joint ventures and the nature thereof. Each of the Company and the Subsidiaries has good and marketable title to all of the shares it purports to own of the stock of each Subsidiary, free and clear in each case of any Lien. All such shares have been duly issued and are fully paid and nonassessable. 8B. CORPORATE ORGANIZATION AND AUTHORITY. The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, (ii) has all requisite legal and corporate power and authority to own and operate its Properties and to carry on its business as now conducted and as presently proposed to be conducted, (iii) has all necessary licenses, certificates and permits to own and operate its Properties and to carry on its business as now conducted and as presently proposed to be conducted, except where the failure to have any such licenses, certificates and permits, together with all other such failures, would not be likely to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes, and (iv) has duly qualified or has been duly licensed, and is authorized to do business and is in good standing as a foreign corporation, except where the failure to be so qualified, licensed and authorized in any jurisdiction, together with all such other failures, would not be likely to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes. The revenues and net income of the Company for the fiscal year ended July 31, 1992, and the total assets of the Company as of July 31, 1992, in each case exceed ninety percent (90%) of A-32 the consolidated revenues, consolidated net income, and consolidated assets of the Company and the Subsidiaries for such period and at such time. 8C. FINANCIAL STATEMENTS. The Company has furnished each Purchaser with the following financial statements, identified by a principal financial officer of the Company: (i) a consolidated balance sheet of the Company and its subsidiaries as at July 31 in each of the years 1990 to 1993, inclusive, and consolidated statements of income, stockholders' equity and cash flows of the Company and its subsidiaries for each such year, all reported on by Deloitte & Touche; and (ii) a consolidated balance sheet of the Company and its subsidiaries as at January 30, 1994 and January 31, 1993 and consolidated statements of income and cash flows for the three month period ended on each such date, prepared by the Company. Such financial statements (including any related schedules and/or notes) are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments), have been prepared in accordance with generally accepted accounting principles as in effect at such time and consistently followed throughout the periods involved (except as otherwise noted therein) and show all liabilities, direct and contingent, of the Company and its subsidiaries required to be shown in accordance with such principles. The balance sheets fairly present the condition of the Company and its subsidiaries as at the dates thereof, and the statements of income, stockholders' equity and cash flows fairly present the results of the operations of the Company and its subsidiaries and their cash flows for the periods indicated. There has been no material adverse change in the business, condition (financial or otherwise) or operations of the Company and the Subsidiaries taken as a whole since July 31, 1993, except for charges in the third Fiscal Quarter of Fiscal Year 1994 to shareholders' equity in connection with the increases in the underfunded status of the Company's pension plans, and to income in connection with the expensing of unamortized pension benefit past service costs, each as described in the Company's Quarterly Report on Form 10-Q for Fiscal Quarter ended January 30, 1994. 8D. ACTIONS PENDING. Except as set forth on Annex 3 hereto, it is not reasonably foreseeable that any action, suit, investigation or proceeding or group of similar actions, suits, investigations or proceedings (including, as such a group, without limitation, all actions, suits, investigations or proceedings arising out of federal or state environmental protection laws), pending or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries, or any properties or rights of the Company or any of the Subsidiaries, by or before any court, arbitrator or administrative or governmental body would result in any material adverse change in the business, condition (financial or otherwise) or operations of the Company and the Subsidiaries taken as a whole. 8E. OUTSTANDING DEBT. Neither the Company nor any of the Subsidiaries has outstanding any Debt except as permitted by paragraph 6C hereof. There exists no default under the provisions of any instrument evidencing such Debt or of any agreement relating thereto. 8F. TITLE TO PROPERTIES. Each of the Company and the Subsidiaries has good and indefeasible title to its respective real Properties (other than Properties that it leases) and good A-33 title to all of its other respective Properties, including the Properties reflected in the balance sheet as at January 30, 1994 referred to in paragraph 8C(ii) hereof (other than Properties disposed of in the ordinary course of business), subject to no Lien of any kind except Liens permitted by paragraph 6A hereof. All leases necessary in any material respect for the conduct of the respective businesses of the Company and the Subsidiaries are valid and subsisting and are in full force and effect. 8G. PATENTS, TRADEMARKS, LICENSES, ETC. Each of the Company and the Subsidiaries owns or possesses all of the patents, trademarks, service marks, trade names, copyrights, licenses, and rights with respect thereto, necessary for the present conduct of its business, without any known conflict with the rights of others. 8H. TAXES. Each of the Company and the Subsidiaries has filed all federal, state and other income tax returns that are required to be filed, and each has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with generally accepted accounting principles. 8I. CONFLICTING AGREEMENTS AND OTHER MATTERS. (I) RESTRICTIONS. Neither the Company nor any of the Subsidiaries is a party to any contract or agreement or subject to any charter or bylaw restriction that would, in the aggregate with all other such contracts, agreements, or charter or bylaw restrictions, be more likely than not to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes. (II) CONFLICTS. Neither the execution nor delivery of this Agreement or the Notes, nor the offering, issuance and sale of the Notes, nor the fulfillment of nor the compliance with the terms and provisions hereof and of the Notes will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the Properties of the Company or any of the Subsidiaries pursuant to, the charter or bylaws of the Company or any of the Subsidiaries, any award of any arbitrator or any agreement (including any agreement with stockholders), instrument, order, judgment, decree, statute, law, rule or regulation to which the Company or any of the Subsidiaries is subject. (III) RESTRICTIONS ON DEBT. Neither the Company nor any of the Subsidiaries is a party to, or otherwise subject to any provision contained in, any instrument evidencing indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other contract or agreement (including its charter) that limits the amount of, or otherwise imposes restrictions on the incurring of, Debt of the Company of the type to be evidenced by the Notes except as set forth in the agreements listed in Annex 3 attached hereto. A-34 (IV) SALE IS LEGAL AND AUTHORIZED. Each of 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) is within the corporate powers of the Company and each Subsidiary; and (b) is legal and does not conflict with, result in any breach of any of the provisions of, constitute a default under, 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, bylaw or other instrument to which it is a party or by which it or any of its Property may be bound. (V) NOTES ARE ENFORCEABLE. The obligations of the Company under this Agreement and the Notes are valid, binding and enforceable in accordance with the terms of this Agreement and the Notes, except the enforceability hereof or thereof, as the case may be, may be: (a) limited by bankruptcy, insolvency or other similar laws affecting the enforceability of creditors' rights generally; and (b) subject to the availability of equitable remedies. 8J. OFFERING OF NOTES. Neither the Company nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Company for sale to, or solicited any offers to buy the Notes or any similar security of the Company from, or otherwise approached or negotiated with respect thereto with, any Person other than institutional investors, and neither the Company nor any agent acting on its behalf has taken any action that would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction. 8K. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns or has any present intention of acquiring any margin stock. The proceeds of sale of the Notes will be used to repay Debt of the Company, to reduce the amount of receivables sold pursuant to the Trade Receivables Agreement and for general corporate purposes. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any margin stock or for the purpose of maintaining, reducing or retiring any Debt which was originally incurred to purchase or carry any stock that is currently a margin stock or for any other purpose which might constitute this transaction a "purpose credit" within the meaning of such Regulation G. Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or the Notes to violate Regulation G, Regulation T, Regulation U or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as was in effect on the Closing Date, as in effect now or as the same may hereafter be in effect. 8L. ERISA. No accumulated funding deficiency (as defined in section 302 of ERISA and section 412 of the IRC), whether or not waived, exists with respect to any Plan (other than a Multiemployer Plan). No liability to the Pension Benefit Guaranty Corporation has been or is A-35 expected by the Company or any ERISA Affiliate to be incurred with respect to any Plan (other than a Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which is or would be materially adverse to the business, condition (financial or otherwise) or operations of the Company and the Subsidiaries taken as a whole. Neither the Company, any Subsidiary nor any ERISA Affiliate has incurred or presently expects to incur any withdrawal liability under Title IV of ERISA with respect to any Multiemployer Plan which is or would be materially adverse to the business, condition (financial or otherwise) or operations of the Company and the Subsidiaries taken as a whole. The execution and delivery of this Agreement and the issuance and sale of the Notes will be exempt from, or will not involve any transaction which is subject to, the prohibitions of section 406 of ERISA and will not involve any transaction in connection with which a penalty could be imposed under section 502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the IRC. The representation by the Company in the next preceding sentence is made in reliance upon and subject to the accuracy of each Purchaser's representation in paragraph 9B hereof. 8M. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any Subsidiary, nor 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 offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body (other than routine filings after the Closing Date with either or both of the Securities and Exchange Commission and state Blue Sky authorities) in connection with the execution and delivery of this Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof or of the Notes. 8N. ENVIRONMENTAL COMPLIANCE. The Company and the Subsidiaries and all of their respective properties and facilities have complied at all times and in all respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations relating to protection of the environment except, in any such case, where failure to comply would not result in a material adverse effect on the business, condition (financial or otherwise) or operations of the Company and the Subsidiaries taken as a whole. 8O. DISCLOSURE. Neither this Agreement nor any other document, certificate or statement furnished to any Purchaser by or on behalf of the Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company or any of the Subsidiaries that in the future (so far as the Company can now foresee) would, in the aggregate with all other such facts, be more likely than not to have a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes and that has not been set forth in this Agreement or in the other documents, certificates and statements furnished to each Purchaser by or on behalf of the Company prior to the date hereof in connection with the transactions contemplated hereby. A-36 8P. COMPLIANCE WITH LAW. Neither the Company nor any Subsidiary: (i) is in violation of any law, ordinance, governmental rule or regulation to which it is subject; or (ii) has failed to obtain any license, certificate, permit, franchise or other governmental authorization necessary to the ownership of its Property or to the conduct of its business; which violation or failure to obtain is more likely than not to have, in the aggregate with all other such violations or failures, a material and adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations set forth in this Agreement and in the Notes. 8Q. CERTAIN LAWS. (I) INVESTMENT COMPANY ACTS. The Company is not, and is not directly or indirectly controlled by, or acting on behalf of any Person which is, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (II) ABSENCE OF FOREIGN OR ENEMY STATUS. The Company is not (a) an "enemy" or an "ally of the enemy" within the meaning of Section 2 of the Trading with the Enemy Act, as amended, or any executive orders or regulations issued or promulgated pursuant thereto, (b) a "national" of any "designated enemy country" as such terms are defined in Executive Order No. 9095, as amended, of the President of the United States of America, or (c) a "national" of any "designated foreign country" within the meaning of the Foreign Assets Control Regulations of the United States of America (Code of Federal Regulations, Title 31, Chapter V, Part 500 to 543). (III) HOLDING COMPANY STATUS. The Company is not a "holding company" or an "affiliate" of a "holding company," or a "subsidiary company" of a "holding company," or a "public utility" within the meaning of the Public Utilities Holding Company Act of 1935, as amended. 9. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser represents as follows: 9A. NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes to be purchased by it hereunder with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the disposition of such Purchaser's Property shall at all times be and remain within its control. A-37 9B. SOURCE OF FUNDS. No part of the funds being used by such Purchaser to pay the purchase price of the Notes being purchased by such Purchaser hereunder constitutes assets allocated to any separate account maintained by such Purchaser in which any employee benefit plan, other than employee benefit plans identified on a list which has been furnished by such Purchaser to the Company, participates to the extent of ten percent (10%) or more. For the purpose of this paragraph 9B, the terms "separate account" and "employee benefit plan" shall have the respective meanings specified in section 3 of ERISA. 10. DEFINITIONS. For the purpose of this Agreement, the terms defined in the introductory sentence and in paragraphs 1 and 2 shall have the respective meanings specified therein, and the following terms shall have the meanings specified with respect thereto below: 10A. YIELD-MAINTENANCE TERMS. "CALLED PRINCIPAL" shall mean, with respect to any Note, the principal of such Note that is to be prepaid or purchased pursuant to paragraph 4B, paragraph 4.E or paragraph 5I hereof (any partial prepayment being applied in satisfaction of required payments of principal in inverse order of their scheduled due dates) or is declared to be immediately due and payable pursuant to paragraph 7A hereof, as the context requires. "DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. "REINVESTMENT YIELD" shall mean, with respect to the Called Principal of any Note, the yield to maturity implied by (i) the yields reported, as of 10:00 a.m. (New York City time) on the Business Day next preceding the Settlement Date with respect to such Called Principal, on the display designated as "Page 678" on the Telerate Service (or such other display as may replace Page 678 on the Telerate Service) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or if such yields shall not be reported as of such time or the yields reported as of such time shall not be ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for the latest day for which such yields shall have been so reported as of the Business Day next preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. A-38 Such implied yield shall be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between yields reported for various maturities. Reinvestment Yield calculated as aforesaid shall be increased by twenty-five one-hundredths percent (0.25%) per annum in the case of any Settlement Date occurring after December 15, 1998. "REMAINING AVERAGE LIFE" shall mean, with respect to the Called Principal of any Note, the number of years (calculated to the nearest one- twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) each Remaining Scheduled Payment of such Called Principal (but not of interest thereon) by (b) the number of years (calculated to the nearest one- twelfth year) which will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. "REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date. "SETTLEMENT DATE" shall mean, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid or purchased pursuant to paragraph 4B, paragraph 4E or paragraph 5I hereof or is declared to be immediately due and payable pursuant to paragraph 7A hereof, as the context requires. "YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal plus (ii) interest accrued thereon as of (including interest due on) the Settlement Date with respect to such Called Principal. The Yield-Maintenance Amount shall in no event be less than zero. 10B. OTHER TERMS. "1994 SENIOR DEBT" shall mean the Company's Senior Notes Due 2003, in the aggregate principal amount of One Hundred Million Dollars ($100,000,000) on substantially the terms and conditions set forth under the heading "DESCRIPTION OF A-39 SENIOR NOTES" in Amendment No. 1 to the Registration Statement on Form S-3 of the Company, as filed with the Securities and Exchange Commission on April 19, 1994, relating thereto. "1994 SUBORDINATED DEBT" shall mean the Company's Convertible Subordinated Notes Due 2004, in the aggregate principal amount of up to Fifty-Seven Million Five Hundred Thousand Dollars ($57,500,000) and which are subordinated to payment of principal, interest and Yield-Maintenance Amount in respect of the Notes, and all other obligations under this Agreement, on substantially the terms and conditions set forth under the heading "DESCRIPTION OF SUBORDINATED NOTES" in Amendment No. 2 to the Registration Statement on Form S-3 of the Company, as filed with the Securities and Exchange Commission on April 19, 1994 relating thereto. "ACCEPTABLE AVAILABILITY" shall mean, at any time on or after the date shown in the first column of the chart below, and on or prior to the date shown in the second column of the chart below, the availability under the Credit Agreement at such time reflected in the third column of the chart below:
ON AND AFTER: TO AND INCLUDING: ACCEPTABLE AVAILABILITY: ========================================================================= Third Amendment Date October 24, 1995 $110,000,000 ------------------------------------------------------------------------- October 25, 1995 April 24, 1996 $100,000,000 ------------------------------------------------------------------------- April 25, 1996 October 24, 1996 $ 90,000,000 ------------------------------------------------------------------------- October 25, 1996 April 24, 1997 $ 80,000,000 ------------------------------------------------------------------------- April 25, 1997 and thereafter $ 0 =========================================================================
"ACCEPTABLE REPLACEMENT CREDIT FACILITY" shall mean, with respect to any replacement, refunding or refinancing of the Credit Agreement, a revolving credit facility: (i) making available to the Company at least the Acceptable Availability: (ii) which, if such facility provides for extension of credit in forms (including, without limitation, letters of credit or banker's acceptances) other than cash, provides that, at the option of the Company, at least the Acceptable Availability shall be available to the Company in cash; provided, however, that, should the Company actually draw credit in forms other than cash (including, without limitation, the issuance of one or more letters of credit), the amount of cash available under such facility may be reduced by the aggregate amount of such credits for so long as such credits are outstanding, so that the aggregate amount available need not exceed the Acceptable Availability at such time; (iii) which shall not require the maintenance of any compensating balance or other similar arrangement in any amount greater than the difference A-40 between the aggregate amount of cash available under such facility minus the Acceptable Availability; (iv) which shall not contain, at the time of the effectiveness of such facility: (a) any financial covenants, events of default or other conditions with which the Company would not be able to comply at such time, based on the most recent business plan presented to the Board of Directors (including updates thereto through the date of effectiveness of such facility) of the Company at such time or, prior to January 25, 1997, that were more onerous than those contained in the Credit Agreement at the time of the effectiveness of such facility; and (b) any borrowing base provision or similar lending constraints; or (c) any conditions precedent to making advances thereunder that would, based on the most recent business plan presented to the Board of Directors (and updates thereto) of the Company at such time, be reasonably likely to prevent the Company from fully utilizing the Acceptable Availability to it under such credit facility at any time during the term of such credit facility or, prior to January 25, 1997, that were more onerous than those contained in the Credit Agreement at the time of the effectiveness of such facility; (v) which shall not have a maturity date earlier than that of the Credit Agreement immediately prior to giving effect to such replacement, refunding or refinancing; and (vi) which shall be unsecured and shall not rank senior in right of payment in any respect to the Notes. "ADJUSTED CONSOLIDATED DEBT" shall mean and include all Debt of the Company and the Consolidated Subsidiaries. "ADJUSTED CONSOLIDATED NET INCOME" shall mean for any period (i) the gross revenues of the Company and the Consolidated Subsidiaries for such period, determined on a consolidated basis; less (ii) all operating and non-operating expenses of the Company and the Consolidated Subsidiaries for such period, including all charges of a proper character (including, without limitation, current and deferred taxes on income, provision for taxes on unremitted foreign earnings which are included in gross revenues, and current additions to reserves), determined on a consolidated basis; A-41 but not including in such gross revenues (i) any gains (net of expenses and taxes applicable thereto) in excess of losses arising from the sale, conversion or other disposition of capital assets, other than gains arising out of any transaction or series of related transactions in which such gains do not exceed One Hundred Thousand Dollars ($100,000); (ii) any gain arising from any write-up of assets subsequent to July 31, 1992; (iii) earnings of any Consolidated Subsidiary accrued prior to the date it became a Consolidated Subsidiary; (iv) earnings of any Person, substantially all the assets of which have been acquired in any manner, realized by such Person prior to the date of such acquisition; (v) net earnings or net losses of any Person in which the Company or any Consolidated Subsidiary shall have an ownership interest unless, in the case of net earnings, such net earnings shall have actually been received by the Company or such Consolidated Subsidiary in the form of cash distributions; (vi) any portion of the net earnings of any Consolidated Subsidiary which for any reason is unavailable for payment of dividends to the Company or any other Consolidated Subsidiary; (vii) the earnings of any Person to which assets of the Company shall have been sold, transferred or disposed of, or into which the Company shall have merged, prior to the date of such transaction; (viii) any gain arising from the acquisition of any Securities of the Company or any Consolidated Subsidiary; (ix) any portion of the net earnings of the Company that cannot be freely converted into United States dollars; and (x) any deferred credit representing the excess of equity in any Consolidated Subsidiary at the date of acquisition over the cost of investment in such Consolidated Subsidiary. "ADJUSTED CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time the excess of total assets of the Company and the Consolidated Subsidiaries at such time, determined on a consolidated basis, over total liabilities of the Company and the Consolidated Subsidiaries at such time, determined on a consolidated basis, in each case determined in accordance with generally accepted accounting principles, excluding, however, from the determination of total assets A-42 (i) all assets that would be classified as intangible assets under such generally accepted accounting principles, including, without limitation, goodwill (whether representing the excess of cost over book value of assets acquired or otherwise), patents, trademarks, trade names, copyrights, franchises, unamortized debt discount and expense, organization costs, research and development costs and other deferred charges (other than prepaid insurance and taxes and pre- production and production costs including, but not limited to, engineering and tooling costs, that are amortized over anticipated deliveries), (ii) treasury stock and minority interests in any Person, (iii) cash, Securities or other Property set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of capital stock, (iv) to the extent not already deducted from total assets, reserves for depreciation, depletion, obsolescence or amortization of Properties and all other reserves or appropriations of retained earnings that, in accordance with such generally accepted accounting principles, should be established in connection with the business conducted by the relevant corporation, and (v) any revaluation or other write-up in book value of assets subsequent to July 31, 1992. Notwithstanding the foregoing, (A) net deferred income tax assets recorded in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109") shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition) and shall be calculated without regard to any valuation allowance with respect to such net deferred tax asset recorded by the Company in accordance with SFAS 109, and (B) any asset established pursuant to Statement of Financial Accounting Standards No. 87, Employers Accounting for Pensions ("SFAS 87") which corresponds to an additional minimum pension liability recorded pursuant to SFAS No. 87 and any prepaid pension asset which arises from amounts funded by the Company in accordance with Internal Revenue Service regulations (but not in excess of the minimum amounts required to be contributed thereunder) in excess of amounts expensed in accordance with SFAS 87, shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition). "AFFILIATE" shall mean any Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the Company, except a Subsidiary. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. "AGREED PUT CONSIDERATION" shall mean as of the date of prepayment by the Company upon the exercise by any holder of Notes of its Right to Put or option to be repaid pursuant to paragraph 5I, the sum of A-43 (i) the principal amount of the Notes held by such holder subject to the prepayment on such date, plus (ii) all accrued and unpaid interest to such date on such Notes, plus (iii) the Yield-Maintenance Amount as of such date with respect to such Notes. "AGREEMENT" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. "BANK LENDERS" shall mean the Lenders as defined in the Credit Agreement. "BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of paragraph 7A. "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed. "CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which, under generally accepted accounting principles, would be required to be capitalized on the books of the Company or any Subsidiary, taken at the amount thereof accounted for as indebtedness (net of interest expense) in accordance with such principles. "CLOSING DATE" shall have the meaning assigned to such term in paragraph 2 of this Agreement. "COMBINED SUBSIDIARY DEBT" shall mean at any time all unsecured Debt of the Subsidiaries at such time (after eliminating intercompany transactions among the Subsidiaries). "COMPANY" shall have the meaning specified in the introductory paragraph of this Agreement. "CONFIDENTIAL INFORMATION" shall mean any information furnished to any holder of Notes by the Company or any agent of the Company in connection with this Agreement (including, without limitation, any information furnished to you pursuant to paragraph 5D hereof) or obtained by any holder of Notes in connection with an inspection made pursuant to paragraph 5G hereof, that is about the Company (or in respect of which the Company has a confidentiality obligation) and that is marked by the Company as being confidential, other than any such information, (i) that was publicly known, or otherwise known to you, at the time the information was furnished to you, (ii) that subsequently becomes publicly known through no act or omission by you, or A-44 (iii) that otherwise becomes known to you, other than through disclosure by the Company or any Subsidiary. "CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum, without duplication, of (i) interest expense related to Debt of the Company and the Consolidated Subsidiaries, (ii) amortization expense related to Debt of the Company and the Consolidated Subsidiaries issued at a discount, (iii) dividends in respect of preferred stock of Consolidated Subsidiaries, (iv) dividends in respect of Permitted Preferred Stock to the extent paid to Persons other than the Company or any wholly-owned Consolidated Subsidiary, plus (v) rentals payable in respect of Capitalized Lease Obligations of the Company and the Consolidated Subsidiaries, in each case calculated for such period on a consolidated basis in accordance with generally accepted accounting principles. "CONSOLIDATED NET INCOME" shall mean for any period (i) the gross revenues of the Company and the Subsidiaries for such period, determined on a consolidated basis; less (ii) all operating and non-operating expenses of the Company and the Subsidiaries for such period, including all charges of a proper character (including, without limitation, current and deferred taxes on income, provision for taxes on unremitted foreign earnings which are included in gross revenues, and current additions to reserves), determined on a consolidated basis; but not including in such gross revenues (i) any gains (net of expenses and taxes applicable thereto) in excess of losses arising from the sale, conversion or other disposition of capital assets, other than gains arising out of any transaction or series of related transactions in which such gains do not exceed One Hundred Thousand Dollars ($100,000); (ii) any gain arising from any write-up of assets subsequent to July 31, 1992; (iii) earnings of any Subsidiary accrued prior to the date it became a Subsidiary; A-45 (iv) earnings of any Person, substantially all the assets of which have been acquired in any manner, realized by such Person prior to the date of such acquisition; (v) net earnings or net losses of any Person in which the Company or any Subsidiary shall have an ownership interest unless, in the case of net earnings, such net earnings shall have actually been received by the Company or such Subsidiary in the form of cash distributions; (vi) any portion of the net earnings of any Subsidiary which for any reason is unavailable for payment of dividends to the Company or any other Subsidiary; (vii) the earnings of any Person to which assets of the Company shall have been sold, transferred or disposed of, or into which the Company shall have merged, prior to the date of such transaction; (viii) any gain arising from the acquisition of any Securities of the Company or any Subsidiary; (ix) any portion of the net earnings of the Company that cannot be freely converted into United States dollars; and (x) any deferred credit representing the excess of equity in any Subsidiary at the date of acquisition over the cost of investment in such Subsidiary. "CONSOLIDATED NET INCOME AVAILABLE FOR FIXED CHARGES" shall mean, for any period, the sum of (i) Adjusted Consolidated Net Income for such period, plus (ii) the aggregate amount of (a) Consolidated Fixed Charges, (b) provisions for taxes on earnings, (c) depreciation expense, (d) the Special Charge; (e) in the case of any such period that includes the fiscal month ending May 2, 1993, the cumulative effect through May 2, 1993 of the accounting changes adopted by the Company, effective as of August 1, 1992, as described in the Company's Form 10-Q filed with the Securities and Exchange Commission for the third quarter of its 1993 Fiscal Year; A-46 (f) in the case of any such period that includes the fiscal month ending May 2, 1993, the provisions and charges, not in excess of $38,000,000 in the aggregate, established by the Company in the third quarter of its 1993 Fiscal Year; and (g) the Tax Adjustment Amount; in each case to the extent, and only to the extent, reflected in the computation of Adjusted Consolidated Net Income for such period. As used in this definition, `Special Charge' shall mean that certain special provision of Fifty Million Dollars ($50,000,000) taken by the Company during the third quarter of its 1992 Fiscal Year;" and `Tax Adjustment Amount' shall mean, for any period, the lesser of (i) accrued interest expense on taxes on earnings for such period minus any interest income on tax refunds for such period and (ii) Three Hundred Thirty-Three Thousand Dollars ($333,333) multiplied by the number of fiscal months in such period; provided, however, that, notwithstanding the foregoing, to the extent that such period includes one or more fiscal months of the Company during the third quarter of the Company's 1992 Fiscal Year, "Tax Adjustment Amount" shall be deemed to mean an amount equal to Six Million One Hundred Thousand Dollars ($6,100,000) for each such fiscal month. "CONSOLIDATED SENIOR DEBT" shall mean at any time Senior Debt at such time, determined on a consolidated basis, minus Non-Recourse Debt of the Company and the Subsidiaries at such time, determined on a consolidated basis. "CONSOLIDATED SUBSIDIARY" shall mean any corporation more than fifty percent (50%) of the total combined voting power of all classes of Voting Stock of which shall, at the time as of which any determination is being made, be owned, directly or indirectly, by the Company. "CONSOLIDATED TANGIBLE ASSETS" shall mean, at any time, the sum of: (i) Adjusted Consolidated Tangible Net Worth at such time; plus (ii) the total amount of all liabilities of the Company and the Consolidated Subsidiaries on a consolidated basis at such time. "CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time the excess of total assets of the Company and the Subsidiaries at such time, determined on a consolidated basis, over total liabilities of the Company and the Subsidiaries at such time, determined A-47 on a consolidated basis, in each case determined in accordance with generally accepted accounting principles, excluding, however, from the determination of total assets: (i) all assets that would be classified as intangible assets under such generally accepted accounting principles, including, without limitation, goodwill (whether representing the excess of cost over book value of assets acquired or otherwise), patents, trademarks, trade names, copyrights, franchises, unamortized debt discount and expense, organization costs, research and development costs and other deferred charges (other than prepaid insurance and taxes and pre- production and production costs including, but not limited to, engineering and tooling costs, that are amortized over anticipated deliveries); (ii) treasury stock and minority interests in Subsidiaries; (iii) cash, Securities or other Property set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of capital stock; (iv) to the extent not already deducted from total assets, reserves for depreciation, depletion, obsolescence or amortization of Properties and all other reserves or appropriations of retained earnings that, in accordance with such generally accepted accounting principles, should be established in connection with the business conducted by the relevant corporation; and (v) any revaluation or other write-up in book value of assets subsequent to July 31, 1992. Notwithstanding the foregoing, (A) net deferred income tax assets recorded in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109") shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition) and shall be calculated without regard to any valuation allowance with respect to such net deferred tax asset recorded by the Company in accordance with SFAS 109, and (B) any asset established pursuant to Statement of Financial Accounting Standards No. 87, Employers Accounting for Pensions ("SFAS 87") which corresponds to an additional minimum pension liability recorded pursuant to SFAS No. 87 and any prepaid pension asset which arises from amounts funded by the Company in accordance with Internal Revenue Service regulations (but not in excess of the minimum amounts required to be contributed thereunder) in excess of amounts expensed in accordance with SFAS 87, shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition). "CONSOLIDATED TOTAL DEBT" shall mean, at any time, Debt of the Company and the Subsidiaries at such time minus Non-Recourse Debt of the Company and the Subsidiaries at such time, determined on a consolidated basis. "CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of April 26, 1989, among the Company and the lenders party thereto and the agent thereunder, as such Credit Agreement may be amended or supplemented from time to time. A-48 "DEBT" shall mean, without duplication, (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments (as such term is defined in Article 9 of the Uniform Commercial Code as from time to time in effect in the State of New York), (iii) obligations to pay the deferred purchase price of Property or services (excluding advances, deposits or partial or progress payments, unpaid wages and related employee obligations and excluding trade payables), (iv) obligations as lessee under Capitalized Lease Obligations, (v) obligations under Guaranties of indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above, (vi) obligations under Title IV of ERISA for each Plan and Multiemployer Plan, in respect of unfunded accrued liabilities for such plans, if any, as of the first day of the plan year as shown in the annual actuarial report most recently delivered to the obligor in respect of such obligations by the actuary for each such Plan and Multiemployer Plan, and (vii) in the case of any Consolidated Subsidiary, all preferred stock of such Consolidated Subsidiary held by Persons other than the Company or a wholly-owned Consolidated Subsidiary, such preferred stock to be valued at the aggregate liquidation preference thereof. "DEBT RATIO" shall mean, at any time, the ratio of Adjusted Consolidated Debt to Adjusted Consolidated Tangible Net Worth. "DEFAULT" shall mean any event or condition that, with notice or the passage of time, or both, would become an Event of Default. "DE MINIMUS PAYMENTS" shall mean, with respect to any Debt of the Company or any Subsidiary (other than Debt governed or evidenced by the Notes, the 9.35% Senior Notes due January 29, 2000, the Credit Agreement, any Acceptable Replacement Credit Facility, the 1994 Senior Notes, the 1994 Subordinated Notes or the Existing Subordinated Notes of either Series), payments, prepayments, defeasances and redemptions (in each case, other than Originally Scheduled Payments) in respect of any such Debt aggregating not more than Five Hundred Thousand Dollars ($500,000) in any Fiscal Year. "DESIGNATED EVENT" shall mean the occurrence of any one or more of the following after the Closing Date: (i) the direct or indirect acquisition by any person (as such term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act), or related A-49 persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act), of (i) beneficial ownership of issued and outstanding shares of Voting Stock of the Company the result of which acquisition is that such person or such group possesses in excess of fifty percent (50%) of the combined voting power of all then issued and outstanding Voting Stock of the Company or (ii) within any period of three-hundred sixty-five (365) consecutive days, all or substantially all of the assets of the Company; or (ii) following the election or removal of directors, a majority of the Company's board of directors consists of individuals who were not members of the Company's board of directors two years before such election or removal, unless the election of each director who was not a director at the beginning of such two-year period has been approved in advance by directors representing at least a majority of the directors then in office who were directors at the beginning of the two-year period; or (iii) the consolidation with, or merger into, any Person by the Company in a transaction in which more than thirty percent (30%) by number of votes of the Voting Stock of the Company is exchanged (the calculation of which shall be made by dividing the number of votes attributable to the Voting Stock so exchanged by the aggregate number of votes attributable to the Voting Stock immediately prior to such transaction); or (iv) (a) any transaction or series of transactions (whether related or unrelated) in which the Company repurchases or otherwise retires in the aggregate, within any period of three hundred sixty-five (365) consecutive days, thirty percent (30%) or more (by number) of the Company's outstanding common stock (the calculation of which shall be made by dividing the number of shares outstanding immediately after giving effect to each such repurchase or retirement, other than any such shares owned by a Subsidiary, by the highest number of shares outstanding at any time during the period of three hundred sixty-five (365) consecutive days ending on (and including) the date of such repurchase or retirement (adjusting in each case for stock splits, stock dividends and other similar transactions, excluding in each case shares held in treasury, and assuming in each case that all securities then convertible into, or representing then effective rights to purchase, common stock have been exercised at such time), or (b) any Distribution made by the Company the Fair Market Value of which, together with the aggregate Fair Market Value of all other Distributions made by the Company during the period of three hundred sixty-five (365) days ending on (and including) the date of such Distribution (each Distribution being valued on the date it is made), equals or exceeds thirty percent (30%) of the Fair Market Value the Company's outstanding common stock (determined at the commencement of such period); in each case if as a result of such event or events Consolidated Total Debt shall, at any time during the period beginning on the date of such transaction (or the date of the A-50 completion of such series of transactions, as the case may be) and ending three hundred sixty-five (365) days thereafter, equal or exceed seventy- five percent (75%) of the sum of Consolidated Total Debt plus Consolidated Tangible Net Worth at such time. "DISTRIBUTION" shall mean: (i) dividends or other distributions on or in respect of the capital stock of the Company or any Subsidiary (except distributions solely in such stock or in Rights, as such term is defined in the Rights Agreement and except to the extent made to the Company or any Wholly-Owned Subsidiary); (ii) the repurchase, purchase, redemption or acquisition of capital stock of the Company or any Subsidiary, or of warrants, rights or other options to purchase such stock (except when solely in exchange for such stock and except to the extent made from the Company or a Wholly-Owned Subsidiary) unless made, contemporaneously, from the net proceeds of a sale of such stock; and (iii) all payments in respect of Subordinated Debt (other than mandatory scheduled payments and prepayments), including optional or voluntary prepayments and including all payments made to acquire Subordinated Debt (except to the extent such payment is made to the Company or a Wholly-Owned Subsidiary). "EEC AFFILIATE" shall mean any corporation organized under the laws of any country which is a member nation of the European Economic Community (as used herein, the "EEC") as such organization is constituted on the Closing Date, that has the majority of its Property located in and makes the major portion of its sales to Persons located in the United States of America, Canada, or the EEC, and more than fifty percent (50%) of the total combined voting power of all classes of Voting Stock of which shall, at the time as of which any determination is being made, be owned, directly or indirectly, by the Company. "EQUITY ISSUANCE ACQUISITIONS" shall mean the acquisition by the Company of Debt (including, without limitation, Notes, the 1994 Subordinated Notes, the Company's 9.35% Senior Notes due January 29, 2000 or the Company's 7% Convertible Subordinated Debentures due 2012), or any portion thereof, for consideration consisting solely of common stock of the Company and in connection with tenders of such Debt by the holders thereof in payment of the exercise or purchase price of any rights, warrants or options to acquire such common stock, or upon conversion of such Debt into such common stock. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "ERISA AFFILIATE" shall mean any corporation or trade or business that (i) is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the IRC) as the Company, or A-51 (ii) is under common control (within the meaning of Section 414(c) of the IRC) with the Company. "ESOP" shall mean the Salaried Employees Stock Ownership Plan, effective August 1, 1983, as amended from time to time. "EVENT OF DEFAULT" shall mean any of the events specified in paragraph 7A hereof. "EXCEPTED PROPERTY" shall have the meaning set forth in paragraph 6P of this Agreement. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. "EXISTING SUBORDINATED NOTES" shall mean and include: (i) the Company's 9.25% Subordinated Debentures due 2017; and (ii) the Company's 7% Convertible Subordinated Debentures due 2012; and the Existing Subordinated Notes of each such series (but not the Existing Subordinated Notes of the other series) shall be referred to collectively as a "SERIES" of Existing Subordinated Notes. "FAIR MARKET VALUE" shall mean at any time 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, under no compulsion to buy or sell, respectively. "FINANCIAL COVENANT" shall mean any covenant, agreement or provision (including, without limitation, the definitions applicable thereto) of or applicable to the Company or any Consolidated Subsidiary contained in any agreement governing, or instrument evidencing, any Debt (or commitment to lend), other than Debt or a commitment to lend among the Company and one or more Consolidated Subsidiaries, of the Company or any Consolidated Subsidiary in an aggregate principal amount greater than $5,000,000, which covenant, agreement or provision: (i) requires the Company or any Consolidated Subsidiary to maintain specified financial amounts or ratios or to meet other financial tests; (ii) restricts the ability of the Company or any Consolidated Subsidiary to: (a) make Distributions, investments, capital expenditures or operating expenditures of any kind; (b) incur, create or maintain any Debt (or other obligations) or Liens; A-52 (c) merge, consolidate or acquire or be acquired by any Person; (d) sell, lease, transfer or dispose of any Property (other than restrictions imposed solely upon collateral, and not upon Property of the Company or any Consolidated Subsidiary generally, by holders of Liens thereon which are permitted by this Agreement; or (e) issue or sell any capital stock of any kind; (iii) is similar to any provision in paragraph 6 of this Agreement; or (iv) provides that a default or event of default shall occur, or that the Company or any Consolidated Subsidiary shall be required to prepay, redeem or otherwise acquire for value any Debt or security as a result of its failure to comply with any provision similar to any of those set forth in any of the foregoing clauses (i), (ii) or (iii). "FIRST AMENDMENT" shall mean the Amendment Agreement, entered into as of June 30, 1993, between the Company and the holders of Notes named therein. "FIRST AMENDMENT DATE" shall mean the "Effective Date," as such term is defined in the First Amendment. "FISCAL YEAR" shall mean any fiscal year of the Company ending on July 31 . "FISCAL QUARTER NET WORTH INCREASE AMOUNTS" shall mean for any fiscal quarter of the Company, the greater of (i) Zero Dollars ($0) and (ii) fifty percent (50%) of Adjusted Consolidated Net Income for such fiscal quarter. "FUJI" shall mean The FUJI Bank, Limited. "GROSS OPERATING INCOME" shall mean for any period, sales minus costs and expenses (other than depreciation and amortization), in each case, as reflected as a line item on the consolidated statements of earnings and cash flows of the Company and the Consolidated Subsidiaries for such period. "GUARANTIES" shall mean, with respect to any Person (the "Guarantor"), any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of the Guarantor guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person (the "Primary Obligor") in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Guarantor: (i) to purchase such indebtedness or obligation or any Property constituting security therefor; A-53 (ii) to loan, advance or supply funds, make any capital contribution or purchase Property from any Person (a) for the purpose of payment of such indebtedness or obligation, or (b) to maintain working capital or other balance sheet condition or any income statement condition of the Primary Obligor or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation; or (iii) to lease Property or to purchase Securities or other Property or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of the Primary Obligor to make payment of the indebtedness or obligation or, in the case of any such lease, under terms providing that the obligation to make payments thereunder is absolute and unconditional under conditions not customarily found in commercial leases then in general use; (iv) to contract or agree to purchase any Property or services if such contract or agreement requires that payment for such Property or services (a) shall be made regardless of whether delivery of such Property or services is ever made or tendered or (b) shall be subordinated to any indebtedness (of the purchaser or user of such Property or the Person entitled to the benefit of such services) owed or to be owed to any Person; or (v) otherwise to assure the owner of the indebtedness or obligation of the Primary Obligor against loss in respect thereof. "IDB FINANCING" shall mean any industrial development bond or similar financing in which a state or other governmental authority incurs Debt to construct, improve or acquire (or, in the case of the San Marcos Bonds, to refinance the construction, improvement or acquisition of) fixed assets for use primarily by the Company or a Subsidiary under a lease or similar arrangement of at least five years' duration and in connection with which the Company or such Subsidiary is obligated (directly or indirectly), under such lease or other arrangement, to make payments to such state or other governmental authority which are used to service such Debt. "INSTITUTIONAL INVESTOR" shall mean (i) any original purchaser of any of the Notes, (ii) the subsidiaries and affiliates of any such purchaser and nominees controlled by any such purchaser, and (iii) any insurance company, pension fund, mutual fund, investment company, bank, savings bank, savings and loan association, investment banking company, trust company, finance or credit company, any portfolio or any A-54 investment fund managed by any of the foregoing, and any other institutional investor, and any nominee of the foregoing controlled by any such Person, provided that in each case such Person has assets of at least Five Hundred Million Dollars ($500,000,000). "INTERCOMPANY DEBT" shall mean Debt owed by the Company or any Subsidiary to the Company or any Subsidiary. "IRC" shall mean the Internal Revenue Code of 1986, as amended from time to time. "LEASE TRANSACTION" shall mean a transaction (including, without limitation, a transaction with respect to qualified leased Property meeting the requirements of Section 168(f)(8) of the IRC) pursuant to which the Company or any Subsidiary makes an investment (as a lessor as contemplated by said Section 168(f)(8) or on an equity basis with the meaning of Section 4(1) of Revenue Procedure 75-21, 1975-1 C.B. 715, as amended or supplemented), in all or part of the purchase price of Property, which Property, concurrently with the purchase thereof, is leased under a Capitalized Lease Obligation by the Company or such Subsidiary (acting directly or through either or both of a trust or partnership and with or without other investors) to a lessee, provided that such investment is made in part for the purpose of saving or deferring Federal income tax liability and that the Company or such Subsidiary incurs no obligation, and creates no Lien in connection with such transaction except that: (i) the Company or such Subsidiary, directly or indirectly (a) may borrow part of the funds necessary to pay the purchase price of such Property (and any related leases, contract rights, general intangibles or accounts), and (b) may secure such borrowings by Liens provided that such Liens do not extend to or cover any Property other than Property referred to in subclause (a) above and do not secure any obligations other than those incurred in connection with such purchase and lease transaction, and (ii) the Company or such Subsidiary may incur other obligations in connection with such transaction (and the Company may guarantee any such obligation of a Subsidiary) provided that such obligations and guarantee (a) constitute Non-Recourse Debt, (b) are incidental and necessary to effect such transaction, and (c) are of the type frequently incurred by lessors or equity investors in connection with the business of leasing Property. A-55 "LETTER OF CREDIT PREPAYMENT EVENT" shall mean either: (i) the redemption, reacquisition or repurchase of any San Marcos Bonds (other than in connection with a Permitted IDB Acquisition); or (ii) any deposit, after November 30, 1994, of cash collateral to secure reimbursement obligations of the Company relating to the San Marcos Bonds or any letter of credit relating thereto; in either case, solely as result of and in response to the failure of the bank which has issued any letter of credit relating to the San Marcos Bonds to extend or renew such outstanding letter of credit; provided, however, that prior to effecting such redemption, reacquisition, repurchase or cash collateralization the Company shall have used its best efforts to retain such letter of credit. The Company covenants, in connection with any Letter of Credit Prepayment Event described in clause (i) above, to actively seek to remarket the redeemed, reacquired or repurchased San Marcos Bonds or, to the extent necessary, to modify the structure of such IDB Financing to the extent necessary to permit a long-term reissuance of the repurchased San Marcos Bonds, and, in connection with any Letter of Credit Prepayment Event described in clause (ii) above, to continue to seek to obtain an unsecured letter of credit not requiring such cash collateralization. "LIEN" shall mean any mortgage, pledge, security interest, encumbrance, lien (statutory or otherwise) or charge of any kind (including any agreement to give any of the foregoing (but excluding negative pledge clauses in agreements related to the borrowing of money), any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction (but excluding informational filings made in respect of leases)) or any other type of preferential arrangement for the purpose, or having the effect, of protecting a creditor against loss or securing the payment or performance of an obligation. "MAXIMUM PENSION CONTRIBUTION" shall mean, for any fiscal year of the Company, a contribution to any or all Plans or Multiemployer Plans not exceeding the greater of: (i) the sum of: (a) the amount set forth in the chart below under the heading "Base Contribution" for such fiscal year; plus (b) the lesser of: (I) the amount set forth in the chart below under the heading "Maximum Additional Contribution" for such fiscal year; and (II) the amount, if positive, by which cash provided by operating activities of the Company and the Subsidiaries (calculated in a manner consistent with the preparation of the A-56 projections contained in the Company's February 28, 1994, financial plan, as provided to the Purchasers) for such fiscal year exceeds the amount set forth in the chart below under the heading "Projected Cash Flow" for such fiscal year, so long as, but only so long as, for a period of not less than thirty (30) days prior to and thirty (30) days following each date on which any contribution made by the Company and the Subsidiary would cause the aggregate amount of contributions during such fiscal year to exceed the "Base Contribution" set forth in the chart below for such fiscal year, the amount of Debt outstanding under the Credit Agreement (or any replacement, renewal or refinancing thereof) is Zero Dollars ($0); and (ii) the minimum contribution permitted during such fiscal year pursuant to ERISA, the IRC and the rules and regulations under ERISA and the IRC. A contribution to a Plan or Multiemployer Plan permitted by clause (b) of this definition may be made within a period of ninety (90) days immediately following the end of such fiscal year.
=================================================================== PROJECTED MAXIMUM CASH ADDITIONAL PROVIDED BY FISCAL YEAR BASE CONTRIBUTION CONTRIBUTION OPERATIONS =================================================================== 1994 $17,000,000 $ 0 $36,700,000 - - ------------------------------------------------------------------- 1995 $36,000,000 $ 3,200,000 $15,600,000 - - ------------------------------------------------------------------- 1996 $37,000,000 $ 6,900,000 $46,100,000 - - ------------------------------------------------------------------- 1997 $30,000,000 $10,500,000 $64,900,000 - - ------------------------------------------------------------------- 1998 $23,000,000 $18,200,000 $53,400,000 ===================================================================
"MOODY'S" means Moody's Investors Service, Inc. "MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA) in respect of which the Company or any ERISA Affiliate is an "employer" (as such term is defined in Section 3 of ERISA). "MULTIPLE EMPLOYER PLAN" shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA other than a Multiemployer Plan, subject to Title IV of ERISA, to which the Company or any ERISA Affiliate and an employer (as such term is defined in Section 3 of ERISA) other than an ERISA Affiliate or the Company contribute. A-57 "NET AFTER-TAX CASH BASIS" shall mean at any time in respect of any investment made in connection with a Lease Transaction, the initial amount of such investment made by the Company or any Subsidiary in such Lease Transaction, less (i) the net aggregate amount (on a cash basis) received by or distributed to the Company or such Subsidiary, on or prior to such time, after payment and deduction of all expenses (including but not limited to insurance and trustee's fees and after payment of interest and principal on any loan incurred in such Lease Transaction) to the extent all such expenses are related to and incurred in connection with such Lease Transaction, and, (ii) the net aggregate amount (on a cash basis), on account of reductions in the Company's quarterly estimated tax payments to the United States and to the State of California, on or prior to such time, as such shall be adjusted at year-end to reflect the actual tax benefits obtained on account of reduced taxes payable by virtue of such Lease Transaction. In computing quarterly estimated tax payments, the Company shall take into consideration, on a consolidated basis, the full taxable year's anticipated benefits of the Lease Transaction, including allowable depreciation and interest, expenses, deductions, investment and other tax credits, and net rental income. "NET RENTALS" shall mean, with respect to any period, all fixed payments that the lessee is required to make during such period by the terms of any lease having an original term of one year or more, but shall not include amounts required to be paid in respect of maintenance, repairs, income taxes, property taxes, insurance, assessments or other similar charges or additional rentals (in excess of fixed minimums) based upon a percentage of gross receipts. "NON-EMPLOYEE DIRECTORS STOCK-OPTION PLANS" shall mean the Company's 1988 Non-Employee Directors Stock-Option Plan and any other comparable future plan. "NON-RECOURSE DEBT" shall mean, as to any Person, in connection with a Lease Transaction, all indebtedness and other obligations of such Person (i) incurred in connection with such Lease Transaction and (ii) of the type described in clause (i) of the definition of Lease Transaction; provided, that the obligations of such Person to repay borrowed money shall be expressly limited as to recourse solely to (A) the property subject to such Lease Transaction (including the proceeds of such property) and (B) the amounts payable by or on behalf of the lessee under or in connection with such Lease Transaction. "NOTEHOLDER ACCEPTANCE" shall have the meaning set forth in paragraph 5I(ii) of this Agreement. "NOTEHOLDER SHARE" shall mean, in respect of any holder of Notes and any Ratable Prepayment Amount, such holder's ratable share of such Ratable Prepayment Amount, such ratable share being determined by reference to the outstanding principal amount of Notes held by such holder as a percentage of the outstanding principal amount of all Notes. A-58 "NOTICE OF SALE" shall have the meaning specified in clause (ii) of paragraph 4.E hereof. "OFFER PERIOD" shall have the meaning set forth in paragraph 5I(ii) of this Agreement. "OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the Company by its President, one of its Vice Presidents, its Chief Financial Officer, its Controller, its Secretary or its Treasurer. "ORIGINALLY SCHEDULED PAYMENTS" shall mean and include: (i) payment of any Debt at scheduled maturity; (ii) with respect to any Debt, originally scheduled prepayments, originally scheduled redemptions, originally scheduled sinking fund payments or originally scheduled reductions in maximum commitments thereof; and (iii) payments in respect of any revolving credit agreement, including, without limitation, the Credit Agreement, which do not result in a permanent reduction of the original commitment thereunder. As used in the preceding sentence, "original" or "originally scheduled" means the maturity, payments, prepayments, or reductions in commitment established as of the Third Amendment Date, or, if later, at the time of execution of the relevant credit facility but does not include any payments, prepayments or reductions in commitment which result from the occurrence of any contingency, even if the provision requiring such payment, prepayment or reduction as a result of such contingency was originally contained in the agreements governing such Debt, and even if the occurrence of such contingency was foreseeable, at the time of the execution of the documentation of such issue of Debt. "PERMITTED EXISTING SUBORDINATED DEBT ACQUISITIONS" shall mean, with respect to either Series of Existing Subordinated Notes, the purchase or acquisition by the Company or any Subsidiary of Existing Subordinated Notes of such Series in anticipation of satisfying an Originally Scheduled Payment thereof; provided, however, that all of the following conditions are met: (i) no Existing Subordinated Notes may be acquired more than three hundred sixty-four (364) days prior to the date of any such Originally Scheduled Payment thereof; (ii) the Company or any Subsidiary, more than one hundred eighty (180) days, but not more than three hundred sixty-four (364) days, prior to the date of the next succeeding Originally Scheduled Payment thereof, may acquire no more than fifty percent (50%) of the aggregate principal amount of Existing Subordinated Notes of such Series required to be prepaid or redeemed on the date of the next succeeding Originally Scheduled Payment; A-59 (iii) the Company or any Subsidiary, not more than one hundred eighty (180) days prior to the date of the next succeeding Originally Scheduled Payment thereof, may acquire an aggregate principal amount of Existing Subordinated Notes of such Series not exceeding (together with any Existing Subordinated Notes of such Series acquired more than one hundred eighty (180) days, but not more than three hundred sixty- four (364) days, prior to the date of the next succeeding Originally Scheduled Payment thereof) one hundred percent (100%) of the aggregate principal amount of Existing Subordinated Notes of such Series required to be prepaid or redeemed on the date of the next succeeding Originally Scheduled Payment; (iv) at the time of such acquisition: (a) no Default or Event of Default shall be continuing; (b) the Company shall not reasonably foresee the occurrence of any Default or Event of Default at any time prior to the date of the next succeeding Originally Scheduled Payment thereof; (c) the Debt Ratio would not exceed 2.50:1.00; and (d) the Company could incur $1.00 of additional Debt; (v) the purchase price paid by the Company and the Subsidiaries in respect of such acquisition of Existing Subordinated Notes shall be less than one hundred percent (100%) of the principal amount of Existing Subordinated Notes so acquired; and (vi) the Company, on the date of each Originally Scheduled Payment in respect of the Existing Subordinated Notes, shall actually apply, in accordance with the provisions of such Existing Subordinated Notes, all Existing Subordinated Notes of such Series acquired by the Company and the Subsidiaries to the prepayment or redemption of such Existing Subordinated Notes required to be prepaid or redeemed on such date. "PERMITTED IDB ACQUISITIONS" shall mean: (i) prepayments or repurchases of San Marcos Bonds upon tender by the holders thereof after May 10, 1994 in accordance with the terms of the indenture governing the San Marcos Bonds; provided, however, that San Marcos Bonds in an aggregate principal amount of Sixteen Million Five Hundred Thousand Dollars ($16,500,000) shall have been issued, outstanding and held and owned by Persons other than the Company, any Subsidiary or any Affiliate on May 10, 1994 (whether or not subsequently repurchased by the Company); and provided, further, that the Company shall be actively seeking to either remarket the San Marcos Bonds that were so prepaid or repurchased pursuant to the provisions of the IDB Financing of the Company's San Marcos, Texas facility or, to the extent necessary in connection with any termination of any outstanding A-60 letter of credit relating to such facility, to modify the structure of such IDB Financing to the extent necessary to permit a long-term reissuance of the repurchased San Marcos Bonds; and (ii) the redemption in full on or before June 1, 1994 of all the San Marcos Bonds, but solely as result of and in response to the failure of FUJI to extend or renew its outstanding letter of credit relating to the IDB Financing of the Company's San Marcos, Texas facility; provided, however, that: (a) prior to effecting such redemption, the Company shall have used its best efforts to retain such letter of credit by offering to deposit cash collateral to secure its obligations to FUJI under the Reimbursement Agreement, dated as of May 1, 1990, with the Company relating to such IDB Financing; (b) following the making of such redemption, the Company shall use its best efforts to obtain a replacement unsecured letter of credit to issue replacement unsecured San Marcos Bonds, and shall thereafter use its best efforts to market or sell such San Marcos Bonds. "PERMITTED INVESTMENTS" means any of the following, to the extent owned by the Company free and clear of all Liens (except such Liens as are permitted by the terms of this Agreement): (i) marketable direct obligations issued or unconditionally guaranteed by the United States government or issued by an agency or instrumentality thereof and backed by the full faith and credit of the United States, in each case maturing within one year after the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 180 days after the date of acquisition thereof and, at the time of acquisition, having a rating of A or higher from either S&P or Moody's (or, if at any time neither S&P nor Moody's shall be rating such obligations, then one of the three highest ratings from another nationally recognized rating service reasonably acceptable to the Required Holders) and not listed in the Credit Watch published by S&P; (iii) commercial paper (other than commercial paper issued by the Company or any Affiliate or Consolidated Subsidiary) maturing no more than 180 days after the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 or P-1 from either S&P or Moody's (or, if at any time neither S&P nor Moody's shall be rating such obligations, then the highest rating from other nationally recognized rating services reasonably acceptable to the Required Holders); (iv) domestic and Eurodollar certificates of deposit or time deposits, bankers' acceptances or bank notes maturing within one year after the date of A-61 acquisition thereof issued by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia having a rating of A or higher from S&P or Moody's; (v) money market funds having an average portfolio maturity, at the time of acquisition thereof, of not more than 180 days, which money market funds either: (a) have a rating from a nationally recognized rating service reasonably acceptable to the Required Holders which is equivalent to a rating of either AAAm-G or AAAm from S&P or a rating of Prime-1 from Moody's; or (b) are required to invest at least 95% of their assets in instruments described in other clauses of this definition; (vi) repurchase obligations with a term of not more than 30 days for instruments described in clauses (i) and (ii) of this definition; (vii) investments made in connection with the Citibank, N.A., overnight Nassau Sweep Account; and (viii) repurchase obligations having Kidder, Peabody & Co., Inc., or any other investment bank organized under the laws of any state of the United States and approved by the Required Holders as the counterparty, with a term of not more than 45 days for whole loans secured by commercial or residential real estate mortgages. "PERMITTED PREFERRED DIVIDEND" shall mean dividends in respect of any Permitted Preferred Stock in an aggregate amount not to exceed in any period of 365 days (or 366 days in any year in which there is a February 29th) the product of (i) the lesser of: (a) an amount equal to 100 basis points in excess of the yield on the U.S. Treasury security with a constant maturity of 30 years on the date of issuance of the Permitted Preferred Stock; and (b) 10% per annum, times (ii) the aggregate cash consideration paid to the Company in consideration of the issuance of the Permitted Preferred Stock. "PERMITTED PREFERRED STOCK" shall mean any issue of preferred stock of the Company which is not required to be redeemed, repurchased or otherwise acquired or A-62 retired, in whole or in part, for value by the Company, upon the occurrence of any contingency or otherwise, prior to July 1, 2003. "PERSON" shall mean an individual, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. "PLAN" shall mean at any time any "employee pension benefit plan" (as such term is defined in Section 3 of ERISA) maintained by the Company or any ERISA Affiliate for employees of the Company or such ERISA Affiliate, excluding any Multiemployer Plan, but including, without limitation, any Multiple Employer Plan. "PREPAYMENT EVENT" shall mean any Letter of Credit Prepayment Event, any mandatory or optional defeasance, prepayment or repurchase, in whole or in part, of any issue of Debt (other than Debt owing solely to the Company or any Wholly-Owned Subsidiary), or reduction in commitment in any credit facility, of the Company or any Subsidiary, or any event which occurs that gives rise to an obligation of the Company or any Subsidiary to make any such defeasance, prepayment, repurchase or reduction, in each case, other than: (i) Originally Scheduled Payments; (ii) Permitted Existing Subordinated Debt Acquisitions; (iii) Permitted IDB Acquisitions; (iv) Equity Issuance Acquisitions; and (v) De Minimus Payments. In connection with any Debt described in clause (vi) of the definition of "Debt," payments in respect of contributions of amounts not exceeding, during any fiscal year of the Company, the Maximum Pension Contribution for such fiscal year to any Plan or Multiemployer Plan shall not give rise to a Prepayment Event, but a Prepayment Event will result from the payment or contribution to any such Plan or Multiemployer Plan of any amount in excess of the Maximum Pension Contribution during any fiscal year. "PREPAYMENT OFFER" shall have the meaning set forth in paragraph 5I(i) of this Agreement. "PREPAYMENT PORTION" shall have the meaning set forth in paragraph 5I(iii) of this Agreement. "PROPERTY" shall mean any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible. "PURCHASE MONEY MORTGAGES" shall mean a Lien held by any Person (whether or not the seller of such assets) on tangible assets (other than assets acquired to replace, A-63 repair, upgrade or alter assets owned by the Company or any Subsidiary on the Closing Date) acquired, improved or constructed by the Company or any Subsidiary after the Closing Date, which Lien secures all or a portion of the related purchase price or improvement or construction costs of such assets (or Debt incurred to pay such purchase price or costs), or any Lien existing on any tangible assets of any corporation at the time it becomes a Subsidiary, and extensions (as to time), renewals and replacements of any such Lien or the Debt secured thereby, provided that, in each such case such Lien does not extend to any other asset of the Company or any Subsidiary; provided, further, that any Lien on acquired Property, or on Property of a corporation at the time it becomes a Subsidiary, was not created in contemplation of such acquisition or such corporation becoming a Subsidiary, as the case may be. "PURCHASERS" shall have the meaning specified in the introductory paragraph of this Agreement. "RATABLE PREPAYMENT AMOUNT" shall mean, in respect of the Notes: (i) in connection with any Letter of Credit Prepayment Event, an amount equal to the product of: (a) the aggregate principal amount of San Marcos Bonds redeemed, reacquired or repurchased, or with respect to which cash collateral has been deposited to secure reimbursement obligations of the Company relating to the San Marcos Bonds or any letter of credit relating thereto, as the case may be, by the Company; times (b) the quotient of: (I) the aggregate amount of Notes then outstanding; divided by (II) the aggregate amount of the Notes and the 9.35% Senior Notes due January 29, 2000 of the Company then outstanding; and (ii) with respect to each other Prepayment Event, a principal amount of the Notes equal to the product of: (a) the highest percentage of any issue of Debt being prepaid, or as to which any offer to prepay shall apply, as a result of the occurrence of such Prepayment Event, multiplied by (b) the outstanding principal amount of the Notes. "REQUIRED HOLDERS" shall mean at any time the holder or holders of at least sixty-six and two-thirds percent (66 2/3%) of the aggregate principal amount of the Notes A-64 outstanding at such time, provided that Notes owned by the Company, any Subsidiary or any Affiliate at such time shall be deemed not to be outstanding for purposes of determining such percentage. "RESPONSIBLE OFFICER" shall mean the chief executive officer, chief operating officer, chief financial officer or chief accounting officer of the Company or any other officer of the Company involved principally in its financial administration or its controllership function. "RESTRICTED STOCK PLANS" shall mean the 1969, 1970, 1972, 1974 and 1984 Restricted Stock Plans of the Company and any other comparable future plan. "RIGHT TO PUT" shall have the meaning specified in clause (i) of paragraph 4.E hereof. "RIGHTS AGREEMENT" shall mean the Rights Agreement dated as of August 15, 1986, between the Company and The First National Bank of Chicago, as in effect on December 21, 1992. "S&P" means Standard & Poor's Corporation. "SAN MARCOS BONDS" shall mean bonds originally issued in connection with the IDB Financing of Company's San Marcos, Texas facility or replacement bonds issued on substantially the same terms as the originally issued bonds. "SECOND AMENDMENT" shall mean the Second Amendment Agreement entered into as of September 24, 1993, between the Company and the holder of Notes named therein. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. "SECURITY" shall have the meaning specified in Section 2(1) of the Securities Act. "SENIOR DEBT" shall mean all Debt of Subsidiaries, all Debt of the Company secured by any Lien and all other Debt ranking senior to or pari passu with the Notes with respect to distributions of the Company's Property in any bankruptcy proceeding. "SENIOR OFFICER" shall mean with respect to any corporation each of the Chairman, President, any Vice-President, the Chief Financial Officer, the Secretary, and the Treasurer of such corporation. "SIGNIFICANT HOLDER" shall mean (i) each Purchaser, so long as such Purchaser shall hold (or be committed under this Agreement to purchase) any Note, or (ii) any other holder of at least five percent (5%) of the aggregate principal amount of the Notes from time to time outstanding. "STOCK INCENTIVE PLANS" shall mean the 1989 Stock Incentive Plan of the Company and any other future comparable plan. A-65 "STOCK OPTION PLANS" shall mean the 1972, 1973, 1974, 1982 and 1984 Stock Option Plans of the Company and any other future comparable plan. "SUBSIDIARY" shall mean any corporation organized under the laws of any state of the United States of America, Canada, or any province of Canada, that has the majority of its Property located in and makes the major portion of its sales to Persons located in the United States of America or Canada, and more than fifty percent (50%) of the total combined voting power of all classes of Voting Stock of which shall, at the time as of which any determination is being made, be owned, directly or indirectly, by the Company. "THIRD AMENDMENT" shall mean the Third Amendment Agreement entered into as of May 10, 1994, between the Company and the holder of Notes named therein. "THIRD AMENDMENT DATE" shall mean the "Effective Date," as such term is defined in the Third Amendment. "TRADE RECEIVABLES AGREEMENT" shall mean (i) the Amended and Restated Trade Receivables Purchase and Sale Agreement dated as of January 26, 1990 and as amended thereafter among the Company, Corporate Asset Funding Company, Inc., Citibank, N.A. and Citicorp North America, Inc., individually and as agent, (ii) the Amended and Restated Trade Receivables Purchase and Sale Agreement dated as of January 26, 1990 and as amended thereafter among the Company, Citibank, N.A. and Citicorp North America, Inc., individually and as agent, and (iii) other agreements for the sale of receivables, or other amounts payable to the Company on account of any pre-production costs, by the Company or any Subsidiary, with recourse to the Company or such Subsidiary no greater than as set forth in the agreement referred to in clause (i) of this definition, provided that in no event shall (a) the Company or any Subsidiary sell Property (or subject Property to any Liens) under any such agreements other than Property of the type that may be sold under any such agreements in accordance with the terms of any such agreements as in effect on the Closing Date, and in no event shall such sales be made unless they are sales of interests in accounts and general intangibles as such terms are defined by the Uniform Commercial Code as in effect in New York, (b) at any time the aggregate amount of claims (whether or not asserted at such time) against any one or more of the Company or the Subsidiaries, or assets of any of them, arising out of such agreements (but only that portion of such claims that represents principal) exceed the greater of, A-66 (I) thirty-five percent (35%) of Adjusted Consolidated Tangible Net Worth, or (II) Sixty Million Dollars ($60,000,000), and (c) for any period of ten consecutive Business Days, the aggregate amount of claims (whether or not asserted at such time) against any one or more of the Company or the Subsidiaries, or assets of any of them, arising out of such agreements (but only that portion of such claims that represents principal) exceed ninety-one percent (91%) of the aggregate face amount of the receivables and general intangibles with respect to which the Company may or has sold interests under any such agreements and which receivables and general intangibles are outstanding at such time. "TRANSFEREE" shall mean any direct or indirect transferee of all or any part of any Note purchased by any Purchaser under this Agreement. "VOTING STOCK" shall mean, with respect to any corporation, any shares of stock of such corporation whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). "WARRANT AGREEMENT" shall mean that certain Warrant Agreement entered into among the Company and holders of the Notes and certain other Debt of the Company on or after the Amendment Date in compliance with the provisions of paragraph 7A of the Amendment. "WARRANTS" shall mean warrants to purchase shares of the common stock of the Company issued pursuant to the Warrant Agreement. "WHOLLY-OWNED SUBSIDIARY" shall mean any Subsidiary one hundred percent (100%) of the capital stock of which (other than directors' qualifying shares) is held of record and beneficially owned by the Company or any other Wholly-Owned Subsidiary. 11. MISCELLANEOUS. 11A. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser shall hold any Note, it will make payments of principal of, interest on, and Agreed Put Consideration and any Yield-Maintenance Amount payable with respect to, such Note, by wire transfer of immediately available funds for credit (not later than 12:00 noon, New York City time, on the date due) to such Purchaser's account or accounts as specified in the Purchaser Schedule attached hereto, or such other account or accounts in the United States as such Purchaser may designate in writing, notwithstanding any contrary provision herein or in any Note with respect to the place of payment. Each Purchaser agrees that, before disposing of any Note, such Purchaser will make a notation thereon (or on a schedule attached thereto) of all principal payments previously made thereon and of the date to which interest thereon has been paid. The Company agrees A-67 to afford the benefits of this paragraph 11A to any Transferee which shall have made the same agreement as each Purchaser has made in this paragraph 11A. 11B. EXPENSES. The Company agrees, whether or not the transactions contemplated hereby shall be consummated, to pay, and save each Purchaser and any Transferee harmless against liability for the payment of, all out-of-pocket expenses arising in connection with such transactions, including (i) all document production and duplication charges and the fees and expenses of any special counsel engaged by such Purchaser or such Transferee in connection with this Agreement, the transactions contemplated hereby and any subsequent proposed modification of, or proposed consent under, this Agreement, whether or not such proposed modification shall be effected or proposed consent granted, and (ii) the costs and expenses, including attorneys' fees, incurred by such Purchaser or such Transferee in enforcing (or determining whether or how to enforce) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the transactions contemplated hereby or by reason of such Purchaser's or such Transferee's having acquired any Note, including without limitation costs and expenses incurred in any bankruptcy case. The obligations of the Company under this paragraph 11B shall survive the transfer of any Note or portion thereof or interest therein by any Purchaser or any Transferee and the payment of any Note. 11C. CONSENT TO AMENDMENTS. This Agreement and the Notes may be amended, and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, if the Company shall obtain the written consent to such amendment, action or omission to act, of the Required Holders except that, without the written consent of the holder or holders of all Notes at the time outstanding, no amendment to this Agreement shall change the maturity of any Note, or change the principal of, or the rate or time of payment of interest on or any Agreed Put Consideration or Yield-Maintenance Amount payable with respect to any Note, or affect the time, amount or allocation of any prepayments, or change the proportion of the principal amount of the Notes required with respect to any consent, amendment, waiver or declaration. With respect to waivers or consents to amendments to or concerning the provisions of paragraph 5I hereof, the provisions of such paragraph and (except as set forth in this sentence) the definitions used therein (as used therein) may not be waived, amended or supplemented without the consent of each holder of Notes, but waivers concerning the occurrence of any Prepayment Event, and waivers and consents to amendments or supplements to the definition of Prepayment Event, may be given by the Required Holders. Each holder of any Note at the time or thereafter outstanding shall be bound by any consent authorized by this paragraph 11C, whether or not such Note shall have been marked to indicate such consent, but any Notes issued thereafter may bear a notation referring to any such consent. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights A-68 of any holder of such Note. As used herein and in the Notes, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented. 11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The Notes are issuable as registered notes without coupons in denominations of at least One Million Dollars ($1,000,000), except as may be necessary to reflect any principal amount not evenly divisible by One Million Dollars ($1,000,000). The Company shall keep at its principal office a register in which the Company shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of the Transferee or Transferees, provided that any such Transferee or Transferees are Institutional Investors. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Company. Whenever any Notes are so surrendered for exchange, the Company shall, at its expense, execute and deliver the Notes which the holder making the exchange is entitled to receive. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue which were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's unsecured indemnity agreement, or in the case of any such mutilation upon surrender and cancellation of such Note, the Company will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. 11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for registra-tion of transfer, the Company may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of, interest on and any Yield-Maintenance Amount payable with respect to such Note and for all other purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to the preceding sentence, the holder of any Note may from time to time grant participations in such Note to any Institutional Investor on such terms and conditions as may be determined by such holder in its sole and absolute discretion, provided that any such participation shall be in a principal amount of at least One Hundred Thousand Dollars ($100,000). 11F. ACCOUNTING TERMS. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements contained in the Company's Quarterly Report on Form 10-Q for fiscal quarter ended May 2, 1993. If any change in accounting principles from those used in the preparation of such financial statements hereafter occasioned by the promulgation of rules and regulations by or required by the Financial Accounting Standards Board, the Cost Accounting Standards Board or the Securities and Exchange Commission (or successors thereto or agencies with similar functions) result in a material change A-69 in the accounting principles used to prepare the financial statements contained in the Company's Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q, the Company and the holders of Notes agree, upon notification of such change by the Company to the holders of Notes or by a holder of Notes to the Company, to enter into negotiations in order to amend paragraph 6 and the Financial Covenants incorporated by reference herein, as applicable, so as to equitably reflect such change with the desired result that the criteria for evaluating the Company's financial condition shall be the same after such change as if such change had not been made. 11G. DIRECTLY OR INDIRECTLY. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether 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. 11H. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein or made in writing by or on behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf of any Purchaser or any Transferee. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between the Purchasers and the Company and supersede all prior agreements and understandings relating to the subject matter hereof. 11I. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this Agreement contained by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not. 11J. DISCLOSURE TO OTHER PERSONS. Each Purchaser agrees to use its best efforts to hold in confidence and not to disclose any Confidential Information, provided, that any Purchaser will be free, after notice to the Company, to correct any false or misleading information that may become public concerning its relationship to the Company and the Subsidiaries or to the transactions contemplated by this Agreement. Notwithstanding the foregoing, the Company acknowledges that the holder of any Note may deliver copies of any financial statements and other documents delivered to such holder, and disclose any other information disclosed to such holder (including, without limitation, Confidential Information), by or on behalf of the Company or any Subsidiary in connection with or pursuant to this Agreement, to (i) such holder's directors, officers, employees, agents and professional consultants, (ii) any other holder of any Note, (iii) any Institutional Investor to which such holder sells or offers to sell such Note or any part thereof, provided that such Institutional Investor signs a written agreement to comply with the confidentiality provisions of this Agreement, regardless of whether or not such offeree purchases any Notes, and provided further that no such A-70 agreement shall be required so long as such Institutional Investor is furnished only with information that is not Confidential Information, (iv) any Institutional Investor to which such holder sells or offers to sell a participation in all or any part of such Note, provided that such Institutional Investor signs a written agreement to comply with the confidentiality provisions of this Agreement, regardless of whether or not such offeree purchases any Notes, and provided further that no such agreement shall be required so long as such Institutional Investor is furnished only with information that is not Confidential Information, (v) any federal or state regulatory authority having jurisdiction over such holder, (vi) the National Association of Insurance Commissioners or any similar organization or (vii) any other Person to which such delivery or disclosure may be necessary, (a) in compliance with any law, rule, regulation or order applicable to such holder, (b) in response to any subpoena or other legal process, or (c) in connection with any litigation to which such holder is a party. 11K. NOTICES. All written communications provided for hereunder shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid) and (i) if to any Purchaser, addressed to such Purchaser at the address specified for such communications in the Purchaser Schedule attached hereto, or at such other address as such Purchaser shall have specified to the Company in writing, (ii) if to any other holder of any Note, addressed to such other holder at such address as such other holder shall have specified to the Company in writing or, if any such other holder shall not have so specified an address to the Company, then addressed to such other holder in care of the last holder of such Note which shall have so specified an address to the Company, and (iii) if to the Company, addressed to it at: Rohr, Inc. Foot of H Street Chula Vista, CA 92012 Attention: Treasurer copy to: General Counsel or at such other address as the Company shall have specified to the holder of each Note in writing; provided, however, that any such communication to the Company may also, A-71 at the option of the holder of any Note, be delivered by any other means either to the Company at its address specified above or to any officer of the Company. 11L. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such Business Day. 11M. SATISFACTION REQUIREMENT. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to any Purchaser or to the Required Holders, the determination of such satisfaction shall be made by such Purchaser or the Required Holders, as the case may be, in the sole and exclusive judgment (exercised in good faith) of the Person or Persons making such determination. 11N. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK. 11O. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 11P. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 11Q. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. 11R. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers are to be several sales, and the obligations of the Purchasers under this Agreement are several obligations. Except as provided in paragraph 3F, no failure by any Purchaser to perform its obligations under this Agreement shall relieve any other Purchaser or the Company of any of its obligations hereunder, and no Purchaser shall be responsible for the obligations of, or any action taken or omitted by, any other Purchaser hereunder. A-72 If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterparts of this letter and return the same to the Company, whereupon this letter shall become a binding agreement among the Company and the Purchasers. Very truly yours, ROHR, INC. By___________________________________ Name: Title: The foregoing Agreement is hereby accepted as of the date first above written. [PURCHASER] By________________________________ Name: Title: A-73 EX-4.5 6 INDENTURE (SENIOR) ROHR, INC. AND IBJ SCHRODER BANK & TRUST COMPANY, AS TRUSTEE ---------------------------- $100,000,000 11 5/8% Senior Notes due 2003 ---------------------------- INDENTURE Dated as of May 15, 1994 TABLE OF CONTENTS -----------------
Page ---- ARTICLE 1 Definitions................................................. 1 SECTION 1.01 Definitions.............................................. 1 SECTION 1.02 Other Definitions........................................ 20 SECTION 1.03 Incorporation by Reference of Trust Indenture Act........ 21 SECTION 1.04 Rules of Construction.................................... 21 ARTICLE 2 The Senior Notes............................................ 22 SECTION 2.01 Form and Dating.......................................... 22 SECTION 2.02 Execution and Authentication............................. 22 SECTION 2.03 Registrar and Paying Agent............................... 23 SECTION 2.04 Paying Agent To Hold Money in Trust...................... 23 SECTION 2.05 Holder Lists............................................. 23 SECTION 2.06 Transfer and Exchange.................................... 24 SECTION 2.07 Replacement Senior Notes................................. 24 SECTION 2.08 Outstanding Senior Notes................................. 24 SECTION 2.09 When Treasury Senior Notes Disregarded................... 25 SECTION 2.10 Temporary Senior Notes................................... 25 SECTION 2.11 Cancellation............................................. 25 SECTION 2.12 Defaulted Interest....................................... 25 SECTION 2.13 CUSIP Number............................................. 26 ARTICLE 3 Redemption.................................................. 26 SECTION 3.01 Notices to Trustee....................................... 26 SECTION 3.02 Selection of Senior Notes To Be Redeemed................. 26 SECTION 3.03 Notice of Redemption..................................... 27 SECTION 3.04 Effect of Notice of Redemption........................... 27 SECTION 3.05 Deposit of Redemption Price.............................. 28 SECTION 3.06 Senior Notes Redeemed in Part............................ 28 ARTICLE 4 Covenants................................................... 28 SECTION 4.01 Payment of Senior Notes.................................. 28 SECTION 4.02 Commission Reports....................................... 28 SECTION 4.03 Compliance Certificate................................... 29 SECTION 4.04 Maintenance of Office or Agency.......................... 29 SECTION 4.05 Limitation on Indebtedness............................... 30 SECTION 4.06 Limitation on Restricted Payments........................ 30 SECTION 4.07 Limitations on Payment Restrictions Affecting Subsidiaries........................................... 31 SECTION 4.08 Limitations on Transactions with Affiliates.............. 33 SECTION 4.09 Limitation on Subsidiary Indebtedness and Preferred Stock........................................ 33 SECTION 4.10 Limitation on Sale of Assets............................. 35
i SECTION 4.11 Limitation on Liens...................................... 37 SECTION 4.12 Continued Existence...................................... 38 SECTION 4.13 Taxes.................................................... 38 SECTION 4.14 Stay, Extension and Usury Laws........................... 39 SECTION 4.15 Investment Company Act................................... 39 SECTION 4.16 Change of Control........................................ 39 SECTION 4.17 Limitation on Sale and Leaseback Transactions............ 41 SECTION 4.18 Appointments to Fill Vacancies in Trustee's Office....... 41 SECTION 4.19 Further Instruments and Acts............................. 41 ARTICLE 5 Successors.................................................. 42 SECTION 5.01 When the Company May Merge, Etc.......................... 42 SECTION 5.02 Successor Corporation Substituted........................ 43 SECTION 5.03 Purchase Option on Change of Control..................... 43 ARTICLE 6 Defaults and Remedies....................................... 44 SECTION 6.01 Events of Default........................................ 44 SECTION 6.02 Acceleration............................................. 45 SECTION 6.03 Other Remedies........................................... 46 SECTION 6.04 Waiver of Past Defaults.................................. 46 SECTION 6.05 Control by Majority...................................... 46 SECTION 6.06 Limitation on Suits...................................... 47 SECTION 6.07 Rights of Holders To Receive Payment..................... 47 SECTION 6.08 Collection Suit by Trustee............................... 47 SECTION 6.09 Trustee May File Proofs of Claim......................... 48 SECTION 6.10 Priorities............................................... 48 SECTION 6.11 Undertaking for Costs.................................... 48 ARTICLE 7 The Trustee................................................. 48 SECTION 7.01 Duties of the Trustee.................................... 49 SECTION 7.02 Rights of the Trustee.................................... 50 SECTION 7.03 Individual Rights of the Trustee......................... 50 SECTION 7.04 Trustee's Disclaimer..................................... 50 SECTION 7.05 Notice of Defaults....................................... 51 SECTION 7.06 Reports by the Trustee to Holders........................ 51 SECTION 7.07 Compensation and Indemnity............................... 51 SECTION 7.08 Replacement of the Trustee............................... 52 SECTION 7.09 Successor Trustee by Merger, Etc......................... 53 SECTION 7.10 Eligibility, Disqualification............................ 53 SECTION 7.11 Preferential Collection of Claims Against Company........ 53
ii ARTICLE 8 Satisfaction and Discharge of Indenture.................... 54 SECTION 8.01 Termination of Company's Obligations.................... 54 SECTION 8.02 Application of Trust Money.............................. 57 SECTION 8.03 Repayment to Company.................................... 57 SECTION 8.04 Reinstatement........................................... 57 ARTICLE 9 Amendments................................................. 58 SECTION 9.01 Without the Consent of Holders.......................... 58 SECTION 9.02 With the Consent of Holders............................. 58 SECTION 9.03 Compliance with the Trust Indenture Act................. 59 SECTION 9.04 Revocation and Effect of Consents....................... 59 SECTION 9.05 Notation on or Exchange of Senior Notes................. 60 SECTION 9.06 Trustee Protected....................................... 60 ARTICLE 10 General Provisions......................................... 60 SECTION 10.01 Trust Indenture Act Controls............................ 60 SECTION 10.02 Notices................................................. 61 SECTION 10.03 Communication by Holders With Other Holders............. 61 SECTION 10.04 Certificate and Opinion as to Conditions Precedent...... 61 SECTION 10.05 Statements Required in Certificate or Opinion........... 62 SECTION 10.06 Rules by Trustee and Agents............................. 62 SECTION 10.07 Legal Holidays.......................................... 63 SECTION 10.08 No Recourse Against Others.............................. 63 SECTION 10.09 Counterparts............................................ 63 SECTION 10.10 Other Provisions........................................ 63 SECTION 10.11 Governing Law........................................... 64 SECTION 10.12 No Adverse Interpretation of Other Agreements........... 64 SECTION 10.13 Successors.............................................. 64 SECTION 10.14 Severability............................................ 64 SECTION 10.15 Table of Contents, Headings, Etc........................ 64
iii CROSS-REFERENCE TABLE* TRUST INDENTURE ACT SECTION - - --------------------------- INDENTURE SECTION ----------------- 310(a)(1).............................................................7.10 (a)(2)................................................................7.11 (a)(3)................................................................N.A (a)(4)................................................................N.A (b)......................................................7.08, 7.10, 10.02 (c)...................................................................N.A 311(a)................................................................7.11 (b)...................................................................7.11 (c)...................................................................N.A. 312(a)................................................................2.05 (b)..................................................................10.03 (c)..................................................................10.03 313(a)................................................................7.06 (b)(1)................................................................N.A. (b)(2)................................................................7.06 (c)............................................................7.06, 10.02 (d)...................................................................7.06 314(a).........................................................4.01, 10.02 (b)...................................................................N.A. (c)(1)...............................................................10.04 (c)(2)...............................................................10.04 (c)(3)................................................................N.A. (d)...................................................................N.A. (e)..................................................................10.05 (f)...................................................................N.A. 315(a).............................................................7.01(b) (b)............................................................7.05, 10.02 (c)................................................................7.01(a) (d)................................................................7.01(c) (e)...................................................................6.11 A-i 316(a)(last sentence).................................................2.09 (a)(1)(A).............................................................6.05 (a)(2)(B).............................................................6.04 (a)(2)................................................................N.A. (b)...................................................................6.02 317(a)(1).............................................................6.08 (a)(2)................................................................6.09 (b)...................................................................2.04 318(a)...............................................................10.01 N.A. means not applicable. - - -------------------------- * This Cross-Reference Table is not part of the Indenture. A-ii THIS INDENTURE, dated as of May 15, 1994, is between Rohr, Inc., a Delaware corporation (the "Company"), and IBJ Schroder Bank & Trust Company, a New York banking corporation ("Trustee"). The Company has duly authorized the creation of its 11 5/8% Senior Notes due 2003 (the "Senior Notes") and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the holders from time to time of the Senior Notes. ARTICLE 1 Definitions SECTION 1.01 Definitions. ----------- "Acquired Indebtedness" of any specified Person means Indebtedness of any other Person and its Subsidiaries existing at the time such other Person merged with or into or became a Subsidiary of such specified Person or assumed by the specified Person in connection with the acquisition of assets from such other Person including, without limitation, Indebtedness of such other Person and its Subsidiaries incurred in connection with or in anticipation of (a) such other Person and its Subsidiaries being merged with or into or becoming a Subsidiary of such specified Person or (b) such acquisition by the specified Person. "Affiliate" means, when used with reference to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the referent Person, as the case may be, or any Person who beneficially owns (within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, 10% or more of the equity interests of the referent Person or warrants, options or other rights to acquire or hold more than 10% of any class of equity interests of the referent Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct or cause the direction of management or policies of the referent Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative of the foregoing. "Agent" means any Registrar, Paying Agent or co-registrar. "Asset Sale" means any sale, lease, transfer, exchange or other disposition by the Company or any Subsidiary (or series of related sales, leases, transfers, exchanges or dispositions) in excess of $1,000,000, including, without limitation, dispositions pursuant to merger, consolidation or sale and leaseback transactions, of (a) shares of Capital Stock of a Subsidiary of the Company (pro rated to the extent of the Company's interest therein), (b) all or substantially all of the properties and assets of any division or line of business of the 1 Company or any Subsidiary of the Company or (c) any other property or assets of the Company (pro rated to the extent of the Company's interest therein) or of any Subsidiary of the Company (pro rated to the extent of the Company's interest therein,) (each referred to for purposes of this definition as a "disposition") by the Company or by any of its Subsidiaries (other than (i) dispositions by the Company to a Wholly Owned Subsidiary of the Company or by a Subsidiary of the Company to the Company or to a Wholly Owned Subsidiary of the Company, (ii) sales or other dispositions of inventory in the ordinary course of business, (iii) any disposition of properties or assets that is consummated in accordance with the provisions of Section 5.01, (iv) any disposition of any account receivable pursuant to the Pooling and Servicing Agreement, (v) dispositions by the Company or any Subsidiary of the Company of the business jet product line, the overhaul and repair business, as conducted by Rohr Aero Services, Inc. and Rohr Aero Services Europe, respectively, on the Issue Date, the Hagerstown, Maryland plant and the Auburn, Washington plant, in each case, including related assets, (vi) the disposition by the Company or any Subsidiary of the Company of interests owned on the Issue Date in two trusts which own an Airbus A300 aircraft and a McDonnell Douglas DC10 aircraft, respectively and (vii) the disposition of Building 107 (at the Company's facility in Chula Vista, California) to (A) any pension plan of the Company or (B) to any other Person if the net proceeds of such disposition are delivered to any pension plan referred to in clause (A) of this definition, in either case resulting in the full satisfaction (or in case the full amount of such net proceeds are so delivered and shall be insufficient to effect such full satisfaction, the partial satisfaction,) of the Company's funding liabilities with respect to any such pension plans). "Average Life" means, as of the date of determination, with respect to any Indebtedness or security, the quotient obtained by dividing (a) the sum of the product of (i) the number of years from such date to the date of each successive scheduled principal or redemption payment of such Indebtedness or security multiplied by (ii) the amount of such principal or redemption payment by (b) the sum of all such principal or redemption payments. "Bank Agent" means, at any time, the then-acting agent under the Revolving Credit Agreement, which shall initially be Citicorp USA, Inc. "Board of Directors" means the Board of Directors of the Company or any authorized committee of the Board of Directors. "Capital Stock" means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of such Person's capital stock, including each class of Common Stock or Preferred Stock of such Person, whether outstanding on the Issue Date or issued after the Issue Date, and any and all rights, warrants or options exchangeable for or convertible into such capital stock (but excluding any debt security that is exchangeable for or convertible into such capital stock). 2 "Capitalized Lease Obligation" means any obligation under a lease that is required to be classified and accounted for as a capital lease obligation under GAAP and, for purposes of this Indenture, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP. The Stated Maturity of such obligation shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without penalty. "Cash Equivalents" means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within three years from the date of acquisition thereof, (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having a long-term rating of at least A from either Standard & Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's") or a short-term rating of at least A-1 from S&P or P-1 from Moody's, (c) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A- 1 from S&P or at least P-1 from Moody's, (d) certificates of deposit, bankers' acceptances, time deposits, eurocurrency deposits or similar types of investments routinely offered by commercial banks and maturing within one year from the date of acquisition thereof issued by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any United States branch of a foreign bank having, at the date of acquisition thereof, combined capital and surplus of not less than $500 million, (e) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (a) above entered into with any commercial bank meeting the qualifications specified in clause (d) above or with investment banks reporting to the Market Reports Division of the Federal Reserve Bank ("FRB") meeting the FRB's capital criteria and having a long-term rating of at least A from either S&P or Moody's and (f) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (a) through (e) above. "Change of Control" means the occurrence of one or more of the following events (whether or not approved by the Board of Directors of the Company): (a) an event or series of events by which any Person or other entity or group of Persons or other entities acting in concert as determined in accordance with Section 13(d) of the Exchange Act, whether or not applicable (a "Group of Persons") shall, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases, merger or otherwise (i) be or become, directly or indirectly, the beneficial owner (within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act, whether or not applicable) of 50% or more of the combined voting power of the then outstanding Voting Stock of the Company or (ii) have the ability to elect, directly or indirectly, a majority of the members of the Board of Directors of the Company or other equivalent governing body thereof, (b) the stockholders of the Company shall approve any Plan of Liquidation of the Company (whether or not otherwise in compliance 3 with the provisions of this Indenture), (c) individuals who at the beginning of any period of two consecutive calendar years constituted the Board of Directors of the Company (together with any new directors whose election or appointment by the Board of Directors of the Company or whose nomination for election by the Company's shareholders was approved by a vote of at least a majority of the members of the Board of Directors of the Company then still in office who either were members of the Board of Directors of the Company at the beginning of such period or whose election, appointment or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors of the Company then in office, or (d) the direct or indirect sale, lease, exchange or other transfer, in one transaction or a series of related transactions, of all or substantially all of the property or assets of the Company to any Person or Group of Persons (whether or not otherwise in compliance with the provisions of this Indenture). "Commission" means the Securities and Exchange Commission. "Common Stock" of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of any Person's common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock. "Company" means the party named as such above until a successor replaces it in accordance with Article 5 and thereafter means the successor. "Consolidated Fixed Charge Coverage Ratio" means, with respect to any Person, the ratio of (a) the aggregate amount of EBITDA of such Person for the four full fiscal quarters ending on or immediately prior to the date of the transaction (the "Transaction Date") giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (such four full fiscal quarter period being referred to herein as the "Four Quarter Period") to (b) the aggregate Consolidated Fixed Charges of such Person for such Four Quarter Period. For purposes of this definition, if the Transaction Date occurs prior to the first anniversary of the Issue Date, EBITDA and Consolidated Fixed Charges shall be calculated, in the case of the Company, after giving effect on a pro forma basis as if the issuance of the Senior Notes and the application of the net proceeds therefrom occurred on the first day of the Four Quarter Period. In addition to and without limitation of the foregoing, for purposes of this definition, EBITDA and Consolidated Fixed Charges shall be calculated after giving effect on a pro forma basis for the period of such calculation to (x) the incurrence or retirement, as the case may be, of any Indebtedness (including Acquired Indebtedness) of such Person or of any of its Subsidiaries during the period commencing on the first day of the Four Quarter Period to and including the Transaction Date (the "Reference Period"), including, without limitation, the incurrence of the Indebtedness giving rise to the need to make such calculation, as if such incurrence or retirement, as the case may be, occurred on the first day of the Reference Period and (y) the EBITDA attributable to any Person, business, property or asset acquired or divested during the Reference Period (provided that with respect to any such acquisition, only to the extent the EBITDA of such Person is otherwise includible in the referent Person's 4 EBITDA) as if such transaction occurred on the first day of the Reference Period. Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (i) interest on Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; (ii) if interest on any Indebtedness actually incurred on the Transaction Date may be optionally determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the entire Reference Period; and (iii) notwithstanding the foregoing, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by Interest Rate Protection Agreements, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements. "Consolidated Fixed Charges" means, with respect to any Person for any period, the sum of, without duplication, the amounts for such period, taken as a single accounting period, of (a) Consolidated Interest Expense and (b) the product of (i) the amount of all dividend requirements whether in cash or otherwise (except dividends payable in shares of Common Stock) paid, accrued or scheduled to be paid or accrued during such period multiplied by (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated Federal, state, local and foreign tax rate (expressed as a decimal number between 1 and 0) of such Person (as reflected in the audited consolidated financial statements of such Person for the most recently completed fiscal year). "Consolidated Interest Expense" means, with respect to any Person for any period, the aggregate of the interest expense (without deduction of interest income) of such Person and its Consolidated Subsidiaries for such period, on a consolidated basis, as determined in accordance with GAAP, including all amortization of original issue discount, the interest component of Capitalized Lease Obligations, net cash costs under all Interest Rate Protection Agreements (including amortization of fees), all capitalized interest, the interest portion of any deferred payment obligations for such period and cash contributions to any employee stock ownership plan to the extent such contributions are used by such employee stock ownership plan to pay interest or fees to any Person (other than the referent Person or one of its Wholly Owned Subsidiaries) in connection with loans incurred by such employee stock ownership plan to purchase capital stock of the referent Person, but net of any amortization of any debt issuance costs. If the Person for whom this calculation is being made or any of its Subsidiaries directly or indirectly guarantees Indebtedness of a third person, the calculation shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness as of the first day of the Reference period. "Consolidated Net Income" means, with respect to any Person for any period, the consolidated net income (or deficit) of such Person and its Consolidated Subsidiaries for such 5 period, on a consolidated basis, as determined in accordance with GAAP consistently applied, provided that the net income of any other Person (other than a Subsidiary) in which the referent Person or any Subsidiary of the referent Person has a joint interest with a third party (which interest does not cause the net income of such other Person to be consolidated into the net income of the referent Person in accordance with GAAP) shall be included only to the extent of the lesser of (a) such net income that has been actually received by the referent Person or Wholly Owned Subsidiary of the referent Person in the form of cash dividends or similar cash distributions (subject to, in the case of a dividend or other distribution to a Wholly Owned Subsidiary of the referent Person, the limitations set forth in clause (i)(1) of the next proviso hereof) or (b) the net income of such other Person (which in no event shall be less than zero); provided further, that there shall be excluded (i)(1) the net income (but not loss) of any Subsidiary of the referent Person to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary, (2) the net income of any Person acquired in a pooling of interests transaction accrued prior to the date it became a Subsidiary of the referent Person, and (3) all gains and losses resulting from the cumulative effect of any accounting change pursuant to the application of Accounting Principles Board Opinion No. 20, as amended, or any successor thereto; (ii) any gain (but not loss), net of any related provisions for taxes, realized upon the sale or other disposition (including, without limitation, dispositions pursuant to Sale-Leaseback Financings) of any property or assets which are not sold or otherwise disposed of in the ordinary course of business and upon the sale or other disposition of any Capital Stock of any Subsidiary of the referent Person; (iii) any gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness of the referent Person; (iv) any extraordinary gain (but not extraordinary loss) net of any related provision for taxes on any such extraordinary gain; (v) any amounts paid or accrued as dividends on Preferred Stock of such Person or Preferred Stock of any Subsidiary of such Person; (vi) income or loss attributable to discontinued operations; and (vii) in the case of a successor to the Company by consolidation or merger or as a transferee of the Company's assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets. "Consolidated Net Worth" of a Person at any date means the Consolidated Stockholders' Equity of such Person less (a) the amount of any gain resulting, directly or indirectly, from the extinguishment, retirement or repurchase of any Indebtedness of such Person or of any of its Subsidiaries, (b) any revaluation or other write-ups subsequent to the Issue Date in the book value of any asset owned by such Person or a Consolidated Subsidiary and (c) any amounts attributable to the cost of treasury stock and the principal amount of any promissory notes receivable from the sale of Capital Stock of such Person or of any of its Subsidiaries. Notwithstanding any of the foregoing, net deferred income tax assets recorded in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109"), shall be calculated without regard to any valuation allowance with respect to such net deferred tax asset recorded by the Company in accordance with SFAS 109. 6 "Consolidated Stockholders' Equity" as of any date means, with respect to any Person, the amount by which the assets of such Person and of its Subsidiaries on a consolidated basis exceed (a) the total liabilities of such Person and its Subsidiaries on a consolidated basis, plus (b) any redeemable Preferred Stock (including Disqualified Capital Stock) of such Person or any redeemable Preferred Stock (including Disqualified Capital Stock) of any Subsidiary of such Person issued to any Person other than to such Person or to a Wholly Owned Subsidiary of such Person, in each case determined in accordance with GAAP. "Consolidated Subsidiary" of any Person means a Subsidiary which for financial reporting purposes is or, in accordance with GAAP, should be, accounted for by such Person as a consolidated subsidiary. "Consolidated Tax Expense" means, with respect to any Person for any period, the aggregate of the U.S. Federal, state and local tax expense attributable to taxes based on income and foreign income tax expenses of such Person and its Consolidated Subsidiaries for such period (net of any income tax benefit), determined in accordance with GAAP. "Convertible Subordinated Notes" means the 7 3/4% Convertible Subordinated Notes due 2004 of the Company offered concurrently with the Senior Notes. "Convertible Subordinated Note Indenture" means that certain indenture by and between the Company and The Bank of New York, as Trustee, governing the Convertible Subordinated Notes as amended or supplemented from time to time. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any of its Subsidiaries against fluctuations in currency values to or under which the Company or any of its Subsidiaries is a party or a beneficiary on the date of this Indenture or becomes a party or a beneficiary thereafter. "Default" means any event that is, or after notice or passage of time or both would be, an Event of Default (as defined in Section 6.01). "Disqualified Capital Stock" means any Capital Stock that, other than solely at the option of the issuer thereof, by its terms (or by the terms of any security into which it is convertible or exchangeable) is, or upon the happening of an event or the passage of time would be, required to be redeemed or repurchased, in whole or in part, or has, or upon the happening of an event or the passage of time would have, a redemption or similar payment due on or prior to the first anniversary of the Maturity Date of the Senior Notes, or is convertible into or exchangeable for debt securities at the option of the holder thereof at any time prior to such Maturity Date. 7 "EBITDA" for any Person means for any period for which it is to be determined the sum of, without duplication, the amounts for such period, taken as a single accounting period, of (a) Consolidated Net Income of such Person for such period, plus (b) only to the extent Consolidated Net Income has been reduced thereby, (i) Consolidated Tax Expense of such Person paid or accrued in accordance with GAAP for such period, (ii) Consolidated Interest Expense of such Person for such period, (iii) depreciation and amortization expenses (including, without limitation, amortization of capitalized debt issuance costs) of such Person and its Consolidated Subsidiaries for such period; all as determined on a consolidated basis in conformity with GAAP consistent with those principles applied in the preparation of the audited financial statements of such Person and its Consolidated Subsidiaries on the Issue Date; provided that if a Person has any Subsidiary that is not a Wholly Owned Subsidiary, EBITDA of such Person shall be reduced by an amount equal to (1) the Consolidated Net Income of such Subsidiary for such period multiplied by (2) the quotient of (A) the number of shares of outstanding Common Stock of such Subsidiary not owned on the last day of such period by such Person or by any Wholly Owned Subsidiary of such Person that is not subject to any encumbrance or restriction on the payment of dividends to such Person divided by (B) the total number of shares of outstanding Common Stock of such Subsidiary on the last day of such period. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Indebtedness" has the meaning set forth in the definition of Permitted Refinancing Indebtedness. "Fair Market Value" or "fair value" means, with respect to any asset or property or Capital Stock, the price which could be negotiated in an arm's- length, free market transaction, for cash, between an informed and willing seller and an informed, willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined by the Board of Directors of the Company acting reasonably and in good faith and shall be evidenced by a written resolution of said Board of Directors (certified by the Secretary or Assistant Secretary of the Company) delivered to the Trustee, provided that if the aggregate non-cash consideration to be received by the Company or any of its Subsidiaries from any Asset Sale shall exceed $10,000,000, then Fair Market Value shall be determined by an Independent Financial Advisor. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of the Issue Date. "incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, guarantee or otherwise 8 become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and "incurrence," "incurred," "incurable" and "incurring" shall have meanings correlative to the foregoing), provided that the accrual of interest (whether such interest is payable in cash or in kind) and the accretion of original issue discount shall not be deemed an incurrence of Indebtedness, provided, further, that (a) any Indebtedness or Disqualified Capital Stock of a Person existing at the time such Person becomes (after the Issue Date) a Subsidiary (whether by merger, consolidation, acquisition or otherwise) of the Company shall be deemed to be incurred by such Subsidiary at the time it becomes a Subsidiary of the Company and (b) any amendment, modification or waiver of any document pursuant to which Indebtedness was previously incurred shall be deemed to be an incurrence of Indebtedness unless such amendment, modification or waiver does not (i) increase the principal or premium thereof or interest rate thereon (including by way of original issue discount), (ii) change to an earlier date the Stated Maturity thereof or the date of any scheduled or required principal payment thereon or the time or circumstances under which such Indebtedness may or shall be redeemed, (iii) if such Indebtedness is subordinated to the Senior Notes, modify or affect, in any manner adverse to the holders such subordination, (iv) if the Company is the obligor thereon, provide that a Subsidiary of the Company not already an obligor thereon shall be an obligor thereon or (v) violate, or cause the Indebtedness to violate, the provisions described under Sections 4.07 and 4.11 of this Indenture. "Indebtedness" means, with respect to any Person, at any date, any of the following, without duplication, (a) any liability, contingent or otherwise, of such Person (i) for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof) (ii) evidenced by a note, bond, debenture or similar instrument or (iii) for the payment of money relating to a Capitalized Lease Obligation or other obligations (whether issued or assumed) relating to the deferred purchase price of property or services but excluding advances, deposits, partial and progress payments, unpaid wages and related employee obligations, trade accounts payable and accrued liabilities in each case arising in the ordinary course of business that are not overdue by 180 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (b) all conditional sale obligations and all obligations under any title retention agreement (even if the rights and remedies of the seller under such agreement in the event of default are limited to repossession or sale of such property); (c) reimbursement obligations of such Person with respect to letters of credit and all obligations of such Person in respect of any banker's acceptance or similar credit transaction entered into in the ordinary course of business; (d) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on any asset or property (including, without limitation, leasehold interests and any other tangible or intangible property) of such Person, whether or not such Indebtedness is assumed by such Person or is not otherwise such Person's legal liability, provided that if the obligations so secured have not been assumed in full by such Person or are otherwise not such Person's legal liability in full, the amount of such Indebtedness for the purposes of this definition shall be limited to the lesser of the amount of such Indebtedness secured by such Lien or the Fair 9 Market Value of the assets or property securing such Lien; (e) all Indebtedness of others guaranteed (including all dividends of other Persons the payment of which is guaranteed), directly or indirectly, by such Person or that is otherwise its legal liability or which such Person has agreed to purchase or repurchase or in respect of which such Person has agreed contingently to supply or advance funds; (f) all Disqualified Capital Stock issued by such Person (other than such Disqualified Capital Stock owned by the referent Person or by any Wholly Owned Subsidiary of the referent Person, provided that if any Wholly Owned Subsidiary of the referent Person shall cease to be a Wholly Owned Subsidiary of the referent Person or shall transfer such Disqualified Capital Stock (other than to the referent Person or another Wholly Owned Subsidiary of the referent Person) the date on which such Wholly Owned Subsidiary so ceases to be a Wholly Owned Subsidiary of the referent Person or so transfers such Disqualified Capital Stock shall be deemed to be the issuance of such Disqualified Capital Stock by the Subsidiary issuer thereof) with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends if any; and (g) all obligations under Currency Agreements and Interest Rate Protection Agreements. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date, provided that the amount outstanding at any time of any Indebtedness issued with original issue discount is the full amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP. "Indenture" means this Indenture as amended or supplemented from time to time. "Independent Financial Advisor" means an accounting, appraisal or investment banking firm of nationally recognized standing that is, in the reasonable and good faith judgment of the Board of Directors of the Company, qualified to perform the task for which such firm has been engaged and disinterested and independent with respect to the Company and its Affiliates. "Interest Rate Protection Agreement" means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement designed to protect a Person or any of its Subsidiaries against fluctuations in interest rates to or under which such Person or any of its Subsidiaries is a party or a beneficiary on the Issue Date or becomes a party or a beneficiary thereafter. 10 "Investment" by any Person means (a) any direct or indirect loan, advance or other extension of credit or capital contribution to (by means of transfers of cash or other property (valued at the Fair Market Value thereof as of the date of transfer) to others or payments for property or services for the account or use of others, or otherwise), (b) any direct or indirect purchase or acquisition of Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by any other Person (whether by merger, consolidation, amalgamation or otherwise and whether or not purchased directly from the issuer of such securities or evidences of Indebtedness), (c) any direct or indirect guarantee or assumption of the Indebtedness of any other Person, and (d) all other items that would be classified as investments (including, without limitation, purchases of assets outside the ordinary course of business) on a balance sheet of such Person prepared in accordance with GAAP. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment. "Issue Date" means the date on which the Senior Notes are originally issued under this Indenture. "Lien" means, with respect to any Person, any mortgage, pledge, lien, encumbrance, easement, restriction, covenant, right-of-way, charge or adverse claim affecting title or resulting in an encumbrance against real or personal property of such Person, or a security interest of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, including any sale and leaseback transaction, any option or other similar agreement to sell, in each case securing obligations of such Person and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statute or statutes) of any jurisdiction other than to reflect ownership by a third party of property leased to the referent Person or any of its Subsidiaries under a lease that is not in the nature of a conditional sale or title retention agreement). "Material Subsidiary" means, at any date of determination, any Subsidiary of the Company that, together with its Subsidiaries, (i) for the most recent fiscal year of the Company accounted for more than 5% of the consolidated revenues of the Company or (ii) as of the end of such fiscal year, was the owner of more than 5% of the consolidated assets of the Company, all as set forth on the most recently available consolidated financial statements of the Company and its consolidated Subsidiaries for such fiscal year prepared in conformity with generally accepted accounting principles as then in effect. "Maturity Date" means May 15, 2003. "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash or Cash Equivalents, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not interest, component thereof) when received in the form of cash or Cash Equivalents (except to the extent such obligations are financed or sold with recourse to the Company or any Subsidiary 11 of the Company) and proceeds from the conversion of other property received when converted to cash or Cash Equivalents, net of (a) reasonable third-party brokerage commissions and other reasonable third-party fees and expenses (including fees and expenses of counsel and investment bankers) related to such Asset Sale, (b) provisions for all taxes as a result of such Asset Sale computed on a consolidated basis reflecting the consolidated results of operations of the Company and its Subsidiaries, taken as a whole, (c) payments made to repay Indebtedness or any other obligation outstanding at the time of such Asset Sale that was incurred in accordance with this Indenture and that either (i) is secured by a Lien incurred in accordance with this Indenture on the property or assets sold or (ii) is required to be paid as a result of such sale in each case to the extent actually repaid in cash and (d) appropriate amounts to be provided by the Company or any Subsidiary of the Company as a reserve against liabilities associated with such Asset Sale, including without limitation pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as determined in conformity with generally accepting accounting principles as then in effect. For purposes of this definition and Section 4.10, "cash" means U.S. dollars or such money as is freely and readily convertible into U.S. dollars. "Net Equity Proceeds" means (a) in the case of any sale by the Company of Qualified Capital Stock of the Company, the aggregate net proceeds received by the Company, after payment of expenses, commissions and the like incurred in connection therewith, whether such proceeds are in cash or in other property (valued as determined reasonably and in good faith by the Board of Directors of the Company, as evidenced by a written resolution of said Board of Directors, at the Fair Market Value thereof at the time of receipt) and (b) in the case of any exchange, exercise, conversion or surrender of any outstanding Indebtedness of the Company or any Subsidiary for or into shares of Qualified Capital Stock of the Company, the amount of such Indebtedness (or, if such Indebtedness was issued at an amount less than the stated principal amount thereof, the accrued amount thereof as determined in accordance with generally accepted accounting principles as then in effect) as reflected in the consolidated financial statements of the Company prepared in accordance with generally accepted accounting principles as then in effect as of the most recent date next preceding the date of such exchange, exercise, conversion or surrender (plus any additional amount required to be paid by the holder of such Indebtedness of the Company or to any wholly owned Subsidiary of the Company upon such exchange, exercise, conversion or surrender) and less any and all payments made to the holders of such Indebtedness, and all other expenses incurred by the Company in connection therewith, in the case of each of clauses (a) and (b) to the extent consummated after the Issue Date, provided that the exchange exercise, conversion or surrender of any Indebtedness outstanding on the Issue Date, including the Convertible Subordinated Notes, which is subordinated (whether pursuant to its terms or by operation of law) to the Senior Notes shall not be or be deemed to be included in Net Equity Proceeds. "New Indebtedness" has the meaning set forth in the definition of Permitted Refinancing Indebtedness. 12 "Officer" means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Accounting Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, any other executive officer, the Secretary and any Assistant Treasurer or any Assistant Secretary of the Company. "Officers' Certificate" means a certificate signed by two Officers, one of whom must be the principal executive officer, principal financial officer, the treasurer or principal accounting officer of the Company. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee except to the extent otherwise indicated in this Indenture. "Pari Passu Indebtedness" means the Senior Notes and any Indebtedness under the Company's Revolving Credit Agreement, its 9.33% Senior Notes due 2002, its 9.35% Senior Notes due 2000, and any other Indebtedness permitted under this Indenture which is pari passu in right of payment with the Senior Notes. "Permitted Indebtedness" means, without duplication, (a) Indebtedness of the Company and its Subsidiaries remaining outstanding immediately after the Issue Date after giving effect to the consummation of the transactions described in the Prospectus under "Use of Proceeds"; (b) $110 million of Indebtedness of the Company evidenced by or arising under the Revolving Credit Agreement; (c) Indebtedness of the Company evidenced by or arising under the Senior Notes and this Indenture; (d) Permitted Refinancing Indebtedness incurred by the Company or by any of its Subsidiaries; (e) unsecured Indebtedness of the Company to a Wholly Owned Subsidiary of the Company, provided that (i) any Indebtedness of the Company to a Wholly Owned Subsidiary of the Company shall be evidenced by an intercompany promissory note that is subordinated in right of payment to the payment and performance of the Company's obligations under this Indenture and the Senior Notes, and (ii) any subsequent issuance or transfer of Capital Stock of a Wholly Owned Subsidiary of the Company (the "Creditor Subsidiary") that results in such Creditor Subsidiary ceasing to be a Wholly Owned Subsidiary of the Company or any subsequent transfer of Indebtedness owing from the Company to such Creditor Subsidiary (other than a transfer to another Wholly Owned Subsidiary of the Company) shall be deemed in each case to constitute the incurrence of Indebtedness by the Company to the extent of any such Indebtedness then outstanding; (f) Indebtedness of the Company in an aggregate principal amount not to exceed, when added to Indebtedness and Preferred Stock of Subsidiaries of the Company incurred under clause (d) of Section 4.09 hereof, 10% of Consolidated Net Worth of the Company, provided, however, that no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of such Indebtedness; and (g) Indebtedness (1) of the Company or of any Subsidiary of the Company in respect of bankers' acceptances provided in the ordinary course of business, (2) of the Company under Currency Agreements and Interest Rate Protection Agreements which are entered into for the purpose of protection 13 against risk of currency or interest rate fluctuations affecting the Company or any of its Subsidiaries in the ordinary course of business that are related to payment obligations of the Company or any of its Subsidiaries otherwise permitted under this Indenture, provided that in the case of Currency Agreements or Interest Rate Protection Agreements that relate to other Indebtedness, such Currency Agreements or Interest Rate Protection Agreements do not increase the obligations of the Company outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates, as applicable, or by reason of fees, indemnities and compensation payable thereunder and (3) of the Company or any of the Subsidiaries of the Company in respect of letters of credit issued in connection with self-insurance and reinsurance obligations incurred in the ordinary course of business, provided that the total amount of outstanding Indebtedness incurred under this clause (3), other than in connection with workers' compensation, unemployment insurance and other social security obligations, shall not exceed $9 million at any one time. "Permitted Investments" means (a) investments held in the form of cash and Cash Equivalents; (b) Investments in any Wholly Owned Subsidiary (or any Person which will, upon the making of such Investment, become a Wholly Owned Subsidiary) of the Company by the Company or by any other Wholly Owned Subsidiary of the Company, provided that (i) any Indebtedness evidencing an Investment in a Wholly Owned Subsidiary of the Company shall not be subordinated or junior to any other Indebtedness or other obligation of such Wholly Owned Subsidiary and (ii) such Investment shall only be a Permitted Investment so long as any such Wholly Owned Subsidiary in which the Investment has been made or which has made such Investment remains a Wholly Owned Subsidiary of the Company; (c) Investments made after the Issue Date, not exceeding $15 million at any one time in excess of Investments made as Restricted Payments, in joint ventures, partnerships or Persons that are not Wholly Owned Subsidiaries of the Company that are made solely for the purpose of acquiring or furthering businesses related to the Company's business; (d) Investments of the Company and its Subsidiaries arising as a result of any Asset Sale otherwise complying with the terms of this Indenture, provided that for each Asset Sale the maximum aggregate amount of Investments permitted under this clause (d) shall not exceed 20% of the total consideration received for such Asset Sale by the Company or any Subsidiary of the Company; (e) Investments in the Company by any Subsidiary of the Company, provided that any Indebtedness evidencing such Investment is subordinated to the Senior Notes; (f) Investments of the Company and its Subsidiaries in the form of promissory notes or deferred payment obligations as a result of the sale of the Company's business jet product line or its Hagerstown, Maryland plant; provided that the aggregate amount of such non-cash consideration does not exceed $15 million; (g) Investments arising from, or of the type contemplated by, the Company's Pooling and Servicing Agreement as in effect on the Issue Date; (h) Investments received in connection with the bona fide settlement of legal proceedings or other disputed obligations arising in the ordinary course of business; (i) loans, advances or other extensions of credit to actual or potential customers or suppliers that are made as part of the purchase or sale of goods or services by the Company or any of its Subsidiaries, as made from time to time by the Company or any Subsidiary in the ordinary course of business and consistent with practices in the industry of the Company; and (j) other 14 Investments made after the Issue Date in the ordinary course of business of the Company not to exceed $10 million at any one time. "Permitted Liens" means, without duplication, (a) Liens for taxes, assessments and governmental charges or levies (other than any Lien imposed by the Employee Retirement Income Security Act of 1974, as amended) that are not yet subject to penalties for non-payment or are being contested in good faith by appropriate proceedings and for which adequate reserves, if required, have been established or other provisions have been made in accordance with GAAP; (b) statutory mechanics', workmen's, materialmen's, operators', warehousemen's, repairmen's, and bankers' liens, and similar Liens imposed by law and arising in the ordinary course of business for sums which are not overdue by more than 15 days, or if so overdue, are being contested in good faith by appropriate proceedings and for which adequate reserves, if required, have been established or other provisions have been made in accordance with GAAP; (c) minor imperfections of, or encumbrances on, title that do not impair the value of property for its intended use; (d) Liens (other than any Lien under the Employee Retirement Income Security Act of 1974, as amended) incurred or deposits made in the ordinary course of business in connection with (or made to secure reinsurance obligations of the Company or any of its Subsidiaries incurred in connection with its or their obligations with respect to) workers' compensation, unemployment insurance and other types of social security; (e) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligations, bankers' acceptances, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a similar nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); (f) easements, rights-of-way, municipal and zoning ordinances and similar charges, encumbrances, title defects or other irregularities that do not materially interfere with the ordinary course of business of the Company or of any of its Subsidiaries; (g) Liens (including extensions and renewals thereof) upon real or tangible personal property acquired after the Issue Date, provided that (1) any such Lien is created solely for the purpose of securing Indebtedness (other than Permitted Indebtedness) (A) that is incurred in accordance with Section 4.05 or 4.09 to finance the cost (including the cost of improvement or construction) of the item of property or assets subject thereto and such Lien is created prior to, at the time of or within 365 days after the later of the acquisition, the completion of construction or the commencement of full operation of such property or (B) that is Permitted Refinancing Indebtedness to Refinance any Indebtedness previously so secured, (2) the principal amount of the Indebtedness secured by any such Lien does not exceed 100% of such cost and (3) any such Lien shall not extend to or cover any property or assets of the Company or of any of its Subsidiaries other than such item of property or assets and any improvements on such item; (h) leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company or of any of its Subsidiaries; (i) Liens encumbering property or assets to secure repayment of advances, deposits or progress or partial payments by a customer of the Company or of any of its Subsidiaries relating to such property or assets; (j) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (k) Liens in favor of the Company or any Wholly Owned Subsidiary of the Company; (l) Liens secured by real property or 15 other assets of the Company or of any Subsidiary of the Company in connection with the financing of industrial revenue and similar bond facilities and related obligations or of any equipment or other property designed primarily for the purpose of air or water pollution control, provided that any such Lien on such facilities, equipment or other property shall not apply to any other property or assets of the Company or of such Subsidiary of the Company; (m) Liens arising from the rendering of a final judgment or order against the Company or any Subsidiary of the Company that does not give rise to an Event of Default; (n) Liens securing reimbursement obligations with respect to letters of credit incurred in accordance with this Indenture that encumber documents and other property relating to such letters of credit and the products and proceeds thereof; (o) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (p) Liens encumbering customary initial deposits and margin deposits, and other Liens that are within the general parameters customary in the industry and incurred in the ordinary course of business securing Indebtedness under Interest Rate Protection Agreements and Currency Agreements and forward contracts, options, futures contracts, futures options or fluctuations in the price of commodities; (q) Liens on sales of receivables; (r) Liens in favor of the Trustee arising under this Indenture; (s) Liens incurred or deposits made in the ordinary course of business to secure up to $9 million of self-insurance and reinsurance obligations, other than obligations related to workers' compensation, unemployment insurance and other types of social security; and (t) deposits made to secure procurement credit card obligations arising from miscellaneous, non-repetitive purchases of supplies and services in the ordinary course of business, with no such purchase to exceed $5,000. "Permitted Payments" means, so long as no Default or Event of Default shall have occurred and be continuing or would result as a consequence thereof, (a) the prepayment, acquisition, retirement or decrease of Indebtedness of the Company that is subordinated (whether pursuant to its terms or by operation of law) to the Senior Notes that is prepaid, acquired, decreased or retired (i) by conversion into or in exchange for Qualified Capital Stock of the Company or (ii) in exchange for or with or out of the net cash proceeds of the substantially concurrent sale (other than by the Company to a Subsidiary of the Company) of Permitted Refinancing Indebtedness (b) payroll, travel, relocation and similar advances to employees of the Company or any Subsidiaries in the ordinary course of the Company's business; (c) loans to employees (other than travel advances) not to exceed $500,000 in the aggregate at any one time outstanding; (d) any purchases, redemptions, acquisitions, cancellations or other retirement for value of shares of Capital Stock of the Company or of any Subsidiary of the Company, options on any such shares or related stock appreciation rights or similar securities held by officers, directors or employees or former officers or employees (or their estates or beneficiaries under their estates) and which were issued pursuant to any stock option plan (or other director officer or employee benefit plan or agreement), upon death, disability, retirement, termination of employment or pursuant to the terms of such plan or agreement and which in the aggregate do not exceed $1,000,000 in any fiscal year; (e) the purchase at a price of not more than $.05 per right of any rights issued or issuable pursuant to currently existing or future rights plans of the Company, provided that 16 such purchase shall not exceed $3 million in the aggregate; or (f) the retirement of shares of the Company's Capital Stock in exchange for or out of the proceeds of a substantially concurrent sale (other than a sale to a Subsidiary of the Company) of other shares of its Capital Stock (other than Disqualified Capital Stock). "Permitted Program Investment" means an investment in design, engineering, tooling or similar costs related to a program undertaken by the Company in the ordinary course of its business. "Permitted Refinancing Indebtedness" means Indebtedness of the Company or of any of the Company's Subsidiaries or Preferred Stock of a Subsidiary of the Company, the net proceeds of which are used to Refinance outstanding Indebtedness of the Company or of any of the Company's Subsidiaries that was outstanding as of the Issue Date or incurred in accordance with this Indenture or Preferred Stock of a Subsidiary of the Company that was out standing as of the Issue Date or issued in accordance with this Indenture, provided that (a) if the Indebtedness (including the Senior Notes) being Refinanced (the "Existing Indebtedness") is pari passu with or subordinated to the Senior Notes, then any Indebtedness Refinancing the Existing Indebtedness (the "New Indebtedness") shall be pari passu with or subordinated to, as the case may be, the Senior Notes, at least to the same extent and in the same manner as the Existing Indebtedness is to the Senior Notes, (b) such New Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Existing Indebtedness, (c) such New Indebtedness has an Average Life at the time such New Indebtedness is incurred that is equal to or greater than the Average Life of the Existing Indebtedness as of the date of such Refinancing, (d) such New Indebtedness is in an aggregate principal amount (or, if such New Indebtedness is issued at a price less than the principal amount thereof, the aggregate amount of gross proceeds therefrom is) not in excess of the aggregate principal amount outstanding under the Existing Indebtedness on the date of the proposed Refinancing thereof (or if the Existing Indebtedness was issued at a price less than the principal amount thereof, then not in excess of the amount of liability in respect thereof determined in accordance with GAAP as of the date of such proposed Refinancing), (e) with respect to such Preferred Stock of the Company's Subsidiaries, Preferred Stock issued in exchange for or the proceeds of which are used to Refinance such existing Preferred Stock of a Subsidiary ("New Preferred Stock") shall have (i) a Stated Maturity no earlier than the Stated Maturity of the Preferred Stock being exchanged or Refinanced, (ii) an Average Life at the time such New Preferred Stock is proposed to be incurred that is equal to or greater than the Average Life of the Preferred Stock to be exchanged or Refinanced as of the date of such proposed exchange or Refinancing and (iii) a liquidation value no greater than the liquidation value of the Preferred Stock to be exchanged or Refinanced as of the date of such proposed exchange or Refinancing and (f) if such Existing Indebtedness is Indebtedness solely of the Company, such New Indebtedness will only be permitted if it is Indebtedness solely of the Company. "Person" means any individual, corporation, partnership, joint venture, trust, estate, unincorporated organization or government or any agency or political subdivision thereof. 17 "Plan of Liquidation" means a plan (including by operation of law) that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously) (a) the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company otherwise than as an entirety or substantially as an entirety and (b) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition and all or substantially all of the remaining assets of the Company to holders of Capital Stock of the Company. "Pooling and Servicing Agreement" means the Pooling and Servicing Agreement dated as of December 23, 1992, among the Company, the Company's Wholly Owned Subsidiary RI Receivables, Inc. and Bankers Trust Company, as trustee on behalf of the Certificateholders (as defined therein), and related documentation and any extension, renewal, modification, restatement or replacement thereof (in whole or in part), as the same may be amended, supplemented or otherwise modified from time to time, provided, however, the investors in any such receivables program shall not obtain an interest in receivables sold under such program which exceeds $70 million in aggregate principal amount at any one time. "Preferred Stock" means the Capital Stock of any Person (other than the Common Stock of such Person) of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding-up of such Person, to shares of Capital Stock of any other class of such Person. "pro forma" means, with respect to any calculation made or required to be made pursuant to the terms of this Indenture, a calculation in accordance with Article 11 of Regulation S-X under the Securities Act. "Prospectus" means the Company's final prospectus dated May 12, 1994 in respect of the public offering of the Senior Notes. "Qualified Capital Stock" means, with respect to any Person, any Capital Stock of such Person that is not Disqualified Capital Stock or convertible into or exchangeable or exercisable for Disqualified Capital Stock and includes rights and other securities issuable under the Company's Amended and Restated Rights Agreement, dated as of April 6, 1990, between the Company and The First National Bank of Chicago, as Rights Agent, as such agreement may be amended or supplemented from time to time. "redemption date" when used with respect to any of the Senior Notes to be redeemed, means the date fixed by the Company for such redemption pursuant to this Indenture and the Senior Notes. 18 "redemption price" when used with respect to any of the Senior Notes to be redeemed, means the price fixed for such redemption pursuant to this Indenture and the Senior Notes. "Reference Period" has the meaning set forth in the definition of "Consolidated Fixed Charge Coverage Ratio." "Refinance" means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. "Refinanced" and "Refinancing" shall have correlative meanings. "Restricted Payment" means (a) the declaration or payment of any dividend or the making of any other distribution, including any dividend or distribution made in connection with the merger or consolidation of the Company (whether in any such case in cash, securities or other property or assets of the Company or of any of its Subsidiaries), on the Company's or any of its Subsidiaries' Capital Stock, or to the holders of the Company's or any of its Subsidiaries' Capital Stock, whether outstanding on the Issue Date or thereafter (other than dividends or distributions payable solely in Qualified Capital Stock of the Company or of such Subsidiary (subject to the last paragraph of Section 4.06) and other than any dividend or distribution declared or paid by any Wholly Owned Subsidiary of the Company); (b) the making of any Investment by the Company or any of its Subsidiaries in any Person other than Permitted Investments; (c) any purchase, redemption, retirement or other acquisition for value by the Company or any Subsidiary of any Capital Stock of the Company or of any of its Subsidiaries or of any Affiliate of the Company or any other securities of a direct or indirect parent of the Company, whether outstanding on the Issue Date or thereafter, or any warrants, rights or options to purchase or acquire shares of the Capital Stock of the Company or of any of its Subsidiaries or of any Affiliate of the Company, whether outstanding on the Issue Date or thereafter, held by any Person other than the Company or one of its Wholly Owned Subsidiaries, other than through the issuance in exchange therefor solely of Qualified Capital Stock of the Company or of such Subsidiary; or (d) the prepayment, acquisition, decrease or retirement for value prior to maturity, scheduled repayment or scheduled sinking fund payment of any Indebtedness of the Company that is subordinated (whether pursuant to its terms or by operation of law) to the Senior Notes, in each case to the extent not contained within the definition of "Permitted Payments". The dollar amount of any non-cash dividend or distribution by the Company or any of its Subsidiaries on the Company's or any Subsidiary's Capital Stock shall be equal to the Fair Market Value of such dividend or distribution at the time of such dividend or distribution. "Revolving Credit Agreement" means the Credit Agreement dated as of April 26, 1989, among the Company, the lenders party thereto, and the Bank Agent, and any agreement governing Indebtedness incurred to refund or Refinance the borrowings, letters of credit and commitments then outstanding or permitted to be outstanding under the Revolving Credit Agreement, in each case together with the related notes and any other instruments and 19 agreements executed from time to time in connection therewith, and in each case as amended, modified, supplemented, extended, renewed, restated, refunded, replaced or refinanced (in whole or in party, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time. "Securities Act" means the Securities Act of 1933, as amended. "Senior Notes" means the Senior Notes issued under this Indenture. "Stated Maturity" means, with respect to any security or Indebtedness, the date specified therein as the fixed date on which any principal of such security or Indebtedness is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase thereof at the option of the holder thereof). A "Subsidiary" of a Person means (a) a corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person or (b) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, have (i) at least a majority ownership interest or (ii) the power to elect or direct the election of the directors or other governing body of such Person. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77- bbbb) as in effect on the date of execution of this Indenture, except as provided in Section 9.03. "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor. "Trust Officer" means any officer within the Corporate Trust & Agencies Administration Department (or any successor department) of the Trustee, including any vice president, assistant vice president, assistant secretary, director or associate director; any other officer of the Trustee customarily performing functions similar to those performed by any officer of the Corporate Trust & Agencies Administration Department; and any other officer of the Trustee to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject. "Voting Stock" means, with respect to any Person, securities of any class or classes of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the board of directors or other governing body of such Person. "Wholly Owned Subsidiary" means, with respect to any Person, any Subsidiary of such Person all the outstanding shares of Capital Stock (other than directors' qualifying 20 shares, if applicable) of which are owned directly by such Person or another Wholly Owned Subsidiary of such Person. SECTION 1.02 Other Definitions. -----------------
Defined in Section "Affiliate Transaction"...................... 4.08 "Asset Sale Offer"........................... 4.10 "Asset Sale Offer Amount".................... 4.10 "Asset Sale Offer Payment Date".............. 4.10 "Asset Sale Offer Termination Date".......... 4.10 "Asset Sale Offer Trigger Date".............. 4.10 "Bankruptcy Law"............................. 6.01 "Business Day"............................... 10.07 "Change of Control Date"..................... 4.16 "Change of Control Offer".................... 4.16 "Change of Control Offer Payment Date"....... 4.16 "Change of Control Offer Termination Date"... 4.16 "Custodian".................................. 6.01 "Event of Default"........................... 6.01 "Legal Holiday".............................. 10.07 "Paying Agent"............................... 2.03 "Registrar".................................. 2.03 "United States Government Obligations"....... 8.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act. ------------------------------------------------- Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the Commission; "indenture securities" means the Senior Notes; "indenture security holder" means a holder of a Senior Note; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and 21 "obligor" on the Senior Notes means the Company or any other obligor on the Senior Notes. All other terms in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them. SECTION 1.04 Rules of Construction. --------------------- Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (c) "or" is not exclusive; (d) words in the singular include the plural, and in the plural include the singular; and (e) the male, female and neuter genders include one another. ARTICLE 2 The Senior Notes SECTION 2.01 Form and Dating. --------------- The Senior Notes and the Trustee's certificate of authentication relating thereto shall be substantially in the form set forth in Exhibit A, which is part of this Indenture, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture. The Senior Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. The Company shall approve the form of the Senior Notes and any notation, legend or endorsement on them. Each Senior Note shall be dated the date of its authentication. The terms and provisions contained in the Senior Notes shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. 22 SECTION 2.02 Execution and Authentication. ---------------------------- Two Officers shall sign the Senior Notes for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Senior Notes. If an Officer whose signature is on a Senior Note no longer holds that office at the time the Senior Note is authenticated, the Senior Note shall nevertheless be valid. A Senior Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Senior Note has been authenticated under this Indenture. Upon a written order of the Company signed by an Officer of the Company, the Trustee shall authenticate Senior Notes for original issue up to the aggregate principal amount stated in paragraph 4 of the Senior Notes. The aggregate principal amount of Senior Notes outstanding at any time may not exceed that amount except as provided in Section 2.07. The Senior Notes shall be issuable only in registered form without coupons and only in denominations of $1,000 or any integral multiple thereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Senior Notes. An authenticating agent may authenticate Senior Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same right as an Agent to deal with the Company or an Affiliate of the Company. SECTION 2.03 Registrar and Paying Agent. -------------------------- The Company shall maintain or cause to be maintained in the Borough of Manhattan, New York, New York (the "New York Office"), and in such other locations as it shall determine, an office or agency: (a) where securities may be presented for registration of transfer or for exchange ("Registrar"); (b) where Senior Notes may be presented for payment ("Paying Agent"); and (c) where notices and demand to or upon the Company in respect of Senior Notes and this Indenture may be served by the holders of Senior Notes. The Registrar shall keep a register of the Senior Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent, Registrar or co-registrar without prior notice. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture and shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-registrar, except that for purposes of Articles 3 and 8 and Sections 4.10 and 4.16, neither the Company nor any of its Subsidiaries shall act as Paying Agent. If the Company fails to appoint or maintain 23 another entity as Registrar or Paying Agent, the Trustee shall act as such, and the Trustee shall initially act as such. The Trustee shall cause the New York Office to be maintained as long as it acts as Registrar or Paying Agent. SECTION 2.04 Paying Agent To Hold Money in Trust. ----------------------------------- The Company shall require each Paying Agent (other than the Trustee, who hereby so agrees), to agree in writing that the Paying Agent will hold in trust for the benefit of holders of Senior Notes or the Trustee all money held by the Paying Agent for the payment of principal or interest on the Senior Notes, and will notify the Trustee of any default by the Company in respect of making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the Company) shall have no further liability for the money. If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the holders of Senior Notes all money held by it as Paying Agent. SECTION 2.05 Holder Lists. ------------ The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of holders of Senior Notes. If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven days before each interest payment date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of holders of Senior Notes. SECTION 2.06 Transfer and Exchange. --------------------- Where Senior Notes are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Senior Notes for other denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Company shall issue and the Trustee shall authenticate Senior Notes at the Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06 or 9.05. The Company shall not be required (a) to issue, register the transfer of or exchange Senior Notes during a period beginning at the opening of business 15 days before the day of any selection of Senior Notes for redemption under Section 3.02 and ending at the close of business on the day of selection, or (b) to register the transfer or exchange of any Senior Note so selected 24 for redemption in whole or in part, except the unredeemed portion of any Senior Note being redeemed in part. SECTION 2.07 Replacement Senior Notes. ------------------------ If the holder of a Senior Note claims that the Senior Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Senior Note if the Trustee's requirements are met. If required by the Trustee or the Company as a condition of receiving a replacement Senior Note, the holder of Senior Note must provide an indemnity bond sufficient, in the judgment of both the Company and the Trustee, to fully protect the Company, the Trustee, any Agent and any authenticating agent from any loss which any of them may suffer if the Senior Note is replaced. The Company and the Trustee may charge the relevant holder for their expenses in replacing any Senior Note. Every replacement Senior Note is an additional obligation of the Company. SECTION 2.08 Outstanding Senior Notes. ------------------------ The Senior Notes outstanding at any time are all the Senior Notes properly authenticated by the Trustee except for those cancelled by the Trustee, those delivered to it for cancellation, and those described in this Section as not outstanding. If a Senior Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Senior Note is held by a bona fide purchaser. If Senior Notes are considered paid under Section 4.01, they cease to be outstanding and interest on them ceases to accrue. A Senior Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Senior Note. SECTION 2.09 When Treasury Senior Notes Disregarded. -------------------------------------- In determining whether the holders of the required principal amount of Senior Notes have concurred in any direction, waiver or consent, Senior Notes owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Senior Notes which the Trustee knows are so owned shall be so disregarded. 25 SECTION 2.10 Temporary Senior Notes. ---------------------- Until definitive Senior Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Senior Notes. Temporary Senior Notes shall be substantially in the form of definitive Senior Notes but may have variations that the Company considers appropriate for temporary Senior Notes. If temporary Senior Notes are issued, the Company will cause definitive Senior Notes to be prepared without unreasonable delay. After the preparation of definitive Senior Notes, the temporary Senior Notes shall be exchangeable for definitive Senior Notes upon surrender of the temporary Senior Notes at any office or agency of the Company designated pursuant to Section 2.03 without charge to the holder. Upon surrender for cancellation of any one or more temporary Senior Notes the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Senior Notes of authorized denominations. Until so exchanged, the temporary Senior Notes shall in all respects be entitled to the same benefits under this Indenture as definitive Senior Notes. SECTION 2.11 Cancellation. ------------ The Company at any time may deliver Senior Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Senior Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel Senior Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of cancelled Senior Notes as the Company directs. The Company may not issue new Senior Notes to replace Senior Notes that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12 Defaulted Interest. ------------------ If the Company fails to make a payment of interest on the Senior Notes, it shall pay such defaulted interest plus, to the extent lawful, any interest payable on the defaulted interest. It may pay such defaulted interest, plus any such interest payable on it, to the persons who are holders of Senior Notes on a subsequent special record date. The Company shall fix any such record date and payment date. At least 15 days before any such record date, the Company shall mail to holders of Senior Notes a notice that states the record date, payment date and amount of such interest to be paid. SECTION 2.13 CUSIP Number. ------------ The Company in issuing the Senior Notes may use a "CUSIP" number, and if so, such CUSIP number shall be included in notices of redemption or exchange as a convenience to holders of Senior Notes; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Senior Notes and that reliance may be placed only on the other identification numbers printed 26 on the Senior Notes. The Company will promptly notify the Trustee of any change in the CUSIP number. ARTICLE 3 Redemption SECTION 3.01 Notices to Trustee. ------------------ If the Company elects to redeem Senior Notes pursuant to the optional redemption provisions of paragraph 5 of the Senior Notes, it shall notify the Trustee of the redemption date and the principal amount of Senior Notes to be redeemed. The redemption price shall be the amount determined pursuant to paragraph 5 of the Senior Notes. The Company shall give each notice provided for in this Section at least 50 days before the redemption date (unless a shorter notice period shall be satisfactory to the Trustee). SECTION 3.02 Selection of Senior Notes To Be Redeemed. ---------------------------------------- If less than all the Senior Notes are to be redeemed, the Trustee shall select the Senior Notes to be redeemed by lot or pro rata or by any other method that the Trustee considers fair and appropriate. The Trustee shall make the selection not more than 75 days and not less than 30 days before the redemption date from Senior Notes outstanding not previously called for redemption. The Trustee may select for redemption a portion of the principal of Senior Note that has a denomination larger than $1,000. Senior Notes and portions thereof will be redeemed in the amount of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Senior Notes called for redemption also apply to portions of Senior Notes called for redemption. The Trustee will make the selection of Senior Notes outstanding and not previously called for redemption. The Trustee shall notify the Company promptly of the Senior Notes or portions of Senior Notes to be called for redemption. SECTION 3.03 Notice of Redemption. -------------------- At least 30 days but not more than 60 days before a redemption date, the Company shall mail a notice of redemption to each holder whose Senior Notes are to be redeemed. The notice shall identify the Senior Notes to be redeemed and shall state: (a) the redemption date; (b) the redemption price; 27 (c) if any Senior Note is being redeemed in part, the portion of the principal amount of such Senior Note to be redeemed and that, after the redemption date, upon surrender of such Senior Note, a new Senior Note or Senior Notes in principal amount equal to the unredeemed portion will be issued; (d) that Senior Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (e) that interest on Senior Notes called for redemption and for which funds have been set apart for payment, ceases to accrue on and after the redemption date (unless the Company defaults in the payment of the redemption price); (f) the paragraph of the Senior Notes pursuant to which the Senior Notes are being redeemed; (g) the aggregate principal amount of Senior Notes that are being redeemed; (h) the CUSIP number of the Senior Notes (provided that the disclaimer permitted by Section 2.13 may be made); and (i) the name and address of the Paying Agent. At the Company's request, the Trustee shall give notice of redemption in the Company's name and at its expense. SECTION 3.04 Effect of Notice of Redemption. ------------------------------ Once notice of redemption is mailed, Senior Notes called for redemption become due and payable on the redemption date at the price set forth in the Senior Note. SECTION 3.05 Deposit of Redemption Price. --------------------------- On or before the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money in immediately available funds sufficient to pay the redemption price of and accrued interest on all Senior Notes to be redeemed on that date. The Trustee or the Paying Agent shall return to the Company any money not required for that purpose. SECTION 3.06 Senior Notes Redeemed in Part. ----------------------------- Upon surrender of a Senior Note that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the holder of a Senior Note at the expense of the Company a new Senior Note equal in principal amount to the unredeemed portion of the Senior Note surrendered. 28 ARTICLE 4 Covenants SECTION 4.01 Payment of Senior Notes. ----------------------- The Company shall pay the principal of and interest on the Senior Notes on the dates and in the manner provided in the Senior Notes. Principal and interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company or a Subsidiary of the Company) holds as of 1:00 P.M. Eastern Time on that date immediately available funds designated for and sufficient to pay all principal and interest then due. To the extent lawful, the Company shall pay interest (including post- petition interest in any proceeding under any Bankruptcy Law) on (a) overdue principal, at the rate borne by Senior Notes, compounded semiannually; and (b) overdue installments of interest (without regard to any applicable grace period) at the same rate, compounded semiannually. SECTION 4.02 Commission Reports. ------------------ So long as any Senior Note is outstanding, the Company shall file with the Commission and, within 15 days after it files them with the Commission, file with the Trustee and thereafter promptly mail or promptly cause the Trustee to mail to the holders of Senior Notes at their addresses as set forth in the register of the Senior Notes copies of the annual reports and of the information, documents and other reports which the Company is required to file with Commission pursuant to Section 13 or 15(d) of the Exchange Act or which the Company would be required to file with the Commission if the Company then had a class of securities registered under the Exchange Act. In addition, the Company shall cause its annual report to stockholders and any quarterly or other financial reports furnished to its stockholders generally to be filed with the Trustee, no later than the date such materials are mailed or made available to the Company's stockholders, and thereafter mailed promptly to the holders of Senior Notes at their addresses as set forth in the register of Senior Notes. SECTION 4.03 Compliance Certificate. ---------------------- The Company shall deliver to the Trustee, within 60 days after the end of the first three fiscal quarters and within 120 days after the end of each fiscal year of the Company, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal period has been made under the supervision of the signing Officers with a view to determining whether the Company has fully performed its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms and conditions hereof (or, if any Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have 29 knowledge) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest on the Senior Notes are prohibited. The Company shall, so long as any of the Senior Notes are outstanding, deliver to the Trustee, forthwith upon becoming aware of any Default, Event of Default or default in the performance of any term or condition in this Indenture, without regard to any period of grace or requirement of notice provided hereunder, an Officers' Certificate specifying such Defaults, Event of Default or default. So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, at the time the Officers' Certificate described in the second preceding paragraph is filed with respect to any fiscal year end of the Company, the Company also shall file with the Trustee a letter or statement of the independent accountants who shall have certified the financial statements of the Company for its preceding fiscal year in connection with the annual report of the Company to its stockholders for such year to that effect that, in making the examination necessary for certification of such financial statements, nothing came to their attention that would lead them to believe that the Company has violated any of the terms or conditions contained in Sections 4.05, 4.06 and 4.09 of this Indenture, which Default remains uncured at the date of such letter or statement or, if they shall have obtained knowledge of any such uncured Default, specifying in such letter or statement such Default or Defaults and the nature thereof, it being understood that such accountants shall not be liable directly or indirectly for failure to obtain knowledge of any such Default or Defaults and that their examination was not directed primarily toward obtaining knowledge of such non compliance. SECTION 4.04 Maintenance of Office or Agency. ------------------------------- The Company shall maintain or cause to be maintained the office or agency required under Section 2.03. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not maintained by the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Senior Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain or cause to be maintained an office or agency in the City of New York for such purpose. SECTION 4.05 Limitation on Indebtedness. -------------------------- The Company shall not, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness, unless (a) no Default or Event of Default shall have occurred and be continuing at the time of the proposed incurrence thereof or shall occur as a result of such proposed incurrence and (b) after giving effect to such proposed incurrence 30 the Company's Consolidated Fixed Charge Coverage Ratio would be greater than 2.0 to 1.0 on or prior to July 31, 1996, and 2.25 to 1.0 on or after August 1, 1996. SECTION 4.06 Limitation on Restricted Payments. --------------------------------- The Company shall not, and shall not permit or cause any of its Subsidiaries to, directly or indirectly, make any Restricted Payment unless, at the time of such proposed Restricted Payment, and on a pro forma basis immediately after giving effect thereto: A. no Default or Event of Default has occurred and is continuing; B. the aggregate amount expended for all Restricted Payments subsequent to the Issue Date would not exceed the sum of: (1) 50% of aggregate Consolidated Net Income of the Company (or if such Consolidated Net Income is a loss, minus 100% of such loss) earned on a cumulative basis during the period beginning on May 2, 1994 and ending on the last date of the Company's fiscal quarter immediately preceding such proposed Restricted Payment; plus (2) 100% of the aggregate Net Equity Proceeds received by the Company from any Person (other than from a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date of Qualified Capital Stock of the Company (excluding (a) any Qualified Capital Stock of the Company paid as a dividend on any Capital Stock of the Company or of any of its Subsidiaries or as interest on any Indebtedness of the Company or of any of its Subsidiaries, (b) the issuance of Qualified Capital Stock upon the conversion of, or in exchange for, any Capital Stock of the Company or of any of its Subsidiaries and (c) any Qualified Capital Stock of the Company with respect to which the purchase price thereof has been financed directly or indirectly using funds (i) borrowed from or advanced by the Company or any of its Subsidiaries, unless and until and to the extent such borrowing advanced is repaid or (ii) contributed or guaranteed by the Company or by any of its Subsidiaries (including, without limitation, in respect of any employee stock ownership or benefit plan) unless and until such guarantee terminates; and C. The Company would be able to incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under Section 4.05 (assuming a market rate of interest with respect thereto). The foregoing provisions of this covenant will not prevent: (a) the payment of any dividend within 60 days after the date of its declaration if at such date of declaration the payment of such dividend would comply with the provisions set forth above, provided that (i) such dividend will be deemed to have been paid as of its date of declaration for the purposes of this 31 covenant and (ii) at the time of payment of such dividend no other Default or Event of Default shall have occurred and be continuing or would result therefrom, (b) if no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof, the purchase, redemption, retirement or acquisition of any shares of Capital Stock of the Company or of any Subsidiary or any Indebtedness of the Company that is subordinated to the Senior Notes solely by conversion into, in exchange for or with or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company and neither such purchase, redemption, retirement, acquisition, conversion or exchange nor the proceeds of any such sale shall be included in any computation made under clause (B)(2) above or (c) the making of any Permitted Payments. The amounts expended pursuant to clauses (a) and (c) (with respect to those items identified in clauses (a)(i), (d), (e) or (f) of the definition of Permitted Payments) of this paragraph will be included in computing the amounts available for Restricted Payments for purposes of the immediately preceding paragraph. For purposes of this covenant a distribution to holders of the Company's Capital Stock of (a) shares of Capital Stock of any of its Subsidiaries or (b) other assets of the Company or of any of its Subsidiaries, without, in either case, the receipt of equivalent consideration therefor shall be deemed to be the equivalent of a cash dividend equal to the excess of the Fair Market Value of the shares or other assets being so distributed at the time of such distribution over the consideration, if any, received therefor. SECTION 4.07 Limitations on Payment Restrictions Affecting Subsidiaries. ---------------------------------------------------------- The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create or become (after the Issue Date) subject to any consensual encumbrance or restriction of any kind (a) on the ability of any such Subsidiary to (i) pay dividends, in cash or otherwise, or make other payments or distributions on its Capital Stock or any other equity interest or participation in, or measured by, its profits, owned by the Company or by any of its Subsidiaries, or make payments on any Indebtedness owed to the Company or to any of its Subsidiaries, (ii) make loans or advances to the Company or to any of its Subsidiaries, (iii) transfer any of their respective property or assets to the Company or to any of its Subsidiaries or (b) on the ability of the Company or any of its Subsidiaries to receive or retain any such (i) dividends, payments or distributions, (ii) loans or advances or (iii) transfer of property or assets, except for such encumbrances or restrictions existing under or by reason of (1) customary provisions restricting subletting, transfer or assignment under any lease governing a leasehold interest of the Company or of any of its Subsidiaries, (2) applicable law, (3) reasonable covenants set forth in the agreements governing the formation of a joint venture otherwise permitted by this Indenture, (4) Acquired Indebtedness incurred in accordance with this Indenture, provided that such encumbrance or restriction in respect of such Acquired Indebtedness is not applicable to any Person, or the property of any Person, other than the Person, or the property of the Person, so acquired and that such Acquired Indebtedness was not incurred by the Company or any of its Subsidiaries or by the Person being acquired in connection with or anticipation of such acquisition, (5) with respect to clause (a)(iii) and (b)(iii) 32 above, purchase money obligations for property acquired in the ordinary course of business, (6) Indebtedness outstanding immediately after the Issue Date (as in effect on the Issue Date), (7) customary provisions in instruments or agreements relating to a Lien permitted to be created, incurred or assumed pursuant to the provisions of Section 4.11 hereof which restrict the transfer of the property or assets subject to such Lien, (8) customary provisions in any agreement otherwise permitted under this Indenture which (i) provide that transactions between the Company and its Subsidiaries be no less favorable to any such Subsidiary than could be obtained from an unaffiliated third party, and (ii) do not have any material adverse effect on the ability of such Subsidiary to pay dividends to the Company or otherwise advance cash, directly or indirectly to the Company on terms no less favorable to any such Subsidiary than could be obtained from an unaffiliated third party or (9) any New Indebtedness that is Permitted Refinancing Indebtedness incurred to Refinance any of the Indebtedness set forth in clauses (4), (5) and (6) above to the extent such encumbrance or restriction in respect of the New Indebtedness is no less favorable to the holders and no more restrictive than such encumbrances or restrictions contained in the Indebtedness being Refinanced as of the date of such Refinancing and do not extend to or cover any other Person or the property of any other Person other than the Person in respect of whom such encumbrance or restriction relating to the Indebtedness being Refinanced applied or any replacement of the Pooling and Servicing Agreement to the extent such encumbrance or restriction in respect of the replacement Pooling and Servicing Agreement is no less favorable to the holders and no more restrictive in any material respect than such encumbrances or restrictions contained in the Pooling and Servicing Agreement as in effect on the Issue Date. SECTION 4.08 Limitations on Transactions with Affiliates. ------------------------------------------- The Company shall not, nor shall the Company permit any of its Subsidiaries to, (a) sell, lease, transfer or otherwise dispose of any of its property or assets to, (b) purchase any property or assets from, (c) make any Investment in, or (d) enter into or amend any contract, agreement or understanding with or for the benefit of, any Affiliate of the Company or of any Subsidiary of the Company (an "Affiliate Transaction"), other than Affiliate Transactions that, in its reasonable judgment are necessary or desirable for the Company or such Subsidiary in the conduct of its business and that (i) a majority of the members of the Board of Directors of the Company reasonably and in good faith determines are in the best interests of the Company or such Subsidiary and (ii) are on terms (which terms are in writing) that are fair and reasonable to the Company or the Subsidiary and that are no less favorable to the Company or such Subsidiary than those that could be obtained in a comparable arm's length transaction by the Company or such Subsidiary from an unaffiliated party, as determined reasonably and in good faith by the Board of Directors of the Company, provided that if the Company or any Subsidiary of the Company enters into an Affiliate Transaction or series of Affiliate Transactions involving or having an aggregate value of more than $10 million such Affiliate Transaction shall, prior to the consummation thereof, have been approved by a majority of the disinterested directors of the Company (or by a majority of the disinterested directors on any committee of directors authorized to consider such matter, provided that the delegation of such matter to such committee has been approved by a majority of disinterested directors of the Company) and, provided, 33 further, that with respect to any such transaction or series of related transactions that involve an aggregate value of more than $20 million the Company or such Subsidiary shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness to itself of such transaction or series of related transactions from a financial point of view from an Independent Financial Advisor and file the same with the Trustee. The foregoing restriction shall not apply to (x) any transaction between Wholly Owned Subsidiaries of the Company, or between the Company and any Wholly Owned Subsidiary of the Company if such transaction is not otherwise prohibited by the terms of this Indenture and (y) any Restricted Payment made in accordance with Section 4.06. Notwithstanding the foregoing, the term "Affiliate Transaction" shall not include any contract, agreement or understanding with or for the benefit of, or a plan for the benefit of, any or all employees of the Company or its Subsidiaries (in their capacity as such) that has been approved by the Company's Board of Directors, a disinterested committee thereof, or a stock issuance to directors pursuant to plans approved by stockholders of the Company. SECTION 4.09 Limitation on Subsidiary Indebtedness and Preferred Stock. --------------------------------------------------------- The Company shall not permit any Subsidiary to, directly or indirectly, incur any Indebtedness or issue any Preferred Stock other than, without duplication: (a) Indebtedness or Preferred Stock issued to and held by the Company or a Wholly Owned Subsidiary of the Company, provided that (i) such Indebtedness is not subordinated to any other Indebtedness of such Subsidiary, and (ii) any subsequent issuance or transfer of Capital Stock of a Wholly Owned Subsidiary of the Company (the "Obligee Subsidiary") to whom a Subsidiary of the Company is indebted (the "Obligor Subsidiary") that results in such Obligee Subsidiary ceasing to be a Wholly Owned Subsidiary of the Company or any subsequent transfer such Indebtedness or Preferred Stock of such Obligor Subsidiary by such Obligee Subsidiary (other than to the Company or another Wholly Owned Subsidiary of the Company) shall be deemed in each case to be the incurrence of such Indebtedness or the issuance of such Preferred Stock by each Obligor Subsidiary owing to or issued to, as the case may be, such Obligee Subsidiary to the extent outstanding as of such date; (b) Indebtedness or Preferred Stock of a Subsidiary of the Company which represents the assumption by such Subsidiary of Indebtedness or Preferred Stock of another Subsidiary of the Company in connection with a merger of such Subsidiaries; (c) Indebtedness or Preferred Stock of any Person (other than a Person that has acquired, directly or indirectly, assets from the Company other than in the ordinary course of business) existing at the time such Person becomes a Subsidiary of the Company, provided that (i) such Indebtedness or Preferred Stock was not incurred or issued as a result of or in connection with or in anticipation of such Person becoming a Subsidiary of the Company, (ii) immediately after giving effect to such Person becoming a Subsidiary of the Company (as if such Indebtedness and Preferred Stock were incurred and issued on the first day of the Reference Period) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under Section 4.05 (assuming a market rate of interest with respect thereto), and (iii) the total of the aggregate principal amount of Indebtedness and the aggregate liquidation value of Preferred Stock of such Person outstanding on the date it becomes a Subsidiary of the Company, plus the total of the 34 aggregate principal amount of Indebtedness and the aggregate liquidation value of Preferred Stock of such other Persons incurred under this clause (c) (but only to the extent such debt or Preferred Stock remains outstanding on the date of determination), does not exceed 10% of the Consolidated Net Worth of the Company; (d) Indebtedness and Preferred Stock of any Subsidiary of the Company, provided that (i) immediately after giving effect thereto (as if the incurrence or issuance thereof occurred on the first day of the Reference Period) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under Section 4.05 (assuming a market rate of interest with respect thereto), and (ii) the total of the aggregate principal amount of the Indebtedness and the aggregate liquidation value of Preferred Stock proposed to be issued and incurred by such Subsidiary plus the total of the aggregate principal amount of Indebtedness and the aggregate liquidation value of Preferred Stock incurred and issued by all Subsidiaries of the Company under this clause (d) does not exceed, when added to Indebtedness of the Company incurred under clause (f) of the definition of "Permitted Indebtedness," 10% of Consolidated Net Worth; (e) Permitted Indebtedness incurred by any Subsidiary of the Company under clauses (a) and (g) of the definition of "Permitted Indebtedness"; (f) Indebtedness or Preferred Stock that is Permitted Refinancing Indebtedness incurred or issued to Refinance any Indebtedness or Preferred Stock incurred or issued by a Subsidiary of the Company prior to the Issue Date or in accordance with this Indenture; or (g) Indebtedness of the Company's non-U.S. Subsidiaries under any working capital or other revolving credit facility in an aggregate amount not to exceed $5 million at any one time. SECTION 4.10 Limitation on Sale of Assets. ---------------------------- The Company will not, and will not permit any of its Subsidiaries to, consummate any Asset Sale unless such Asset Sale is for at least Fair Market Value and at least 80% of the consideration therefrom received by the Company or such Subsidiary is in the form of cash or Cash Equivalents. Following any Asset Sale, an amount equal to the Net Cash Proceeds of such Asset Sale shall be applied by the Company or such Subsidiary within 365 days of the date of the Asset Sale, at its election, to either: (a) the payment of Pari Passu Indebtedness with an equal and concurrent reduction in the commitment related to such Pari Passu Indebtedness, if applicable, provided any Net Cash Proceeds which are applied on such pro rata basis to reduce Indebtedness under the Revolving Credit Agreement shall result in a permanent reduction of the borrowing availability thereunder; (b) make any Permitted Program Investment or any other investment in capital assets usable in the Company's or its Subsidiaries' lines of business or in an asset or business in the same line of business as the Company; or (c) a combination of payment and investment permitted by the foregoing clauses (a) and (b). On the earlier of (A) the 366th day after the date of an Asset Sale or (B) such date as the Board of Directors of the Company or of such Subsidiary determines (as evidenced by a written resolution of said Board of Directors) not to apply an amount equal to the Net Cash Proceeds relating to such Asset Sale as set forth in the immediately preceding sentence (each of (A) and (B), an "Asset Sale Offer Trigger Date"), the Company or such Subsidiary shall be obligated to apply an amount equal to aggregate amount of Net Cash Proceeds which have not been applied on or before such Asset Sale Offer 35 Trigger Date as permitted by the foregoing clauses (a), (b) and (c) of the immediately preceding sentence (each an "Asset Sale Offer Amount") to make an offer to purchase for cash (the "Asset Sale Offer") from all holders of Senior Notes on a pro rata basis that amount of Senior Notes equal to the Asset Sale Offer Amount at a price equal to 100% of the principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest thereon to the date of repurchase. Notwithstanding the foregoing, if an Asset Sale Offer Amount is less than $10 million, the application of such Asset Sale Offer Amount to an Asset Sale Offer may be deferred until such time as such Asset Sale Offer Amount plus the aggregate amount of all Asset Sale Offer Amounts arising subsequent to such Asset Sale Offer Trigger Date from all Asset Sales by the Company and its Subsidiaries aggregates at least $10 million, at which time the Company or such Subsidiary shall apply all Asset Sale Offer Amounts that have been so deferred to make an Asset Sale Offer (the first date the aggregate of all such deferred Asset Sale Offer Amounts is equal to $10 million or more shall be deemed to be an "Asset Sale Offer Trigger Date"). In the event of the transfer of substantially all (but not all) of the property and assets of the Company as an entirety to a Person in a transaction permitted under Section 5.01, the successor corporation shall be deemed to have sold the properties and assets of the Company not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. Each Asset Sale Offer shall be mailed to the holders of the Senior Notes at the addresses shown on the register of holders maintained by the Registrar with a copy to the Trustee and the Paying Agent, within 10 days following the applicable Asset Sale Offer Trigger Date, and shall comply with each of the procedures for notice set forth below. Each Asset Sale Offer shall remain open until a specified date (the "Asset Sale Offer Termination Date") which is at least 20 Business Days from the date such Asset Sale Offer is mailed. During the period specified in the Asset Sale Offer, holders of Senior Notes may elect to tender their Senior Notes in whole or in part in integral multiples of $1,000 in exchange for cash. Payment shall be made by the Company (or applicable Subsidiary) in respect of Senior Notes properly tendered pursuant to this Section on a specified Business Day (the "Asset Sale Offer Payment Date") which shall be no earlier than three Business Days after the Asset Sale Offer Termination Date and no later then 60 days after such applicable Asset Sale Offer Trigger Date. To the extent holders of Senior Notes properly tender Senior Notes in an amount exceeding the Asset Sale Offer Amount, Senior Notes of tendering holders will be repurchased on a pro rata basis (based on amounts tendered). The notice, which shall govern the terms of the Asset Sale Offer, shall include such disclosures as are required by law and shall state: (a) that the Asset Sale Offer is being made pursuant to this Section 4.10; (b) the purchase price (including the amount of the accrued interest, if any) for each Senior Note, the Asset Sale Offer Termination Date and the Asset Sale Offer Payment Date; 36 (c) that any Senior Note not tendered or accepted for payment will continue to accrue interest in accordance with the terms thereof; (d) that, unless the Company defaults on making the payment, any Senior Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Offer Payment Date; (e) that holders electing to have Senior Notes purchased pursuant to an Asset Sale Offer will be required to surrender their Senior Notes to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the Asset Sale Offer Termination Date and must complete any form letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent; (f) that holders of Senior Notes will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the Asset Sale Offer Termination Date, a tested telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of Senior Notes the holder delivered for purchase, the Senior Note certificate number (if any) and a statement that such holder is withdrawing his election to have such Senior Notes purchased; (g) that if Senior Notes in a principal amount in excess of the Asset Sale Offer Amount are tendered pursuant to the Asset Sale Offer, the Company shall purchase Senior Notes on a pro rata basis among the Senior Notes tendered (with such adjustments as may be deemed appropriate by the Company so that only Senior Notes in denominations of $1,000 or integral multiples of $1,000 shall be acquired); (h) that holders whose Senior Notes are purchased only in part will be issued new Senior Notes equal in principal amount to the unpurchased portion of the Senior Notes surrendered; and (i) the instructions that holders must follow in order to tender their Senior Notes. On the Asset Sale Offer Termination Date, the Company shall (i) accept for payment Senior Notes or portions thereof tendered pursuant to the Asset Sale Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Senior Notes or portions thereof so tendered and accepted and (iii) deliver to the Trustee the Senior Notes so accepted together with an Officers' Certificate setting forth the Senior Notes or portions thereof tendered to and accepted for payment by the Company. On the Asset Sale Offer Payment Date, the Paying Agent shall mail or deliver to the holders of Senior Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and mail or deliver to such holders a new Senior Note equal in principal amount to any unpurchased portion of the Senior Note surrendered. Any Senior Notes not so accepted shall be promptly mailed or delivered by the Company to the holder thereof. 37 If an offer is made to repurchase the Senior Notes pursuant to an Asset Sale Offer, the Company will and will cause its Subsidiaries to comply with all tender offer rules under state and Federal securities laws, including, but not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.10, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.10 by virtue thereof. SECTION 4.11 Limitation on Liens. ------------------- The Company may not, and may not permit any of its Subsidiaries to, voluntarily or involuntarily, create, incur or assume any Liens upon any of their respective properties or assets whether owned on the Issue Date or acquired thereafter, or on any income or profits therefrom, or assign or otherwise convey any right to receive income or profits thereon, securing any Indebtedness of the Company or of any of its Subsidiaries other than, without duplication (a) Liens granted by the Company securing Indebtedness of the Company that is incurred in accordance with this Indenture and that is Pari Passu Indebtedness, provided that the Senior Notes are secured on an equal and ratable basis to such Liens, (b) Liens granted by the Company securing Indebtedness of the Company incurred in accordance with this Indenture and that is subordinated to the Senior Notes, provided that the Senior Notes are secured by Liens ranking prior to such Liens, (c) Liens existing on the Issue Date to the extent and in the manner such Liens are in effect on the Issue Date, (d) Permitted Liens, (e) Liens relating to other Indebtedness and Sale-Leaseback Financings in an aggregate amount not to exceed at any one time 10% of the Company's Consolidated Net Worth, (f) Liens in respect of Acquired Indebtedness incurred by the Company in accordance with Section 4.05 and in respect of Acquired Indebtedness incurred by a Subsidiary of the Company in accordance with clause (d) of Section 4.09, provided that the Lien in respect of such Acquired Indebtedness secured such Acquired Indebtedness at the time of the incurrence of such Acquired Indebtedness by the Company or by one of its Subsidiaries and such Lien and the Acquired Indebtedness were not incurred by the Company or any of its Subsidiaries or by the Person being acquired or from whom the assets are proposed to be acquired in connection with, or in anticipation of, the incurrence of such Acquired Indebtedness by the Company or by one of its Subsidiaries and, provided further, that such Liens do not extend to or cover any property or assets of the Company or of any of its Subsidiaries other than the property or assets that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Company or of one of its Subsidiaries, (g) Liens granted by a corporation, which Liens are in existence at the time such corporation becomes a Subsidiary of the Company, provided that such Liens were not created by such corporation in connection with or in anticipation of such corporation becoming a Subsidiary of the Company, and provided further that such Liens do not extend to or cover any property or assets of the Company or any of its Subsidiaries other than the property or assets of such acquired corporation prior to the time it became a Subsidiary of the Company and (h) Liens in respect of New Indebtedness that is Permitted Refinancing Indebtedness incurred to Refinance any of the Indebtedness set forth in clauses (a), (b), (c), (e), (f) and (g) above, provided that such Liens in respect of such New Indebtedness are no less favorable to the 38 holders of Senior Notes than the Liens in respect of the Indebtedness being Refinanced and such Liens in respect of New Indebtedness do not extend to or cover any properties or assets of the Company or of any of the Company's Subsidiaries other than the property or assets that secured the Indebtedness being Refinanced. SECTION 4.12 Continued Existence. ------------------- Subject to Article 5, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. SECTION 4.13 Taxes. ----- The Company shall pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by appropriate proceedings or where the failure to do so (together with all other such failures) would not have a material adverse effect on the financial condition or results of operations of the Company and its Subsidiaries, taken as a whole. SECTION 4.14 Stay, Extension and Usury Laws. ------------------------------ The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the Company's obligation to pay the Senior Notes; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law insofar as such law applies to the Senior Notes, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. SECTION 4.15 Investment Company Act. ---------------------- The Company, as of the Issue Date, is not and shall not become an investment company subject to registration under the Investment Company Act of 1940, as amended. SECTION 4.16 Change of Control. ----------------- Following a Change of Control (the date of each such occurrence being the "Change of Control Date"), the Company shall notify the holders of Senior Notes in writing of such occurrence and shall make an offer (the "Change of Control Offer") to purchase all Senior Notes then outstanding at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the "Change of Control Offer Payment Date" (as defined below). 39 Notice of a Change of Control shall be mailed by or at the direction of the Company to the holders of Senior Notes as shown on the register of such holders maintained by the Registrar not less than 15 days nor more than 30 days after the applicable Change of Control Date at the addresses as shown on the register of holders maintained by the Registrar, with a copy to the Trustee and the Paying Agent. The Change of Control Offer shall remain open until a specified date (the "Change of Control Offer Termination Date") which is at least 20 Business Days from the date such notice is mailed. During the period specified in such notice, holders of Senior Notes may elect to tender their Senior Notes in whole or in part in integral multiples of $1,000 in exchange for cash. Payment shall be made by the Company in respect of Senior Notes properly tendered pursuant to this Section on a specified Business Day (the "Change of Control Offer Payment Date") which shall be no earlier than three Business Days after the applicable Change of Control Offer Termination Date and no later than 60 days after the applicable Change of Control Date. The notice, which shall govern the terms of the Change of Control Offer, shall include such disclosures as are required by law and shall state: (a) that a Change of Control Offer is being made pursuant to this Section 4.16 and that all Senior Notes will be accepted for payment; (b) the purchase price (including the amount of accrued interest, if any) for each Senior Note, the Change of Control Offer Termination Date and the Change of Control Offer Payment Date; (c) that any Senior Note not accepted for payment will continue to accrue interest in accordance with the terms thereof; (d) that, unless the Company defaults on making the payment, any Senior Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Offer Payment Date; (e) that holders electing to have Senior Notes purchased pursuant to a Change of Control Offer will be required to surrender their Senior Notes to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the Change of Control Offer Termination Date and must complete any form letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent; (f) that holders of Senior Notes will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the Change of Control Offer Termination Date, a tested telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of Senior Notes the holder delivered for purchase, the Senior Note certificate number (if any) and a statement that such holder is withdrawing his election to have such Senior Notes purchased; 40 (g) that holders whose Senior Notes are purchased only in part will be issued Senior Notes equal in principal amount to the unpurchased portion of the Senior Notes surrendered; (h) the instructions that holders must follow in order to tender their Senior Notes; and (i) the circumstances and relevant facts regarding such Change of Control (including, but not limited to, information with respect to pro forma historical financial information after giving effect to such Change of Control, information regarding the Persons acquiring control and such Persons' business plans going forward). On the Change of Control Offer Termination Date, the Company shall (i) accept for payment Senior Notes or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Senior Notes or portions thereof so tendered and accepted and (iii) deliver to the Trustee the Senior Notes so accepted together with an Officers' Certificate setting forth the Senior Notes or portions thereof tendered to and accepted for payment by the Company. On the Change of Control Offer Payment Date, the Paying Agent shall mail or deliver to the holders of Senior Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and mail or deliver to such holders a new Senior Note equal in principal amount to any unpurchased portion of the Senior Note surrendered. Any Senior Notes not so accepted shall be promptly mailed or delivered by the Company to the holder thereof. In addition, in the event of any Change of Control, the Company shall not, and shall not permit any of its Subsidiaries to, purchase, redeem or otherwise acquire any Indebtedness subordinated or junior to the Senior Notes pursuant to any analogous provision relating to such Indebtedness on or prior to the payment in full in cash or Cash Equivalents of all Senior Notes, together with accrued and unpaid interest thereon with respect to which the Change of Control Offer was accepted. If an offer is made to redeem Senior Notes as a result of a Change of Control, the Company will be required to comply with all tender offer rules under state and Federal securities laws, including, but not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such offer. SECTION 4.17 Limitation on Sale and Leaseback Transactions. --------------------------------------------- The Company will not, and will not permit any of its Subsidiaries to, enter into any sale and leaseback transaction, provided that the Company (and not a Subsidiary of the Company) may enter into such a sale and leaseback transaction if (a) with respect to any such transaction involving the incurrence of Capitalized Lease Obligations, the Company could have (i) incurred Indebtedness in an amount equal to the debt relating to such sale and leaseback transaction pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.05 and (ii) 41 incurred a Lien to secure such Indebtedness pursuant to Section 4.11, (b) the proceeds of such sale and leaseback transaction are at least equal to the Fair Market Value of the property that is subject of such sale and leaseback transaction and (c) the Company shall apply or cause to be applied the proceeds of such transaction in compliance with Section 4.10. SECTION 4.18 Appointments to Fill Vacancies in Trustee's Office. -------------------------------------------------- The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so that there shall at all times be a Trustee hereunder. SECTION 4.19 Further Instruments and Acts. ---------------------------- Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. ARTICLE 5 Successors SECTION 5.01 When the Company May Merge, Etc. -------------------------------- The Company will not, in a single transaction or series of related transactions, consolidate or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets to, any Person or adopt a Plan of Liquidation unless: (a) either (i) the Company shall be the surviving or continuing corporation or (ii) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, transfer or lease the properties and assets of the Company substantially as an entirety or in the case of a Plan of Liquidation, the Person to which all or substantially all of the assets of the Company have been transferred (1) shall be a corporation organized and validly existing under the laws of the United States or any State thereof or the District of Columbia and (2) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, the due and punctual payment of the principal of, and premium, if any, and interest on all of the Senior Notes and the performance of every covenant of the Senior Notes and this Indenture on the part of the Company to be performed or observed; (b) immediately after giving effect to such transaction and any assumption contemplated by clause (2) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Company (in the case of clause (i) of the foregoing 42 clause (a)) or such Person (in the case of clause (ii) thereof) (i) shall have a Consolidated Net Worth (immediately after the transaction but prior to any purchase accounting adjustments relating to such transaction) equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction and (ii) shall be able to incur (assuming a market rate of interest with respect thereto) at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) under Section 4.05, provided that in determining the "Consolidated Fixed Charge Coverage Ratio" of the resulting, transferee or surviving Person, such ratio shall be calculated as if the transaction (including the incurrence of any Indebtedness or Acquired Indebtedness) occurred on the first day of the Reference Period; (c) immediately before and after giving effect to such transaction and the assumption contemplated by clause (a)(ii)(2) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred in connection with or in respect of the transaction) no Default or Event of Default shall have occurred and be continuing; (d) the Company or such Person shall have delivered to the Trustee (i) an Officers' Certificate and an Opinion of Counsel (which may be in-house counsel of the Company), each stating that such consolidation, merger, sale, assignment, conveyance, transfer or lease or Plan of Liquidation and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with the provisions of this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied and (ii) a certification from the Company's independent certified public accountants stating that the Company has made the calculations required by clause (b) above in accordance with the terms of this Indenture; and (e) neither the Company nor any Subsidiary of the Company nor such Person, as the case may be, would thereupon become obligated with respect to any Indebtedness (including Acquired Indebtedness), nor any of its property or assets subject to any Lien, unless the Company or such Subsidiary or such Person, as the case may be, could incur such Indebtedness (including Acquired Indebtedness) or create such Lien under this Indenture (giving effect to such Person being bound by all the terms of this Indenture). For purposes of Section 5.01, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Subsidiaries of the Company, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. SECTION 5.02 Successor Corporation Substituted. --------------------------------- Upon any such consolidation, merger, sale, assignment, conveyance, lease or transfer in accordance with Section 5.01, the successor Person formed by such consolidation or into which 43 the Company is merged or to which such conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor had been named as the Company therein, and thereafter (except in the case of a sale, assignment, transfer, lease, conveyance or other disposition) the predecessor corporation will be relieved of all further obligations and covenants under this Indenture and the Senior Notes. SECTION 5.03 Purchase Option on Change of Control. ------------------------------------ This Article 5 does not affect the obligations of the Company (including without limitation any successor to the Company) under Section 4.16. ARTICLE 6 Defaults and Remedies SECTION 6.01 Events of Default. ----------------- An "Event of Default" with respect to any Senior Notes occurs if: (a) the Company defaults in the payment of principal of, or premium, if any, on the Senior Notes when due at maturity, upon repurchase, upon acceleration or otherwise, including, without limitation, failure of the Company to repurchase the Senior Notes on the date required pursuant to Section 4.10 or 4.16 or failure to make any optional redemption payment when due; or (b) the Company defaults in the payment of any installment of interest on the Senior Notes when due (including any interest payable in connection with any optional redemption payment) and continuance of such default for more than 30 days; or (c) the Company fails to observe, perform or comply with any of the provisions described under Sections 4.05, 4.06, 4.09, 4.10, 4.16 and 5.01 and the failure to remedy such failure prior to the receipt of written notice from the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding Senior Notes; or (d) the Company defaults (other than a default set forth in Section 6.01, clauses (a), (b) and (c) above) in the performance of, or breach of, any other covenant or warranty of the Company in this Indenture or the Senior Notes and fails to remedy such default or breach within a period of 45 days after the receipt of written notice from the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Senior Notes; or (e) (i) the Company fails to pay at maturity or a default in the obligation to pay when due the principal of, interest on (but only to the extent any such failure to pay 44 interest is not fully cured prior to the expiration of the grace period provided in such Indebtedness on the date such interest payment was initially due), or any other payment obligation on any other Indebtedness (other than the Senior Notes) of the Company or of any Subsidiary of the Company, whether such Indebtedness exists on the Issue Date or shall be incurred thereafter, having, individually or in the aggregate, an outstanding principal amount of $15,000,000 or more or (ii) any other Indebtedness (other than the Senior Notes) of the Company or of any Subsidiary of the Company, whether such Indebtedness exists on the Issue Date or shall be incurred thereafter, having, individually or in the aggregate, an outstanding principal amount of $15,000,000 or more, is declared due and payable prior to its stated maturity; or (f) a court of competent jurisdiction enters one or more judgments or orders against the Company or any Subsidiary of the Company or any of their respective property or assets in an aggregate amount in excess of $15,000,000 and that are not covered by insurance written by third parties, which judgments or orders have not been vacated, discharged, satisfied or stayed pending appeal within 60 days from the entry thereof; or (g) the Company or any Material Subsidiary, pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; or (h) a court of competent jurisdiction enters a judgment, order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Material Subsidiary in an involuntary case, (B) appoints a Custodian of the Company or any Material Subsidiary for all or substantially all of its property, or (C) orders the liquidation of the Company or any Material Subsidiary, and the order or decree remains unstayed and in effect for 60 days. 45 The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. SECTION 6.02 Acceleration. ------------ If an Event of Default (other than an Event of Default specified in clauses (g) and (h) of Section 6.01) occurs and is continuing, then and in every such case the Trustee, by written notice to the Company, or the holders of at least 25% in aggregate principal amount of the then outstanding Senior Notes, by written notice to the Company and the Trustee, may declare the unpaid principal of and accrued interest on all the Senior Notes to be due and payable. Upon such declaration such principal amount, premium, if any, and accrued and unpaid interest shall be immediately due and payable notwithstanding anything contained in this Indenture or the Senior Notes to the contrary. If an Event of Default with respect to the Company specified in clauses (g) or (h) of Section 6.01 occurs, all unpaid principal of, and premium, if any, and accrued and unpaid interest or, Senior Notes then outstanding shall automatically become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holder of Senior Notes. The holders of a majority in principal amount of the then outstanding Senior Notes by notice to the Trustee may rescind an acceleration and its consequences if all existing Events of Default, other than the nonpayment of principal and premium, if any, and interest on the Senior Notes which has become due solely by virtue of such acceleration have been cured or waived and if the rescission would not conflict with any judgment or decree of any court of competent jurisdiction. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03 Other Remedies. -------------- If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of or interest on the Senior Notes or to enforce the performance of any provision of the Senior Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Senior Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any holder of a Senior Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04 Waiver of Past Defaults. ----------------------- The holders of a majority in aggregate principal amount of the Senior Notes then outstanding may, on behalf of the holders of all the Senior Notes, waive an existing Default or Event of Default and its consequences, except Default or Event of Default in the payment of the principal of or interest on the Senior Notes (other than nonpayment of principal of and premium, 46 if any, or interest on the Senior Notes which has become due solely by virtue of an acceleration which has been duly rescinded, as provided above), or in respect of a covenant or provision of this Indenture which cannot be modified or amended without the consent of all holders of Senior Notes. When a Default is waived, it is cured and stops continuing. No waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05 Control by Majority. ------------------- The holders of a majority in principal amount of the then outstanding Senior Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other holders of Senior Notes or that may involve the Trustee in personal liability; provided that the Trustee may take any other action the Trustee deems proper that is not inconsistent with such directions. SECTION 6.06 Limitation on Suits. ------------------- A holder of a Senior Note may not pursue any remedy with respect to this Indenture or the Senior Notes unless: (a) the holder gives to the Trustee notice of a continuing Event of Default; (b) the holders of at least 25% in principal amount of the then outstanding Senior Notes make a request to the Trustee to pursue the remedy; (c) such holder or holders offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (e) during such 60-day period the holders of a majority in principal amount of the then outstanding Senior Notes do not give the Trustee a direction inconsistent with the request. A holder of a Senior Note may not use this Indenture to prejudice the rights of another holder or to obtain a preference or priority over another holder. SECTION 6.07 Rights of Holders To Receive Payment. ------------------------------------ Notwithstanding any other provision of this Indenture, the right of any holder of a Senior Note to receive payment of principal and interest on the Senior Note, on or after the respective due dates expressed in the Senior Note, or to bring suit for the enforcement of any such payment 47 on or after such respective dates, shall not be impaired or affected without the consent of the holder of a Senior Note. SECTION 6.08 Collection Suit by Trustee. -------------------------- If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid on the Senior Notes and interest on overdue principal and interest and such further amount as shall be sufficient to cover the costs and, to the extent lawful, expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09 Trustee May File Proofs of Claim. -------------------------------- The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the holders of Senior Notes allowed in any judicial proceedings relative to the Company, its creditors or its property. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder of a Senior Note any plan of reorganization, arrangement, adjustment or composition affecting the Senior Notes or the rights of any holder thereof, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding. SECTION 6.10 Priorities. ---------- If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee, and the costs and expenses of collection; Second: to holders of Senior Notes for amounts due and unpaid on the Senior Notes for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Senior Notes for principal and interest, respectively; and Third: to the Company. Except as otherwise provided in Section 2.12, the Trustee may fix a record date and payment date for any payment to holders of Senior Notes. 48 SECTION 6.11 Undertaking for Costs. --------------------- In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.07 or a suit by holders of more than 10% in principal amount of the then outstanding Senior Notes. ARTICLE 7 The Trustee The Trustee hereby accepts the trust imposed upon it by this Indenture and covenants and agrees to perform the same, as herein expressed. SECTION 7.01 Duties of the Trustee. --------------------- (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) Except during the continuance of an Event of Default: (i) The duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) This paragraph does not limit the effect of paragraph (b) of this Section; 49 (ii) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Whether or not therein expressly so provided, every provision of this Indenture that is in any way related to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02 Rights of the Trustee. --------------------- (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in such a document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any attorney or agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by Officers of the Company. (f) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder. 50 SECTION 7.03 Individual Rights of the Trustee. -------------------------------- The Trustee in its individual or any other capacity may become the owner or pledgee of Senior Notes and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11. SECTION 7.04 Trustee's Disclaimer. -------------------- The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Senior Notes, it shall not be accountable for the Company's use of the proceeds from the Senior Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Senior Notes or any other document in connection with the sale of the Senior Notes or pursuant to this Indenture other than its certificate of authentication. SECTION 7.05 Notice of Defaults. ------------------ If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each holder of a Senior Note a notice of the Default or Event of Default within 60 days after it occurs. A Default or an Event of Default shall not be considered known to the Trustee unless it is a Default or Event of Default in the payment of principal or interest when due under Section 6.01(a) or (b) or the Trustee shall have received notice thereof, in accordance with this Indenture, from the Company or from the holders of a majority in principal amount of the outstanding Senior Notes. Except in the case of a Default or Event of Default in payment of principal or interest on any Senior Note, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interest of the holders of Senior Notes. SECTION 7.06 Reports by the Trustee to Holders. --------------------------------- Within 60 days after the reporting date stated in Section 10.10, the Trustee shall mail to holders of Senior Notes a brief report dated as of such reporting date that complies with TIA (S) 313(a) (but if no event described in TIA (S) 313(a) has occurred within twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA (S) 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA (S) 313(c). A copy of each report at the time of its mailing to holders of Senior Notes shall be filed with the Commission and each stock exchange, if any, on which the Senior Notes are listed. The Company shall notify the Trustee when the Senior Notes are listed on any stock exchange. 51 SECTION 7.07 Compensation and Indemnity. -------------------------- The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and its services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses may include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any loss, liability or expense incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim with counsel designated by the Company, who may be outside counsel to the Company but shall in all events be reasonably satisfactory to the Trustee, and the Trustee shall cooperate in the defense. In addition, the Trustee may retain one separate counsel and, if deemed advisable by such counsel, local counsel, and the Company shall pay the reasonable fees and expenses of such separate counsel and local counsel. The indemnification herein extends to any settlement, provided that the Company will not be liable for any settlement made without its consent, provided, further, that such consent will not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through its own negligence or bad faith. To secure the Company's payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Senior Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on Senior Notes. Such Liens shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. SECTION 7.08 Replacement of the Trustee. -------------------------- A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign at any time and be discharged from the trust hereby created by so notifying the Company. The holders of a majority in principal amount of the then outstanding 52 Senior Notes may remove the Trustee by so notifying the Trustee and the Company. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a Custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the holders of a majority in principal amount of the then outstanding Senior Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the holders of at least 10% in principal amount of the then outstanding Senior Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee after written request by any holder of a Senior Note who has been a holder for at least six months fails to comply with Section 7.10, such holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to holders of Senior Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided that all sums owing to the retiring Trustee hereunder have been paid and subject to the lien provided for in Section 7.07. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09 Successor Trustee by Merger, Etc. --------------------------------- If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act shall be the successor Trustee. 53 SECTION 7.10 Eligibility, Disqualification. ----------------------------- This Indenture shall always have a Trustee who satisfies the requirements of TIA (S) 310(a)(1). The Trustee shall always have a combined capital and surplus as stated in Section 10.10. The Trustee is subject to TIA (S) 310(b) regarding the disqualification of a trustee upon acquiring a conflicting interest. SECTION 7.11 Preferential Collection of Claims Against Company. ------------------------------------------------- The Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship set forth in TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to the extent indicated therein. ARTICLE 8 Satisfaction and Discharge of Indenture SECTION 8.01 Termination of Company's Obligations. ------------------------------------ (i) This Indenture shall cease to be of further effect (except that the Company's obligations under Section 7.07 and 8.03 shall survive) when all outstanding Senior Notes theretofore authenticated and issued have been delivered (other than destroyed, lost or stolen Senior Notes that have been replaced or paid) to the Trustee for cancellation and the Company has paid all sums payable hereunder. In addition, the Company may terminate its obligations under this Indenture (except the Company's obligations under Sections 7.07 and 8.03) if, under terms satisfactory to the Trustee: (a) the Senior Notes have either become due and payable or are by their terms due and payable within one year (or scheduled for redemption within one year); and (b) the Company irrevocably deposits in trust with the Trustee money or United States Government Obligations (defined below in this Section 8.01), or a combination thereof, sufficient, without consideration of the reinvestment of interest in the opinion of the chief financial officer of the Company expressed in a written certificate delivered to the Trustee, to pay principal and interest on the Senior Notes to maturity or upon redemption, as the case may be. The Company may make the deposit only during the one year period. However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.04, 7.07, 7.08, 8.03 and 8.04 shall survive until the Senior Notes are no longer outstanding. Thereafter, only the Company's obligations in Sections 7.07 and 8.03 shall survive. After a deposit made pursuant to this Section 8.01, the Trustee upon request of the Company shall acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified above. 54 In addition, the Company may elect to have either clause (ii) or clause (iii) below be applied to the outstanding Senior Notes upon compliance with the conditions set forth in clause (iv) below. (ii) Upon the Company's exercise under the last sentence of paragraph (i) above of the option applicable to this paragraph (ii), the Company shall be deemed to have been released and discharged from its obligations with respect to the outstanding Senior Notes on the date the conditions set forth below are satisfied ("legal defeasance"). For this purpose, legal defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Senior Notes, which shall thereafter be deemed to be "outstanding" only for the purpose of the Sections of and matters under this Indenture referred to in subclauses (A), (B), (C) and (D) of this clause (ii), and to have satisfied all its other obligations under such Senior Notes and this Indenture insofar as such Senior Notes are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (A) the rights of holders of outstanding Senior Notes to receive solely from the trust fund described in clause (iv) below and as more fully set forth in such clause, payments in respect of the principal of, and premium, if any, and interest on such Senior Notes when such payments are due, (B) the Company's obligations with respect to such Senior Notes when such payments are due, (C) the Company's obligations with respect to such Senior Notes under Sections 2.03, 2.05, 2.06, 2.07 and 4.04, and, with respect to the Trustee, under Section 7.07, (D) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (E) this Section 8.01 and Sections 8.03 and 8.04. Subject to compliance with this Section 8.01, the Company may exercise its option under this clause (ii) notwithstanding the prior exercise of its option under paragraph (iii) below with respect to the Senior Notes. (iii) Upon the Company's exercise under the last sentence of clause (i) of the option applicable to this clause (iii), the Company shall be released and discharged from its obligations under any covenant contained in Article 4 (except for Sections 4.01 and 4.04) and Article 5 with respect to the outstanding Senior Notes on and after the date the conditions set forth below are satisfied ("covenant defeasance"), and the Senior Notes shall thereafter be deemed to be not "outstanding" for the purpose of any direction, waiver, consent or declaration or act of holders of Senior Notes (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to the outstanding Senior Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 but, except as specified above, the remainder of this Indenture (including without limitation obligations set forth in Sections 8.03 and 8.04 hereof) and such Senior Notes shall be unaffected thereby. 55 (iv) The following shall be the conditions to the application of either clause (ii) or (iii) above to the outstanding Senior Notes: (a) the Company has irrevocably deposited in trust with the Trustee or, at the option of the Trustee, with a trustee, satisfactory to the Trustee and the Company, under terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, cash in United States dollars, United States Government Obligations, or a combination thereof, sufficient, without consideration of the reinvestment of interest, in the opinion of the chief financial officer of the Company expressed in a written certificate delivered to the Trustee, to pay at maturity principal and interest on the Senior Notes; provided that (i) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such United States Government Obligations to the Trustee and (ii) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such United States Government Obligations to the payment of said principal and interest with respect to the Senior Notes; (b) in the case of an election under clause (ii) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel reasonably acceptable to the Trustee stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that the holders of the outstanding Senior Notes will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such legal defeasance had not occurred; (c) in the case of an election under clause (iii) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel reasonably acceptable to the Trustee (i) to the effect that the holders of the outstanding Senior Notes will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such covenant defeasance had not occurred or (ii) that the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the foregoing effect. (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit; (e) such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a Default or Event of Default under any material agreement or instrument to which the Company or any of its subsidiaries is bound; 56 (f) The Company shall deliver to the Trustee an Opinion of Counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (g) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the holders over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and (h) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent provided for relating to the legal defeasance under clause (ii) above or the covenant defeasance under clause (iii) above, as the case may be, have been complied with. After such irrevocable deposit made pursuant to this Section 8.01 (and satisfaction of the other conditions set forth herein), the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified above. As used herein, "United States Government Obligations" means obligations for which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option. SECTION 8.02 Application of Trust Money. -------------------------- The Trustee shall hold in trust money or United States Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from United States Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal and interest on the Senior Notes. SECTION 8.03 Repayment to Company. -------------------- The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Company shall have first caused notice of such payment to the Company to be mailed to each holder entitled thereto no less than 30 days prior to such payment. After payment to the Company, holders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person and all liability of the Trustee and such Paying Agent with respect to such money shall cease. 57 SECTION 8.04 Reinstatement. ------------- If the Trustee or Paying Agent is unable to apply any money in accordance with Section 8.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Senior Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02; provided, however, that if the Company makes any payment of interest on or principal of any Senior Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the holders of such Senior Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE 9 Amendments SECTION 9.01 Without the Consent of Holders. ------------------------------ The Company and the Trustee may amend or modify this Indenture (including the terms and conditions of the Senior Notes) without notice to or the consent of any holder of Senior Notes for the purpose of: (a) adding to the covenants of the Company for the benefit of the holders of Senior Notes; (b) surrendering any right or power conferred upon the Company; (c) evidencing the successor of another corporation to the Company and the assumption of the Company thereunder and in the Senior Notes as permitted herein; (d) curing any ambiguity, or correcting or supplementing any defective provision contained herein or making any changes in any other provisions of this Indenture which the Company and the Trustee deem necessary or desirable and which, in either case, will not adversely affect the interests of the holders of Senior Notes. SECTION 9.02 With the Consent of Holders. --------------------------- Subject to Section 6.07, the Company and the Trustee may amend this Indenture or the Senior Notes with the written consent of the holders of not less than a majority in aggregate principal amount of the then outstanding Senior Notes. 58 Subject to Sections 6.04 and 6.07, the holders of a majority in principal amount of the Senior Notes then outstanding may also waive compliance in a particular instance by the Company with any provision of this Indenture or the Senior Notes. However, without the consent of each holder of a Senior Note affected, an amendment or waiver under this Section may not: (a) reduce the amount of Senior Notes whose holders must consent to an amendment, supplement or waiver; (b) reduce the rate of or extend the time for payment of, interest, including defaulted interest, on any Senior Note; (c) reduce the principal of or premium on or change the fixed maturity of any Senior Note or alter the redemption provisions with respect thereto; (d) make the principal of or premium, if any, or interest on, any Senior Note payable in money other than as provided for in this Indenture and the Senior Note; (e) waive a continuing default in the payment of the principal of or premium, if any, interest on, or redemption or repurchase payment with respect to, any Senior Note, including, without limitation, a continuing default to make payment when required upon a Change of Control or after an Asset Sale Offer Trigger Date; (f) after the Company's obligation to purchase the Senior Notes arises hereunder, to then amend, modify or change the obligation of the Company to make or consummate a Change of Control Offer in the event of a Change of Control or an Asset Sale Offer in the event of an Asset Sale Offer Trigger Date or waive any default in the performance thereof or modify any of the provisions or definitions with respect to any such offers; or (g) make any change in provisions relating to waivers of defaults, the abilities of holders of Senior Notes to enforce their rights hereunder or the provisions of clauses (a) through (g) of this Section 9.02. To secure a consent of the holders under this Section, it shall not be necessary for such holders to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment or waiver under this Section becomes effective, the Company shall mail to holders of Senior Notes a notice briefly describing the amendment or waiver. 59 SECTION 9.03 Compliance with the Trust Indenture Act. --------------------------------------- Every amendment to this Indenture or the Senior Notes shall be set forth in a supplemental indenture that complies with the TIA as then in effect. SECTION 9.04 Revocation and Effect of Consents. --------------------------------- Until an amendment or waiver becomes effective, a consent to it by a holder of a Senior Note is a continuing consent by the holder and every subsequent holder of a Senior Note or portion of a Senior Note that evidences the same debt as the consenting holder's Senior Note, even if notation of the consent is not made on any Senior Note. However, any such holder or subsequent holder may revoke the consent as to his or her Senior Note or portion of a Senior Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate certifying that the holders of the requisite principal amount of Senior Notes have consented to the amendment or waiver. The Company may, but shall not obligated to, fix a record date for the purpose of determining the holders entitled to consent to any amendment or waiver. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those persons who were holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment or waiver or to revoke any consent previously given, whether or not such persons continue to be holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from holders of the principal amount of Senior Notes required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment or waiver becomes effective it shall bind every holder, unless it is of the type described in any of clauses (a) through (g) of Section 9.02. In such case, the amendment or waiver shall bind each holder of a Senior Note who has consented to it. SECTION 9.05 Notation on or Exchange of Senior Notes. --------------------------------------- Senior Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article 9 may, and shall if required by the Trustee, bear a notation in the form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Senior Notes so modified as to conform, in the opinion of the Company and the Trustee, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for outstanding Senior Notes. SECTION 9.06 Trustee Protected. ----------------- The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article 9 if such amendment or supplemental indenture does not adversely affect the rights, 60 duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing such amendment or supplemental indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. ARTICLE 10 General Provisions SECTION 10.01 Trust Indenture Act Controls. ---------------------------- If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA (S) 318(c), the imposed duties shall control. SECTION 10.02 Notices. ------- Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail, with postage prepaid (registered or certified, return receipt requested), facsimile or overnight air couriers guaranteeing next day delivery, to the other's address stated in Section 10.10. The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to holders of Senior Notes) shall be deemed to have been duly given at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when transmission confirmed, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a holder of a Senior Note shall be mailed by first-class mail, with postage prepaid, to his or her address shown on the register kept by the Registrar. Failure to mail a notice or communication to a holder or any defect in it shall not affect its sufficiency with respect to other holders. If a notice or communication is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company sends a notice or communication to holders of Senior Notes, it shall send a copy to the Trustee and each Agent at the same time. All other notices or communications shall be in writing. 61 SECTION 10.03 Communication by Holders With Other Holders. ------------------------------------------- Holders of Senior Notes may communicate pursuant to TIA (S) 312(b) with other holders with respect to their rights under this Indenture or the Senior Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA (S) 312(c). SECTION 10.04 Certificate and Opinion as to Conditions Precedent. -------------------------------------------------- Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.05) stating that, in the opinion of such person, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.05) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with. SECTION 10.05 Statements Required in Certificate or Opinion. --------------------------------------------- Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA (S) 314(a)(4)) shall include: (a) a statement that the person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Any Officers' Certificate may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such Officer knows that the opinion with respect to the matters upon which his certificate may be based as aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon certificates, statements or opinions of, or 62 representations by an officer or officers of the Company, or other persons or firms deemed appropriate by such counsel, unless such counsel knows that the certificates, statements or opinions or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous. Any Officers' Certificate, statement or Opinion of Counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representation by an accountant (who may be an employee of the Company), or firm of accountants, unless such Officer or counsel, as the case may be, knows that the certificate or opinion or representation with respect to the accounting matters upon which his certificate, statement or opinion may be based as aforesaid is erroneous. SECTION 10.06 Rules by Trustee and Agents. --------------------------- The Trustee may make reasonable rules for action by or a meeting of holders of Senior Notes. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 10.07 Legal Holidays. -------------- A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in the City of New York are not required to be open, and a "Business Day" is any day that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 10.08 No Recourse Against Others. -------------------------- No director, officer, employee or stockholder, as such, of the Company from time to time shall have any liability for any obligations of the Company under the Senior Notes or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each holder by accepting a Senior Note waives and releases all such liability. This waiver and release are part of the consideration for the Senior Notes. Each of such directors, officers, employees and stockholders is a third party beneficiary of this Section 10.08. SECTION 10.09 Counterparts. ------------ This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 63 SECTION 10.10 Other Provisions. ---------------- The Company initially appoints the Trustee as Paying Agent, Registrar and authenticating agent. The first certificate pursuant to Section 4.03 shall be for the first full fiscal quarter of the Company following the issuance of Senior Notes hereunder. The reporting date for Section 7.06 is February 15 of each year. The first reporting date is the first February 15th following the issuance of Senior Notes hereunder. The Trustee shall always have, or shall be a Subsidiary of a bank or bank holding company which has, a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Company's address is: Rohr, Inc. 850 Lagoon Drive Chula Vista, CA 91910 Attention: General Counsel Facsimile: (619) 691-4222 Telephone: (619) 691-2025 The Trustee's address is: IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 Attention: Corporate Trust & Agencies Administration Facsimile: (212) 858-2952 Telephone: (212) 858-2529 SECTION 10.11 Governing Law. ------------- The internal laws of the State of New York shall govern this Indenture and the Senior Notes, without regard to the conflict of laws provisions thereof. SECTION 10.12 No Adverse Interpretation of Other Agreements. --------------------------------------------- This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such other indenture, loan or debt agreement may not be used to interpret this Indenture. 64 SECTION 10.13 Successors. ---------- All agreements of the Company in this Indenture and the Senior Notes shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. SECTION 10.14 Severability. ------------ In case any provision in this Indenture or in the Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.15 Table of Contents, Headings, Etc. --------------------------------- The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. 65 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed and attested, all as of the date first above written, signifying their agreements contained in this Indenture. SIGNATURES ROHR, INC. By: /s/ A.L. Majors --------------- Name: A.L. Majors Title: Vice President and Chief Accounting Officer Attest: /s/ R.W. Madsen - - --------------- Secretary IBJ SCHRODER BANK & TRUST COMPANY By: /s/ Barbara McCluskey --------------------- Name: Barbara McCluskey Title: Assistant Vice President Attest: /s/ Susan Lowelle - - ----------------- S-1 EXHIBIT A (Face of Security) No. _____________ $ CUSIP 775416 AC 4 ROHR, INC. 11 5/8% SENIOR NOTE DUE 2003 promises to pay to or registered assigns, the principal sum of Dollars on May 15, 2003 Interest Payment Dates: May 15 and November 15 Regular Record Dates: May 1 and November 1 Certificate of Authentication This Senior Note is one of the Senior Notes issued pursuant to the within-mentioned Indenture. IBJ SCHRODER ROHR, INC. Bank & Trust Company as Trustee By By ------------------------------ ----------------------------------- Authorized Signatory President and Chief Executive Officer Dated: By ----------------------------------- Secretary (SEAL) A-1 (Back of Security) ROHR, INC. 11 5/8% SENIOR NOTE DUE 2003 1. INTEREST. Rohr, Inc., a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Senior Note at the rate per annum shown above. The Company will pay interest semiannually on May 15 and November 15 of each year. Interest on the Senior Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from May 19, 1994. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes (except defaulted interest) to the person in whose name each Senior Note is registered at the close of business on the May 1 or November 1 immediately preceding the relevant interest payment date even though Senior Notes are cancelled after such record date and on or before the interest payment date. Holders must surrender Senior Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by check payable in such money, and may mail such check to the holder's registered address. 3. PAYING AGENT AND REGISTRAR. IBJ Schroder Bank & Trust Company, a New York banking corporation (together with any successor trustee under the Indenture referred to below, the "Trustee"), will act as Paying Agent and Registrar. The Company may change the Paying Agent, Registrar or co-registrar without prior notice. Subject to certain limitations in the Indenture, the Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Senior Notes under an Indenture dated as of May 15, 1994 (the "Indenture") between the Company and the Trustee. The terms of the Senior Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. The Senior Notes are subject to, and qualified by, all such terms, certain of which are summarized hereon, and holders are referred to the Indenture and such Act for a statement of such terms. The Senior Notes are unsecured general obligations of the Company limited to $100,000,000 in aggregate principal amount. Capitalized terms not defined below have the same meaning as is given to them in the Indenture. 5. OPTIONAL REDEMPTION. The Company may redeem the Senior Notes, in whole or in part, prior to maturity at any time on or after May 15, 1999 at the redemption prices (expressed in percentages of principal amount) set forth below plus accrued interest to the date fixed for redemption, if redeemed during the 12-month period beginning on May 15 of each year starting with the year indicated below. A-2
Redemption Year Price - - ---------------------- ----------- 1999.................. 105.81% 2000.................. 103.88% 2001.................. 101.94% 2002 and thereafter... 100.00%
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the date fixed for redemption to each holder of Senior Notes to be redeemed at his or her registered address. Senior Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. In the event of a redemption of less than all of the Senior Notes, the Senior Notes will be chosen for redemption by the Trustee by lot or pro rata or, if required, in compliance with the requirements of the principal national securities exchange, if any, on which the Senior Notes are listed. On and after the redemption date interest ceases to accrue on Senior Notes or portions of them called for redemption (unless the Company defaults in the payment of the redemption price). If this Senior Note is redeemed subsequent to a record date with respect to any interest payment date specified above and on or prior to such interest payment date, then any accrued interest will be paid to the person in whose name this Senior Note is registered at the close of business on such record date. 7. CHANGE OF CONTROL. Upon a Change of Control, the Company shall make a Change of Control Offer to purchase all outstanding securities at a price equal to 101% of the aggregate principal amount of the Senior Notes, plus accrued and unpaid interest to the date of purchase, such offer to be made as provided in the Indenture. To accept the Change of Control Offer, the holder hereof must comply with the terms thereof, including surrendering this Senior Note, with the "Option of Holder to Elect Purchase" portion hereof completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent, at the address specified in the notice of the Change of Control Offer mailed to holders as provided in the Indenture, prior to termination of the Change of Control Offer. 8. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Senior Notes may be registered and Senior Notes may be exchanged as provided in the Indenture. As a condition of transfer, the Registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Senior Note or portion of a Senior Note selected for redemption. Also, it need not exchange or register the transfer of any Senior Notes for a period of 15 days before a selection of Senior Notes to be redeemed. 9. PERSONS DEEMED OWNERS. The registered holder of a Senior Note may be treated as its owner for all purposes. A-3 10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or the Senior Notes may be amended with the consent of the holders of at least a majority in principal amount of the then outstanding Senior Notes and any existing default may be waived with the consent of the holders of a majority in principal amount of the then outstanding Senior Notes. Without the consent of any holder, the Indenture or the Senior Notes may be amended to: add to the covenants of the Company for the benefit of the holders; surrender any right or power conferred upon the Company; evidence the succession of another person to the Company and the assumption by such successor of the covenants and obligations of the Company thereunder and in the Senior Notes as permitted in the Indenture; and cure any ambiguity or correct or supplement any defective provision herein or make any changes in any other provisions of the Indenture which the Company and the Trustee deem necessary or desirable and which in either case will not adversely affect the interest of the holders of the Senior Notes. 11. DEFAULTS AND REMEDIES. An Event of Default is: default for 30 days in payment of interest on the Senior Notes; default in payment of principal of or premium if any, on the Senior Notes; failure by the Company for 45 days after notice to it to comply with any of its other agreements in the Indenture or the Senior Notes (except that with respect to certain other covenants, such defaults shall be Events of Default with such notice but without such passage of time); certain defaults under and accelerations prior to maturity of certain indebtedness; certain final judgments which remain undischarged; and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the then outstanding Senior Notes may declare all the Senior Notes to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Senior Notes become due and payable without further action or notice. Holders may not enforce the Indenture or the Senior Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Senior Notes. Subject to certain limitations, holders of a majority in principal amount of the then outstanding Senior Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish quarterly compliance certificates to the Trustee. 12. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its Affiliates, in their individual or any other capacities, may make or continue loans to or guaranteed by, accept deposits from and perform services for the Company or its Affiliates and may otherwise deal with the Company or its Affiliates as if it were not Trustee. 13. NO RECOURSE AGAINST OTHERS. No director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Senior Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each holder by accepting a Senior Note waives and releases all such liability. The waiver and release are part of the consideration for the Senior Notes. A-4 14. AUTHENTICATION. This Senior Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 15. ABBREVIATIONS. Customary abbreviations may be used in the name of a holder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by the entireties, JT TEN = joint tenants with right of survivorship and not as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act. The Company will furnish to any holder upon written request and without charge a copy of the Indenture. Requests may be made to: General Counsel, Rohr, Inc., 850 Lagoon Drive, Chula Vista, California 91910. A-5 ASSIGNMENT FORM If you the holder want to assign this Senior Note, fill in the form below and have your signature guaranteed: I or we assign and transfer this Senior Note to ________________________________ ________________________________________________________________________________ (Insert assignee's social security or tax ID number)____________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint _____________________________________________ agent to transfer this Senior Note on the books of the Company. The agent may substitute another to act for him. Date:______________ Your signature: --------------------------------- (Sign exactly as your name appears on the other side of this Senior Note) Signature Guarantee:____________________________________________________________ A-6 OPTION OF HOLDER TO ELECT PURCHASE If you wish to have this Senior Note purchased by the Company pursuant to Sections 4.10 or 4.16 of the Indenture, check the Box: If you wish to have a portion of this Senior Note purchased by the Company pursuant to Sections 4.10 or 4.16 of the Indenture, state the amount in multiples of $1,000: $_______________ Date:_____________________________ Your signature:________________________________________________ (Sign exactly as your name appears on the other side of this Senior Note) Signature Guarantee:___________________________________________ A-7 EX-4.6 7 INDENTURE (CONVERTIBLE) ROHR, INC. AND THE BANK OF NEW YORK, AS TRUSTEE ---------------------------- $50,000,000 7 3/4% Convertible Subordinated Notes due 2004* ---------------------------- INDENTURE Dated as of May 15, 1994 - - ---------------------------------- *Plus an over-allotment option up to $7,500,000 TABLE OF CONTENTS -----------------
PAGE ---- ARTICLE 1 Definitions...................................... 1 SECTION 1.01 Definitions............................... 1 SECTION 1.02 Other Definitions......................... 11 SECTION 1.03 Incorporation by Reference of Trust Indenture Act........................... 12 SECTION 1.04 Rules of Construction..................... 13 ARTICLE 2 The Convertible Subordinated Notes............... 13 SECTION 2.01 Form and Dating........................... 13 SECTION 2.02 Execution and Authentication.............. 13 SECTION 2.03 Registrar and Paying Agent................ 14 SECTION 2.04 Paying Agent To Hold Money in Trust....... 15 SECTION 2.05 Holder Lists.............................. 15 SECTION 2.06 Transfer and Exchange..................... 15 SECTION 2.07 Replacement Convertible Subordinated Notes................................... 16 SECTION 2.08 Outstanding Convertible Subordinated Notes................................... 16 SECTION 2.09 When Treasury Convertible Subordinated Notes Disregarded....................... 16 SECTION 2.10 Temporary Convertible Subordinated Notes................................... 17 SECTION 2.11 Cancellation.............................. 17 SECTION 2.12 Defaulted Interest........................ 17 SECTION 2.13 CUSIP Number.............................. 17 ARTICLE 3 Redemption....................................... 18 SECTION 3.01 Notices to Trustee........................ 18 SECTION 3.02 Selection of Convertible Subordinated Notes To Be Redeemed.................... 18 SECTION 3.03 Notice of Redemption...................... 18 SECTION 3.04 Effect of Notice of Redemption............ 19 SECTION 3.05 Deposit of Redemption Price............... 20 SECTION 3.06 Convertible Subordinated Notes Redeemed in Part................................. 20 ARTICLE 4 Covenants........................................ 20 SECTION 4.01 Payment of Convertible Subordinated Notes................................... 20 SECTION 4.02 Commission Reports........................ 21 SECTION 4.03 Compliance Certificate.................... 21 SECTION 4.04 Maintenance of Office or Agency........... 21 SECTION 4.05 Limitation on Sale of Assets.............. 22 SECTION 4.06 Continued Existence....................... 25 SECTION 4.07 Taxes..................................... 25 SECTION 4.08 Change of Control......................... 25
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PAGE ---- SECTION 4.09 Appointments to Fill Vacancies in Trustee's Office......................... 27 SECTION 4.10 Further Instruments and Acts.............. 27 SECTION 4.11 Stay, Extension and Usury Laws............ 27 SECTION 4.12 Investment Company Act.................... 28 ARTICLE 5 Successors....................................... 28 SECTION 5.01 When the Company May Merge, Etc........... 28 SECTION 5.02 Successor Corporation Substituted......... 29 SECTION 5.03 Purchase Option on Change of Control...... 29 ARTICLE 6 Defaults and Remedies............................ 29 SECTION 6.01 Events of Default......................... 29 SECTION 6.02 Acceleration.............................. 31 SECTION 6.03 Other Remedies............................ 32 SECTION 6.04 Waiver of Past Defaults................... 32 SECTION 6.05 Control by Majority....................... 32 SECTION 6.06 Limitation on Suits....................... 33 SECTION 6.07 Rights of Holders To Receive Payment...... 33 SECTION 6.08 Collection Suit by Trustee................ 33 SECTION 6.09 Trustee May File Proofs of Claim.......... 34 SECTION 6.10 Priorities................................ 34 SECTION 6.11 Undertaking for Costs..................... 34 ARTICLE 7 The Trustee...................................... 35 SECTION 7.01 Duties of the Trustee..................... 35 SECTION 7.02 Rights of the Trustee..................... 36 SECTION 7.03 Individual Rights of the Trustee.......... 37 SECTION 7.04 Trustee's Disclaimer...................... 37 SECTION 7.05 Notice of Defaults........................ 37 SECTION 7.06 Reports by the Trustee to Holders......... 38 SECTION 7.07 Compensation and Indemnity................ 38 SECTION 7.08 Replacement of the Trustee................ 39 SECTION 7.09 Successor Trustee by Merger, etc.......... 40 SECTION 7.10 Eligibility, Disqualification............. 40 SECTION 7.11 Preferential Collection of Claims Against Company......................... 40 ARTICLE 8 Satisfaction and Discharge of Indenture.......... 41 SECTION 8.01 Termination of Company's Obligations...... 41 SECTION 8.02 Application of Trust Money................ 44 SECTION 8.03 Repayment to Company...................... 44 SECTION 8.04 Reinstatement............................. 45
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PAGE ---- ARTICLE 9 Amendments....................................... 45 SECTION 9.01 Without the Consent of Holders............ 45 SECTION 9.02 With the Consent of Holders............... 46 SECTION 9.03 Compliance with the Trust Indenture Act..................................... 47 SECTION 9.04 Revocation and Effect of Consents......... 47 SECTION 9.05 Notation on or Exchange of Convertible Subordinated Notes...................... 48 SECTION 9.06 Trustee Protected......................... 48 ARTICLE 10 General Provisions............................... 48 SECTION 10.01 Trust Indenture Act Controls.............. 48 SECTION 10.02 Notices................................... 48 SECTION 10.03 Communication by Holders With Other Holders................................. 49 SECTION 10.04 Certificate and Opinion as to Conditions Precedent.................... 49 SECTION 10.05 Statements Required in Certificate or Opinion.............................. 50 SECTION 10.06 Rules by Trustee and Agents............... 50 SECTION 10.07 Legal Holidays............................ 51 SECTION 10.08 No Recourse Against Others................ 51 SECTION 10.09 Counterparts.............................. 51 SECTION 10.10 Other Provisions.......................... 51 SECTION 10.11 Governing Law............................. 52 SECTION 10.12 No Adverse Interpretation of Other Agreements.............................. 52 SECTION 10.13 Successors................................ 52 SECTION 10.14 Severability.............................. 53 SECTION 10.15 Table of Contents, Headings, Etc.......... 53 ARTICLE 11 Subordination.................................... 53 SECTION 11.01 Agreement To Subordinate.................. 53 SECTION 11.02 Liquidation; Dissolution; Bankruptcy...... 53 SECTION 11.03 Default on Designated Senior Indebtedness............................ 54 SECTION 11.04 Acceleration of Convertible Subordinated Notes...................... 54 SECTION 11.05 When Distributions Must Be Paid Over...... 55 SECTION 11.06 Notice by the Company..................... 55 SECTION 11.07 Subrogation............................... 55 SECTION 11.08 Relative Rights........................... 56 SECTION 11.09 Subordination May Not Be Impaired by the Company............................. 56 SECTION 11.10 Distribution of Notice to the Representative.......................... 57 SECTION 11.11 Rights of the Trustee and Paying Agent................................... 57 SECTION 11.12 No Fiduciary Duty to Holders of Senior Indebtedness..................... 58 SECTION 11.13 Authorization to Effect Subordination..... 58
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PAGE ---- ARTICLE 12 Conversion of Convertible Subordinated Notes.... 58 SECTION 12.01 Conversion Privilege..................... 58 SECTION 12.02 Manner of Exercise of Conversion Privilege.............................. 59 SECTION 12.03 Cash Payments in Lieu of Fractional Shares................................. 60 SECTION 12.04 Adjustment of Conversion Price........... 60 SECTION 12.05 Notice to Holders Prior to Certain Corporate Actions...................... 66 SECTION 12.06 Reservation of Shares of Common Stock.................................. 67 SECTION 12.07 Taxes upon Conversion.................... 67 SECTION 12.08 Covenants as to Common Stock............. 68 SECTION 12.09 Consolidation or Merger or Sale of Assets.............................. 68 SECTION 12.10 Disclaimer of Responsibility for Certain Matters........................ 69 SECTION 12.11 Cancellation of Converted Notes.......... 69 SECTION 12.12 Voluntary Reduction...................... 70
iv CROSS-REFERENCE TABLE* Trust Indenture Act Section --------------------------- Indenture Section ----------------- 310(a)(1)..................................................................7.10 (a)(2)...................................................................7.11 (a)(3)...................................................................N.A. (a)(4)...................................................................N.A. (b).........................................................7.08, 7.10, 10.02 (c)......................................................................N.A. 311(a).....................................................................7.11 (b)......................................................................7.11 (c)......................................................................N.A. 312(a).....................................................................2.05 (b).....................................................................10.03 (c).....................................................................10.03 313(a).....................................................................7.06 (b)(1)...................................................................N.A. (b)(2)...................................................................7.06 (c)...............................................................7.06, 10.02 (d)......................................................................7.06 314(a)..............................................................4.01, 10.02 (b)......................................................................N.A. (c)(1)..................................................................10.04 (c)(2)..................................................................10.04 (c)(3)...................................................................N.A. (d)......................................................................N.A. (e).....................................................................10.05 (f)......................................................................N.A. 315(a)..................................................................7.01(b) (b)...............................................................7.05, 10.02 (c)...................................................................7.01(a) (d)...................................................................7.01(c) (e)......................................................................6.11 316(a)(last sentence)......................................................2.09 (a)(1)(A)................................................................6.05 (a)(2)(B)................................................................6.04 v (a)(2)...................................................................N.A. (b)......................................................................6.02 317(a)(1)..................................................................6.08 (a)(2)...................................................................6.09 (b)......................................................................2.04 vi THIS INDENTURE, dated as of May 15, 1994, is between Rohr, Inc., a Delaware corporation (the "Company"), and The Bank of New York, a New York State banking corporation ("Trustee"). The Company has duly authorized the creation of its 7 3/4% Convertible Subordinated Notes due 2004 (the "Convertible Subordinated Notes") and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the holders from time to time of the Convertible Subordinated Notes. ARTICLE 1 Definitions SECTION 1.01 Definitions. ----------- "Acquired Indebtedness" of any specified Person means Indebtedness of any other Person and its subsidiaries existing at the time such other Person merged with or into or became a subsidiary of such specified Person or assumed by the specified Person in connection with the acquisition of assets from such other Person including, without limitation, Indebtedness of such other Person and its subsidiaries incurred in connection with or in anticipation of (a) such other Person and its subsidiaries being merged with or into or becoming a subsidiary of such specified Person or (b) such acquisition by the specified Person. "Affiliate" means, when used with reference to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the referent Person, as the case may be, or any Person who beneficially owns (within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, 10% or more of the equity interests of the referent Person or warrants, options or other rights to acquire or hold more than 10% of any class of equity interests of the referent Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct or cause the direction of management or policies of the referent Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative of the foregoing. "Agent" means any Registrar, Paying Agent, Conversion Agent or co- registrar. "Asset Sale" means any sale, lease, transfer, exchange or other disposition by the Company or any subsidiary (or series of related sales, leases, transfers, exchanges or dispositions) in excess of $1,000,000, including, without limitation, dispositions pursuant to merger, consolidation or sale and leaseback transactions, of (a) shares of Capital Stock of a subsidiary of the Company (pro rated to the extent of the Company's interest therein), (b) all or substantially all of the properties and assets of any division or line of business of the Company or any subsidiary of the Company or (c) any other property or assets of the 1 Company (pro rated to the extent of the Company's interest therein) or of any subsidiary of the Company (pro rated to the extent of the Company's interest therein) outside the ordinary course of business of the Company or such subsidiary (each referred to for purposes of this definition as a "disposition") by the Company or by any of its subsidiaries (other than (i) dispositions by the Company to a wholly owned subsidiary of the Company or by a subsidiary of the Company to the Company or to a wholly owned subsidiary of the Company, (ii) sales or other dispositions of inventory in the ordinary course of business, (iii) any disposition of properties or assets that is consummated in accordance with the provisions of Section 5.01, (iv) any disposition of any account receivable pursuant to the Pooling and Servicing Agreement, (v) dispositions by the Company or any subsidiary of the Company of the business jet related product line, the overhaul and repair business as conducted by Rohr Aero Services, Inc. and Rohr Aero Services Europe, respectively, on the Issue Date, the Hagerstown, Maryland plant and the Auburn, Washington plant, in each case, including related assets, (vi) the disposition by the Company or any subsidiary of the Company of interests owned on the Issue Date in two trusts which own an Airbus A300 aircraft and a McDonnell Douglas DC10 aircraft, respectively and (vii) the disposition of Building 107 (at the Company's facility in Chula Vista, California) to (A) any pension plan of the Company or (B) to any other Person if the net proceeds of such disposition are delivered to any pension plan referred to in clause (A) of this definition, in either case resulting in the full satisfaction (or in case the full amount of such net proceeds are so delivered and shall be insufficient to effect such full satisfaction, the partial satisfaction) of the Company's funding liabilities with respect to any such pension plan or plans). "Bank Agent" means, at any time, the then-acting agent under the Revolving Credit Agreement, which shall initially be Citicorp USA, Inc. "Board of Directors" means the Board of Directors of the Company or any authorized committee of the Board of Directors. "Capital Stock" means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of such Person's capital stock, including each class of Common Stock or Preferred Stock of such Person, whether outstanding on the Issue Date or issued after the Issue Date, and any and all rights, warrants or options exchangeable for or convertible into such capital stock (but excluding any debt security that is exchangeable for or convertible into such capital stock). "Capitalized Lease Obligation" means any obligation under a lease that is required to be classified and accounted for as a capital lease obligation under GAAP and, for purposes of this Indenture, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP. The Stated Maturity of such obligation shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without penalty. 2 "Cash Equivalents" means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof, (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"), (c) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit or bankers' acceptances maturing within one year from the date of acquisition thereof issued by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any United States branch of a foreign bank having, at the date of acquisition thereof, combined capital and surplus of not less than $250 million, (e) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (d) above and (f) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (a) through (e) above. "Change of Control" means the occurrence of one or more of the following events (whether or not approved by the Board of Directors of the Company): (a) an event or series of events by which any Person or other entity or group of Persons or other entities acting in concert as determined in accordance with Section 13(d) of the Exchange Act, whether or not applicable (a "Group of Persons") shall, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases, merger or otherwise (i) be or become, directly or indirectly, the beneficial owner (within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act, whether or not applicable) of 50% or more of the combined voting power of the then outstanding Voting Stock of the Company or (ii) have the ability to elect, directly or indirectly, a majority of the members of the Board of Directors of the Company or other equivalent governing body thereof, (b) the shareholders of the Company shall approve any Plan of Liquidation of the Company (whether or not otherwise in compliance with the provisions of this Indenture), (c) individuals who at the beginning of any period of two consecutive calendar years constituted the Board of Directors of the Company (together with any new directors whose election or appointment by the Board of Directors of the Company or whose nomination for election by the Company's shareholders was approved by a vote of at least a majority of the members of the Board of Directors of the Company then still in office who either were members of the Board of Directors of the Company at the beginning of such period or whose election, appointment or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors of the Company then in office, or (d) the direct or indirect sale, lease, exchange or other transfer, in one transaction or a series of related transactions, of all or substantially all of the property or assets of the Company to any Person or Group of Persons (whether or not otherwise in compliance with the provisions of this Indenture). 3 "Commission" means the Securities and Exchange Commission. "Common Stock" of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of any Person's common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock. "Company" means the party named as such above until a successor replaces it in accordance with Article 5 and thereafter means the successor. "Consolidated Net Worth" of a Person at any date means the Consolidated Stockholders' Equity of such Person less (a) the amount of any gain resulting, directly or indirectly, from the extinguishment, retirement or repurchase of any Indebtedness of such Person or of any of its subsidiaries, (b) any revaluation or other write-ups subsequent to the Issue Date in the book value of any asset owned by such Person or a Consolidated Subsidiary and (c) any amounts attributable to the cost of treasury stock and the principal amount of any promissory notes receivable from the sale of Capital Stock of such Person or of any of its subsidiaries. Notwithstanding any of the foregoing, net deferred income tax assets recorded in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109"), shall be calculated without regard to any valuation allowance with respect to such net deferred tax asset recorded by the Company in accordance with SFAS 109. "Consolidated Stockholders' Equity" as of any date means, with respect to any Person, the amount by which the assets of such Person and of its subsidiaries on a consolidated basis exceed (a) the total liabilities of such Person and of its subsidiaries on a consolidated basis, plus (b) any redeemable Preferred Stock of any such Person or any redeemable Preferred Stock of any subsidiary of such issued to any Person other than to such Person or to a wholly owned subsidiary of such Person, in each case determined in accordance with GAAP. "Consolidated Subsidiary" of any Person means a subsidiary which for financial reporting purposes is or, in accordance with GAAP, should be, accounted for by such Person as a consolidated subsidiary. "Convertible Subordinated Notes" means the Convertible Subordinated Notes issued under this Indenture. "Conversion Agent" means any Person authorized by the Company to accept Convertible Subordinated Notes for conversion pursuant to this indenture and deliver shares of Common Stock (or other securities or property) deliverable upon such conversion. "Conversion Notice" has the meaning specified in Section 12.02. 4 "Conversion Price" means the initial conversion price specified in the form of Note in Section 17 of such form, as adjusted in accordance with the provisions of Article 12. "Daily Market Price" when used with reference to the Common Stock or another security means the price of a share of Common Stock or such other security on any date, determined (a) on the basis of the last reported sales price of the Common Stock or such other security for such date (i) as reported on the composite tape, or similar reporting system, for issues listed on the New York Stock Exchange (or if the Common Stock or such other security has not been listed on that exchange, for issues listed on such other national securities exchange upon which the Common Stock or such other securities are listed as may be designated by the Board of Directors from time to time for the purposes hereof) or (ii) if the Common Stock or such other security is not listed or admitted to trading on any national securities exchange, as reported on the National Market System of the National Association of Securities Dealers Automated Quotation System ("Nasdaq") or (b) if there is no such reported sale on the date in question, on the basis of the average of the closing bid and asked quotations regular way so reported for such date or (c) if the Common Stock or security is not listed on any national securities exchange or on the Nasdaq National Market System, on the basis of the average of the high bid and low asked quotations regular way on the date in question in the over-the-counter market as reported by Nasdaq, or if not so quoted, as reported by National Quotation Bureau, Incorporated or a similar organization. "Default" means any event that is, or after notice or passage of time or both would be, an Event of Default (as defined in Section 6.01). "Designated Senior Indebtedness" means Senior Indebtedness of the Company now or hereafter outstanding under (i) the Revolving Credit Agreement; (ii) the Company's 9.35% Senior Notes due 2000 and 9.33% Senior Notes due 2002; (iii) the Senior Notes; and (iv) any other Senior Indebtedness issued in one or more substantially concurrent issuances on substantially similar terms, the aggregate original principal amount of which is $50 million or more. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Fair Market Value" or "fair value" means, with respect to any asset or property or Capital Stock, the price which could be negotiated in an arm's- length, free market transaction, for cash, between an informed and willing seller and an informed and willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined by the Board of Directors of the Company acting reasonably and in good faith and shall be evidenced by a written resolution of said Board of Directors (certified by the Secretary or Assistant Secretary of the Company) delivered to the Trustee, provided that if the aggregate non-cash consideration to be received by the Company or any of its subsidiaries from any Asset Sale shall exceed $10,000,000, then Fair Market Value shall be determined by an Independent Financial Advisor. 5 "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of the Issue Date. "incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and "incurrence," "incurred," "incurable" and "incurring" shall have meanings correlative to the foregoing), provided that the accrual of interest (whether such interest is payable in cash or in kind) and the accretion of original issue discount shall not be deemed an incurrence of Indebtedness, provided, further, that (a) any Indebtedness of a Person existing at the time such Person becomes (after the Issue Date) a subsidiary (whether by merger, consolidation, acquisition or otherwise) of the Company shall be deemed to be incurred by such subsidiary at the time it becomes a subsidiary of the Company and (b) any amendment, modification or waiver of any document pursuant to which Indebtedness was previously incurred shall be deemed to be an incurrence of Indebtedness unless such amendment, modification or waiver does not (i) increase the principal or premium thereof or interest rate thereon (including by way of original issue discount), (ii) change to an earlier date the Stated Maturity thereof or the date of any scheduled or required principal payment thereon or the time or circumstances under which such Indebtedness may or shall be redeemed, (iii) if such Indebtedness is subordinated to the Convertible Subordinated Notes, modify or affect, in any manner adverse to the holders of the Convertible Subordinated Notes, such subordination or (iv) if the Company is the obligor thereon, provide that a subsidiary of the Company not already an obligor thereon shall be an obligor thereon. "Indebtedness" means, with respect to any Person, at any date, any of the following, without duplication, (a) any liability, contingent or otherwise, of such Person (i) for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (ii) evidenced by a note, bond, debenture or similar instrument, (iii) for the payment of money relating to a Capitalized Lease Obligation or (iv) with respect to an obligation (whether issued or assumed) relating to the deferred purchase price of property or services but excluding advances, deposits, partial and progress payments, unpaid wages and related employee obligations, trade accounts payable and accrued liabilities in each case arising in the ordinary course of business that are not overdue by 180 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (b) all conditional sale obligations and all obligations under any title retention agreement (even if the rights and remedies of the seller under such agreement in the event of default are limited to repossession or sale of such property); (c) reimbursement obligations of such Person with respect to letters of credit and 6 all obligations of such Person in respect of any banker's acceptance or similar credit transaction entered into in the ordinary course of business; (d) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on any asset or property (including, without limitation, leasehold interests and any other tangible or intangible property) of such Person, whether or not such Indebtedness is assumed by such Person or is not otherwise such Person's legal liability, provided that if the obligations so secured have not been assumed in full by such Person or are otherwise not such Person's legal liability in full, the amount of such Indebtedness for the purposes of this definition shall be limited to the lesser of the amount of such Indebtedness secured by such Lien or the Fair Market Value of the assets or property securing such Lien; and (e) all Indebtedness of others guaranteed (including all dividends of other Persons the payment of which is guaranteed), directly or indirectly, by such Person or that is otherwise its legal liability or which such Person has agreed to purchase or repurchase or in respect of which such Person has agreed contingently to supply or advance funds. "Indenture" means this Indenture as amended or supplemented from time to time. "Independent Financial Advisor" means an accounting, appraisal or investment banking firm of nationally recognized standing that is, in the reasonable and good faith judgment of the Board of Directors of the Company, qualified to perform the task for which such firm has been engaged and disinterested and independent with respect to the Company and its Affiliates. "Interest Payment Date" means May 15 and November 15 of each year. "Issue Date" means the date on which the Convertible Subordinated Notes are originally issued under this Indenture. "Lien" means, with respect to any Person, any mortgage, pledge, lien, encumbrance, easement, restriction, covenant, right-of-way, charge or adverse claim affecting title or resulting in an encumbrance against real or personal property of such Person, or a security interest of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, including any sale and leaseback transaction, any option or other similar agreement to sell, in each case securing obligations of such Person and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statute or statutes) of any jurisdiction other than to reflect ownership by a third party of property leased to the referent Person or any of its subsidiaries under a lease that is not in the nature of a conditional sale or title retention agreement). "Material Subsidiary" means, at any date of determination, any subsidiary of the Company that, together with its subsidiaries, (i) for the most recent fiscal year of the Company accounted for more than 5% of the consolidated revenues of the Company or (ii) as of the end of such fiscal year, was the owner of more than 5% of the consolidated assets of the Company, all as set forth on the most recently available consolidated financial 7 statements of the Company and its Consolidated Subsidiaries for such fiscal year prepared in conformity with generally accepted accounting principles as then in effect. "Maturity Date" means May 15, 2004. "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash or Cash Equivalents, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not interest, component thereof) when received in the form of cash or Cash Equivalents (except to the extent such obligations are financed or sold with recourse to the Company or any subsidiary of the Company) and proceeds from the conversion of other property received when converted to cash or Cash Equivalents, net of (a) reasonable third-party brokerage commissions and other reasonable third-party fees and expenses (including fees and expenses of counsel and investment bankers) related to such Asset Sale, (b) provisions for all taxes as a result of such Asset Sale computed on a consolidated basis reflecting consolidated results of operations of the Company and its subsidiaries, taken as a whole, (c) payments made to repay Indebtedness or any other obligation outstanding at the time of such Asset Sale that was incurred in accordance with this Indenture and that either (i) is secured by a Lien incurred in accordance with this Indenture on the property or assets sold or (ii) is required to be paid as a result of such sale in each case to the extent actually repaid in cash and (d) appropriate amounts to be provided by the Company or any subsidiary of the Company as a reserve against liabilities associated with such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as determined in conformity with generally accepted accounting principles as then in effect. For purposes of this definition and Section 4.05 "cash" means U.S. dollars or such money as is freely and readily convertible into U.S. dollars. "Officer" means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Accounting Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, any other executive officer, the Secretary and any Assistant Treasurer or any Assistant Secretary of the Company. "Officers' Certificate" means a certificate signed by two Officers, one of whom must be the principal executive officer, principal financial officer, the treasurer or principal accounting officer of the Company. "Opinion of Counsel" means a written opinion from legal counsel who may be an employee of or counsel to the Company or the Trustee except to the extent otherwise indicated in this Indenture. 8 "Permitted Program Investment" means an investment in design, engineering, tooling or similar costs related to a program undertaken by the Company in the ordinary course of its business. "Person" means any individual, corporation, partnership, joint venture, trust, estate, unincorporated organization or government or any agency or political subdivision thereof. "Plan of Liquidation" means a plan (including by operation of law) that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously) (i) the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company otherwise than as an entirety or substantially as an entirety and (ii) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition and all or substantially all of the remaining assets of the Company to holders of capital stock of the Company. "Pooling and Servicing Agreement" means the Pooling and Servicing Agreement dated as of December 23, 1992, among the Company, the Company's wholly owned subsidiary RI Receivables, Inc. and Bankers Trust Company, as trustee on behalf of the Certificateholders (as defined therein), and related documentation and any extension, renewal, modification, restatement or replacement thereof (in whole or in part), as the same may be amended, supplemented or otherwise modified from time to time; provided, however, the investors in any such receivables program shall not obtain an interest in receivables sold under such program which exceeds $70 million in aggregate principal amount at any one time. "Preferred Stock" means the Capital Stock of any Person (other than the Common Stock of such Person) of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding-up of such Person, to shares of Capital Stock of any other class of such Person. "pro forma" means, with respect to any calculation made or required to be made pursuant to the terms of this Indenture, a calculation in accordance with Article 11 of Regulation S-X under the Securities Act. "Prospectus" means the Company's final prospectus dated May 12, 1994 in respect of the public offering of the Convertible Subordinated Notes. "Qualified Capital Stock" means, with respect to any Person, any Capital Stock of such Person that is not Disqualified Capital Stock or convertible into or exchangeable or exercisable for Disqualified Capital Stock and includes Rights and other securities issuable under the Company's Amended and Restated Rights Agreement, dated as of April 6, 1990, between the Company and The First National Bank of Chicago, as Rights Agent, as such agreement may be amended or supplemented from time to time. 9 "redemption date" when used with respect to any of the Convertible Subordinated Notes to be redeemed, means the date fixed by the Company for such redemption pursuant to this Indenture and the Convertible Subordinated Notes. "redemption price" when used with respect to any of the Convertible Subordinated Notes to be redeemed, means the price fixed for such redemption pursuant to this Indenture and the Convertible Subordinated Notes. "Regular Record Date" means the May 1 or November 1 immediately preceding each interest payment date. "Representative" means the Bank Agent and each trustee, agent or other representative of the holders of any class of Senior Indebtedness (or, with respect to any class of Senior Indebtedness which does not have any such trustee, agent or other representative, any holder of such Senior Indebtedness acting with the consent of the required lenders necessary to bind such class of Senior Indebtedness) who has been so identified in writing to the Trustee and the Company provided, however that solely for the purposes of 11.03 hereof, (i) in the case of the Company's 9.33% Senior Notes, holders, acting as a group, who represent in writing to the Trustee and the Company that they are owners of record of at least 66-2/3% in interest of the Company's outstanding 9.33% Senior Notes, or in the case of the 9.35% Senior Notes, holders, acting as a group, who represent in writing to the Trustee and the Company that they are the owners of record of at least 66-2/3% in interest of the Company's outstanding 9.35% Senior Notes. "Revolving Credit Agreement" means the Credit Agreement dated as of April 26, 1989, among the Company, the lenders party thereto, and the Bank Agent, and any agreement governing Indebtedness incurred to refund or refinance the borrowings, letters of credit and commitments then outstanding or permitted to be outstanding under the Revolving Credit Agreement, in each case together with the related notes and any other instruments and agreements executed from time to time in connection therewith, and in each case as amended, modified, supplemented, extended, renewed, restated, refunded, replaced or refinanced (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time. "Securities Act" means the Securities Act of 1933, as amended. "Senior Notes" means the 11-5/8% Senior Notes due 2003 of the Company offered concurrently with the Convertible Subordinated Notes. "Senior Note Indenture" means that certain indenture by and between the Company and IBJ Schroder Bank & Trust Company, as Trustee, governing the Senior Notes as amended or supplemented from time to time. 10 "Senior Indebtedness" means all present or future Indebtedness of the Company described in clauses (a)(i), (a)(ii), (a)(iv) and (c) of the definition of Indebtedness, created, incurred, assumed or, except to the extent described below, guaranteed (to the extent of the guarantee) by the Company (and all renewals, modifications, extensions or refundings thereof), together with all other obligations owing in connection therewith, including principal, interest (including interest accruing on any such indebtedness which is Designated Senior Indebtedness after the filing of a petition by or against the Company under any bankruptcy law, whether or not the claim for such interest is allowed as a claim after such filing in any proceeding under such bankruptcy law), premium, if any, fees, costs, expenses and indemnities unless the instrument under which such Indebtedness is created, incurred, assumed or guaranteed provides that such Indebtedness is not senior or superior in right of payment to the Convertible Subordinated Notes. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness shall not include (a) any Indebtedness of the Company owing to any of its subsidiaries, (b) Capitalized Lease Obligations, (c) Indebtedness or other obligations in respect of the Pooling and Servicing Agreement, (d) the Company's 9.25% Subordinated Debentures due 2017 and its 7% Convertible Subordinated Debentures due 2012 and (e) with respect to an obligation relating to the deferred purchase price of property or services, any advances, deposits, partial or progress payments, payables, unpaid wages and related employee obligations, trade accounts and accrued liabilities. "Stated Maturity" means, with respect to any security or Indebtedness, the date specified therein as the fixed date on which any principal of such security or Indebtedness is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase thereof at the option of the holder thereof). A "subsidiary" of any Person means (a) a corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned by such Person, by one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person or (b) any other Person (other than a corporation) in which such Person, one or more subsidiaries of such Person or such Person and one or more subsidiaries of such Person, directly or indirectly, at the date of determination thereof, have (i) at least a majority ownership interest or (ii) the power to elect or direct the election of the directors or other governing body of such Person. "Time of Determination" means the time and date of the earlier of (i) the record date or determining stockholders entitled to receive their rights, warrants or distributions referred to in Section 12.04(b) and (c), or (ii) the commencement of "ex-dividend" trading on the exchange or market referred to in the definition of the term "Daily Market Price." "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S) (S) 77aaa- 77-bbbb) as in effect on the date of execution of this Indenture, except as provided in Section 9.03. 11 "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor. "Trust Officer" means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporation trust matters. "Voting Stock" means, with respect to any Person, securities of any class or classes of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the board of directors or other governing body of such Person. SECTION 1.02 Other Definitions. -----------------
Defined in Section "Asset Sale Offer"........................... 4.05 "Asset Sale Offer Amount".................... 4.05 "Asset Sale Offer Payment Date".............. 4.05 "Asset Sale Offer Termination Date".......... 4.05 "Asset Sale Offer Trigger Date".............. 4.05 "Bankruptcy Law"............................. 6.01 "business day"............................... 10.07 "Change of Control Date"..................... 4.08 "Change of Control Offer".................... 4.08 "Change of Control Offer Payment Date"....... 4.08 "Change of Control Offer Termination Date"... 4.08 "Custodian".................................. 6.01 "Event of Default"........................... 6.01 "Expiration Time"............................ 12.04 "Legal Holiday".............................. 10.07 "non-electing share"......................... 12.09 "Other Subordinated Notes"................... 11.02 "Paying Agent"............................... 2.03 "Purchased Shares"........................... 12.04 "Registrar".................................. 2.03 "United States Government Obligations"....... 8.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act. ------------------------------------------------- Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. 12 The following TIA terms used in this Indenture have the following meanings: "Commission" means the Commission; "indenture securities" means the Convertible Subordinated Notes; "indenture security holder" means a holder of a Convertible Subordinated Note; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the Convertible Subordinated Notes means the Company or any other obligor on the Convertible Subordinated Notes. All other terms in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them. SECTION 1.04 Rules of Construction. --------------------- Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; and (5) the male, female and neuter genders include one another. ARTICLE 2 The Convertible Subordinated Notes SECTION 2.01 Form and Dating. --------------- The Convertible Subordinated Notes and the Trustee's certificate of authentication relating thereto shall be substantially in the form set forth in Exhibit A, which is part of this 13 Indenture, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture. The Convertible Subordinated Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. The Company shall approve the form of the Convertible Subordinated Notes and any notation, legend or endorsement on them. Each Convertible Subordinated Note shall be dated the date of its authentication. The terms and provisions contained in the Convertible Subordinated Notes shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. SECTION 2.02 Execution and Authentication. ---------------------------- Two Officers shall sign the Convertible Subordinated Notes for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Convertible Subordinated Notes. If an Officer whose signature is on a Convertible Subordinated Note no longer holds that office at the time the Convertible Subordinated Note is authenticated, the Convertible Subordinated Note shall nevertheless be valid. A Convertible Subordinated Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Convertible Subordinated Note has been authenticated under this Indenture. Upon a written order of the Company signed by an Officer of the Company, the Trustee shall authenticate Convertible Subordinated Notes for original issue up to an aggregate principal amount of $50,000,000 (plus up to $7,500,000 aggregate principal amount of Convertible Subordinated Notes that may be sold by the Company pursuant to the over-allotment option granted pursuant to the Underwriting Agreement, dated as of May 12, 1994, between the Company and Salomon Brothers Inc). The aggregate principal amount of Convertible Subordinated Notes outstanding at any time may not exceed that amount except as provided in Section 2.07. The Convertible Subordinated Notes shall be issuable only in registered form without coupons and only in denominations of $1,000 or any integral multiple thereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Convertible Subordinated Notes. An authenticating agent may authenticate Convertible Subordinated Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has same right as an Agent to deal with the Company or an Affiliate of the Company. 14 SECTION 2.03 Registrar and Paying Agent. -------------------------- The Company shall maintain or cause to be maintained in the Borough of Manhattan, New York, New York (the "New York Office"), and in such other locations as it shall determine, an office or agency: (i) where securities may be presented for registration of transfer or for exchange ("Registrar"); (ii) where Convertible Subordinated Notes may be presented for payment ("Paying Agent"); and (iii) where notices and demand to or upon the Company in respect of Convertible Subordinated Notes and this Indenture may be served by the holders of the Convertible Subordinated Notes. The Registrar shall keep a register of the Convertible Subordinated Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent, Registrar or co-registrar without prior notice. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture and shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company or any of its subsidiaries may act as Paying Agent, Registrar or co-registrar, except that for purposes of Articles 3 and 8 and Sections 4.05 and 4.08, neither the Company nor any of its subsidiaries shall act as Paying Agent. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such, and the Trustee shall initially act as such. The Trustee shall cause the New York Office to be maintained as long as it acts as Registrar or Paying Agent. SECTION 2.04 Paying Agent To Hold Money in Trust. ----------------------------------- The Company shall require each Paying Agent (other than the Trustee, who hereby so agrees), to agree in writing that the Paying Agent will hold in trust for the benefit of holders of the Convertible Subordinated Notes or the Trustee all money held by the Paying Agent for the payment of principal or interest on the Convertible Subordinated Notes, and will notify the Trustee of any default by the Company in respect of making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a subsidiary of the Company) shall have no further liability for the money. If the Company or a subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the holders of the Convertible Subordinated Notes all money held by it as Paying Agent. SECTION 2.05 Holder Lists. ------------ The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of holders of Convertible Subordinated Notes. If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven days before each interest payment date and at such other times as the Trustee may request 15 in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of holders of Convertible Subordinated Notes. SECTION 2.06 Transfer and Exchange. --------------------- Where Convertible Subordinated Notes are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Convertible Subordinated Notes for other denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Company shall issue and the Trustee shall authenticate Convertible Subordinated Notes at the Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06 or 9.05. The Company shall not be required (i) to issue, register the transfer of or exchange Convertible Subordinated Notes during a period beginning at the opening of business 15 days before the day of any selection of Convertible Subordinated Notes for redemption under Section 3.02 and ending at the close of business on the day of selection, or (ii) to register the transfer or exchange of any Convertible Subordinated Note so selected for redemption in whole or in part, except the unredeemed portion of any Convertible Subordinated Note being redeemed in part. SECTION 2.07 Replacement Convertible Subordinated Notes. ------------------------------------------ If the holder of a Convertible Subordinated Note claims that the Convertible Subordinated Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Convertible Subordinated Note if the Trustee's requirements are met. If required by the Trustee or the Company as a condition of receiving a replacement Convertible Subordinated Note, the holder of a Convertible Subordinated Note must provide an indemnity bond sufficient, in the judgment of both the Company and the Trustee, to fully protect the Company, the Trustee, any Agent and any authenticating agent from any loss which any of them may suffer if the Convertible Subordinated Note is replaced. The Company and the Trustee may charge the relevant holder for their expenses in replacing any Convertible Subordinated Note. Every replacement Convertible Subordinated Note is an additional obligation of the Company. SECTION 2.08 Outstanding Convertible Subordinated Notes. ------------------------------------------ The Convertible Subordinated Notes outstanding at any time are all the Convertible Subordinated Notes properly authenticated by the Trustee except for those cancelled by the Trustee, those delivered to it for cancellation, and those described in this Section as not outstanding. 16 If a Convertible Subordinated Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Convertible Subordinated Note is held by a bona fide purchaser. If Convertible Subordinated Notes are considered paid under Section 4.01, they cease to be outstanding and interest on them ceases to accrue. A Convertible Subordinated Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Convertible Subordinated Note. SECTION 2.09 When Treasury Convertible Subordinated Notes Disregarded. -------------------------------------------------------- In determining whether the holders of the required principal amount of Convertible Subordinated Notes have concurred in any direction, waiver or consent, Convertible Subordinated Notes owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Convertible Subordinated Notes which the Trustee knows are so owned shall be so disregarded. SECTION 2.10 Temporary Convertible Subordinated Notes. ---------------------------------------- Until definitive Convertible Subordinated Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Convertible Subordinated Notes. Temporary Convertible Subordinated Notes shall be substantially in the form of definitive Convertible Subordinated Notes but may have variations that the Company considers appropriate for temporary Convertible Subordinated Notes. If temporary Convertible Subordinated Notes are issued, the Company will cause definitive Convertible Subordinated Notes to be prepared without unreasonable delay. After the preparation of definitive Convertible Subordinated Notes, the temporary Convertible Subordinated Notes shall be exchangeable for definitive Convertible Subordinated Notes upon surrender of the temporary Convertible Subordinated Notes at any office or agency of the Company designated pursuant to Section 2.03 without charge to the holder of the Convertible Subordinated Note. Upon surrender for cancellation of any one or more temporary Convertible Subordinated Notes the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Convertible Subordinated Notes of authorized denominations. Until so exchanged, the temporary Convertible Subordinated Notes shall in all respects be entitled to the same benefits under this Indenture as definitive Convertible Subordinated Notes. SECTION 2.11 Cancellation. ------------ The Company at any time may deliver Convertible Subordinated Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Convertible Subordinated Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel Convertible Subordinated Notes surrendered for registration 17 of transfer, exchange, payment, replacement or cancellation and shall dispose of cancelled Convertible Subordinated Notes as the Company directs, provided that the Trustee shall not be required to destroy such Convertible Subordinated Notes. The Company may not issue new Convertible Subordinated Notes to replace Convertible Subordinated Notes that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12 Defaulted Interest. ------------------ If the Company fails to make a payment of interest on the Convertible Subordinated Notes, it shall pay such defaulted interest plus, to the extent lawful, any interest payable on the defaulted interest. It may pay such defaulted interest, plus any such interest payable on it, to the persons who are holders of Convertible Subordinated Notes on a subsequent special record date. The Company shall fix any such record date and payment date. At least 15 days before any such record date, the Company shall mail to holders of the Convertible Subordinated Notes a notice that states the record date, payment date and amount of such interest to be paid. SECTION 2.13 CUSIP Number. ------------ The Company in issuing the Convertible Subordinated Notes may use a "CUSIP" number, and if so, such CUSIP number shall be included in notices of redemption or exchange as a convenience to holders of Convertible Subordinated Notes; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Convertible Subordinated Notes and that reliance may be placed only on the other identification numbers printed on the Convertible Subordinated Notes. The Company will promptly notify the Trustee of any change in the CUSIP number. ARTICLE 3 Redemption SECTION 3.01 Notices to Trustee. ------------------ If the Company elects to redeem Convertible Subordinated Notes pursuant to the optional redemption provisions of paragraph 5 of the Convertible Subordinated Notes, it shall notify the Trustee of the redemption date and the principal amount of Convertible Subordinated Notes to be redeemed. The redemption price shall be the amount determined pursuant to paragraph 5 of the Convertible Subordinated Notes. The Company shall give each notice provided for in this Section at least 50 days before the redemption date (unless a shorter notice period shall be satisfactory to the Trustee). 18 SECTION 3.02 Selection of Convertible Subordinated Notes To Be Redeemed. ---------------------------------------------------------- If less than all the Convertible Subordinated Notes are to be redeemed, the Trustee shall select the Convertible Subordinated Notes to be redeemed by lot or pro rata or by a method that complies with the requirements of any exchange on which the Convertible Subordinated Notes are listed that the Trustee considers fair and appropriate. The Trustee shall make the selection not more than 75 days and not less than 30 days before the redemption date from Convertible Subordinated Notes outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Convertible Subordinated Notes that have a denomination larger than $1,000. Convertible Subordinated Notes and portions thereof will be redeemed in the amount of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Convertible Subordinated Notes called for redemption also apply to portions of Convertible Subordinated Notes called for redemption. The Trustee will make the selection of Convertible Subordinated Notes outstanding and not previously called for redemption. The Trustee shall notify the Company promptly of the Convertible Subordinated Notes or portions of Convertible Subordinated Notes to be called for redemption. SECTION 3.03 Notice of Redemption. -------------------- At least 30 days but not more than 60 days before a redemption date, the Company shall mail a notice of redemption to each holder whose Convertible Subordinated Notes are to be redeemed. The notice shall identify the Convertible Subordinated Notes to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) if any Convertible Subordinated Note is being redeemed in part, the portion of the principal amount of such Convertible Subordinated Note to be redeemed and that, after the redemption date, upon surrender of such Convertible Subordinated Note, a new Convertible Subordinated Note or Convertible Subordinated Notes in principal amount equal to the unredeemed portion will be issued; (4) that Convertible Subordinated Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) that interest on Convertible Subordinated Notes called for redemption and for which funds have been set apart for payment, ceases to accrue on and after the redemption date (unless the Company defaults in the payment of the redemption price); 19 (6) the paragraph of the Convertible Subordinated Notes pursuant to which the Convertible Subordinated Notes are being redeemed; (7) the aggregate principal amount of Convertible Subordinated Notes that are being redeemed; (8) the CUSIP number of the Convertible Subordinated Notes (provided that the disclaimer permitted by Section 2.13 may be made); (9) the name and address of the Paying Agent; and (10) that Convertible Subordinated Notes called for redemption may be converted at any time prior to the close of business on the redemption date and if not converted prior to the close of business on such date, the right of conversion will be lost. At the Company's request, the Trustee shall give notice of redemption in the Company's name and at its expense. SECTION 3.04 Effect of Notice of Redemption. ------------------------------ Once notice of redemption is mailed, Convertible Subordinated Notes called for redemption become due and payable on the redemption date at the price set forth in the Convertible Subordinated Note. SECTION 3.05 Deposit of Redemption Price. --------------------------- On or before the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money in immediately available funds sufficient to pay the redemption price of and accrued interest on all Convertible Subordinated Notes to be redeemed on that date. The Trustee or the Paying Agent shall return to the Company any money not required for that purpose. SECTION 3.06 Convertible Subordinated Notes Redeemed in Part. ----------------------------------------------- Upon surrender of a Convertible Subordinated Note that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the holder of a Convertible Subordinated Note at the expense of the Company a new Convertible Subordinated Note equal in principal amount to the unredeemed portion of the Convertible Subordinated Note surrendered. ARTICLE 4 Covenants 20 SECTION 4.01 Payment of Convertible Subordinated Notes. ----------------------------------------- The Company shall pay the principal of and interest on the Convertible Subordinated Notes on the dates and in the manner provided in the Convertible Subordinated Notes. Principal and interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company or a subsidiary of the Company) holds as of 1:00 P.M. Eastern Time on that date immediately available funds designated for and sufficient to pay all principal and interest then due, provided, however, that money held by the Agent for the benefit of holders of Senior Indebtedness pursuant to the provisions of Article 11 hereof or the payment of which to the holders of the Convertible Subordinated Notes is prohibited by Article 11 shall not be considered to be designated for the payment of any principle of or interest on the Convertible Subordinated Notes within the meaning of this Section 4.01. To the extent lawful, the Company shall pay interest (including post- petition interest in any proceeding under any Bankruptcy Law) on (i) overdue principal, at the rate borne by Convertible Subordinated Notes, compounded semiannually; and (ii) overdue installments of interest (without regard to any applicable grace period) at the same rate, compounded semiannually. SECTION 4.02 Commission Reports. ------------------ So long as any Convertible Subordinated Note is outstanding, the Company shall file with the Commission and, within 15 days after it files them with the Commission, file with the Trustee and thereafter mail promptly or cause the Trustee to mail promptly to the holders of Convertible Subordinated Notes at their addresses as set forth in the register of the Convertible Subordinated Notes copies of the annual reports and of the information, documents and other reports which the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act or which the Company would be required to file with the Commission if the Company then had a class of securities registered under the Exchange Act. In addition, the Company shall cause its annual report to stockholders and any quarterly or other financial reports furnished to its stockholders generally to be filed with the Trustee, no later than the date such materials are mailed or made available to the Company's stockholders, and thereafter mailed promptly to the holders of Convertible Subordinated Notes at their addresses as set forth in the register of Convertible Subordinated Notes. SECTION 4.03 Compliance Certificate. ---------------------- The Company shall deliver to the Trustee, within 60 days after the end of the first three fiscal quarters and within 120 days after the end of each fiscal year of the Company, an Officers' Certificate stating that a review of the activities of the Company and its subsidiaries during the preceding fiscal period has been made under the supervision of the signing Officers with a view to determining whether the Company has fully performed its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every 21 covenant contained in this Indenture and is not in default in the performance or observance of any of the terms and conditions hereof (or, if any Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest on the Convertible Subordinated Notes are prohibited. The Company shall, so long as any of the Convertible Subordinated Notes are outstanding, deliver to the Trustee, forthwith upon becoming aware of any Default, Event of Default or default in the performance of any term or condition in this Indenture, without regard to any period of grace or requirement of notice provided hereunder, an Officers' Certificate specifying such Default, Event of Default or default. SECTION 4.04 Maintenance of Office or Agency. ------------------------------- The Company shall maintain or cause to be maintained the office or agency required under Section 2.03. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not maintained by the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Convertible Subordinated Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain or cause to be maintained an office or agency in the City of New York for such purpose. SECTION 4.05 Limitation on Sale of Assets. ---------------------------- The Company will not, and will not permit any of its subsidiaries to, consummate any Asset Sale unless such Asset Sale is for at least Fair Market Value and at least 80% of the consideration therefrom received by the Company or such subsidiary is in the form of cash or Cash Equivalents. Following any Asset Sale, an amount equal to the Net Cash Proceeds of such Asset Sale shall be applied by the Company or such subsidiary within 365 days of the date of the Asset Sale, at its election, to either: (a) the payment of Senior Indebtedness; provided, however, any Net Cash Proceeds which are applied to reduce Indebtedness under the Revolving Credit Agreement shall result in a permanent reduction of the borrowing availability thereunder; (b) make any Permitted Program Investment or any other investment in capital assets usable in the Company's or its subsidiaries' lines of business or in an asset or business in the same line of business as the Company; or (c) a combination of payment and investment permitted by the foregoing clauses (a) and (b). On the earlier of (A) the 366th day after the date of an Asset Sale or (B) such date as the Board of Directors of the Company or of such subsidiary determines (as 22 evidenced by a written resolution of said Board of Directors) not to apply an amount equal to the Net Cash Proceeds relating to such Asset Sale as set forth in the immediately preceding sentence (each of (A) and (B), an "Asset Sale Offer Trigger Date"), the Company or such subsidiary shall be obligated to apply an amount equal to aggregate amount of Net Cash Proceeds which have not been applied on or before such Asset Sale Offer Trigger Date as permitted by the foregoing clauses (a), (b) and (c) of the immediately preceding sentence (each an "Asset Sale Offer Amount") to make an offer to purchase for cash (the "Asset Sale Offer") from all holders of Convertible Subordinated Notes on a pro rata basis that amount of Convertible Subordinated Notes equal to the Asset Sale Offer Amount at a price equal to 100% of the principal amount of the Convertible Subordinated Notes to be repurchased, plus accrued and unpaid interest thereon to the date of repurchase. Notwithstanding the foregoing, if an Asset Sale Offer Amount is less than $10 million, the application of such Asset Sale Offer Amount to an Asset Sale Offer may be deferred until such time as such Asset Sale Offer Amount plus the aggregate amount of all Asset Sale Offer Amounts arising subsequent to such Asset Sale Offer Trigger Date from all Asset Sales by the Company and its subsidiaries aggregates at least $10 million, at which time the Company or such subsidiary shall apply all Asset Sale Offer Amounts that have been so deferred to make an Asset Sale Offer (the first date the aggregate of all such deferred Asset Sale Offer Amounts is equal to $10 million or more shall be deemed to be an "Asset Sale Offer Trigger Date"). In the event of the transfer of substantially all (but not all) of the property and assets of the Company as an entirety to a Person in a transaction permitted under Section 5.01, the successor corporation shall be deemed to have sold the properties and assets of the Company not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. Each Asset Sale Offer shall be mailed to the holders of the Convertible Subordinated Notes at the addresses shown on the register of holders maintained by the Registrar with a copy to the Trustee and the Paying Agent, within 10 days following the applicable Asset Sale Offer Trigger Date, and shall comply with each of the procedures for notice set forth below. Each Asset Sale Offer shall remain open until a specified date (the "Asset Sale Offer Termination Date") which is at least 20 business days from the date such Asset Sale Offer is mailed. During the period specified in the Asset Sale Offer, holders of Convertible Subordinated Notes may elect to tender their Convertible Subordinated Notes in whole or in part in integral multiples of $1,000 in exchange for cash. Payment shall be made by the Company (or applicable subsidiary) in respect of Convertible Subordinated Notes properly tendered pursuant to this Section on a specified business day (the "Asset Sale Offer Payment Date") which shall be no earlier than three business days after the Asset Sale Offer Termination Date and no later then 60 days after such applicable Asset Sale Offer Trigger Date. To the extent holders of Convertible Subordinated Notes properly tender Convertible Subordinated Notes in an amount exceeding the Asset Sale Offer Amount, Convertible Subordinated Notes of tendering holders will be repurchased on a pro rata basis (based on amounts tendered). 23 The notice, which shall govern the terms of the Asset Sale Offer, shall include such disclosures as are required by law and shall state: (a) that the Asset Sale Offer is being made pursuant to this Section 4.05; (b) the purchase price (including the amount of the accrued interest, if any) for each Convertible Subordinated Note, the Asset Sale Offer Termination Date and the Asset Sale Offer Payment Date; (c) that any Convertible Subordinated Note not tendered or accepted for payment will continue to accrue interest in accordance with the terms thereof; (d) that, unless the Company defaults on making the payment, any Convertible Subordinated Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Offer Payment Date; (e) that holders electing to have Convertible Subordinated Notes purchased pursuant to an Asset Sale Offer will be required to surrender their Convertible Subordinated Notes to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the Asset Sale Offer Termination Date and must complete any form letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent; (f) that holders of Convertible Subordinated Notes will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the Asset Sale Offer Termination Date, a tested telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of Convertible Subordinated Notes the holder delivered for purchase, the Convertible Subordinated Note certificate number (if any) and a statement that such holder is withdrawing his election to have such Convertible Subordinated Notes purchased; (g) that if Convertible Subordinated Notes in a principal amount in excess of the Asset Sale Offer Amount are tendered pursuant to the Asset Sale Offer, the Company shall purchase Convertible Subordinated Notes on a pro rata basis among the Convertible Subordinated Notes tendered (with such adjustments as may be deemed appropriate by the Company so that only Convertible Subordinated Notes in denominations of $1,000 or integral multiples of $1,000 shall be acquired); (h) that holders whose Convertible Subordinated Notes are purchased only in part will be issued new Convertible Subordinated Notes equal in principal amount to the unpurchased portion of the Convertible Subordinated Notes surrendered; and (i) the instructions that holders must follow in order to tender their Convertible Subordinated Notes. 24 On the Asset Sale Offer Termination Date, the Company shall (i) accept for payment Convertible Subordinated Notes or portions thereof tendered pursuant to the Asset Sale Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Convertible Subordinated Notes or portions thereof so tendered and accepted and (iii) deliver to the Trustee the Convertible Subordinated Notes so accepted together with an Officers' Certificate setting forth the Convertible Subordinated Notes or portions thereof tendered to and accepted for payment by the Company. On the Asset Sale Offer Payment Date, the Paying Agent shall mail or deliver to the holders of Convertible Subordinated Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and mail or deliver to such holders a new Convertible Subordinated Note equal in principal amount to any unpurchased portion of the Convertible Subordinated Note surrendered. Any Convertible Subordinated Notes not so accepted shall be promptly mailed or delivered by the Company to the holder thereof. If an offer is made to repurchase the Convertible Subordinated Notes pursuant to an Asset Sale Offer, the Company will and will cause its subsidiaries to comply with all tender offer rules under state and Federal securities laws, including, but not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.05, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.05 by virtue thereof. SECTION 4.06 Continued Existence. ------------------- Subject to Article 5, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. SECTION 4.07 Taxes. ----- The Company shall pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by appropriate proceedings or where the failure to do so (together with all other such failures) would not have a material adverse effect on the financial condition or results of operations of the Company and its subsidiaries, taken as a whole. SECTION 4.08 Change of Control. ----------------- Following a Change of Control (the date of each such occurrence being the "Change of Control Date"), the Company shall notify the holders of Convertible Subordinated Notes in writing of such occurrence and shall make an offer (the "Change of Control Offer") to purchase all Convertible Subordinated Notes then outstanding at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the "Change of Control Offer Payment Date" (as defined below). 25 Notice of a Change of Control shall be mailed by or at the direction of the Company to the holders of Convertible Subordinated Notes as shown on the register of such holders maintained by the Registrar not less than 15 days nor more than 30 days after the applicable Change of Control Date at the addresses as shown on the register of holders maintained by the Registrar, with a copy to the Trustee and the Paying Agent. The Change of Control Offer shall remain open until a specified date (the "Change of Control Offer Termination Date") which is at least 20 business days from the date such notice is mailed. During the period specified in such notice, holders of Convertible Subordinated Notes may elect to tender their Convertible Subordinated Notes in whole or in part in integral multiples of $1,000 in exchange for cash. Payment shall be made by the Company in respect of Convertible Subordinated Notes properly tendered pursuant to this Section on a specified business day (the "Change of Control Offer Payment Date") which shall be no earlier than three business days after the applicable Change of Control Offer Termination Date and no later than 60 days after the applicable Change of Control Date. The notice, which shall govern the terms of the Change of Control Offer, shall include such disclosures as are required by law and shall state: (a) that a Change of Control Offer is being made pursuant to this Section 4.08 and that all Convertible Subordinated Notes will be accepted for payment; (b) the purchase price (including the amount of accrued interest, if any) for each Convertible Subordinated Note, the Change of Control Offer Termination Date and the Change of Control Offer Payment Date; (c) that any Convertible Subordinated Note not accepted for payment will continue to accrue interest in accordance with the terms thereof; (d) that, unless the Company defaults on making the payment, any Convertible Subordinated Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Offer Payment Date; (e) that holders electing to have Convertible Subordinated Notes purchased pursuant to a Change of Control Offer will be required to surrender their Convertible Subordinated Notes to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the Change of Control Offer Termination Date and must complete any form letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent; (f) that holders of Convertible Subordinated Notes will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the Change of Control Offer Termination Date, a tested telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of Convertible Subordinated Notes the holder delivered for purchase, the Convertible 26 Subordinated Note certificate number (if any) and a statement that such holder is withdrawing his election to have such Convertible Subordinated Notes purchased; (g) that holders whose Convertible Subordinated Notes are purchased only in part will be issued Convertible Subordinated Notes equal in principal amount to the unpurchased portion of the Convertible Subordinated Notes surrendered; (h) the instructions that holders must follow in order to tender their Convertible Subordinated Notes; and (i) the circumstances and relevant facts regarding such Change of Control (including, but not limited to, information with respect to pro forma historical financial information after giving effect to such Change of Control, information regarding the Persons acquiring control and such Persons' business plans going forward). On the Change of Control Offer Termination the Company shall (i) accept for payment Convertible Subordinated Notes or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Convertible Subordinated Notes or portions thereof so tendered and accepted and (iii) deliver to the Trustee the Convertible Subordinated Notes so accepted together with an Officers' Certificate setting forth the Convertible Subordinated Notes or portions thereof tendered to and accepted for payment by the Company. On the Change of Control Payment Date, the Paying Agent shall mail or deliver to the holders of Convertible Subordinated Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and mail or deliver to such holders a new Convertible Subordinated Note equal in principal amount to any unpurchased portion of the Convertible Subordinated Note surrendered. Any Convertible Subordinated Notes not so accepted shall be promptly mailed or delivered by the Company to the holder thereof. In addition, in the event of any Change of Control, the Company shall not, and shall not permit any of its subsidiaries to, purchase, redeem or otherwise acquire any Indebtedness subordinated or junior to the Convertible Subordinated Notes pursuant to any analogous provision relating to such Indebtedness on or prior to the payment in full in cash or Cash Equivalents of all Convertible Subordinated Notes, together with accrued and unpaid interest thereon with respect to which the Change of Control Offer was accepted. If an offer is made to redeem Convertible Subordinated Notes as a result of a Change of Control, the Company will be required to comply with all tender offer rules under state and Federal securities laws, including, but not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such offer. 27 SECTION 4.09 Appointments to Fill Vacancies in Trustee's Office. -------------------------------------------------- The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so that there shall at all times be a Trustee hereunder. SECTION 4.10 Further Instruments and Acts. ---------------------------- Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 4.11 Stay, Extension and Usury Laws. ------------------------------ The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter enforced, that may affect the Company's obligation to pay the Convertible Subordinated Notes; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law insofar as such law applies to the Convertible Subordinated Notes, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. SECTION 4.12 Investment Company Act. ---------------------- The Company, as of the Issue Date, is not and shall not become an investment company subject to registration under the Investment Company Act of 1940, as amended. ARTICLE 5 Successors SECTION 5.01 When the Company May Merge, Etc. ------------------------------- The Company will not, in a single transaction or series of related transactions, consolidate or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets to, any Person or adopt a Plan of Liquidation unless: (a) either (i) the Company shall be the surviving or continuing corporation or (ii) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, transfer or lease the properties and assets of the Company substantially as an entirety or in the case of a Plan 28 of Liquidation, the Person to which all or substantially all of the assets of the Company have been transferred (1) shall be a corporation organized and validly existing under the laws of the United States or any State thereof or the District of Columbia and (2) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, the due and punctual payment of the principal of, and premium, if any, and interest on all of the Convertible Subordinated Notes and the performance of every covenant of the Convertible Subordinated Notes and this Indenture on the part of the Company to be performed or observed; (b) immediately after giving effect to such transaction and any assumption contemplated by clause (a)(ii)(2) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Company (in the case of clause (i) of the foregoing clause (a)) or such Person (in the case of clause (ii) thereof) shall have a Consolidated Net Worth (immediately after the transaction but prior to any purchase accounting adjustments relating to such transaction) equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction; (c) immediately before and after giving effect to such transaction and any assumption contemplated by clause (a)(ii)(2) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred in connection with or in respect of the transaction) no Default and no Event of Default shall have occurred and be continuing; and (d) the Company or such Person shall have delivered to the Trustee (i) an Officers' Certificate and an Opinion of Counsel (which counsel may be in-house counsel of the Company), each stating that such consolidation, merger, conveyance, transfer or lease or Plan of Liquidation and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this provision of this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied and (ii) a certificate from the Company's independent certified public accountants stating that the Company has made the calculations required by clause (b) above in accordance with the terms of this Indenture. For purposes of this Section 5.01, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more subsidiaries of the Company, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. SECTION 5.02 Successor Corporation Substituted. --------------------------------- Upon any such consolidation, merger, conveyance, lease or transfer in accordance with Section 5.01, the successor Person formed by such consolidation or into which the Company is 29 merged or to which such conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor had been named as the Company therein, and thereafter (except in the case of a sale, assignment, transfer, lease, conveyance or other disposition) the predecessor corporation will be relieved of all further obligations and covenants under this Indenture and the Convertible Subordinated Notes. SECTION 5.03 Purchase Option on Change of Control. ------------------------------------ This Article 5 does not affect the obligations of the Company (including without limitation any successor to the Company) under Section 4.08. ARTICLE 6 Defaults and Remedies SECTION 6.01 Events of Default. ----------------- An "Event of Default" with respect to any Convertible Subordinated Notes occurs if: (a) the Company defaults in the payment of principal of, or premium, if any, on the Convertible Subordinated Notes when due at maturity, upon repurchase, upon acceleration or otherwise, including, without limitation, failure of the Company to repurchase the Convertible Subordinated Notes on the date required pursuant to Section 4.05 or following a Change of Control or failure to make any optional redemption payment when due; or (b) the Company defaults in the payment of any installment of interest on the Convertible Subordinated Notes when due (including any interest payable in connection with any optional redemption payment) and continuance of such default for more than 30 days; or (c) the Company fails to observe, perform or comply with any of the provisions described in Sections 4.05, 4.08 and 5.01, and the failure to remedy such failure prior to the receipt of written notice from the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Convertible Subordinated Notes; or (d) the Company defaults (other than a default set forth in clauses (a), (b) and (c) above) in the performance of, or breach of, any other covenant or warranty of the Company set forth in this Indenture or the Convertible Subordinated Notes and fails to remedy such default or breach within a period of 45 days after the receipt of written notice from the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Convertible Subordinated Notes; or 30 (e) any Indebtedness (other than the Convertible Subordinated Notes) of the Company or of any subsidiary, whether such Indebtedness exists on the Issue Date or shall be incurred thereafter, having, individually or in the aggregate, an outstanding principal amount of $15 million or more, either (i) is declared due and payable prior to its stated maturity or (ii) is not paid upon the final maturity of such Indebtedness; or (f) a court of competent jurisdiction enters one or more judgments or orders against the Company or any subsidiary of the Company or any of their respective property or assets in an aggregate amount in excess of $15 million and they are not covered by insurance written by third parties, which judgments or orders have not been vacated, discharged, satisfied or stayed pending appeal within 60 days from the entry thereof; or (g) the Company or any Material Subsidiary, pursuant to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (iv) makes a general assignment for the benefit of its creditors; or (h) a court of competent jurisdiction enters a judgment, order or decree under any Bankruptcy Law that: (i) is for relief against the Company or any Material Subsidiary in an involuntary case, (ii) appoints a Custodian of the Company or any Material Subsidiary for all or substantially all of its property, or (iii) orders the liquidation of the Company or any Material Subsidiary, and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. 31 SECTION 6.02 Acceleration. ------------ If an Event of Default (other than an Event of Default specified in clauses (g) and (h) of Section 6.01) occurs and is continuing, then and in every such case the Trustee, by written notice to the Company (with a copy to the Bank Agent, each of the holders of the Company's 9.33% Senior Notes and its 9.35% Senior Notes and any other Representatives of Designated Senior Indebtedness), or the holders of at least 25% in aggregate principal amount of the then outstanding Convertible Subordinated Notes, by written notice to the Company and the Trustee (with a copy to the Bank Agent, each of the holders of the Company's 9.33% Senior Notes and its 9.35% Senior Notes and any other Representatives of Designated Senior Indebtedness), may declare the unpaid principal of and accrued interest on all the Convertible Subordinated Notes to be due and payable, provided, however that failure to provide a copy of such notice to any party other than the Company and the Trustee shall have no effect on any such declaration. Upon such declaration such principal amount, premium, if any, and accrued and unpaid interest shall become immediately due and payable, notwithstanding anything contained in this Indenture or the Convertible Subordinated Notes to the contrary but subject to the provisions of Article 11 hereof; and provided further, that so long as any Designated Senior Indebtedness is outstanding, any such declaration shall not be effective until the earlier of (a) five business days after the delivery of such notice to the Company or (b) the acceleration of any Designated Senior Indebtedness. If any Event of Default with respect to the Company specified in clauses (g) or (h) of Section 6.01 occurs, all unpaid principal of and premium, if any, and accrued and unpaid interest on the Convertible Subordinated Notes then outstanding shall become automatically due and payable subject to the provisions of Article 11 hereof, without any declaration or other act on the part of the Trustee or any holder of Convertible Subordinated Notes. The holders of a majority in principal amount of the then outstanding Convertible Subordinated Notes by notice to the Trustee may rescind an acceleration of the Convertible Subordinated Notes and its consequences if all existing Events of Default (other than nonpayment of principal of or premium, if any, and interest on the Convertible Subordinated Notes which has become due solely by virtue of such acceleration) have been cured or waived and if the rescission would not conflict with any judgment or decree of any court of competent jurisdiction. No such rescission shall affect any subsequent Default or Event of Default or impair any right consequent thereto. SECTION 6.03 Other Remedies. -------------- If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of or interest on the Convertible Subordinated Notes or to enforce the performance of any provision of the Convertible Subordinated Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Convertible Subordinated Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any holder of a Convertible Subordinated Note in exercising any right or remedy accruing upon an Event of Default shall 32 not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04 Waiver of Past Defaults. ----------------------- The holders of a majority in aggregate principal amount of the Convertible Subordinated Notes then outstanding may, on behalf of the holders of all the Convertible Subordinated Notes waive an existing Default or Event of Default and its consequences, except a Default or Event of Default in the payment of the principal of or interest on the Convertible Subordinated Notes (other than the non-payment of principle of and premium, if any, and interest on the Convertible Subordinated Notes which has become due solely by virtue of an acceleration which has been duly rescinded as provided above), or in respect of a covenant or provision of this Indenture which cannot be modified or amended without the consent of all holders of convertible Subordinated Notes. When a Default is waived, it is cured and stops continuing. No waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05 Control by Majority. ------------------- The holders of a majority in principal amount of the then outstanding Convertible Subordinated Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other holders of Convertible Subordinated Notes or that may involve the Trustee in personal liability; provided, that the Trustee may take any other action the Trustee deems proper that is not inconsistent with such directions. SECTION 6.06 Limitation on Suits. ------------------- A holder of a Convertible Subordinated Note may not pursue any remedy with respect to this Indenture or the Convertible Subordinated Notes unless: (1) the holder gives to the Trustee notice of a continuing Event of Default; (2) the holders of at least 25% in principal amount of the then outstanding Convertible Subordinated Notes make a request to the Trustee to pursue the remedy; (3) such holder or holders offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and 33 (5) during such 60-day period the holders of a majority in principal amount of the then outstanding Convertible Subordinated Notes do not give the Trustee a direction inconsistent with the request. A holder of a Convertible Subordinated Note may not use this Indenture to prejudice the rights of another holder or to obtain a preference or priority over another holder. SECTION 6.07 Rights of Holders To Receive Payment. ------------------------------------ Subject to the provisions of Article 11 hereof, notwithstanding any other provision of this Indenture, the right of any holder of a Convertible Subordinated Note to receive payment of principal and interest on the Convertible Subordinated Note, on or after the respective due dates expressed in the Convertible Subordinated Note, or to bring suit for the enforcement of any such payment on or after such respective dates, and such rights shall not be impaired or affected without the consent of the holder of a Convertible Subordinated Note. SECTION 6.08 Collection Suit by Trustee. -------------------------- If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid on the Convertible Subordinated Notes and interest on overdue principal and interest and such further amount as shall be sufficient to cover the costs and, to the extent lawful, expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09 Trustee May File Proofs of Claim. -------------------------------- The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the holders of Convertible Subordinated Notes allowed in any judicial proceedings relative to the Company, its creditors or its property. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder of a Convertible Subordinated Note any plan of reorganization, arrangement, adjustment or composition affecting the Convertible Subordinated Notes or the rights of any holder thereof, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding. SECTION 6.10 Priorities. ---------- If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: 34 First: to the Trustee for amounts due under Section 7.07, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee, and the costs and expenses of collection; Second: to holders of Senior Indebtedness to the extent required by Article 11; Third: to holders of Convertible Subordinated Notes for amounts due and unpaid on the Convertible Subordinated Notes for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Convertible Subordinated Notes for principal and interest, respectively; and Fourth: to the Company. Except as otherwise provided in Section 2.12, the Trustee may fix a record date and payment date for any payment to holders of Convertible Subordinated Notes. SECTION 6.11 Undertaking for Costs. --------------------- In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit, other than the Trustee, of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a holder pursuant to Section 6.07 or a suit by holders of more than 10% in principal amount of the then outstanding Convertible Subordinated Notes. ARTICLE 7 The Trustee The Trustee hereby accepts the trust imposed upon it by this Indenture and covenants and agrees to perform the same, as herein expressed. Whether or not herein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article 7. SECTION 7.01 Duties of the Trustee. --------------------- (a) If an Event of Default known to the Trustee has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. 35 (b) Except during the continuance of an Event of Default known to the Trustee: (1) The duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the form required by this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section; (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Whether or not therein expressly so provided, every provision of this Indenture that is in any way related to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02 Rights of the Trustee. --------------------- (a) The Trustee may rely on and shall be protected in acting or refraining from acting upon any resolution, Officers' Certificate, or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, security or other document believed by it to be 36 genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter contained therein. (b) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof is herein specifically prescribed). In addition, before the Trustee acts or refrains from acting, it may require an Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its attorneys and agents and other Persons not regularly in its employ and shall not be responsible for the misconduct or negligence of any attorney or agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its discretion, rights or powers. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by Officers of the Company. (f) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder. (g) The Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or discretion of any of the holders of Convertible Subordinated Notes pursuant to the provisions of this Indenture, unless such holders have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby. (h) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, security or other document unless requested in writing to do so by the holders of not less than a majority in aggregate principal amount of the Convertible Subordinated Notes then outstanding, provided that if the Trustee determines in its sole and absolute discretion to make any such investigation, then it shall be entitled, upon reasonable prior notice and during normal business hours, to examine the books and records and the premises of the Company, personally or by agent or attorney, and the reasonable expenses of every such examination shall be paid by the Company or, if paid by the Trustee or any predecessor Trustee, shall be reimbursed by the Company upon demand. 37 SECTION 7.03 Individual Rights of the Trustee. -------------------------------- The Trustee in its individual or any other capacity may become the owner or pledgee of Convertible Subordinated Notes with the same rights it would have if it were not the Trustee and may otherwise deal with the Company or an Affiliate and receive, collect, hold and retain collections from the Company with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11. SECTION 7.04 Trustee's Disclaimer. -------------------- The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Convertible Subordinated Notes. It shall not be accountable for the Company's use of the proceeds from the Convertible Subordinated Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture. It shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Convertible Subordinated Notes or any other document in connection with the sale of the Convertible Subordinated Notes or pursuant to this Indenture other than its certificate of authentication. SECTION 7.05 Notice of Defaults. ------------------ If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each holder of a Convertible Subordinated Note a notice of the Default or Event of Default within 45 days after it occurs. A Default or an Event of Default shall not be considered known to the Trustee unless it is a Default or Event of Default in the payment of principal or interest when due under Section 6.01(a) or (b) or the Trustee shall have received notice thereof, in accordance with this Indenture, from the Company or from the holders of a majority in principal amount of the outstanding Convertible Subordinated Notes. Except in the case of a Default or Event of Default in payment of principal or interest on any Convertible Subordinated Note, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interest of the holders of the Convertible Subordinated Notes. SECTION 7.06 Reports by the Trustee to Holders. --------------------------------- Within 60 days after the reporting date stated in Section 10.10, the Trustee shall mail to holders of Convertible Subordinated Notes a brief report dated as of such reporting date that complies with TIA (S) 313(a) (but if no event described in TIA (S) 313(a) has occurred within twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA (S) 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA (S) 313(c). 38 A copy of each report at the time of its mailing to holders of Convertible Subordinated Notes shall be filed, at the expense of the Company, by the Trustee with the Commission and each stock exchange, if any, on which the Convertible Subordinated Notes are listed. The Company shall timely notify the Trustee when the Convertible Subordinated Notes are listed on any stock exchange. SECTION 7.07 Compensation and Indemnity. -------------------------- The Company shall pay to the Trustee from time to time and the Trustee shall be entitled to reasonable compensation for its acceptance of this Indenture and its services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by or on behalf of it in addition to the compensation for its services. Such expenses may include the reasonable compensation, disbursements and expenses of the Trustee's agents, counsel and other Persons not regularly in its employ. The Company shall indemnify the Trustee against any loss, liability or expense incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture and the trusts hereunder, including the costs and expenses of defending itself against or investigating any claim of liability in the premises, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim with counsel designated by the Company, who may be outside counsel to the Company but shall in all events be reasonably satisfactory to the Trustee, and the Trustee shall cooperate in the defense. In addition, the Trustee may retain one separate counsel and, if deemed advisable by such counsel, local counsel, and the Company shall pay the reasonable fees and expenses of such separate counsel and local counsel. The indemnification herein extends to any settlement, provided that the Company will not be liable for any settlement made without its consent, provided, further, that such consent will not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through its own negligence or bad faith. To secure the Company's payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Convertible Subordinated Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on Convertible Subordinated Notes. Such Liens and the Company's obligations under this Section shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) occurs, the expenses and the compensation for the services (including 39 the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. SECTION 7.08 Replacement of the Trustee. -------------------------- A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign at any time and be discharged from the trust hereby created by so notifying the Company. The holders of a majority in principal amount of the then outstanding Convertible Subordinated Notes may remove the Trustee by so notifying the Trustee and the Company in writing and may appoint a successor Trustee. The Company may remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (3) a Custodian or public officer takes charge of the Trustee or its property; or (4) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the holders of a majority in principal amount of the then outstanding Convertible Subordinated Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the holders of at least 10% in principal amount of the then outstanding Convertible Subordinated Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee after written request by any holder of a Convertible Subordinated Note who has been a holder for at least six months fails to comply with Section 7.10, such holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to 40 holders of Convertible Subordinated Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided that all sums owing to the retiring Trustee hereunder have been paid and subject to the lien provided for in Section 7.07. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the preceding paragraph. SECTION 7.09 Successor Trustee by Merger, etc. --------------------------------- If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein. SECTION 7.10 Eligibility, Disqualification. ----------------------------- This Indenture shall always have a Trustee who satisfies the requirements of TIA (S) 310(a)(1). The Trustee shall always have a combined capital and surplus as stated in Section 10.10. The Trustee is subject to TIA (S) 310(b) regarding the disqualification of a trustee upon acquiring a conflicting interest. SECTION 7.11 Preferential Collection of Claims Against Company. ------------------------------------------------- The Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship set forth in TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to the extent indicated therein. ARTICLE 8 Satisfaction and Discharge of Indenture SECTION 8.01 Termination of Company's Obligations. ------------------------------------ (i) This Indenture shall cease to be of further effect (except that the Company's obligations under Section 7.07 and 8.03 shall survive) when all outstanding Convertible Subordinated Notes theretofore authenticated and issued have been delivered (other than destroyed, lost or stolen Convertible Subordinated Notes that have been replaced or paid) to the Trustee for cancellation and the Company has paid all sums payable hereunder. In addition, the Company may terminate its obligations under this Indenture (except the Company's obligations 41 under Sections 7.07 and 8.03) if, under terms satisfactory to the Trustee: (a) the Convertible Subordinated Notes have either become due and payable or are by their terms due and payable within one year or scheduled for redemption within one year; and (b) the Company irrevocably deposits in trust with the Trustee money or United States Government Obligations (defined below in this Section 8.01), or a combination thereof, sufficient, without consideration of the reinvestment of interest in the opinion of the chief financial officer of the Company expressed in a written certificate delivered to the Trustee, to pay principal and interest on the Convertible Subordinated Notes to maturity or upon redemption, as the case may be. The Company may make the deposit only if Article 11 permits it. However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.04, 7.07, 7.08, 8.03 and 8.04 shall survive until the Convertible Subordinated Notes are no longer outstanding. Thereafter, only the Company's obligations in Sections 7.07 and 8.03 shall survive. After a deposit made pursuant to this Section 8.01, the Trustee upon request of the Company shall acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified above. In addition, the Company may elect to have either clause (ii) or clause (iii) below be applied to the outstanding Convertible Subordinated Notes upon compliance with the conditions set forth in clause (iv) below. (ii) Upon the Company's exercise under the last sentence of paragraph (i) above of the option applicable to this paragraph (ii), the Company shall be deemed to have been released and discharged from its obligations with respect to the outstanding Convertible Subordinated Notes on the date the conditions set forth below are satisfied ("legal defeasance"). For this purpose, legal defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding Convertible Subordinated Notes, which shall thereafter be deemed to be "outstanding" only for the purpose of the Sections of and matters under this Indenture referred to in subclauses (A), (B), (C) and (D) of this clause (ii), and to have satisfied all its other obligations under such Convertible Subordinated Notes and this Indenture insofar as such Convertible Subordinated Notes are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (A) the rights of holders of outstanding Convertible Subordinated Notes to receive solely from the trust fund described in clause (iv) below and as more fully set forth in such clause, payments in respect of the principal of premium, if any, and interest on such Convertible Subordinated Notes when such payments are due, (B) the Company's obligations with respect to such Convertible Subordinated Notes when such payments are due, (C) the Company's obligations with respect to such Convertible Subordinated Notes under Sections 2.03, 2.05, 2.06, 2.07 and 4.04, and, with respect to the Trustee, under Section 7.07, (D) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (E) this Section 8.01 and Sections 8.03 and 8.04. Subject to compliance with this Section 8.01, the Company may exercise its option under this 42 clause (ii) notwithstanding the prior exercise of its option under paragraph (iii) below with respect to the Convertible Subordinated Notes. (iii) Upon the Company's exercise under the last sentence of clause (i) of the option applicable to this clause (iii), the Company shall be released and discharged from its obligations under any covenant contained in Article 4 (except for Sections 4.01 and 4.04) and Article 5 with respect to the outstanding Convertible Subordinated Notes on and after the date the conditions set forth below are satisfied ("covenant defeasance"), and the Convertible Subordinated Notes shall thereafter be deemed to be not "outstanding" for the purpose of any direction, waiver, consent or declaration or act of holders of Convertible Subordinated Notes (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to the outstanding Convertible Subordinated Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 but, except as specified above, the remainder of this Indenture (including without limitation obligations set forth in Sections 8.03 and 8.04 hereof) and such Convertible Subordinated Notes shall be unaffected thereby. (iv) The following shall be the conditions to the application of either clause (ii) or (iii) above to the outstanding Convertible Subordinated Notes: (a) the Company has irrevocably deposited in trust with the Trustee or, at the option of the Trustee, with a trustee, satisfactory to the Trustee and the Company, under terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, cash in U.S. dollars, United States Government Obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of the Chief Financial Officer of the Company expressed in a written certificate delivered to the Trustee, to pay the principal of, premium, if any, and interest on the outstanding Convertible Subordinated Notes on the stated maturity or on the applicable redemption date, as the case may be, of such principal or installment of principal of, premium, if any, or interest on the outstanding Convertible Subordinated Notes; provided that (i) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such United States Government Obligations to the Trustee, (ii) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such United States Government Obligations to the payment of said principal and interest with respect to the Convertible Subordinated Notes, and (iii) such deposit does not violate Article 11 hereto; (b) in the case of an election under clause (ii) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel reasonably acceptable to the Trustee stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date 43 of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that the holders of the outstanding Convertible Subordinated Notes will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such legal defeasance had not occurred; (c) in the case of an election under clause (iii) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel reasonably acceptable to the Trustee (i) to the effect that the holders of the outstanding Convertible Subordinated Notes will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such covenant defeasance had not occurred or (ii) that the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the foregoing effect; (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit; (e) such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a Default or Event of Default under, any material agreement or instrument (including any agreement or instrument governing or evidencing Designated Senior Indebtedness) to which the Company or any of its subsidiaries is bound; (f) The Company shall deliver to the Trustee an Opinion of Counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (g) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the holders of Convertible Subordinated Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and (h) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent provided for relating to the legal defeasance under clause (ii) above or the covenant defeasance under clause (iii) above, as the case may be, have been complied with. After such irrevocable deposit made pursuant to this Section 8.01 (and satisfaction of the other conditions set forth herein), the Trustee upon request shall acknowledge in writing the 44 discharge of the Company's obligations under this Indenture except for those surviving obligations specified above. As used herein, "United States Government Obligations" means obligations for which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option. SECTION 8.02 Application of Trust Money. -------------------------- The Trustee shall hold in trust money or United States Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from United States Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal and interest on the Convertible Subordinated Notes. Money and securities so held in trust are not subject to Article 11. SECTION 8.03 Repayment to Company. -------------------- The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Company shall have first caused notice of such payment to the Company to be mailed to each holder of a Convertible Subordinated Note entitled thereto no less than 30 days prior to such payment. After payment to the Company, holders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person and all liability of the Trustee and such Paying Agent with respect to such money shall cease. SECTION 8.04 Reinstatement. ------------- If the Trustee or Paying Agent is unable to apply any money in accordance with Section 8.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Convertible Subordinated Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02; provided, however, that if the Company makes any payment of interest on or principal of any Convertible Subordinated Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the holders of such Convertible Subordinated Notes to receive such payment from the money held by the Trustee or Paying Agent. 45 ARTICLE 9 Amendments SECTION 9.01 Without the Consent of Holders. ------------------------------ The Company and the Trustee may amend this Indenture or the Convertible Subordinated Notes without notice to or the consent of any holder of a Convertible Subordinated Note for the purposes of: (a) adding to the covenants of the Company for the benefit of the holders of Convertible Subordinated Notes; (b) surrendering any right or power herein conferred upon the Company; (c) providing for conversion rights of holders of Convertible Subordinated Notes in the event of consolidation, merger or sale of all or substantially all of the assets of the Company and to otherwise comply with Section 5.01; (d) evidencing the succession of another Person to the Company and the assumption by such successor of the covenants and obligations of the Company thereunder and in the Convertible Subordinated Notes as permitted herein; (e) reducing the Conversion Price, provided that such reduction will not adversely affect the interests of holders of Convertible Subordinated Notes in any material respect; or (f) curing any ambiguity or correcting or supplementing any defective provision contained in this Indenture, or making any other changes in the provisions of this Indenture which the Company and the Trustee may deem necessary or desirable and which will not adversely affect the interest of the holders of Convertible Subordinated Notes. SECTION 9.02 With the Consent of Holders. --------------------------- Subject to Section 6.07, the Company and the Trustee may amend this Indenture or the Convertible Subordinated Notes with the written consent of the holders of at least a majority in principal amount of the then outstanding Convertible Subordinated Notes. Subject to Sections 6.04 and 6.07, the holders of a majority in principal amount of the Convertible Subordinated Notes then outstanding may also waive compliance in a particular instance by the Company with any provision of this Indenture or the Convertible Subordinated Notes. 46 However, without the consent of each holder of a Convertible Subordinated Note affected, an amendment or waiver under this Section may not: (a) reduce the amount of Convertible Subordinated Notes whose holders must consent to an amendment or waiver; (b) reduce the rate of, or extend the time for payment of, interest, including defaulted interest, on any Convertible Subordinated Note; (c) reduce the principal of or premium on or change the fixed maturity of any Convertible Subordinated Note or alter redemption provisions with respect thereto; (d) make the principal of, or premium, if any, or interest on, any Convertible Subordinated Note payable in money other than as provided for herein and in the Convertible Subordinated Notes; (e) waive continuing default in the payment of the principal of or premium, if any, or interest on, redemption or repurchase payment with respect to, any Convertible Subordinated Notes, including without limitation a continuing failure to make payment when required upon a Change of Control or after an Asset Sale Offer Trigger Date; (f) after the Company's obligation to purchase the Convertible Subordinated Notes arises hereunder, to then amend, modify or change the obligation of the Company to make or consummate a Change of Control Offer in the event of a Change of Control or an Asset Sale Offer in the event of an Asset Sale Offer Trigger Date or waive any default in the performance thereof or modify any of the provisions or definitions with respect to such offers; (g) modify the provision contained herein relating to conversion of or subordination of the Convertible Subordinated Notes in a manner adverse to the holders thereof; or (h) make any change in provisions relating to waivers of defaults, the abilities of holders of Convertible Subordinated Notes to enforce their rights hereunder or the provisions of clauses (a) through (h) of this Section 9.02. To secure a consent of the holders of Convertible Subordinated Notes under this Section, it shall not be necessary for such holders to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment or waiver under this Section becomes effective, the Company shall mail to holders of Convertible Subordinated Notes a notice briefly describing the amendment or waiver. 47 The Company agrees that no amendment, supplement or waiver under this Article 9 may make any change that adversely affects the rights under Article 11 of any holders of any Designated Senior Indebtedness unless the percentage of holders necessary to amend or waive terms of such Designated Senior Indebtedness consent to such change. SECTION 9.03 Compliance with the Trust Indenture Act. --------------------------------------- Every amendment to this Indenture or the Convertible Subordinated Notes shall be set forth in a supplemental indenture that complies with the TIA as then in effect. SECTION 9.04 Revocation and Effect of Consents. --------------------------------- Until an amendment or waiver becomes effective, a consent to it by a holder of a Convertible Subordinated Note is a continuing consent by the holder and every subsequent holder of a Convertible Subordinated Note or portion of a Convertible Subordinated Note that evidences the same debt as the consenting holder's Convertible Subordinated Note, even if notation of the consent is not made on any Convertible Subordinated Note. However, any such holder or subsequent holder may revoke the consent as to his or her Convertible Subordinated Note or portion of a Convertible Subordinated Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate certifying that the holders of the requisite principal amount of Convertible Subordinated Notes have consented to the amendment or waiver. The Company may, but shall not obligated to, fix a record date for the purpose of determining the holders of Convertible Subordinated Notes entitled to consent to any amendment or waiver. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those persons who were holders of Convertible Subordinated Notes at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment or waiver or to revoke any consent previously given, whether or not such persons continue to be holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from holders of the principal amount of Convertible Subordinated Notes required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment or waiver becomes effective it shall bind every holder of a Convertible Subordinated Note, unless it is of the type described in any of clauses (1) through (9) of Section 9.02. In such case, the amendment or waiver shall bind each holder of a Convertible Subordinated Note who has consented to it. SECTION 9.05 Notation on or Exchange of Convertible Subordinated Notes. --------------------------------------------------------- Convertible Subordinated Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article 9 may, and shall if required by the Trustee, bear a notation in the form approved by the Trustee as to any matter provided for in such 48 supplemental indenture. If the Company shall so determine, new Convertible Subordinated Notes so modified as to conform, in the opinion of the Company and the Trustee, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for outstanding Convertible Subordinated Notes. SECTION 9.06 Trustee Protected. ----------------- The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article 9 if such amendment or supplemental indenture does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing such amendment or supplemental indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. ARTICLE 10 General Provisions SECTION 10.01 Trust Indenture Act Controls. ---------------------------- If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA (S) 318(c), the imposed duties shall control. SECTION 10.02 Notices. ------- Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail, with postage prepaid (registered or certified, return receipt requested), facsimile or overnight air couriers guaranteeing next day delivery, to the other's address stated in Section 10.10. The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to holders of Convertible Subordinated Notes) shall be deemed to have been duly given at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when transmission confirmed, if transmitted by facsimile; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a holder of a Convertible Subordinated Note shall be mailed by first-class mail, with postage prepaid, to his or her address shown on the register kept 49 by the Registrar. Failure to mail a notice or communication to a holder or any defect in it shall not affect its sufficiency with respect to other holders. If a notice or communication is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company sends a notice or communication to holders of Convertible Subordinated Notes, it shall send a copy to the Trustee and each Agent at the same time. All other notices or communications shall be in writing. SECTION 10.03 Communication by Holders With Other Holders. ------------------------------------------- Holders may communicate pursuant to TIA (S) 312(b) with other holders with respect to their rights under this Indenture or the Convertible Subordinated Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA (S) 312(c). SECTION 10.04 Certificate and Opinion as to Conditions Precedent. -------------------------------------------------- Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.05) stating that, in the opinion of such person, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.05) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with. SECTION 10.05 Statements Required in Certificate or Opinion. --------------------------------------------- Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA (S) 314(a)(4)) shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; 50 (3) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Any Officers' Certificate may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such Officer knows that the opinion with respect to the matters upon which his certificate may be based as aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon certificates, statements or opinions of, or representations by an officer or officers of the Company, or other persons or firms deemed appropriate by such counsel, unless such counsel knows that the certificates, statements or opinions or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous. Any Officers' Certificate, statement or Opinion of Counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representation by an accountant (who may be an employee of the Company), or firm of accountants, unless such Officer or counsel, as the case may be, knows that the certificate or opinion or representation with respect to the accounting matters upon which his certificate, statement or opinion may be based as aforesaid is erroneous. SECTION 10.06 Rules by Trustee and Agents. --------------------------- The Trustee may make reasonable rules for action by or a meeting of holders of Convertible Subordinated Notes. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 10.07 Legal Holidays. -------------- A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in the City of New York are not required to be open, and a business day is any day that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 10.08 No Recourse Against Others. -------------------------- No director, officer, employee or stockholder, as such, of the Company from time to time shall have any liability for any obligations of the Company under the Convertible Subordinated Notes or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each holder by accepting a Convertible Subordinated Note waives and releases all such liability. This waiver and release are part of the consideration for 51 the Convertible Subordinated Notes. Each of such directors, officers, employees and stockholders is a third party beneficiary of this Section 10.08. SECTION 10.09 Counterparts. ------------ This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION 10.10 Other Provisions. ---------------- The Company initially appoints the Trustee as Paying Agent, Registrar and authenticating agent. The first certificate pursuant to Section 4.03 shall be for the first full fiscal quarter of the Company following the issuance of Convertible Subordinated Notes hereunder. The reporting date for Section 7.06 is April 15 of each year. The first reporting date is the first April 15 following the issuance of Convertible Subordinated Notes hereunder. The Trustee shall always have, or shall be a subsidiary of a bank or bank holding company which has, a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Company's address is: Rohr, Inc. 850 Lagoon Drive Chula Vista, CA 91910 Attention: General Counsel Facsimile: (619) 691-4222 Telephone: (619) 691-2025 The Trustee's address is: The Bank of New York 101 Barclay Street, 21st Floor West New York, New York 10286 Attention: Corporate Trust Administration Facsimile: (212) 815-5915 Telephone: (212) 815-5736 The Bank Agent's address is: 52 Citicorp USA, Inc. c/o Citicorp North America, Inc. 725 South Figueroa Street Los Angeles, CA 90017 Attention: Airline and Aerospace Group Facsimile: (213) 623-3592 SECTION 10.11 Governing Law. ------------- The internal laws of the State of New York shall govern this Indenture and the Convertible Subordinated Notes, without regard to the conflict of laws provisions thereof. SECTION 10.12 No Adverse Interpretation of Other Agreements. --------------------------------------------- This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a subsidiary. Any such other indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 10.13 Successors. ---------- All agreements of the Company in this Indenture and the Convertible Subordinated Notes shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. SECTION 10.14 Severability. ------------ In case any provision in this Indenture or in the Convertible Subordinated Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.15 Table of Contents, Headings, Etc. -------------------------------- The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. ARTICLE 11 Subordination 53 SECTION 11.01 Agreement To Subordinate. ------------------------ The Company agrees, and each holder by accepting a Convertible Subordinated Note agrees, that the indebtedness evidenced by the Convertible Subordinated Notes is subordinated and junior in right of payment, to the extent and in the manner provided in this Article, to the prior payment in full in cash or Cash Equivalents of all Senior Indebtedness and that the subordination is for the benefit of the holders of Senior Indebtedness from time to time. SECTION 11.02 Liquidation; Dissolution; Bankruptcy. ------------------------------------ Upon any distribution to creditors of the Company in a liquidation, reorganization or dissolution of the Company (in each case whether total or partial) or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding or upon assignment for the benefit of creditors relating to the Company or its property, or a marshalling of assets or liabilities of the Company (in each case whether voluntary or involuntary); (1) holders of Senior Indebtedness shall first be entitled to be paid all obligations owing thereon or in respect thereof in full in cash or Cash Equivalents before any payment or distribution may be made on or in respect of the Convertible Subordinated Notes, except to the extent that holders receive securities that are subordinated to Senior Indebtedness to at least the same extent as the Convertible Subordinated Notes (the "Other Subordinated Securities"); and (2) holders of Convertible Subordinated Notes (or the Trustee on their behalf) will be required to pay over their share of such distribution directly to any Representative of the holders of Senior Indebtedness for payment thereto or, if such holders have no Representative, directly to such holders of Senior Indebtedness, until such Senior Indebtedness is paid in full in cash or Cash Equivalents except to the extent that holders of Convertible Subordinated Notes receive Other Subordinated Securities. For purposes of this Article 11, a distribution may consist of cash, securities or other property, by payment, transfer, set-off or otherwise. SECTION 11.03 Default on Designated Senior Indebtedness. ----------------------------------------- The Company may not make any direct or indirect payment on or in respect of any obligations on the Convertible Subordinated Notes and may not acquire or defease any Convertible Subordinated Notes from the Trustee or any holder of Convertible Subordinated Notes for cash or property (other than Other Subordinated Securities) if: (a) a default in the payment of any principal or other obligation in respect of Designated Senior Indebtedness occurs and is continuing beyond any applicable grace period; or 54 (b) a default, other than a default referred to in clause (a) above, on any Designated Senior Indebtedness occurs and is continuing that then permits holders of such Designated Senior Indebtedness to accelerate its maturity and the Trustee receives a notice of the default from the Bank Agent or other Representative on behalf of Designated Senior Indebtedness requesting that payments in respect of the Convertible Subordinated Notes be prohibited. So long as payments on the Convertible Subordinated Notes are otherwise permitted, then the Company may and shall resume payments on the Convertible Subordinated Notes and may acquire them upon the earlier of: (x) the date upon which such default is cured or waived, or (y) in the case of a default and notice referred to in (b) above, 179 days after such notice is received by the Trustee (the "Payment Blockage Period"). Only one Payment Blockage Period may be commenced within any consecutive 365-day period with respect to the Convertible Subordinated Notes. SECTION 11.04 Acceleration of Convertible Subordinated Notes. ---------------------------------------------- If payment of the Convertible Subordinated Notes is accelerated because of an Event of Default, the Company and the Trustee each shall promptly notify holders of Senior Indebtedness of the acceleration. SECTION 11.05 When Distributions Must Be Paid Over. ------------------------------------ In the event that any payment or distribution of assets of the Company, whether in cash, property or securities (other than Other Subordinated Securities) shall be received by the Trustee on account of the principal or interest on or other obligations in respect of the Convertible Subordinated Notes at a time when the Trustee shall have received notice in accordance with Section 11.11 that such payment is prohibited by Section 11.02 or 11.03, such payment or distribution shall be segregated and held by the Trustee in trust for the benefit of, and shall forthwith be paid over and delivered to any Representative of the holders of Senior Indebtedness for payments thereto, or, if such holders have no Representative, directly to such holders of Senior Indebtedness (pro rata as to each of such holders on the basis of the respective amounts of Senior Indebtedness held by them), as their respective interests may appear, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or Cash Equivalents in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. Any distribution to the holders of the Senior Indebtedness or their Representatives of assets other than cash or Cash Equivalents may be held by such holders or Representatives as collateral securing the payment of such Senior Indebtedness without any duty to liquidate or otherwise realize on such assets or to apply such assets to any Senior Indebtedness. 55 If a payment or distribution is made to holders of Convertible Subordinated Notes that because of this Article 11 should not have been made to them, the holders of Convertible Subordinated Notes who receive the payment or distribution shall hold it segregated from other assets and hold it in trust for holders of Senior Indebtedness and pay it over to them as their interests may appear for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or Cash Equivalents in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. SECTION 11.06 Notice by the Company. --------------------- The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of principal of or interest on the Convertible Subordinated Notes to violate this Article, but failure to give such notice shall not affect the subordination of the Convertible Subordinated Notes to the Senior Indebtedness provided in this Article. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 11.07 Subrogation. ----------- After all Senior Indebtedness is paid in full in cash or Cash Equivalents and all letters of credit under the Revolving Credit Agreement have expired or been terminated or the reimbursement obligations of the Company in respect of such letters of credit then outstanding have been fully secured by cash or Cash Equivalents and until the Convertible Subordinated Notes are paid in full, holders of Convertible Subordinated Notes shall be subrogated to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the holders of Convertible Subordinated Notes have been applied to the payment of Senior Indebtedness. A distribution made under this Article to holders of Senior Indebtedness which otherwise would have been made to holders of Convertible Subordinated Notes is not, as between the Company and such holders, a payment by the Company on Senior Indebtedness. SECTION 11.08 Relative Rights. --------------- This Article defines the relative rights of holders of Convertible Subordinated Notes and holders of Senior Indebtedness. Nothing in this Indenture shall: (1) impair, as between the Company and holders of Convertible Subordinated Notes, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Convertible Subordinated Notes in accordance with their terms; 56 (2) affect the relative rights of holders of Convertible Subordinated Notes and creditors of the Company, other than their rights in relation to holders of Senior Indebtedness; or (3) prevent the Trustee or any holder of a Convertible Subordinated Note from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness to receive payments and distributions otherwise payable to holders of Convertible Subordinated Notes. If the Company fails because of this Article to pay principal of or interest on a Convertible Subordinated Note on the due date, the failure is still a Default or Event of Default. SECTION 11.09 Subordination May Not Be Impaired by the Company. ------------------------------------------------ No right of any holder of Senior Indebtedness to enforce the subordination of the indebtedness evidenced by the Convertible Subordinated Notes shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture (regardless of any knowledge thereof that such holder may have or otherwise be charged with), or by any act or failure to act by such holder. If at any time any payment of any obligations with respect to any Senior Indebtedness is rescinded or must otherwise be returned upon the insolvency, bankruptcy, reorganization or liquidation of the Company or otherwise, the provisions of this Article 11 shall continue to be effective or reinstated, as the case may be, to the same extent as though such payment had not been made. SECTION 11.10 Distribution of Notice to the Representative. -------------------------------------------- Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representative, if any. Whenever a distribution is to be made or notice is to be given to holders of the Company's outstanding 9.33% Senior Notes or its 9.35% Senior Notes, such distribution shall be made and such notice shall be given to each holder of record of such notes at the address specified in the register of holders of such notes maintained by the Company. Upon any payment or distribution of assets of the Company referred to in this Article 11, the Trustee and the holders of Convertible Subordinated Notes shall be entitled to rely conclusively upon any order or decree made by any court of competent jurisdiction or upon any certificate of any Representative (as to the Senior Indebtedness for which it is the Representative) or of any liquidating trustee or agent or an Officers' Certificate (as to any Senior Indebtedness for which there is no Representative) for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness 57 of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 11. SECTION 11.11 Rights of the Trustee and Paying Agent. -------------------------------------- Notwithstanding any provision of this Article 11 or any other provision of this Indenture, the Trustee and the Paying Agent shall not at any time be charged with knowledge of the existence of any facts which would prohibit the making of any payment or distribution to or by the trustee or a Paying Agent or the taking of any other action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and until the Trustee or such Paying Agent, as the case may be, shall have received at its office specified in Section 10.10 written notice thereof from the Company, a Representative or a holder of Senior Indebtedness entitled to give such notice and, prior to the receipt of any such written notice, the Trustee and such paying Agent shall be entitled in all respects conclusively to assume that no such fact exists. The Trustee or the Paying Agent may continue to make payments on the Convertible Subordinated Notes unless it receives such a notice at least one business day prior to the date upon which payment is due. The Trustee shall be entitled to rely in good faith on the delivery to it of a written notice by a Person representing himself, herself or itself to be a Representative on behalf of a holder of Senior Indebtedness to establish that such notice has been given by a Representative or a holder of such Senior Indebtedness. Only the Company, a Representative or a holder of Senior Indebtedness that has no Representative may give the notice. The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights. SECTION 11.12 No Fiduciary Duty to Holders of Senior Indebtedness. --------------------------------------------------- With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 11, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee or the Paying Agent. Neither the Trustee nor the Paying Agent shall be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness, and the Trustee shall not be liable to any holder of such Senior Indebtedness if it shall, in the absence of bad faith, pay over or deliver to holders of Convertible Subordinated Notes, the Company or any other person monies or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this Article 11 or otherwise. SECTION 11.13 Authorization to Effect Subordination. ------------------------------------- Each holder of a Convertible Subordinated Note by its or his acceptance thereof authorizes and expressly directs the Trustee on its or his behalf to take such action as may be necessary or appropriate to effect the subordination provisions contained in this Article 11, and 58 appoints the Trustee its or his attorney-in-fact for such purpose, including, in the event of any liquidation, reorganization or dissolution of the Company, whether in a bankruptcy, reorganization, insolvency, receivership or similar proceeding or otherwise, the immediate filing of a claim for the unpaid balance of its or his Convertible Subordinated Notes in the form required in such proceeding, and to cause such claim to be approved. If the Trustee does not file a proper claim or proof of debt in the form required in such proceeding prior to 30 days before the expiration of the time to file such claim or claims, then the holders of any Senior Indebtedness or their Representatives are hereby authorized to file an appropriate claim for and on behalf of the holders of the Convertible Subordinated Notes. ARTICLE 12 Conversion of Convertible Subordinated Notes SECTION 12.01 Conversion Privilege. -------------------- Subject to and upon compliance with the provisions of this Article 12, the holder of any Convertible Subordinated Note shall have the right, at its option, at any time on or prior to the close of business on May 15, 2004 (or, if such Note or portion thereof is called for redemption prior to May 15, 2004, then in respect of such Convertible Subordinated Note or portion thereof, on or prior to the close of business on the date fixed for redemption, unless the Company shall default in payment due upon redemption thereof in which case such conversion right will terminate at the close of business on the date such default is cured), to convert the principal amount of any such Convertible Subordinated Note, or any portion of such principal amount which is $1,000 or an integral multiple thereof, into that number of fully paid and nonassessable whole shares of Common Stock obtained by dividing the principal amount of the Convertible Subordinated Note or portion thereof to be converted by the Conversion Price in effect at such time and by surrender of the Convertible Subordinated Note so to be converted in whole or in part, such surrender to be made in the manner provided in Section 12.02. SECTION 12.02 Manner of Exercise of Conversion Privilege. ------------------------------------------ In order to exercise the conversion privilege, the holder of any Convertible Subordinated Note to be converted in whole or in part shall surrender such Convertible Subordinated Note, duly endorsed or assigned to the Company or in blank, at any of the offices or agencies to be maintained for such purpose by the Company pursuant to Section 4.04, accompanied by the funds, if any, required by the last paragraph of this Section, and shall give irrevocable written notice of conversion in the form provided on the Convertible Subordinated Notes (or such other notice as is acceptable to the Company) to the Company (a "Conversion Notice") at such office or agency that the holder elects to convert such Convertible Subordinated Note or the portion thereof specified in said notice. Such Conversion Notice shall also state the name or names, together with the address or addresses, in which the certificate or certificates for shares of Common Stock which shall be issuable in such conversion shall be issued. Each Convertible 59 Subordinated Note surrendered for conversion shall, unless the shares issuable on conversion are to be issued in the same name as the name in which such Convertible Subordinated Note is registered, be accompanied by instruments of transfer, in form satisfactory to the Company, duly executed by the holder or his duly authorized attorney and in amount sufficient to pay any transfer or similar tax. As promptly as practicable after the surrender of such Convertible Subordinated Note and the receipt of such Conversion Notice, instruments of transfer and funds, if any, as aforesaid, the Company shall issue and shall deliver at such office or agency to such holder, or on his written order, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such Convertible Subordinated Note or portion thereof in accordance with the provisions of this Article 12 and a check or cash in respect of any fractional interest in a share of Common Stock arising upon such conversion, as provided in Section 12.03. In case any Convertible Subordinated Note of a denomination greater than $1,000 shall be surrendered for partial conversion, the Company shall execute and the Trustee shall register or cause to be registered and shall authenticate and deliver to or upon the order of the holder of the Convertible Subordinated Note so surrendered at the expense of the Company, a new Convertible Subordinated Note in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note. Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which such Convertible Subordinated shall have been surrendered and such Conversion Notice (and any applicable instruments of transfer and any required funds) received by the Company as aforesaid, and the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares represented thereby at such time on such date and such conversion shall be at the Conversion Price in effect at such time on such date, unless the stock transfer books of the Company shall be closed on that date, in which event such Person or Persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the date upon which such Convertible Subordinated Note shall have been surrendered and such Conversion Notice received by the Company. Any Convertible Subordinated Note or portion thereof surrendered for conversion after the close of business on a Regular Record Date for payment of interest and before the close of business on the next succeeding Interest Payment Date (unless such Convertible Subordinated Note or portion thereof being converted is called for redemption on a redemption date in that period) shall be accompanied by payment, in funds acceptable to the Company, of an amount equal to the interest thereon that is to be paid on such Interest Payment Date on the principal amount being converted; provided, however, that no such payment need be made if there shall exist at the time of conversion a default in the payment of interest on the Convertible Subordinated Notes. An amount equal to such payment shall be paid by the Company on such Interest Payment Date to the holder of such Convertible Subordinated Notes at the close of business on such Regular Record Date; provided, however, that, if the Company shall default in the payment of interest on such Interest Payment Date, such amount shall be paid to the 60 Person who made such required payment. Except as provided for above in this Section, no payments or adjustments shall be made upon conversion on account of accrued interest on the Convertible Subordinated Notes or for any dividends or distributions on any shares of Common Stock delivered upon the conversion of such Convertible Subordinated Notes as provided in this Article. SECTION 12.03 Cash Payments in Lieu of Fractional Shares. ------------------------------------------ No fractional shares or scrip representing fractions of shares of Common Stock shall be issued upon conversion of the Convertible Subordinated Notes. If more than one Convertible Subordinated Note shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Convertible Subordinated Notes, or specified portions thereof to be converted, so surrendered. Instead of any fractional interest in a share of Common Stock which would otherwise be deliverable upon the conversion of any Convertible Subordinated Note or Convertible Subordinated Notes, the Company shall pay to the holder of such Convertible Subordinated Note an amount in cash (computed to the nearest cent) equal to the Daily Market Price thereof at the close of business on the business day next preceding the day of conversion multiplied by the fractional interest (expressed as a percentage) that otherwise would have been deliverable to such holder upon such conversion of the Convertible Subordinated Notes. SECTION 12.04 Adjustment of Conversion Price. ------------------------------ The Conversion Price shall be as specified in the form of Convertible Subordinated Note set forth in Article 17 thereof subject to adjustment as provided below. The Conversion Price shall be adjusted from time to time by the Company as follows: (a) In case the Company, after the date of this Indenture, shall (i) pay a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue by reclassification of its Common Stock any shares of Capital Stock of the Company, the Conversion Price in effect immediately prior to such action shall be adjusted so that the holder of any Convertible Subordinated Note thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other Capital Stock of the Company that it would have owned or been entitled to receive immediately following such action had such Convertible Subordinated Note been converted immediately prior to the occurrence of such event. An adjustment made pursuant to this subsection (a) shall become effective immediately after the record date, in the case of a dividend or distribution, or immediately after the effective date, in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this subsection (a), the holder of any Convertible Subordinated Note thereafter surrendered for conversion shall become entitled to receive shares of two or more classes of Capital 61 Stock or shares of Common Stock and other Capital Stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a statement filed by the Company with the Trustee and with any Conversion Agent as soon as practicable) shall determine the allocation of the adjusted Conversion Price between or among shares of such classes of Capital Stock or shares of Common Stock and other Capital Stock. (b) In case the Company, after the date of this Indenture, shall issue rights, warrants or options to all holders of its outstanding shares of Common Stock entitling them to subscribe for or purchase shares of Common Stock (or securities convertible into Common Stock) at a price per share less than the current market price per share (as determined pursuant to subsection (h) of this Section 12.04) of the Common Stock, the Conversion Price in effect immediately prior thereto shall be adjusted so that it shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the date of issuance of such rights, warrants or options by a fraction of which the numerator shall be the number of shares of Common Stock outstanding on the date of issuance of such rights, warrants or options (immediately prior to such issuance), plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase (or the aggregate conversion price of the convertible securities so offered for subscription or purchase) would purchase at such current market price, and of which the denominator shall be the number of shares of Common Stock outstanding on the date of issuance of such rights, warrants or options (immediately prior to such issuance) plus the number of additional shares of Common Stock so offered for subscription or purchase (or into which the convertible securities so offered for subscription or purchase are convertible). Such adjustment shall be made successively whenever any such rights, warrants or options are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, warrants or options. In determining whether any rights, warrants or options entitle the holders to subscribe for or purchase shares of Common Stock (or securities convertible into Common Stock) at less than such current market price, and in determining the aggregate offering price of such shares of Common Stock (or conversion price of such convertible securities), there shall be taken into account any consideration received by the Company for such rights, warrants or options (and for such convertible securities), the value of such consideration, if other than cash, to be determined by the Board of Directors (whose determination shall be conclusive and shall be described in a certificate filed with the Trustee and with any Conversion Agent by the Company as soon as practicable). If at the end of the period during which such warrants, rights or options are exercisable not all such warrants, rights or options shall have been exercised, the adjusted Conversion Price shall be immediately readjusted to what it would have been based on the number of additional shares of Common Stock actually issued (or the number of shares of Common Stock issuable upon conversion of convertible securities actually issued). 62 (c) In case the Company, after the date of this Indenture, shall distribute to all or substantially all holders of its outstanding Common Stock any shares of Capital Stock (other than Common Stock), evidences of its indebtedness or assets (including securities and cash, but excluding any cash dividend paid out of current or retained earnings of the Company and dividends or distributions payable in stock for which adjustment is required pursuant to subsection (a) of this Section 12.04) or rights, warrants or options to subscribe for or purchase securities of the Company (excluding those referred to in subsection (b) of this Section 12.04), then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the record date of such distribution by a fraction of which the numerator shall be the current market price per share (as determined pursuant to subsection (h) of this Section 12.04) of the Common Stock less the fair market value on such record date (as determined by the Board of Directors, whose determination shall be conclusive and shall be described in a certificate filed with the Trustee and with any Conversion Agent by the Company as soon as practicable) of the portion of the Capital Stock or the evidences of indebtedness or the assets so distributed to the holder of one share of Common Stock or of such subscription rights, warrants or options applicable to one share of Common Stock and of which the denominator shall be such current market price per share of Common Stock. Such adjustment shall become effective immediately after the record date for the determination of stockholders entitled to receive such distribution. In the event of a distribution to all or substantially all holders of Common Stock of rights to subscribe for additional shares of the Company's Capital Stock (other than those referred to in subsection (b) of this Section 12.04), the Company may, instead of making an adjustment in the Conversion Price, make proper provision so that each holder of a Convertible Subordinate Note who converts such Convertible Subordinated Note after the record date for such distribution and prior to the expiration or redemption of such rights shall be entitled to receive upon such conversion, in addition to shares of Common Stock, an appropriate number of such rights. If at the end of the period during which warrants, rights or options described in this subsection (c) are exercisable not all such warrants, rights or options shall have been exercised, the adjusted Conversion Price shall be immediately readjusted to what it would have been based on the number of warrants, rights or options actually exercised. (d) Notwithstanding anything in subsection (b) or (c) of this Section 12.04 to the contrary, with respect to any rights, warrants or options covered by subsection (b) or (c) of this Section 12.04, if such rights, warrants or options are only exercisable upon the occurrence of certain triggering events, then for purposes of this Section 12.04 such rights, warrants or options shall not be deemed issued or distributed, and any adjustment to the Conversion Price required by subsection (b) or (c) of this Section 12.04 shall not be made until such triggering events occur and such rights, warrants or options become exercisable. (e) In case the Company, after the date of this Indenture, shall issue to an Affiliate shares of its Common Stock (excluding those rights, warrants, options, shares 63 of Capital Stock or evidences of its indebtedness or assets referred to in subsection (b) or (c) to this Section 12.04) at a net price per share less than the current market price per share (as determined pursuant to subsection (h) of this Section 12.04) on the date the Company fixes the offering price of such additional shares, the Conversion Price shall be reduced immediately thereafter so that it shall equal the price determined by multiplying such Conversion Price in effect immediately prior thereto by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such additional shares plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered would purchase at the current market price and the denominator shall be the number of shares of Common Stock that would be outstanding immediately after the issuance of such additional shares. Such adjustment shall be made successively whenever such an issuance is made. This subsection (e) shall not apply to Common Stock issued to any Affiliate under a bona fide employee or director benefit plan or agreement adopted by the Company or any subsidiary thereof and approved by either the stockholders of the Company or a majority of the Company's outside directors. (f) In case the Company, after the date of this Indenture, shall, by dividend or otherwise, at any time distribute to all holders of its Common Stock cash (including any cash that is distributed as part of a distribution referred to in subsection (c) of this Section) in an aggregate amount that, together with (i) the aggregate amount of any other distributions to all holders of its Common Stock made exclusively in cash within the 12 months preceding the date fixed for determining the stockholders entitled to such distribution and in respect of which no Conversion Price adjustment pursuant to this subsection (f) has been made and (ii) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as of such date of determination, of consideration payable in respect of any tender offer by the Company or a subsidiary for all or any portion of the Common Stock consummated within 12 months preceding the date fixed for determining the stockholders entitled to such distribution and in respect of which no Conversion Price adjustment pursuant to subsection (g) of this Section has been made, exceeds 15% of the product of the current market price per share (determined as provided in subsection (h) of this Section) on the date fixed for the determination of stockholders entitled to receive such distribution times the number of shares of Common Stock outstanding on such date, the Conversion Price shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the current market price per share (determined as provided in subsection (h) of this Section) on the date fixed for such determination less the amount of cash so distributed at such time applicable to one share of Common Stock and the denominator shall be such current market price, such reduction to become effective immediately prior to the opening of business on the date after the date fixed for such determination. (g) In case a tender offer made by the Company or any subsidiary, after the date of this Indenture, for all or any portion of the Common Stock shall be consummated and 64 such tender offer shall involve an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of the last time (the "Expiration Time") that tenders may be made pursuant to such tender offer (as it may be amended) that, together with (i) aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as of the consummation of such tender offer, of other consideration paid or payable in respect of any tender offer by the Company or a subsidiary for all or any portion of the Common Stock consummated within the 12 months preceding the consummation of such tender offer and in respect of which no Conversion Price adjustment pursuant to this subsection (g) has been made and (ii) the aggregate amount of any distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the consummation of such tender offer and in respect of which no Conversion Price adjustment pursuant to subsection (f) of this Section has been made, exceeds 15% of the product of the current market price per share (determined as provided in subsection (h) of this Section) immediately prior to the Expiration Time times the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time, the Conversion Price shall be reduced by multiplying the Conversion Price in effect immediately prior to the Expiration Time by a fraction of which the numerator shall be (i) the product of the current market price per share (determined as provided in subsection (h) of this Section) immediately prior to the Expiration Time times the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time minus (ii) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders upon consummation of such tender offer (the shares accepted for payment in the tender offer being referred to as the "Purchased Shares") and the denominator shall be the product of (x) such current market price per share times (y) such number of outstanding shares at the Expiration Time minus the number of Purchased Shares, such reduction to become effective immediately prior to the opening of business on the day following the Expiration Time; provided that if the number of Purchased Shares or the aggregate consideration payable therefor have not been finally determined by such opening of business, the adjustment required by this subsection (g) shall, pending such final determination, be made based upon the preliminary announced results of such tender offer, and, after such final determination shall have been made, the adjustment required by this subsection (g) shall be made based upon the number of Purchased Shares and the aggregate consideration payable therefor as so finally determined. (h) For the purpose of any computation under subsections (b) through (g) of this Section 12.04, the current market price per share of Common Stock on any date shall be deemed to be the average of the Daily Market Prices for the shorter of (i) 30 consecutive business days ending on the last full trading day on the exchange or market referred to in determining such Daily Market Prices prior to the Time of Determination or (ii) the period commencing on the date next succeeding the first public announcement of the 65 issuance of such rights or warrants or such distribution through such last full trading day prior to the Time of Determination. (i) In any case in which this Section 12.04 shall require that an adjustment be made immediately following a record date or an effective date, the Company may elect to defer (but only until five business days following the filing by the Company with the Trustee and any Conversion Agent of the certificate required by subsection (k) of this Section 12.04) issuing to the holder of any Convertible Subordinated Note converted after such record date or effective date the shares of Common Stock issuable upon such conversion over and above the shares of Common Stock issuable upon such conversion on the basis of the Conversion Price prior to adjustment, and paying to such holder any amount of cash in lieu of a fractional share. (j) No adjustment in the Conversion Price shall be required to be made unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this subsection (j) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 12.04 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. No adjustment to the Conversion Price need be made if only the par value of the Common Stock is changed (including any change to no par value Common Stock). To the extent that the Notes become convertible into cash, no adjustment need be made thereafter as to such cash and interest will not accrue on such cash. Anything in this Section 12.04 to the contrary notwithstanding, the Company shall be entitled to make such reduction in the Conversion Price, in addition to those required by this Section 12.04, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision of shares, distribution of rights to purchase stock or securities, or distribution of securities convertible into or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable to the recipients. (k) Whenever the Conversion Price is adjusted as herein provided, (i) the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee a certificate signed by the President, any Vice President or the Treasurer of the Company setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment and the manner of computing the same, which certificate shall be conclusive evidence of the correctness of such adjustment, and (ii) a notice stating that the Conversion Price has been adjusted and setting forth the adjusted Conversion Price shall forthwith be given by the Company to the holders of Convertible Subordinated Notes in the manner provided in Section 10.02. The Company may correct any previous certificate and notice given pursuant to this subsection (k) by (i) promptly filing with the Trustee and any Conversion Agent other than the Trustee a new certificate in the form required by this subsection (k) and (ii) giving a new notice to the holders of Convertible Subordinated Notes in the form and manner required by this subsection (k). Such new certificate and notice shall state that 66 such certificate and notice are being provided to correct the previous certificate and notice. Except as otherwise provided in Section 7.01, neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to the certificate required by this subsection (k) except to exhibit the same to any holder of Convertible Subordinated Notes who requests to inspect it. The certificate required by this subsection (k) shall be filed at each office or agency maintained for the purposes of conversion of Notes pursuant to Section 2.03. (l) In the event that at any time, as a result of an adjustment made pursuant to subsection (a) of this Section 12.04, the holder of any Convertible Subordinated Note thereafter surrendered for conversion shall become entitled to receive any shares of the Company other than shares of Common Stock, thereafter the Conversion Price of such other shares so receivable upon conversion of any Note shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to Common Stock contained in this Article 12 and the other provisions of this Article 12 applicable to Common Stock shall apply to such other shares. SECTION 12.05 Notice to Holders Prior to Certain Corporate Actions. ---------------------------------------------------- In case: (a) the Company shall take any action that would require an adjustment in the Conversion Price pursuant to Section 12.04(c); or (b) the Company shall authorize the granting to the holders of its Common Stock generally of rights, warrants or options to subscribe for or purchase any shares of stock of any class or of any other rights (other than employee or director stock options); or (c) there shall be any reorganization or reclassification of the Common Stock (other than a subdivision or combination of the outstanding Common Stock and other than a change in the par value of the Common Stock), or any consolidation or merger to which the Company is a party, or any conveyance, transfer, sale or lease of the Company's properties and assets as, or substantially as, an entirety; or (d) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause to be filed with the Trustee and any Conversion Agent, and shall cause to be given to the holders of Convertible Subordinated Notes, in the manner provided in Section 10.02, as promptly as possible, but in any event at least 10 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, or distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such distribution 67 or rights are to be determined, or (ii) the date on which such reorganization, reclassification, consolidation, merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding up is expected to become effective or occur, and, if applicable, the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, transfer, sale, lease, liquidation or winding up. Failure to give such notice or any defect therein shall not affect the legality or validity of the proceedings described in subsection (a), (b), (c) or (d) of this Section 12.05. SECTION 12.06 Reservation of Shares of Common Stock. ------------------------------------- The Company shall at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued shares of Common Stock or its issued shares of Common Stock held in its treasury, or both, for the purpose of effecting conversions of Convertible Subordinated Notes, the full number of shares of Common Stock deliverable upon the conversion of all outstanding Notes not theretofore converted. Before taking any action that would cause an adjustment reducing the Conversion Price below the then par value (if any) of the shares of Common Stock deliverable upon conversion of the Convertible Subordinated Notes, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price. SECTION 12.07 Taxes upon Conversion. --------------------- The Company shall pay any and all documentary, stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock on conversions of Notes pursuant hereto; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock in a name other than that of the holder of the Convertible Subordinated Note or Convertible Subordinated Notes to be converted and no such issue or delivery shall be made unless and until the Person requesting such issue or delivery has paid to the Company the amount of any such tax or has established to the satisfaction of the Company that such tax has been paid. SECTION 12.08 Covenants as to Common Stock. ---------------------------- The Company covenants that all shares of Common Stock which may be delivered upon conversions of Convertible Subordinated Notes will upon delivery be duly and validly issued and fully paid and nonassessable, free of all Liens and charges and not subject to any preemptive rights. 68 The Company further covenants that, for so long as the Common Stock shall be listed on the New York Stock Exchange or any other national securities exchange, the Company will, if permitted by the rules of such exchange, list and keep listed all Common Stock issuable upon conversion of the Convertible Subordinated Notes. SECTION 12.09 Consolidation or Merger or Sale of Assets. ----------------------------------------- Notwithstanding any other provision herein to the contrary, in case of any consolidation or merger to which the Company is a party (other than a merger or consolidation which does not result in any reclassification, conversion, exchange or cancellation of the outstanding shares of Common Stock of the Company), or in case of any conveyance, transfer, sale or lease to another corporation of the properties and assets of the Company as, or substantially as, an entirety, the corporation formed by such consolidation, or the corporation whose securities, cash or other property will immediately after the merger or consolidation be owned, by virtue of the merger or consolidation, by the holders of Common Stock of the Company immediately prior to the merger or the corporation which shall have acquired such properties and assets of the Company, as the case may be, shall promptly execute and deliver to the Trustee a supplemental indenture providing that the holder of each Convertible Subordinated Note then outstanding shall have the right thereafter to convert such Note, during the period such Note is convertible as specified in this Article 12, into the kind and amount of securities, cash or other property receivable upon such consolidation, merger, conveyance, transfer, sale or lease by a holder of the number of shares of Common Stock into which such Note might have been converted immediately prior to such consolidation, merger, conveyance, transfer, sale or lease, assuming such holder of Common Stock (i) is not a Person with which the Company consolidated or into which the Company merged or was merged or to which such conveyance, transfer, sale or lease was made or an Affiliate of such Person and (ii) did not exercise statutory rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such consolidation, merger, conveyance, transfer, sale or lease (provided that if the kind or amount of securities, cash or other property receivable upon such consolidation, merger, conveyance, transfer, sale or lease is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purposes of this Section 12.09 the kind and amount of securities, cash or other property receivable upon such consolidation, merger, conveyance, transfer, sale or lease for each non-electing share shall be deemed to be the kind and amount so receivable per share by the holders of a plurality of the non-electing shares). Such supplemental indenture shall provide for adjustments which, for events subsequent to the effective date of such supplemental indenture, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 12 in relation to any shares of stock or other securities or property thereafter deliverable on the conversion of the Notes. The above provisions of this Section 12.09 shall similarly apply to successive consolidations, mergers, conveyances, transfers, sales or leases. 69 The Company shall give notice of the execution of such a supplemental indenture to the holders of Convertible Subordinated Notes in the manner provided in Section 10.02 within 30 days after the execution thereof; provided, however, that such notice need not be given if such information has been provided prospectively in the notice given pursuant to Section 12.05. Failure to give such notice, or any defects therein, shall not affect the legality or validity of any such supplemental indenture or any transaction contemplated in this Section 12.09. SECTION 12.10 Disclaimer of Responsibility for Certain Matters. ------------------------------------------------ Neither the Trustee nor any Conversion Agent shall at any time be under any duty or responsibility to any holder of Convertible Subordinated Notes to determine whether any facts exist which may require any adjustment of the Conversion Price, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. Neither the Trustee nor any Conversion Agent shall be accountable with respect to the listing or registration referred to in Section 12.08 or the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, cash or other property, which may at any time be issued or delivered upon the conversion of any Note; and neither the Trustee nor any Conversion Agent makes any representation with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or to make any cash payment upon the surrender of any Note for the purpose of conversion or, subject to the provisions of Section 7.01, to comply with any of the covenants of the Company contained in this Article 12. SECTION 12.11 Cancellation of Converted Notes. ------------------------------- All Notes delivered for conversion shall be delivered to the Trustee to be cancelled by or at the direction of the Trustee, which shall dispose of the same as provided in Section 2.11. SECTION 12.12 Voluntary Reduction. ------------------- The Company from time to time may reduce the Conversion Price by any amount for any period of time if the period is at least 20 days or such longer period as may be required by law and if the reduction is irrevocable during such period. 70 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed and attested, all as of the date first above written, signifying their agreements contained in this Indenture. ROHR, INC. By: /s/ A.L. Majors --------------- Name: A.L. Majors ----------- Title: Vice President and Chief Accounting ----------------------------------- Officer ------- Attest: /s/ R.W. Madsen - - --------------- Secretary THE BANK OF NEW YORK By: /s/ Robert F. McIntyre ---------------------- Name: Robert F. McIntyre ------------------ Title: Assistant Vice President ------------------------ Attest: /s/ DML - - ------- S-1 EXHIBIT A (Face of Security) No. _____________ $ ________________ CUSIP 775416 AD 2 ROHR, INC. 7 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004 promises to pay to or registered assigns, the principal sum of Dollars on May 15, 2004 Interest Payment Dates: May 15 and November 15 Regular Record Dates: May 1 and November 1 Certificate of Authentication This is one of the Convertible Subordinated Notes described in the within-mentioned Indenture. THE BANK OF NEW YORK as Trustee ROHR, INC. By By -------------------------------- --------------------------------------- Authorized Signatory President and Chief Executive Officer Dated: By --------------------------------------- Secretary (SEAL) A-1 (Back of Security) ROHR, INC. 7 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004 1. INTEREST. Rohr, Inc., a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Convertible Subordinated Note at the rate per annum shown above. The Company will pay interest semiannually on May 15 and November 15 of each year. Interest on the Convertible Subordinated Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from May 19, 1994. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Convertible Subordinated Notes (except defaulted interest) to the person in whose name each Convertible Subordinated Note is registered at the close of business on the May 1 or November 1 immediately preceding the relevant interest payment date (each a "Regular Record Date") even though Convertible Subordinated Notes are cancelled after the record date and on or before the interest payment date. Holders must surrender Convertible Subordinated Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by check payable in such money, and may mail such check to the holder's registered address. 3. PAYING AGENT AND REGISTRAR. The Bank of New York, a New York State banking corporation (together with any successor Trustee under the Indenture referred to below, the "Trustee"), will act as Paying Agent and Registrar. The Company may change the Paying Agent, Registrar or co-registrar without prior notice. Subject to certain limitations in the Indenture, the Company or any of its subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Convertible Subordinated Notes under an Indenture dated as of May 15, 1994 (the "Indenture") between the Company and the Trustee. The terms of the Convertible Subordinated Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code (S) (S) 77aaa-77bbbb) as in effect on the date of the Indenture. The Convertible Subordinated Notes are subject to, and qualified by, all such terms, certain of which are summarized hereon, and holders are referred to the Indenture and such Act for a statement of such terms. The Convertible Subordinated Notes are unsecured general obligations of the Company limited to (except as otherwise provided in the Indenture) up to $50,000,000 in aggregate principal amount, unless an election has been made as set forth in Article 2 of the Indenture to increase such aggregate principal amount by an amount not to exceed $7,500,000. Capitalized terms not defined below have the same meaning as is given to them in the Indenture. A-2 5. OPTIONAL REDEMPTION. The Company may redeem the Convertible Subordinated Notes, in whole or in part, prior to maturity at any time on or after May 15, 1998 at the following redemption prices (expressed as percentages of the principal amount), plus accrued and unpaid interest to the date fixed for redemption, if redeemed during the twelve-month period beginning May 15 of each year indicated below:
Redemption Year Price ---- ---------- 1998................................... 104.650% 1999................................... 103.875% 2000................................... 103.100% 2001................................... 102.325% 2002................................... 101.550% 2003................................... 100.775% 2004................................... 100.000%
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the date fixed for redemption to each holder of Convertible Subordinated Notes to be redeemed at his or her registered address. Convertible Subordinated Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. In the event of a redemption of less than all of the Convertible Subordinated Notes, the Convertible Subordinated Notes will be chosen for redemption by the Trustee by lot or pro rata or, if required, in compliance with the requirements of the principal national securities exchange, if any, on which the Convertible Subordinated Notes are listed. On and after the redemption date interest ceases to accrue on Convertible Subordinated Notes or portions of them called for redemption (unless the Company defaults in the payment of the redemption price). If this Convertible Subordinated Note is redeemed subsequent to a record date with respect to any interest payment date specified above and on or prior to such interest payment date, then any accrued interest will be paid to the person in whose name this Convertible Subordinated Note is registered at the close of business on such record date. 7. CHANGE OF CONTROL. Upon a Change of Control, the Company shall make a Change of Control Offer to purchase all outstanding securities at a price equal to 101% of the aggregate principal amount of the Convertible Subordinated Notes, plus accrued and unpaid interest to the date of purchase, such offer to be made as provided in the Indenture. To accept the Change of Control Offer, the holder hereof must comply with the terms thereof, including surrendering this Convertible Subordinated Note, with the "Option of Holder to Elect Purchase" portion hereof completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent, at the address specified in the notice of the Change of Control Offer mailed to holders as provided in the Indenture, prior to termination of the Change of Control Offer. A-3 8. SUBORDINATION. To the extent set forth in Article 11 of the Indenture the Convertible Subordinated Notes are subordinated to Senior Indebtedness. Senior Indebtedness shall not include (a) any indebtedness of the Company to any of its subsidiaries, (b) Capitalized Lease Obligations, (c) indebtedness or other obligations in respect of the Pooling and Servicing Agreement, (d) the Company's 9.25% Subordinated Debentures due 2017 and its 7% Convertible Subordinated Debentures due 2012, and (e) with respect to an obligation relating to the deferred purchase price of property or services, any advances, deposits, partial or progress payments, payables, unpaid wages and related employee obligations, trade accounts and accrued liabilities. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Convertible Subordinated Notes may be paid. The Company agrees, and each holder by accepting a Convertible Subordinated Note agrees, to the subordination and authorizes the Trustee to give it effect. 9. DENOMINATIONS, TRANSFER, EXCHANGE. The Convertible Subordinated Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Convertible Subordinated Notes may be registered and Convertible Subordinated Notes may be exchanged as provided in the Indenture. As a condition of transfer, the Registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Convertible Subordinated Note or portion of a Convertible Subordinated Note selected for redemption. Also, it need not exchange or register the transfer of any Convertible Subordinated Note for a period of 15 days before a selection of Convertible Subordinated Notes to be redeemed. 10. PERSONS DEEMED OWNERS. The registered holder of a Convertible Subordinated Note may be treated as its owner for all purposes. 11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or the Convertible Subordinated Notes may be amended with the consent of the holders of at least a majority in principal amount of the then outstanding Convertible Subordinated Notes and any existing default may be waived with the consent of the holders of a majority in principal amount of the then outstanding Convertible Subordinated Notes. Without the consent of any holder, the Indenture or the Convertible Subordinated Notes may be amended to: add to the covenants of the Company for the benefit of the holders of Convertible Subordinated Notes; surrender any right or power conferred upon the Company; provide for conversion rights of holders of Convertible Subordinated Notes in the event of consolidation, merger or sale of all or substantially all of the assets of the Company; evidence the succession of another person to the Company and the assumption by such successor of the covenants and obligations of the Company thereunder and in the Convertible Subordinated Notes as permitted by the Indenture; reduce the Conversion Price, provided that such reduction will not adversely affect the interest of holders of Convertible Subordinated Notes in any material respect; cure any ambiguity or correct or supplement any defective provision contained in the Indenture, or make any other change in the provisions of the Indenture which the Company and the Trustee may deem A-4 necessary or desirable and which will not adversely affect the interest of the holders of Convertible Subordinated Notes. 12. DEFAULTS AND REMEDIES. An Event of Default is: default for 30 days in payment of interest on the Convertible Subordinated Notes; default in payment of principal of or premium, if any, on the Convertible Subordinated Notes; failure by the Company to comply with certain covenants of the Indenture upon the receipt of written notice of such default as set forth in the Indenture; failure by the Company for 60 days after notice to it to comply with any of its other agreements in the Indenture or the Convertible Subordinated Notes; certain defaults under and accelerations prior to maturity of certain indebtedness; certain final judgments which remain undischarged; and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the then outstanding Convertible Subordinated Notes may declare all the Convertible Subordinated Notes to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Convertible Subordinated Notes become due and payable without further action or notice. Holders may not enforce the Indenture or the Convertible Subordinated Notes except as provided in the Indenture. The Trustee may require an indemnity satisfactory to it before it enforces the Indenture or the Convertible Subordinated Notes. Subject to certain limitations, holders of a majority in principal amount of the then outstanding Convertible Subordinated Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish quarterly compliance certificates to the Trustee. 13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its Affiliates, in their individual or any other capacities, may make or continue loans to or guaranteed by, accept deposits from and perform services for the Company or its Affiliates and may otherwise deal with the Company or its Affiliates as if it were not Trustee. 14. NO RECOURSE AGAINST OTHERS. No director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Convertible Subordinated Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each holder by accepting a Convertible Subordinated Note waives and releases all such liability. The waiver and release are part of the consideration for the Convertible Subordinated Notes. 15. AUTHENTICATION. This Convertible Subordinated Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. ABBREVIATIONS. Customary abbreviations may be used in the name of a holder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by the entireties, JT TEN = joint tenants with right of survivorship and not as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act. A-5 17. CONVERSIONS. Subject to and upon compliance with the provisions of the Indenture, the registered holder of this Note has the right, at its option, at any time or prior to the close of business on May 15, 2004 (or in case this Convertible Subordinated Note or any portion hereof shall be called for redemption prior to such date, then on or prior to the close of business on the date fixed for redemption), to convert the principal amount hereof, or any portion of such principal amount which is $1,000 or an integral multiple thereof, into that number of fully paid and nonassessable whole shares of common stock of the Company ("Common Stock") obtained by dividing the principal amount of the Convertible Subordinated Note or portion thereof to be converted by the conversion price of $10.35 per share, or the conversion price as adjusted from time to time as provided in the Indenture, upon surrender of this Convertible Subordinated Note to the Company at the office or agency maintained for such purpose in New York, New York (and at such other offices or agencies designated for such purpose by the Company), accompanied by written notice of conversion duly executed and (if the shares of Common Stock to be issued on conversion are to be issued in any name other than that of the registered holder of this Convertible Subordinated Note) by instruments of transfer, in form satisfactory to the Company, duly executed by the registered holder or its duly authorized attorney and, in case such surrender shall be made during the period starting after the close of business on the Regular Record Date immediately preceding any Interest Payment Date through the close of business on such Interest Payment Date (unless this Note or the portion thereof being converted is subject to redemption on a redemption date in that period), also accompanied by payment in funds acceptable to the Company of an amount equal to the interest otherwise payable on such Interest Payment Date on the principal amount of this Note then being converted. Subject to the aforesaid requirement for a payment in the event of conversion after the close of business on a Regular Record Date immediately preceding an Interest Payment Date, no payment or adjustment shall be made on conversion for interest accrued hereon or for dividends on Common Stock delivered on conversion. The right to convert this Note is subject to the provisions of the Indenture relating to conversion rights in the case of certain consolidations, mergers, or sales or transfers of substantially all the Company's assets. The Company shall not issue fractional shares or scrip representing fractions of shares of Common Stock upon any such conversion, but shall make an adjustment therefor in cash on the basis of the then current market value of such fractional interest as provided in the Indenture. The Company will furnish to any holder upon written request and without charge a copy of the Indenture. Requests may be made to: General Counsel, Rohr, Inc., 850 Lagoon Drive, Chula Vista, California 91910. A-6 FORM OF CONVERSION NOTICE To: ROHR, INC. The undersigned registered owner of the Convertible Subordinated Note hereby irrevocably exercises the option to convert this Convertible Subordinated Note, or portion hereof (which is $1,000 or an integral multiple thereof) below designated, into shares of Common Stock of Rohr, Inc. in accordance with the terms of the Indenture referred to in this Convertible Subordinated Note, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for fractional shares and Convertible Subordinated Notes representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If shares or any portion of this Convertible Subordinated Note not converted are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be paid by the undersigned on account of interest and taxes accompanies this Convertible Subordinated Note. Dated: _______________________________________ Fill in for registration of shares if _______________________________________ to be delivered, and Notes if to Signature(s) be issued, other than to and in the name of the registered holder Principal amount to be converted (Please Print): (if less than all): $ ,000 _______________________________________ Social Security or other Tax- payer Identification Number __________________________________ (Name) __________________________________ (Street Address) __________________________________ (City, State and zip code) Signature Guarantee: __________________________________ A-7 ASSIGNMENT FORM If you the holder want to assign this Convertible Subordinated Note, fill in the form below and have your signature guaranteed: I or we assign and transfer this Convertible Subordinated Note to ______________ ________________________________________________________________________________ (Insert assignee's social security or tax ID number) ___________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint_________________________________________________agent to transfer this Convertible Subordinated Note on the books of the Company. The agent may substitute another to act for him. Date: __________________ Your Signature:____________________________________ (Sign exactly as your name appears on the other side of this Convertible Subordinated Note) Signature Guarantee: ___________________________________________________________ A-8 OPTION OF HOLDER TO ELECT PURCHASE If you wish to have this Convertible Subordinated Note purchased by the Company pursuant to Sections 4.05 or 4.08 of the Indenture, check the Box: If you wish to have a portion of this Convertible Subordinated Note purchased by the Company pursuant to Section 4.05 or 4.08 of the Indenture, state the amount (in multiples of $1,000): $_______________ Date: ___________________ Your Signature:____________________________________ (Sign exactly as your name appears on the other side of this Convertible Subordinated Note) Signature Guarantee: __________________________________________________________ A-9 EX-10.11.6 8 6TH AMENDMENT Exhibit 10.11.6 SIXTH AMENDMENT This SIXTH AMENDMENT, dated as of September 24, 1993 among ROHR, INC. (formerly known as Rohr Industries, Inc.) (the "Borrower"), the Lenders parties to the Credit Agreement as defined and referred to below, and CITIBANK, N.A. ("Citibank"), as Agent (the "Agent") for such Lenders. PRELIMINARY STATEMENT. The Borrower has entered into a Credit Agreement dated as of April 26, 1989, as amended by the First Amendment dated as of July 21, 1989, the Second Amendment dated as of January 25, 1990, the Third Amendment dated as of April 30, 1990, the Letter Amendment dated as of October 31, 1992, and the Fifth Amendment dated as of July 9, 1993 (said Credit Agreement, as so amended, being the "Credit Agreement", the terms defined therein being used herein as therein defined unless otherwise defined herein), with the Lenders parties thereto and the Agent. The Borrower and the Lenders have agreed to amend the Credit Agreement as hereinafter set forth. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Amendment to Credit Agreement. Effective as of the date hereof ----------------------------- and subject to the conditions set forth in Section 2 below, clause (iv)(B) in the definition of "Net Income Available for Fixed Charges" in Section 1.01 of the Credit Agreement is hereby amended to read as follows: "(B) the provisions and charges, not in excess of $38 million in the aggregate, established by the Borrower in the third Fiscal Quarter of Fiscal Year 1993." SECTION 2. Conditions of Effectiveness. This Sixth Amendment shall become --------------------------- effective as of the date hereof when: (a) the Agent shall have received counterparts of this Sixth Amendment executed by the Borrower and the Majority Lenders or, as to any such Lender, advice satisfactory to the Agent that such Lender has executed counterparts of this Sixth Amendment, (b) the definition of "Consolidated Net Income Available for Fixed Charges" in each of the Note Agreements, dated as of January 15, 1990 and December 21, 1992, between the Borrower and the note holders parties thereto, each as amended through June 30, 1993, shall have been amended in substantially the same manner as set forth in Section 1 hereof, and (c) the definition of "Net Income Available for Fixed Charges" incorporated from the Credit Agreement into the Sublease Agreement, dated as of September 14, 1 1992, between the Borrower and State Street Bank and Trust Company of California, National Association, and W. Jeffrey Kramer, not in an individual capacity but solely as owner trustee under a trust for the benefit of General Electric Capital Corporation, as amended through July 9, 1993, shall have been effectively amended in substantially the same manner as set forth in Section 1 hereof. SECTION 3. Reference to and Effect on the Credit Agreement. (a) On and ----------------------------------------------- after the date hereof each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Credit Agreement, and each reference in the Notes to the "Credit Agreement", "thereunder", "thereof", "therein" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. (b) Except as specifically amended above, the Credit Agreement and the A Notes, and each B Note outstanding on the date hereof, shall remain in full force and effect and are hereby ratified and confirmed. (c) The execution, delivery and effectiveness of this Sixth Amendment shall not operate as a waiver of any right, power or remedy of any Lender or the Agent under the Credit Agreement or any of the Notes nor constitute a waiver of any of the provisions contained therein. SECTION 4. Costs and Expenses. The Borrower agrees to pay on demand all ------------------ costs and expenses of the Agent in connection with the preparation, execution and delivery of this Sixth Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent with respect hereto and with respect to advising the Agent as to its rights and responsibilities hereunder. SECTION 5. Execution in Counterparts. This Sixth Amendment may be ------------------------- executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Sixth Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Sixth Amendment. SECTION 6 Governing Law. This Sixth Amendment shall be governed by, and -------------- construed in accordance with, the laws of the State of New York. IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to be executed by their respective 2 officers thereunto duly authorized, as of the date first above written. ROHR, INC. By /s/ R. M. Miller -------------------------------- Vice President and Treasurer CITIBANK, N.A., as Agent By /s/ Barbara A. Cohen -------------------------------- Vice President BANKS ----- CITIBANK, N.A. By /s/ Barbara A. Cohen -------------------------------- Vice President BANKERS TRUST COMPANY By /s/ Edward Benedict -------------------------------- Title: Vice President THE FIRST NATIONAL BANK OF CHICAGO By /s/ Levoyd E. Robinson -------------------------------- Title: Assistant Vice President WELLS FARGO BANK, N.A. By /s/ Dan Pallaras -------------------------------- Title: Vice President 3 EX-10.11.7 9 7TH AMENDMENT SEVENTH AMENDMENT This SEVENTH AMENDMENT, dated as of May 10, 1994 among ROHR, INC. (formerly known as Rohr Industries, Inc.) (the "Borrower"), the financial institutions listed on the signature pages hereof under the heading "Lenders" (collectively the "Lenders"), BANKERS TRUST COMPANY, as "Assignor" under, and as defined in, Section 3 hereof, and CITIBANK, N.A. ("Citibank"), as resigning Agent for such Lenders pursuant to Section 2 below, and CITICORP USA, INC., a Delaware corporation ("CUSA"), as successor Agent for the Lenders from time to time pursuant to said Section 2. PRELIMINARY STATEMENT. The Borrower has entered into a Credit Agreement dated as of April 26, 1989, as amended by the First Amendment dated as of July 21, 1989, the Second Amendment dated as of January 25, 1990, the Third Amendment dated as of April 30, 1990, the Letter Amendment dated as of October 31, 1992, the Fifth Amendment dated as of July 9, 1993, and the Sixth Amendment dated as of September 24, 1993 (said Credit Agreement, as so amended, being the "Credit Agreement", the terms defined therein being used herein as therein defined unless otherwise defined herein), with the Lenders party thereto and the Agent. The Borrower and the Lenders have agreed to amend and modify the Credit Agreement as hereinafter set forth. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Amendment to Credit Agreement. The Credit Agreement is, ----------------------------- effective as of the date hereof and subject to the satisfaction of the conditions set forth in Section 4 below, hereby amended as follows: (a) Section 1.01 is hereby amended by adding the following definitions in appropriate alphabetical order: "'Affiliate' means, as to any Person, any other Person that, --------- directly or indirectly, controls, is controlled by or is under common control with such Person." "'Agent's Account' means the account of the Agent maintained by --------------- the Agent with Citibank at its office at 399 Park Avenue, New York, New York 10043, Account No. 36852248, Attention: Rohr, Inc. Account." "'Agent's Syndication Account' means the account of the Agent --------------------------- maintained by the Agent with Citibank at its office at 399 Park Avenue, New York, 2 New York 10043, Account No. 36852248, Attention: Rohr, Inc. Account." "'Borrower's Account' means the account of the Borrower maintained ------------------ by the Borrower with Citibank at its offices at 399 Park Avenue, New York, New York 10043, Account No. 38007777." "'CUSA' means Citicorp USA, Inc., a Delaware corporation." ---- "'Debt Date' means the date of issuance and sale by the Borrower --------- of the Senior Notes and the Subordinated Debt." "'Environmental Action' means any administrative, regulatory or -------------------- judicial action, suit, demand, demand letter, claim, notice of non- compliance or violation, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or any third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief." "'Environmental Permit' means any permit, approval, identification -------------------- number, license or other authorization required under any applicable Environmental Law." "'Gross Operating Income' means, for any period, sales less costs ---------------------- ---- and expenses attributable to sales (other than amortization and depreciation), in each case as reflected on the consolidated statements of operations and cash flows of the Borrower and the Subsidiaries for such period." "'Hazardous Materials' means petroleum and petroleum products, by ------------------- products or breakdown products, radioactive materials, asbestos- containing materials, radon gas and any other chemicals, materials or substances designated, classified or regulated as being 'hazardous' or 'toxic', or words of similar import, under any federal, state, local or foreign statute, law, ordinance, rule, 3 regulation, code, order, judgment, decree or judicial or agency interpretation, policy or guidance." "'Insufficiency' means, with respect to any Plan, the amount, if ------------- any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA." "'Material Adverse Effect' means a material adverse effect of (a) ----------------------- the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Agent or any Lender under this Agreement or any Note or (c) the ability of the Borrower to perform its obligations under this Agreement or any Note." "'Senior Notes' means promissory notes of the Borrower that are ------------ (i) publicly issued after April 1, 1994 and (ii) subject to such terms and provisions as shall be (a) acceptable to the Majority Lenders and the Agent and (b) substantially similar to those terms and provisions described in the draft prospectus of April 19, 1994 filed by the Borrower with the Securities and Exchange Commission in connection with the offering of the Borrower's Senior Notes due 2003." "'Seventh Amendment' means the Seventh Amendment, dated as of May ----------------- 10, 1994 among the Borrower, the Lenders, Bankers Trust Company (as an 'Assignor' thereunder) and the Agent (including Citibank as resigning Agent and CUSA as successor Agent)." (b) The definitions of "Commitment", "Eligible Assignee", "Environmental Laws", "ERISA Event", "Lenders", "Permitted Liens", "Repayment Date", "Subordinated Debt", and "Termination Date" in Section 1.01 are hereby amended to read, respectively, as follows: "'Commitment' means, with respect to any Lender at any time, the ---------- amount set forth opposite such Lender's name on the signature pages of the Seventh Amendment or, if such Lender has entered into one or more Assignments and Acceptances after the date of the Seventh Amendment, set forth for such Lender in the Register maintained by the Agent pursuant to 4 Section 8.07(c) as such Lender's 'Commitment', as such amount may be reduced at or prior to such time pursuant to Section 2.05." "'Eligible Assignee' means (a) any Affiliate of any Lender, (b) ----------------- any Federal Reserve Bank (other than with respect to any assignment of a Commitment) or (c) any Person approved by the Agent and the Borrower, such approval not to be unreasonably withheld; provided, that in the -------- case of clauses (a) and (c) of this definition, such Affiliate or Person is a financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business; and provided, further, however, that an -------- ------- ------- Affiliate of the Borrower shall not qualify as an Eligible Assignee under clause (c) of this definition." "'Environmental Law' means any federal, state, local or foreign ----------------- statute, law, ordinance, rule, regulation, code, order, judgment or decree or written judicial or agency interpretation, policy or guidance having the force of law relating to the environment, health, safety or Hazardous Materials." "'ERISA Event' means (i) the occurrence of a reportable event, ----------- within the meaning of Section 4043(b) of ERISA (other than an event described in Section 4043(b)(3)), unless the 30-day notice requirement with respect thereto was waived by the PBGC as of the date of the Seventh Amendment, (ii) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA), (iii) the cessation of operations at a facility in the circumstances described in Section 4062(e) of ERISA, (iv) the withdrawal by the Borrower or an ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA, (v) the failure by the Borrower or any ERISA Affiliate to make a payment to a Plan required under Section 302(f)(1) of ERISA, which Section imposes a lien for failure to make required payments, (vi) the adoption of an amendment to a Plan requiring the provision of security to such Plan, pursuant to 5 Section 307 of ERISA, or (vii) the institution by the PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or the occurrence of any event or condition which would constitute grounds under Section 4042(a)(i) and (ii) of ERISA for the termination of, or the appointment of a trustee to administer, a Plan." "'Lenders' means (i) the financial institutions listed on the ------- signature pages of the Seventh Amendment under the heading 'Lenders' and (ii) each Eligible Assignee that shall become a party hereto pursuant to Section 8.07." "'Permitted Liens' means such of the following as to which no --------------- enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced (except as permitted below): [clauses (i) through (viii) remain unchanged] . . . "(ix) pledges or deposits of cash or Permitted Investments to secure obligations in respect of letters of credit issued in connection with any workers' compensation or self-insurance or reinsurance program established by the Borrower or any of its Subsidiaries;" [clauses (x) and (xi) remain unchanged] "'Repayment Date' means the date on which any Debt (other than (i) -------------- Debt resulting from Advances, (ii) Debt owed to any Subsidiary of the Borrower, and (iii) Debt described in clause (vi) of the definition of "Debt" contained in Section 1.01) of the Borrower is prepaid, redeemed, purchased, defeased or otherwise satisfied prior to the scheduled repayment date or stated maturity thereof; provided, however, that the -------- ------- date on which any of the following occurs shall not be a Repayment Date: (a) the satisfaction of Debt through its surrender to the Borrower in payment for stock issuable upon exercise of a warrant issued pursuant to the Warrant Agreement dated as of July 31, 1993 between the Borrower and the purchasers identified therein, (b) the conversion of the 6 Borrower's 7% Convertible Subordinated Debentures due 2012 and 7 3/4% Convertible Subordinated Notes due 2004 into common stock of the Borrower in accordance with their respective terms, and (c) prepayments, redemptions, purchases, defeasances or other satisfactions of Debt (other than Debt evidenced by the Borrower's 9.35% and 9.33% senior notes due 2000 and 2002, respectively, 9.25% subordinated notes due 2017, 7% convertible subordinated notes due 2012, Senior Notes and Subordinated Debt) aggregating not more than $500,000 in any Fiscal Year, and provided, further, that it is understood and agreed that the -------- ------- scheduled repayment date or stated maturity of the industrial development bonds (in an aggregate principal amount up to $16,500,000) related to the Borrower's San Marcos, Texas facility shall include the date on which such bonds shall be prepaid, redeemed or purchased in connection with the expiration of the letter of credit related thereto or upon tender by the holders thereof in accordance with the terms of the indenture governing such bonds." "'Subordinated Debt' means Debt of the Borrower that is (i) ----------------- publicly issued after April 1, 1994, (ii) convertible into shares of common stock of the Borrower, and (iii) subject to such other terms and provisions as shall be (A) acceptable to the Majority Lenders and the Agent and (B) substantially similar to those terms and provisions described in the draft prospectus of April 19, 1994 filed by the Borrower with the Securities and Exchange Commission in connection with the offering of the Borrower's Convertible Subordinated Notes due 2004." "'Termination Date' means April 25, 1997 or the earlier date of ---------------- termination in whole of the Commitments pursuant to Section 2.05 or 6.01." (c) Section 1.01 is hereby further amended by deleting the definitions of "Consolidated Cash Flow", "Liquidity Fund", "Liquidity Fund Amount", "P Commitment", "P Commitment Increase Date", "P Commitment Reduction Date", "S Commitment" and "Subordinated Debt Date". (d) Section 1.01 is hereby further amended by amending in their entirety the last sentence of the definition of the term "Adjusted Consolidated Tangible Net Worth" and the proviso to the definition of the ------- term "Tangible Net Worth" to read as follows, respectively: 7 "Notwithstanding the foregoing, (A) net deferred income tax assets recorded in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ('SFAS 109') shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition) and shall be calculated without regard to any valuation allowance with respect to such net deferred tax asset recorded by the Borrower in accordance with SFAS 109, and (B) any asset established pursuant to Statement of Financial Accounting Standards No. 87, Employers' Accounting for Pensions ('SFAS 87') which corresponds to an additional minimum pension liability recorded pursuant to SFAS 87 and any prepaid pension asset which arises from amounts funded by the Borrower in accordance with Internal Revenue Service regulations in excess of amounts expensed in accordance with SFAS 87 shall be treated as a tangible asset (and not deducted pursuant to clause (i) or (iv) of this definition)." "; provided, however, that in calculating Tangible Net Worth (A) a net -------- ------- deferred tax asset recorded by the Borrower in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ('SFAS No. 109'), shall be treated as a tangible asset and shall be calculated without regard to any valuation allowance with respect to such net deferred tax asset recorded by the Borrower in accordance with SFAS No. 109 and (B) any asset established pursuant to Statement of Financial Accounting Standards No. 87, Employers' Accounting for Pensions ('SFAS No. 87'), which corresponds to an additional minimum pension liability recorded by the Borrower in accordance with SFAS No. 87 and any prepaid pension asset which arises from amounts funded by the Borrower in accordance with Internal Revenue Service regulations in excess of amounts expensed in accordance with SFAS 87, shall be treated as a tangible asset." (e) Section 2.01 is hereby amended in its entirety to read as follows: "SECTION 2.01. The A Advances. Each Lender severally agrees, on -------------- the terms and conditions hereinafter set forth, to make A Advances to the Borrower from time to time on any Business Day during the period from the date hereof until the Termination Date in an aggregate amount not to exceed at any time outstanding (i) such Lender's Commitment on such Business Day less (ii) the aggregate amount of such ---- 8 Lender's Participation in the then outstanding aggregate amount of all Letter of Credit Liability related to all Letters of Credit; provided -------- that the aggregate amount of the Commitments of the Lenders shall be deemed used from time to time to the extent of the aggregate amount of the B Advances then outstanding and such deemed use of the aggregate amount of the Commitments shall be applied to the Lenders ratably according to their respective Commitments (such deemed use of the aggregate amount of the Commitments being a 'B Reduction'). Each A Borrowing shall be in an aggregate amount of $4,000,000 or an integral multiple of $1,000,000 in excess thereof and shall, subject to the provisions of Section 2.02(b), consist of A Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender's Commitment in effect from time to time, the Borrower may borrow under this Section 2.01, repay pursuant to Section 2.06 or prepay pursuant to Section 2.09 and reborrow under this Section 2.01." (f) Section 2.02(a) is hereby amended by amending: (i) the first sentence thereof by replacing the time "11:00 A.M. (New York City time)" with the time "12:00 Noon (New York City time)" and the words "the third Business Day prior to the date of the proposed A Borrowing" with the words "the first Business Day prior to the date of the proposed A Borrowing if it is comprised of Base Rate Advances, or the third Business Day prior to the date of the proposed A Borrowing if it is comprised of A Advances of any other Type", and (ii) the fourth and fifth sentences thereof to read as follows: "Each Lender shall, before 1:00 P.M. (New York City time) on the date of such A Borrowing, make available for the account of its Applicable Lending Office to the Agent at the Agent's Syndication Account, in same day funds, such Lender's ratable portion of such A Borrowing. After the Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Agent will make such funds available to the Borrower by crediting the Borrower's Account; provided, however, that the -------- ------- Agent shall first make a portion of such funds equal to any drawing 9 under any Letter of Credit which has remained unreimbursed for at least two Business Days available to Citibank, as issuing bank of such Letter of Credit, for reimbursement of such drawing as contemplated by Section 2.14(c)." (g) Section 2.03(a)(v) is hereby amended by adding to the end thereof the following sentence: "The failure of any Lender to make the B Advance to be made by it, if any, as part of any B Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make the B Advance to be made by such other Lender, if any, on the date of such B Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the B Advance, if any, to be made by such other Lender on the date of any B Borrowing." (h) Section 2.05 is hereby amended in its entirety to read as follows: "SECTION 2.05. Reduction of the Commitments. ---------------------------- (a) Automatic Reduction. The Commitment of each Lender ------------------- (determined without giving effect to any B Reduction on such day) shall automatically reduce on October 25, 1995, April 25, 1996 and October 25, 1996 (each such day being an 'Amortization Date'), to the amount obtained by multiplying the percentage set opposite the applicable Amortization Date below times the Commitment of such Lender on the date of the Seventh Amendment (determined after giving effect to any subsequent Assignment and Acceptance but without giving effect to any B Reduction on such day):
Amortization Date Percentage ----------------- ---------- October 25, 1995 90.90909% April 25, 1996 81.81818% October 25, 1996 72.72727%
provided, however, that on the Termination Date the Commitment of each -------- ------- Lender shall be zero. (b) Optional Reduction. The Borrower shall have the right, upon ------------------ at least two Business Days' 10 notice to the Agent, to terminate in whole or reduce ratably in part the unused portions of the respective Commitments of the Lenders; provided that each partial reduction shall be in the aggregate amount -------- of $4,000,000 or an integral multiple of $1,000,000 in excess thereof. (c) Mandatory Reduction. On each Repayment Date, the Commitment ------------------- of each Lender shall automatically reduce by such Lender's ratable share of the Pro Rata Amount in respect of such Repayment Date." (i) Section 2.10 is hereby amended by deleting subsections (b), (e), (f) and (g) thereof, and by amending subsection (d) thereof, to read as follows: "(d) On the Debt Date, the Borrower shall prepay (ratably, if in part), out of the net cash proceeds referred to below, the outstanding aggregate principal amount of the Advances in an amount equal to the lesser of (i) the aggregate principal amount of the Advances then outstanding and (ii) the net cash proceeds (net of all related taxes, costs and expenses) of the issuance of the Senior Notes and the Subordinated Debt, together with accrued interest to the date of such prepayment on the principal amount prepaid. The Agent shall immediately distribute such prepayment in accordance with Section 2.12. In the case of any such prepayment of any Adjusted CD Rate Advance or Eurodollar Rate Advance, the Borrower shall pay any additional amount for which the Borrower shall be obligated pursuant to Section 8.04(b) not later than three Business Days after the Borrower receives written notice from the Agent or the applicable Lenders of such additional amount." (j) Section 2.12(a) is hereby amended by amending the first sentence thereof to read as follows: "The Borrower shall make each payment hereunder and under the Notes, irrespective of and without condition or deduction for any counterclaim, defense, recoupment or setoff, not later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars to the Agent at the Agent's Account in same day funds." (k) Section 2.14(a) is hereby amended by (i) increasing the figure "$8,500,000" contained therein as the Letter of Credit Subfacility to the figure "$30,000,000" and (ii) replacing the parenthetical "(except itself)" contained in the third sentence thereof 11 with the parenthetical "(except itself but including CUSA)". (l) Section 2.14(b)(i) is hereby amended by amending the second sentence thereof by adding to the end thereof a new clause (F) to read as follows: "and (F) purpose for such Letter of Credit, which purpose may only be to support the Borrower's or any Subsidiary's industrial revenue or similar bonds, or the Borrower's or any Subsidiary's obligations in connection with any workers' compensation or self-insurance or reinsurance program, or the Borrower's or any Subsidiary's trade obligations incurred in the ordinary course of its business." (m) Section 2.14(c) is hereby amended by: (i) amending the first sentence thereof to add after the words "which shall be a Base Rate Advance" the parenthetical "(or, if the Borrower shall request an A Borrowing comprised of A Advances of any other Type on any day after the second Business Day following such drawing, on which day any amount of such drawing shall remain unreimbursed, an Advance of the Type so requested by the Borrower)", (ii) amending the third and fourth sentences thereof to read as follows: "Each such Lender shall, on the first Business Day following such notification, make an A Advance, which shall be a Base Rate Advance, in an amount equal to the amount of its Participation in such drawing for application to reimburse Citibank (but without any requirement for compliance with the provisions of Sections 2.01 and 2.02 or the conditions set forth in Article III) and ---- ---- ------- --- shall make available for the account of its Applicable Lending Office to the Agent for the account of Citibank, by deposit to the Agent's Account in same day funds, the amount of such A Advance. If and to the extent that any such Lender shall not have so made the amount of such A Advance available to the Agent, such Lender and the Borrower severally agree to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by Citibank until the date such amount 12 is paid to the Agent, at (i) in the case of the Borrower, the Base Rate (or, if the Borrower shall request an A Borrowing comprised of A Advances of a Type other than Base Rate Advances on any day after the second Business Day following the applicable drawing, on which day any amount of such drawing shall remain unreimbursed, the Eurodollar Rate or Adjusted CD Rate, as applicable to such A Advances), and (ii) in the case of such Lender, the Federal Funds Rate." and (iii) amending the last sentence thereof to read as follows: "For purposes of Sections 2.14(a) and 3.03, until any A Advance made by Citibank under this subsection (c) is repaid from the A Advances made by the other Lenders under this subsection (c), such A Advance made by Citibank shall not be considered outstanding as an A Advance but rather outstanding solely as Letter of Credit Liability." (n) Section 2.16 is hereby amended in its entirety to read as follows: "SECTION 2.16. Use of Proceeds. The proceeds of the Advances --------------- shall be available (and the Borrower agrees that it shall use such proceeds) solely to provide working capital for the Borrower (it being understood that such working capital shall not include funds for repayment, prepayment, redemption, purchase, defeasance or other satisfaction of Debt or for providing cash or other collateral to secure any Debt)." (o) Section 3.03 is hereby amended in its entirety to read as follows: "SECTION 3.03. Conditions Precedent to Certain A Borrowings and ------------------------------------------------ each Letter of Credit. The obligation of the Lenders to make that --------------------- portion of the A Advances on the occasion of any A Borrowing which would be used to repay any B Advances or would otherwise cause the sum of the aggregate outstanding amount of A Advances owing to the Lenders plus the then outstanding aggregate amount of all Letter of Credit ---- Liability related to all Letters of Credit, to increase over the sum of such aggregate outstanding amount of A Advances plus outstanding ---- 13 aggregate amount of Letter of Credit Liability immediately prior to the making of such A Advances on the occasion of such A Borrowing, and the right of the Borrower to request, and the obligation of Citibank in respect of, the Issuance of each Letter of Credit which Issuance would cause the sum of the aggregate outstanding amount of all Letter of Credit Liability related to all Letters of Credit plus the then ---- outstanding aggregate amount of all A Advances owing to the Lenders, to increase over the sum of such aggregate outstanding amount of Letter of Credit Liability plus outstanding aggregate amount of A Advances ---- immediately prior to the Issuance of such Letter of Credit, shall in each such case be subject to the further conditions precedent that on the date of such A Borrowing or Issuance the following statements shall be true (and the acceptance by the Borrower of the proceeds of such A Borrowing, and the Issuance of such Letter of Credit, shall constitute a representation and warranty made by the Borrower that on the date of such A Borrowing or Issuance such statements are true): (i) the representations and warranties contained in subsections (e), (f) and (j) of Section 4.01 are correct on and as of the date of such A Borrowing or Issuance, before and after giving effect to such A Borrowing or Issuance and to the application of the proceeds therefrom, as though made on and as of such date, and (ii) no event has occurred and is continuing, or would result from such A Borrowing or Issuance or from the application of the proceeds therefrom, which would constitute an Event of Default but for the requirement that notice be given or time elapse or both." (p) Article III is hereby amended by renumbering Sections 3.04 and 3.05 as Sections 3.05 and 3.06, respectively, and by adding to Article III a new Section 3.04 to read as follows: "SECTION 3.04. Conditions Precedent to certain Letters of Credit. ------------------------------------------------- The right of the Borrower to request, and the obligation of Citibank in respect of, the Issuance of each Letter of Credit that supports any Debt described in clause (i) or (ii) of the definition of 'Debt' contained in Section 1.01 (subject to the requirements of clause (F) of Section 2.14(b)(i)) shall be subject to the further conditions precedent that on the date of such Issuance this Agreement shall have been amended, and the Agent shall have received such documents, as the 14 Agent shall reasonably request in order to secure and otherwise protect the obligations of the Borrower to Citibank and the Lenders in respect of such Letter of Credit in the same manner as such Debt is secured and otherwise protected." (q) Section 4.01(e) is hereby amended in its entirety to read as follows: "(e) The Consolidated balance sheet of the Borrower and the Subsidiaries as at July 31, 1993 and the related Consolidated statements of operations, shareholders' equity and cash flows of the Borrower and the Subsidiaries for the Fiscal Year then ended, accompanied by an opinion of Deloitte & Touche, independent public accountants, and the Consolidated balance sheet of the Borrower and the Subsidiaries as at January 30, 1994, and the related Consolidated statements of operations, shareholders' equity and cash flows of the Borrower and the Subsidiaries for the six months then ended, duly certified by the chief financial officer of the Borrower, copies of which have been furnished to each Lender, fairly present, subject, in the case of said balance sheet as at January 30, 1994, and said statements of operations, shareholders' equity and cash flows for the six months then ended, to year-end audit adjustments, the Consolidated financial condition of the Borrower and the Subsidiaries as at such dates and the Consolidated results of the operations and cash flows of the Borrower and the Subsidiaries for the periods ended on such dates, all in accordance with generally accepted accounting principles applied on a consistent basis; and since July 31, 1993, there has been no material adverse change in the financial condition or operations of the Borrower and the Subsidiaries taken as a whole. The Lenders agree that charges in the third Fiscal Quarter of Fiscal Year 1994 to shareholders' equity in connection with increases in the underfunded status of the Borrower's pension plans, and to income in connection with the expensing of unamortized pension benefit past service costs, each as described in the Borrower's Quarterly Report on Form 10-Q for the Fiscal Quarter ended January 30, 1994, will not constitute such a material adverse change." (r) Section 4.01 is hereby amended by amending subsection (k) to read as follows: 15 "(k) Set forth in Schedule V is a complete and accurate list, as of the date of the Seventh Amendment, of all the outstanding Debt of the Borrower and its Subsidiaries (other than Debt owed by the Borrower to any of its Subsidiaries or by any of its Subsidiaries to the Borrower or any other of its Subsidiaries and Debt described in clause (vi) of the definition of 'Debt' contained in Section 1.01) and the instruments and agreements, and amendments, supplements and other modifications thereto, evidencing such Debt." and by adding to Section 4.01 a new subsection (l) to read as follows: "(l) The obligations of the Borrower under this Agreement and the Notes constitute, and are entitled to the benefits of, 'Senior Indebtedness' and 'Designated Senior Indebtedness' as defined in, and under, the indenture related to the Subordinated Debt." (s) Section 5.01(c) is hereby amended in its entirety to read as follows: "(c) Maintenance of Consolidated Tangible Net Worth. Maintain ---------------------------------------------- for each day (or, for any day on which all of the long-term public senior debt securities of the Borrower are rated at least BBB- by Standard & Poor's Corporation and Baa3 by Moody's Investors Service, Inc., for the last day of the Fiscal Quarter in which such day occurs) a Consolidated Tangible Net Worth of not less than $125,000,000 to and including July 31, 1994, and thereafter the sum of (i) $125,000,000 plus (ii) 50% of the sum of the positive Consolidated Net Income, if ---- any, during the period from August 1, 1994 to such day (or, for any day on which all of the long-term public senior debt securities of the Borrower have such ratings, to the last day of such Fiscal Quarter), plus (iii) the aggregate amount of all capital contributions ---- (including, without limitation, all amounts attributable to the conversion of Debt of the Borrower to equity of the Borrower) received by the Borrower or any Subsidiary (other than such contributions originally made by the Borrower or any of its Subsidiaries) in cash, in other property, or by conversion of Debt of the Borrower at any time after the date of the Seventh Amendment." 16 (t) Section 5.01(d) is hereby amended in its entirety to read as follows: "(d) Maintenance of Ratio of Net Income Available for Fixed ------------------------------------------------------ Charges to Fixed Charges. Maintain for each day (or, for any day on ------------------------ which all of the long-term public senior debt securities of the Borrower are rated at least BBB- by Standard & Poor's Corporation and Baa3 by Moody's Investors Service, Inc., for the last day of the Fiscal Quarter in which such day occurs) a ratio of Consolidated Net Income Available for Fixed Charges for the period of 365 consecutive days (or 366 consecutive days for any such period that includes February 29) ending on such day (or, for any day on which all of the long-term public senior debt securities of the Borrower have such ratings, ending on the last day of the Fiscal Quarter in which such day occurs), to Consolidated Fixed Charges for such period of not less than the ratio set forth opposite the period set forth below in which such day occurs:
Period Ratio ------ ----- From the date of the 1.40 to 1 Seventh Amendment to July 31, 1994 From August 1, 1994 to 1.55 to 1 July 31, 1995 From August 1, 1995 to 1.90 to 1 July 31, 1996 From August 1, 1996 to 2.00 to 1" the Termination Date
(u) Section 5.01 is hereby amended by deleting the existing subsection (e) thereof and by adding thereto a new subsection (e) to read as follows: "(e) Compliance with Environmental Laws. Comply, cause each of ---------------------------------- its Subsidiaries to comply and use its best efforts to cause all other Persons occupying its properties to comply, with all Environmental Laws and Environmental Permits applicable to its operations and properties; obtain and renew all Environmental Permits necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any 17 investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all applicable Environmental Law; in each case unless ------ the failure to so act would not be reasonably likely to have a Material Adverse Effect; provided, however, that neither the Borrower nor any of -------- ------- its Subsidiaries shall be required to undertake any such investigation, study, sampling and testing, cleanup, removal, remedial or other action to the extent that its obligations to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances." (v) Section 5.02(a) is hereby amended in its entirety to read as follows: "(a) Debt Ratio. Permit the Debt Ratio for any day (or, for any ---------- day on which all of the long-term public senior debt securities of the Borrower are rated at least BBB- by Standard & Poor's Corporation and Baa3 by Moody's Investors Service, Inc., for the last day of the Fiscal Quarter in which such day occurs) to be greater than the ratio set forth opposite the period set forth below in which such day occurs:
Period Ratio ------ ----- From the date of the 5.60 to 1 Seventh Amendment to July 31, 1994 From August 1, 1994 to 5.00 to 1 July 31, 1995 From August 1, 1995 to 4.10 to 1 July 31, 1996 From August 1, 1996 to 3.20 to 1" the Termination Date
(w) Section 5.02(d) is hereby amended by adding to the end thereof a new clause (iii) to read as follows: "and (iii) all or substantially all of the assets of Rohr Aero Services, Inc. and Rohr Aero Services 18 Europe may be sold (whether in one transaction or in a series of transactions and, in the case of the assets of Rohr Aero Services Europe, whether indirectly through the sale of its stock or directly) if such sales comply with the requirements of Section 5.02(j)." (x) Section 5.02(e) is hereby amended by deleting in its entirety paragraph (v) of the except clause thereof, and Section 5.02(h) is hereby ------ amended by deleting in its entirety clause (iii) thereof. (y) Section 5.02(i) is hereby amended by adding to the end thereof under the words "Fiscal Quarter" and "Amount", respectively, the following: -------------- ------ "Each Fiscal Quarter 1997 $7,500,000" (z) Section 5.02(j) is hereby amended by: (i) replacing the term "Consolidated Cash Flow" contained in Section 5.02(j) with the term "Gross Operating Income"; and (ii) amending Section 5.02(j)(iii) to read as follows: "(iii) in the good faith opinion of the board of directors of the Borrower (or a committee of such board to whom such matter has been properly delegated), the sale, lease, transfer or other disposition is for fair market value and is in the best interests of the Borrower; and". (aa) Section 5.02 is hereby amended by adding to the end thereof a new subsection (k) to read as follows: "(k) Incurrence of Debt. Incur, or permit any Subsidiary to ------------------ incur, any Debt other than: (i) Debt incurred from time to time hereunder; (ii) Debt evidenced by the Senior Notes in an aggregate principal amount not to exceed $100,000,000, and Subordinated Debt in an aggregate principal amount not to exceed $57,500,000; (iii) Debt in an aggregate principal amount not to exceed $10,000,000 at any time outstanding; provided, however, that no -------- ------- more than $5,000,000 of such amount may be Debt of Subsidiaries at any time; 19 (iv) Debt of Subsidiaries under revolving credit facilities, so long as the aggregate amount of all such Debt outstanding at any time shall not exceed $5,000,000; (v) Debt of any Subsidiary to the Borrower or any of its other Subsidiaries or of the Borrower to any of its Subsidiaries, provided that in each case such Debt was incurred in the ordinary -------- course of business; (vi) any refinancing, renewal, extension or refunding of outstanding Debt not resulting in an increase in the principal amount thereof, provided that such Debt is pari passu in right of -------- ---- ----- payment to the Debt refinanced, renewed, extended or refunded; (vii) Debt described in clause (vi) of the definition of 'Debt' contained in Section 1.01; (viii) Debt in an aggregate principal amount not to exceed $16,500,000 incurred in connection with the sale or resale of industrial development bonds relating to the Borrower's San Marcos, Texas facility, provided, however, that such Debt may be -------- ------- incurred only if the Borrower previously prepaid, redeemed or purchased $16,500,000 principal amount of such bonds in connection with the expiration of the letter of credit related thereto; and (ix) Debt incurred in connection with the resale of the industrial development bonds referred to in clause (viii) above that were prepaid or purchased by the Borrower upon tender by the holders thereof in accordance with the terms of the indenture governing such bonds; provided, that in the case of clauses (ii) through (vii) above the Debt -------- referred to in such clauses shall be unsecured." (bb) Section 5.03 is hereby amended by deleting subsection (m) thereof. (cc) Section 6.01 is hereby amended by amending subsection (g) to read as follows: 20 "(g) There shall occur any 'Change of Control' as defined in the indenture relating to the Senior Notes or the Subordinated Debt; or" and by adding to Section 6.01 new subsections (h), (i), (j) and (k) to read as follows: "(h) any non-monetary judgment or order shall be rendered against the Borrower or any of its Subsidiaries that is reasonably likely to have a Material Adverse Effect, and there shall be any period of 45 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or "(i) any ERISA Event shall have occurred with respect to a Plan of the Borrower or any of its ERISA Affiliates and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans of the the Borrower and its ERISA Affiliates with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Borrower and its ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or "(j) the Borrower or any of its ERISA Affiliates shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Borrower and its ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification, exceeds $5,000,000 or requires payments exceeding $2,500,000 per annum; or "(k) the Borrower or any of its ERISA Affiliates shall have been notified by the sponsor of a Multiemployer Plan of the Borrower or any of its ERISA Affiliates that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganization or termination the aggregate annual contributions of the Borrower and its ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan 21 year in which such reorganization or termination occurs by an amount exceeding $5,000,000;". (dd) Section 8.07 is hereby amended by: (i) replacing the words "P Commitment and S Commitment" each place such words appear therein with the term "Commitment"; (ii) amending the proviso to the first sentence of subsection (a) ------- thereof by adding to the end thereof new clauses (vi) and (vii) thereof to read as follows: ", (vi) any Lender assigning all of its obligations shall not be released from its obligations under Section 7.05 to the extent relating to the period during which it was a Lender and (vii) in the case of any assignee organized under the laws of a jurisdiction outside the United States, such assignee shall have delivered to the Agent the forms prescribed by the Internal Revenue Service of the United States certifying as to such assignee's status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to such assignee under this Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty"; (iii) amending clause (y) of the second sentence of subsection (a) thereof by adding after the words "an assigning Lender's rights and obligations" in the parenthetical contained therein the parenthetical "(other than its obligations under Section 7.05 to the extent relating to the period during which it was a Lender)"; and (iv) amending the first sentence of subsection (d) thereof by adding after the words "representing that it is an Eligible Assignee" the words ", and, if such assignee is organized under the laws of a jurisdiction outside the United States, the forms referred to in clause (vii) of the proviso to Section 8.07(a),". ------- (ee) Article VIII is hereby amended by adding thereto new Sections 8.10, 8.11 and 8.12 to read as follows: 22 "SECTION 8.10. Indemnification. (a) The Borrower agrees to --------------- indemnify and hold harmless the Agent and each Lender and each of their Affiliates and their officers, directors, employees and agents (each, an 'Indemnified Party') from and against any and all claims, damages, ----------------- losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of, or in connection with the preparation for a defense of, any investigation, litigation or proceeding arising out of, related to or in connection with (i) any credit extended or used under the Notes or this Agreement, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances or (ii) the actual or alleged presence of Hazardous Materials on any property of the Borrower or any of its Subsidiaries or any Environmental Action relating in any way to the Borrower or any of its Subsidiaries, in each case whether or not such investigation, litigation or proceeding is brought by the Borrower or its directors or shareholders (other than in the case of any litigation for breach of this Agreement by any Indemnified Party which litigation results in a final, non-appealable judgment against such Indemnified Party) or its creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated; provided, -------- however, that no Indemnified Party shall be entitled to be indemnified ------- or held harmless hereunder to the extent such claim, damage, loss, liability or expense resulted from (x) a dispute solely between or among the Agent, one or more Lenders, any other Indemnified Party and/or one or more holders of participations herein, or (y) such Indemnified Party's gross negligence or willful misconduct. (b) Without prejudice to the survival of any other agreement of the Borrower hereunder, the obligations of the Borrower contained in subsection (a) of this Section 8.10 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes. "SECTION 8.11. Jurisdiction, Etc. (a) The Borrower hereby ------------------ irrevocably and unconditionally submits to the nonexclusive jurisdiction of any 23 New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the Notes, or for recognition or enforcement of any judgment, and the Borrower hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. The Borrower hereby also consents to the service of copies of the summons and complaint and any other process which may be served in any such action or proceeding by the mailing of copies of such summons, complaint and other process to the Borrower at its address specified in Section 8.02. The Borrower agrees that a final, non-appealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Borrower, any Lender or the Agent may otherwise have to bring any action or proceeding relating to this Agreement or the Notes in the courts of any other jurisdiction. (b) The Borrower irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or the Notes in any New York State or federal court. The Borrower hereby irrevocably waives, to the fullest extent permitted by law, the defense of any inconvenient forum to the maintenance of such action or proceeding in any such court. "SECTION 8.12. Waiver of Jury Trial. Each of the Borrower, the -------------------- Agent and the Lenders hereby irrevocably waives all right to trail by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the Notes or the actions of the Borrower, the Agent or any Lender in the negotiation, administration, performance or enforcement thereof or any amendment thereof." (ff) The term "P Commitment", used throughout the Credit Agreement in provisions that have not been amended by the foregoing subsections (a) through (ee), is hereby amended to read "Commitment". 24 (gg) Paragraph 3 of Exhibit C to the Credit Agreement is hereby amended by adding to the end thereof a new clause (vii) to read as follows: "and (vii) if the Assignee is organized under the laws of a jurisdiction outside the United States, delivers to the Agent herewith the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee's status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty." (hh) A new Schedule V is hereby added to the Credit Agreement, to read in the form of Schedule V attached hereto. SECTION 2. Successor Agent. Notwithstanding anything to the contrary --------------- contained in Section 7.06 of the Credit Agreement, effective as of the date hereof and subject to the satisfaction of the conditions set forth in Section 4 below: (a) Citibank hereby resigns as Agent under the Credit Agreement. (b) The Lenders hereby appoint CUSA as successor Agent under the Credit Agreement as amended by this Seventh Amendment, the Borrower hereby approves such appointment of CUSA as Agent, and CUSA hereby accepts such appointment as Agent. (c) The term "Agent" as used in the Credit Agreement and each Note, in each case as amended by this Seventh Amendment and by each subsequent amendment or other modification of the Credit Agreement or such Note, is and shall be and mean CUSA in its capacity as Agent under such Credit Agreement. (d) Each reference to "Citibank, N.A." as Agent in (i) each Note, (ii) the form of B Note attached to the Credit Agreement as Exhibit A-2, (iii) the form of Notice of A Borrowing attached to the Credit Agreement as Exhibit B-1, (iv) the form of Notice of B Borrowing attached to the Credit Agreement as Exhibit B-2, (v) the form of Assignment and Acceptance attached to the Credit Agreement as Exhibit C, and (vi) the form of Business Status Report attached to the Credit Agreement as 25 Exhibit F, is and shall be amended to be a reference to "Citicorp USA, Inc." in its capacity as Agent under the Credit Agreement as amended hereby and by each subsequent amendment thereof. SECTION 3. Assignment. Notwithstanding anything to the contrary ---------- contained in Section 8.07 of the Credit Agreement, effective as of the date hereof and subject to the satisfaction of the conditions set forth in Section 4 below: (a) Citibank hereby sells and assigns to CUSA, and Bankers Trust Company (together with Citibank, the "Assignors") hereby sells and assigns to each Lender listed as an Assignee on Annex A hereto (each, together with CUSA, an "Assignee"), and CUSA hereby purchases and assumes from Citibank one hundred percent of, and each other Assignee hereby purchases and assumes from Bankers Trust Company the percentage interest specified on Annex A hereto for such Assignee in and to, all of such Assignor's rights and obligations under the Credit Agreement as amended by this Seventh Amendment (without giving effect to the reduction in the Commitment of such Assignor pursuant to Section 3 of this Seventh Amendment) as of the date hereof (other than such Assignor's obligations under Section 7.05 thereof to the extent relating to the period during which it was a Lender and, in the case of the assignment by Citibank, its rights and obligations under Sections 2.14 and 2.15 thereof and otherwise in connection with any Letter of Credit or any Issuance thereof), including, without limitation, (i) such Commitment of such Assignor, (ii) the aggregate outstanding principal amount of A Advances owing to such Assignor as of the date hereof, and (iii) the A Note held by such Assignor, so that as a result of such sale, assignment, purchase and assumption, the Commitment of CUSA is as set forth on the signature pages hereof and the aggregate outstanding principal amount of A Advances owing to CUSA is the aggregate outstanding principal amount of A Advances owing to Citibank immediately prior to giving effect to this Seventh Amendment, and the Commitment of each such other Assignee is as set forth on Annex A hereto and the signature pages hereof and the aggregate outstanding principal amount of A Advances (prior to any payment required under Section 2.10(d) of the Credit Agreement and Section 4(c) hereof) owing to such Assignee is as set forth on Annex A hereto. (b) Each Assignor and each Assignee hereby agrees that the sale and assignment by such Assignor and to such Assignee, respectively, pursuant to subsection (a) above, 26 and the purchase and assumption by such Assignee and from such Assignor, respectively, pursuant to subsection (a) above, is and shall be made on the terms set forth in paragraphs 2 and 3 of the form of Assignment and Acceptance attached to the Credit Agreement as Exhibit C thereto, as amended by this Seventh Amendment. Without limiting the generality of the foregoing, each Assignee hereby (i) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as amended by this Seventh Amendment as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (ii) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement as amended by this Seventh Amendment are required to be performed by it as a Lender, and (iii) other than in the case of CUSA, delivers herewith the forms referred to in clause (vii) of such paragraph 3. (c) Each Assignee specifies as its CD Lending Office, Domestic Lending Office (and address for notices) and Eurodollar Lending Office the office set forth next to its name on the Annex A hereto or, in the case of CUSA, on the signature pages hereof. (d) This Section 3 and Annex A hereto, and the signature pages hereof, is and will be referred to as the Assignment and Acceptance pursuant to which each Assignee became a Lender under, and for purposes of, the Credit Agreement. (e) The Borrower hereby approves each Assignee as an "Eligible Assignee" under the Credit Agreement for purposes of Section 8.07 thereof and otherwise. SECTION 4. Conditions of Effectiveness. This Seventh Amendment shall --------------------------- become effective as of the date hereof when (a) the Agent shall have received (i) counterparts of this Seventh Amendment executed by the Borrower and all of the Lenders and the Assignor, or, as to any of the Lenders or the Assignor, advice satisfactory to the Agent that such Lenders have, or that the Assignor has, executed counterparts of this Seventh Amendment, and (ii) for purposes of Section 3 above, in the case of any Assignee other than CUSA, the forms referred to in clause (iii) of Section 3(b), 27 (b) the Borrower shall have paid to the Agent (i) for the ratable account of the Lenders, (A) the amendment fee equal to 1/4 of 1% of the Lenders' Commitments (as defined in the Credit Agreement in effect immediately before the effectiveness of the Seventh Amendment) and (B) the maturity extension fee equal to 3/4 of 1% of such Commitments, (ii) for the account of each Lender whose new Commitment (as defined in the Credit Agreement as amended by this Seventh Amendment) exceeds such Lender's old Commitment (as defined in the Credit Agreement immediately before the effectiveness of this Seventh Amendment), the increased commitment fee equal to 2% of the amount by which such new Commitment exceeds such old Commitment, and (iii) for the account of the Agent (as defined in the Credit Agreement as modified by Section 2 of this Seventh Amendment) the agency fee as shall have been agreed upon between the Borrower and the Agent, (c) the Borrower shall have received at least $100,000,000 in gross cash proceeds from the issuance and sale of the Senior Notes and at least $50,000,000 in gross cash proceeds from the issuance and sale of the Subordinated Debt, and shall have paid to the Agent, pursuant to Section 2.10(d), the amount of such proceeds specified by Section 2.10(d), (d) the Agent shall have received (i) copies, certified to be true, of the instruments, agreements, amendments, supplements and modifications listed in Schedule V of the Credit Agreement as amended hereby, and (ii) copies, certified to be true, of amendments to that Debt listed in such Schedule V indicated therein as being amended, which amendments will (A) permit the transactions contemplated by subsection (c) above, (B) provide for the elimination of all requirements relating to the Liquidity Fund, and (C) otherwise be in form and substance satisfactory to the Majority Lenders, and (e) the Agent shall have additionally received all of the following documents, each document (unless otherwise indicated) being dated the date of receipt thereof by the Agent (which date shall be the same for all such documents), in form and substance satisfactory to the Agent: (1) New Notes to the order of the Lenders, respectively, in the principal amounts of their respective Commitments (in exchange for the existing Notes cancelled by the Banks), 28 (2) certified copies of the executed indentures relating to the Senior Notes and the Subordinated Debt, (3) certified copies of the resolutions of the Board of Directors of the Borrower approving this Seventh Amendment and the matters contemplated thereby, (4) a certificate of the Secretary or an Assistant Secretary of the Borrower certifying the names and true signatures of its officers authorized to sign this Seventh Amendment and the other documents to be delivered hereunder, (5) a favorable opinion of Gibson, Dunn & Crutcher, counsel for the Borrower, in substantially the form of Exhibit A hereto, (6) a favorable opinion of Richard W. Madsen, Esq., general counsel for the Borrower, in substantially the form of Exhibit B hereto, (7) a favorable opinion of Shearman & Sterling, counsel for the Agent, in substantially the form of Exhibit C hereto, and (8) a certificate of a duly authorized officer of the Borrower to the effect that: (A) the representations and warranties contained in Section 4.01 of the Credit Agreement as amended by this Seventh Amendment, and in Section 5 of this Seventh Amendment, are correct on and as of the date of such certificate as though made on and as of such date, (B) no event has occurred and is continuing, or would result from the issuance and sale of the Senior Notes and the Subordinated Debt or from the application of the proceeds therefrom, which would constitute an Event of Default or an event which with the lapse of time or the giving of notice, or both, would constitute an Event of Default, and (C) the Borrower has issued and sold, and received proceeds from the issuance and sale of, the Senior Notes and the Subordinated Debt as required by Section 4(c) above. 29 Each statement made by the Borrower in the certificate delivered pursuant to clause (8) of Section 4(e) above shall be a representation and warranty made by the Borrower in connection with the Credit Agreement for purposes of, and within the meaning of, Section 6.01(b) of the Credit Agreement. SECTION 5. Representations and Warranties of the Borrower. The ------------------------------------- -------- Borrower represents and warrants as follows: (a) The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and is duly qualified and in good standing as a foreign corporation in the State of California. (b) The execution, delivery and performance by the Borrower of this Seventh Amendment are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action and do not contravene (i) the Borrower's charter or by-laws, or (ii) law or any contractual restriction binding on or affecting the Borrower. (c) No authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Borrower of this Seventh Amendment. (d) This Seventh Amendment constitutes legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with its terms. SECTION 6. Reference to and Effect on the Credit Agreement. (a) Upon ----------------------------------------------- the effectiveness of this Seventh Amendment, on and after the date hereof (i) each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Credit Agreement, and each reference in the Notes to the "Credit Agreement", "thereunder", "thereof", "therein" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended or otherwise modified by this Seventh Amendment and (ii) each reference in each Note to "this Note", "hereunder", "hereof", "herein" or words of like import referring to such Note, and each reference in the Credit Agreement to any or all of the Notes, "thereunder", "thereof", "therein" or words of like import referring to such Note or Notes, shall mean and be a reference to such Note or Notes as amended by this Seventh Amendment. 30 (b) Except as specifically amended above, the Credit Agreement and the A Notes, and each B Note outstanding on the date hereof, shall remain in full force and effect and are hereby ratified and confirmed. (c) Except as the Credit Agreement may expressly be modified hereby, the execution, delivery and effectiveness of this Seventh Amendment shall not operate as a waiver of any right, power or remedy of any Lender or the Agent under the Credit Agreement or any of the Notes nor constitute a waiver of any of the provisions contained therein. SECTION 7. Costs and Expenses. The Borrower agrees to pay on demand ------------------ all costs and expenses of the Agent in connection with the preparation, execution and delivery of this Seventh Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent with respect hereto and with respect to advising the Agent as to its rights and responsibilities hereunder. SECTION 8. Execution in Counterparts. This Seventh Amendment may be ------------------------- executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Seventh Amendment, or of any document required to be delivered hereunder, by telecopier shall be effective as delivery of a manually executed counterpart of this Seventh Amendment or such document. SECTION 9. Governing Law. This Seventh Amendment shall be governed ------------- by, and construed in accordance with, the laws of the State of New York. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 31 IN WITNESS WHEREOF, the parties hereto have caused this Seventh Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. ROHR, INC. By: /s/ R. M. MILLER ____________________________ Title: Vice President and Treasurer CITIBANK, N.A., as resigning Agent By: /s/ BARBARA A. COHEN ____________________________ Vice President CITICORP USA, INC., as successor Agent By: /s/ EDWARD LETTIERI ____________________________ Vice President Lenders ------- Commitment - - ---------- $ 0 CITIBANK, N.A. By: /s/ BARBARA A. COHEN ____________________________ Vice President $ 30,000,000 CITICORP USA, INC. By: /s/ EDWARD LETTIERI ____________________________ Vice President 399 Park Avenue New York, New York 10043 c/o Citicorp USA, Inc. 725 South Figueroa Street Los Angeles, California 90017 Attention: National Corporate Division/Loan Administration Telex No.: 127001 GCN:LAXIS Telephone: 213-239-1432 Telecopy: 213-623-3592 32 $ 30,000,000 WELLS FARGO BANK, N.A. By: /s/ STANLEY R. JEPPSEN _________________________________ Title: Stanley R. Jeppsen, VP/LTL $ 25,000,000 THE FIRST NATIONAL BANK OF CHICAGO By: /s/ LINDA M. THOMPSON _________________________________ Title: Vice President $ 5,000,000 MANUFACTURERS BANK By: /s/ V. HANAGAMI _________________________________ Title: Vice President $ 5,000,000 ROYAL BANK OF CANADA By: /s/ BRIAN W. DIXON _________________________________ Title: Brian W. Dixon Senior Manager $ 5,000,000 THE LONG-TERM CREDIT BANK OF JAPAN, LTD., Los Angeles Agency By: /s/ SHUICH TAKENAKA _________________________________ Title: Joint General Manager $ 2,500,000 BANQUE FRANCAISE DU COMMERCE EXTERIEUR By: /s/ DAVID MUSICANT _________________________________ Title: David Musicant Assistant Vice President By: /s/ PHILIPPE L. SIRAND _________________________________ Title: Philippe L. Sirand First VP and Manager $ 2,500,000 BANCA COMMERCIALE ITALIANA, Los Angeles Foreign Branch By: /s/ G. ACCARDO _________________________________ Title: SVP/Manager By: /s/ J. WITYAK _________________________________ Title: J. Wityak, VP 33 $ 2,500,000 BANCO CENTRAL HISPANOAMERICANO, S.A. By: /s/ J. ESTRUCH ____________________________ Title: Vice President $ 2,500,000 THE MITSUBISHI TRUST AND BANKING CORPORATION, LOS ANGELES AGENCY By: /s/ TAKASHI SUGITA ____________________________ Title: Chief Manager - - --------------------------- $110,000,000 Total of the Commitments =========== Assignors --------- CITIBANK, N.A. (other than with respect to Letters of Credit) By: /s/ BARBARA A. COHEN ____________________________ Vice President BANKERS TRUST COMPANY By: /s/ EDWARD BENEDICT ____________________________ Title: V.P. EX-10.13.3 10 AMENDMENT AGREEMENT (9-24-94) Exhibit 10.13.3 AMENDMENT AGREEMENT This Amendment Agreement (this "Amendment") dated as of September 24, 1993, between Rohr, Inc., a Delaware corporation ("Rohr"), State Street Bank and Trust Company of California, National Association, a national banking association, and W. Jeffrey Kramer, not in an individual capacity but solely as owner trustees (State Street Bank and Trust Company of California and W. Jeffrey Kramer are collectively referred to as the "Trustees"), and General Electric Capital Corporation ("GE Capital"). WITNESSETH: WHEREAS, Rohr is a party to a Sublease Agreement, dated as of September 14, 1992, with the Trustees, as owner trustees under that certain Trust Agreement for the benefit of GE Capital; WHEREAS, such Sublease Agreement was amended by that certain Waiver and Modification Agreement, dated as of July 9, 1993 (such Sublease Agreement, as so amended, the "GE Capital Sublease"); and WHEREAS, Rohr has requested that a financial covenant incorporated into the GE Capital Sublease be modified; NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Amendment to GE Capital Sublease. Section XVII (j) of the GE ----------------------------------- Capital Sublease is amended in its entirety to read as follows: (j) The provisions of Sections 5.01(c), 5.01(d) and 5.02(a) of the Credit Agreement, dated as of April 26, 1989, among Sublessee, the Lenders parties thereto and Citibank, N.A., as agent, as in effect on September 24, 1993 (after giving effect to the Sixth Amendment thereto dated as of such date), together with all relevant definitions pertaining to such Sections, are incorporated herein by reference. 2. Jury Trial Waiver EACH OF THE PARTIES HERETO HEREBY UNCONDITIONALLY ----------------- WAIVES THEIR RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS 1 AMENDMENT, ANY DEALINGS AMONG ANY OF THEM RELATING TO THE SUBJECT MATTER HEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG THEM. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AMENDMENT. IN THE EVENT OF LITIGATION, THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 3. Direction to Trustees GE Capital hereby joins in this Amendment to ----------------------- acknowledge its consent to the terms and provisions hereof and to direct the Trustees to enter into this Amendment and any other agreements, instruments and documents to be executed in connection herewith in their capacity as owner trustees. 4. Expenses Rohr agrees to pay all reasonable costs and expenses of the -------- Trustees and GE Capital in connection with the preparation, execution, delivery and enforcement of this Amendment and any other agreements, instruments and documents executed in connection herewith. 5. Further Assurances Each of the parties hereto agrees that at any time ------------------ it shall execute and deliver all further instruments and documents, and take all further action, in order to effectuate or otherwise document the transactions contemplated hereby or otherwise implement the intention of the parties under this Amendment, as any of the parties hereto and their successors and assigns reasonably may request. 6. Further Modifications NO VARIATION OR MODIFICATION OF THIS AMENDMENT --------------------- OR ANY WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH OF THE PARTIES HERETO. 2 7. Multiple Counterparts This Agreement may be executed in two or more --------------------- counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first above written. Rohr, Inc. State Street Bank and Trust Company of California, National Association, not in its individual capacity but solely By: /s/ R. M. Miller as Corporate Trustee -------------------------------- Name: Ronald M. Miller Title: Vice President & Treasurer By: /s/ W. Jeffrey Kramer ---------------------------------- Name: W. Jeffrey Kramer Title: Assistant Vice President /s/ W. Jeffrey Kramer -------------------------------------- w. Jeffrey Kramer not in his individual capacity, but solely in his capacity as Individual Trustee General Electric Capital Corporation By: /s/ Timothy R. Brewer ---------------------------------- Name: Timothy R. Brewer Title: Manager - Field Operations 3 EX-10.13.4 11 AMENDMENT AGREEMENT (5-10-94) Exhibit 10.13.4 AMENDMENT AGREEMENT This Amendment Agreement (this "Amendment") dated as of May 10, 1994, between Rohr, Inc., a Delaware corporation ("Rohr"), State Street Bank and Trust Company of California, National Association, a national banking association, and W. Jeffrey Kramer, not in an individual capacity but solely as owner trustees (State Street Bank and Trust Company of California and W. Jeffrey Kramer are collectively referred to as the "Trustees"), and General Electric Capital Corporation ("GE Capital"). WITNESSETH: WHEREAS, Rohr is a party to a Sublease Agreement, dated as of September 14, 1992, with the Trustees, as owner trustees under that certain Trust Agreement for the benefit of GE Capital (such Sublease Agreement, as amended to date, being hereinafter referred to as the "GE Capital Sublease"); WHEREAS, Rohr has requested that a covenant in the GE Capital Sublease be modified; NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Amendment to GE Capital Sublease. Section XVII (j) of the GE Capital ----------------------------------- Sublease is amended in its entirety to read as follows: (j) The provisions of Sections 5.01(c), 5.01(d) and 5.02(a) of the Credit Agreement, dated as of April 26, 1989, among Sublessee, the Lenders parties thereto and Citicorp USA, Inc., as agent, (after giving effect to the Seventh Amendment thereto dated as of May 10, 1994), together with all relevant definitions pertaining to such Sections, are incorporated herein by reference. 2. Effectiveness of Amendment. This Amendment shall become effective upon --------------------------- the sale by Rohr of at least $100 Million of senior notes and at least $50 Million of convertible subordinated notes. 3. Jury Trial Waiver EACH OF THE PARTIES HERETO HEREBY UNCONDITIONALLY ----------------- WAIVES THEIR RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS 1 AMENDMENT, ANY DEALINGS AMONG ANY OF THEM RELATING TO THE SUBJECT MATTER HEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG THEM. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AMENDMENT. IN THE EVENT OF LITIGATION, THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 4. Direction to Trustees GE Capital hereby joins in this Amendment to ----------------------- acknowledge its consent to the terms and provisions hereof and to direct the Trustees to enter into this Amendment and any other agreements, instruments and documents to be executed in connection herewith in their capacity as owner trustees. 5. Expenses Rohr agrees to pay all reasonable costs and expenses of the -------- Trustees and GE Capital in connection with the preparation, execution, delivery and enforcement of this Amendment and any other agreements, instruments and documents executed in connection herewith. 6. Further Assurances Each of the parties hereto agrees that at any time ------------------ it shall execute and deliver all further instruments and documents, and take all further action, in order to effectuate or otherwise document the transactions contemplated hereby or otherwise implement the intention of the parties under this Amendment, as any of the parties hereto and their successors and assigns reasonably may request. 7. Further Modifications NO VARIATION OR MODIFICATION OF THIS AMENDMENT --------------------- OR ANY WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH OF THE PARTIES HERETO. 2 8. Multiple Counterparts This Amendment may be executed in two or more --------------------- counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized representatives as of the date first above written. Rohr, Inc. State Street Bank and Trust Company of California, National Association, not in its individual capacity but solely By: /s/ R. M. Miller as Corporate Trustee -------------------------------- Name: Ronald M. Miller Title: Vice President & Treasurer By: /s/ W. Jeffrey Kramer ---------------------------------- Name: W. Jeffrey Kramer Title: Assistant Vice President /s/ W. Jeffrey Kramer -------------------------------------- W. Jeffrey Kramer not in his individual capacity, but solely in his capacity as Individual Trustee General Electric Capital Corporation By: /s/ Timothy R. Brewer ---------------------------------- Name: Timothy R. Brewer Title: Manager - Field Operations 3 EX-11.1 12 CALCULATION PRIMARY NET INCOME ROHR, INC. AND SUBSIDIARIES --------------------------- CALCULATION OF PRIMARY NET INCOME PER SHARE ------------------------------------------- OF COMMON STOCK - UNAUDITED --------------------------- (in thousands except for share data) ------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED -------------------- -------------------- MAY 1, MAY 2, MAY 1, MAY 2, 1994 1993 1994 1993 -------- -------- ------- --------- Income (loss) before cumulative effect of accounting changes $(2,687) $(22,201) $ 5,048 $ (30,716) Cumulative effect of accounting changes, net of taxes - - - (223,950) ------- -------- ------- --------- Net income (loss) applicable to primary earnings per common share $(2,687) $(22,201) $ 5,048 $(254,666) ======= ======== ======= ========= Common stock and common stock equivalents: Average shares of common stock outstanding during the period 18,015 17,898 18,012 17,888 Net effect of common stock equivalents (principally stock options and rights) 48 - 29 1 ------- -------- ------- --------- Total common stock and common stock equivalents 18,063 17,898 18,041 17,889 ======= ======== ======= ========= Net income (loss) per average share of common stock: Before accounting changes $ (0.15) $ (1.24) $ 0.28 $ (1.72) Effect of accounting changes - - - (12.52) ------- -------- ------- --------- Primary net income (loss) per common share $ (0.15) $ (1.24) $ 0.28 $ (14.24) ======= ======== ======= =========
EXHIBIT 11.1 EX-11.2 13 CALCULATION FULLY DILUTED NET INCOME ROHR, INC. AND SUBSIDIARIES --------------------------- CALCULATION OF FULLY DILUTED NET INCOME PER SHARE ------------------------------------------------- OF COMMON STOCK - UNAUDITED --------------------------- (in thousands except for share data) ------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED -------------------- -------------------- MAY 1, MAY 2, MAY 1, MAY 2, 1994 1993 1994 1993 -------- -------- ------- --------- Net income (loss) before cumulative effect of accounting changes applicable to primary earnings per common share $(2,687) $(22,201) $ 5,048 $ (30,716) Add back interest and issue expense on convertible debentures, net of tax adjustment 1,234 1,229 3,693 3,712 ------- -------- ------- --------- Adjusted net income before cumulative effect of accounting changes applicable to common stock on a fully diluted basis (1,453) (20,972) 8,741 (27,004) Cumulative effect of accounting changes, net of taxes - - - (223,950) ------- -------- ------- --------- Net income (loss) applicable to fully diluted earnings per share $(1,453) $(20,972) $ 8,741 $(250,954) ======= ======== ======= ========= Average number of shares outstanding on a fully diluted basis: Shares used in primary earnings per share 18,063 17,898 18,041 17,889 Shares on conversion of debentures 2,674 2,674 2,674 2,674 ------- -------- ------- --------- Average number of shares outstanding on a fully diluted basis 20,737 20,572 20,715 20,563 ======= ======== ======= ========= Fully diluted net income (loss) per common share before cumulative effect of accounting change $ (0.07) $ (1.02) $ 0.42 $ (1.31) Loss from cumulative effect of accounting changes, net of taxes (10.89) ------- -------- ------- --------- Fully diluted net income (loss) per common share $ (0.07) $ (1.02) $ 0.42 $ (12.20) ======= ======== ======= =========
Note: The assumed conversion of the Company's convertible debentures were anti- dilutive or did not have a materially dilutive impact on earnings per share, hence only primary earnings per share is presented in the Company's Consolidated Financial Statements. EXHIBIT 11.2 -----END PRIVACY-ENHANCED MESSAGE-----