-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JQ1O21CSAIOQiT7Krhm9ZWgfJxVHR3Z/Ri1oQXjd1EAhefIEe3gU0QQnpS+dHckC Uj9yIMczselV7j4mU+Lf8w== 0000898430-96-000656.txt : 19960228 0000898430-96-000656.hdr.sgml : 19960228 ACCESSION NUMBER: 0000898430-96-000656 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19960128 FILED AS OF DATE: 19960226 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROHR INC CENTRAL INDEX KEY: 0000084801 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [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: 96525328 BUSINESS ADDRESS: STREET 1: 850 LAGOON DRIVE 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 FOR PERIOD ENDING JANUARY 28, 1996 FY96: SECOND 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 JANUARY 28, 1996 COMMISSION FILE NUMBER 1-6101 ROHR, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 95-1607455 (State of other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 850 LAGOON DRIVE, CHULA VISTA, CALIFORNIA 91910-2098 (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 FEBRUARY 15, 1996, THERE WERE 21,432,682 SHARES OF THE REGISTRANT'S COMMON STOCK OUTSTANDING. ================================================================================ ================================================================================ PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ROHR, INC. AND SUBSIDIARIES --------------------------- CONSOLIDATED BALANCE SHEETS --------------------------- (in thousands except for share data) ------------------------------------
JAN. 28, JULY 31, 1996 1995 ----------- --------- ASSETS (UNAUDITED) - ------ Cash and cash equivalents $ 58,592 $ 84,584 Accounts receivable 81,861 72,152 Inventories: Work-in-process 477,840 429,578 Raw materials, purchased parts and supplies 22,574 23,367 Less customers' progress payments and advances (62,613) (62,670) -------- -------- Inventories - net 437,801 390,275 Deferred tax asset 6,493 6,493 Prepaid expenses and other current assets 10,023 13,685 -------- -------- TOTAL CURRENT ASSETS 594,770 567,189 Property, plant and equipment - net 211,163 217,051 INVESTMENT IN LEASES 33,473 34,657 DEFERRED TAX ASSET 105,108 105,020 OTHER ASSETS 52,081 52,623 -------- -------- $996,595 $976,540 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Accounts payable and other liabilities $167,595 $157,872 Taxes on income 577 451 Short-term debt 1,979 - Current portion of long-term debt 14,048 14,119 -------- -------- TOTAL CURRENT LIABILITIES 184,199 172,442 LONG-TERM DEBT 511,543 540,658 PENSION AND POST-RETIREMENT OBLIGATIONS - LONG-TERM 72,988 69,386 OTHER OBLIGATIONS 18,244 18,123 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 21,192,114 and 18,068,076 shares, respectively 21,192 18,068 Additional paid-in capital 132,766 102,887 Retained earnings 94,081 93,394 Minimum pension liability adjustment (38,418) (38,418) -------- -------- TOTAL SHAREHOLDERS' EQUITY 209,621 175,931 -------- -------- $996,595 $976,540 ======== ========
Page 1 ROHR, INC. AND SUBSIDIARIES --------------------------- CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED ----------------------------------------------- (in thousands except for per share data) ----------------------------------------
SECOND QUARTER ENDED SIX MONTHS ENDED -------------------- -------------------- JAN. 28, JAN. 29, JAN. 28, JAN. 29, 1996 1995 1996 1995 -------- -------- -------- -------- Sales $180,702 $219,774 $331,102 $411,930 Costs and Expenses 159,071 195,499 290,604 365,742 General & Administrative Expenses 5,247 6,289 11,975 12,849 -------- -------- -------- -------- Operating Income 16,384 17,986 28,523 33,339 Interest Income 608 861 1,660 1,976 Interest Expense 12,574 13,409 24,960 27,587 Charge for Exchange of Convertible Notes 4,075 - 4,075 - -------- -------- -------- -------- Income from Continuing Operations - Before Taxes on Income 343 5,438 1,148 7,728 Taxes on Income 138 2,186 461 3,107 -------- -------- -------- -------- Income from Continuing Operations 205 3,252 687 4,621 Income from Discontinued Operations - Net of Taxes - 337 - 835 -------- -------- -------- -------- Net Income $ 205 $ 3,589 $ 687 $ 5,456 ======== ======== ======== ======== NET INCOME PER SHARE: PRIMARY: Income from Continuing Operations $ 0.01 $ 0.18 $ 0.04 $ 0.26 Income from Discontinued Operations - 0.02 - 0.04 -------- -------- -------- -------- Net Income $ 0.01 $ 0.20 $ 0.04 $ 0.30 ======== ======== ======== ======== ASSUMING FULL DILUTION: Income from Continuing Operations $ 0.01 $ 0.17 $ 0.04 $ 0.25 Income from Discontinued Operations - 0.01 - 0.04 -------- -------- -------- -------- Net Income $ 0.01 $ 0.18 $ 0.04 $ 0.29 ======== ======== ======== ======== Cash Dividends per Share of Common Stock $ - $ - $ - $ - ======== ======== ======== ========
Page 2 ROHR, INC. AND SUBSIDIARIES --------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED ------------------------------------------------- (in thousands) --------------
SECOND QUARTER ENDED SIX MONTHS ENDED -------------------- -------------------- JAN. 28, JAN. 29, JAN. 28, JAN. 29, 1996 1995 1996 1995 -------- -------- -------- -------- OPERATING ACTIVITIES: Net income $ 205 $ 3,589 $ 687 $ 5,456 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 5,279 5,589 10,605 10,775 Charge for exchange of convertible notes 4,075 - 4,075 - Changes due to (increase) decrease in operating assets: Accounts receivable 9,746 (7,309) (7,210) (4,040) Inventories - net (3,551) 4,004 (47,526) (21,786) Prepaid expenses and other assets 1,508 1,324 3,934 5,466 Changes due to increase (decrease) in operating liabilities: Accounts payable and other liabilities (6,599) (5,326) 9,977 (2,506) Pension and post-retirement obligations 1,797 3,360 3,603 (29,896) Taxes on income and deferred taxes 24 152 38 1,260 Other 1,083 1,693 938 4,406 -------- -------- -------- -------- Net cash provided by (used in) operating activities 13,567 7,076 (20,879) (30,865) -------- -------- -------- -------- INVESTING ACTIVITIES: Sale of short-term investments - 17,568 - 17,568 Repurchase of sale/leaseback assets - (21,782) - (21,782) Purchase of property, plant and equipment (2,750) (1,401) (5,236) (2,940) Net advances on discontinued operations - (776) - (5,045) Other 1,105 1,261 285 1,953 -------- -------- -------- -------- Net cash used in investing activities (1,645) (5,130) (4,951) (10,246) -------- -------- -------- -------- FINANCING ACTIVITIES: Short-term borrowings 1,979 - 1,979 - Repayment of other long-term borrowings (593) (969) (934) (1,617) Cash collateral for receivable sales program (4,499) (4,692) (2,499) 14,503 Reduction in sales of receivable sales program - - - (20,000) Other 918 (124) 1,292 655 -------- -------- -------- -------- Net cash used in financing activities (2,195) (5,785) (162) (6,459) -------- -------- -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 9,727 (3,839) (25,992) (47,570) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 48,865 72,265 84,584 115,996 -------- -------- -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 58,592 $ 68,426 $ 58,592 $ 68,426 ======== ======== ======== ======== SUPPLEMENTAL INFORMATION: Cash paid during the year for: Interest, net of amount capitalized $ 11,226 $ 11,439 $ 25,111 $ 26,095 Income taxes 93 1,336 266 1,149 Non-cash financing activities: Exchange of 7.75% convertible notes (28,066) - (28,121) - Change in equity due to exchange of 7.75% convertible notes 32,141 - 32,196 - Charge for exchange of convertible notes (4,075) - (4,075) -
Page 3 ROHR, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED) The consolidated balance sheet as of January 28, 1996, and statements of earnings and cash flows for the second quarter and six months ended January 28, 1996, and January 29, 1995, 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 Form 10-K for the year ended July 31, 1995. CONTINGENCIES During November 1994 through January 1995, inspection of commercial aircraft revealed a cracked spar cap on two wing pylons. The Company has warranted these applications to its customer. Investigation indicates that the wing pylon spar caps, which were sourced, assembled, and supplied by a major subcontractor to the Company, did not receive a required process step. Analysis and testing show that there are no airworthiness or safety of flight concerns with continued aircraft operations. Subsequent fleetwide inspections have revealed no other cracks; however, a replacement program has been implemented. The spar caps will require replacement on approximately 120 aircraft over a period of several years. The wing pylon is warranted to Rohr by its subcontractor and the Company believes that the cost of removing and replacing the spar cap components for the wing pylon, which is expected to approximate $315,000 per aircraft, will be primarily the responsibility of the subcontractor. To date, the subcontractor has borne their costs to furnish materials but has paid only a portion of the cost incurred by the Company. The Company believes that it will recover a substantial portion of its own costs under the terms of its subcontractor's contractual warranty and that the resolution of this matter will not have a material adverse effect on the Company's financial condition. In addition, the Company acquired other materials directly from the spar cap materials supplier, a small company with limited financial resources. Some of these materials were not processed to specifications before use in various aircraft applications. The Company has warranted these applications. With respect to these other applications, no failures have been noted to date and the Company and its customers are investigating whether any replacement or repair will be required. Page 4 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 percent to the State of California and 10 percent to the Stringfellow entities, leaving 25 percent to the generator/counterclaimants (including the Company) and other users of the site (or a maximum of up to 28 percent depending on the allocation of any Stringfellow entity orphan share). On the state law claims, the special master recommended a 95 percent share for the State of California, and 5 percent for the Stringfellow entities, leaving 0 percent 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, 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, 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 waste 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 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. In January 1996, McDonnell Douglas Corporation announced a change in the method of accounting for its MD-11 program. Its announcement indicated that such action was taken "in recognition of production rates, existing order base, and length of time required to achieve program deliveries". In light of these changing conditions, the Company is reassessing the market requirements for its products on the MD-11 related programs. This preliminary reassessment indicated that the PW4000 program, which also provides nacelles with reversers for the Airbus A300 and A310 aircraft, may not achieve contractual quantities within the specified time period. Page 5 The PW4000 contract provides that under such circumstances the parties are to negotiate an equitable price adjustment. The Company is preparing to commence such negotiations with its customer. At the end of the second quarter, the Company had in excess of $50 million of excess over average and preproduction cost inventoried on this program. CONVERTIBLE SUBORDINATED NOTES In the second quarter of fiscal 1996, the Company privately negotiated the exchange of 3.0 million shares of the Company's common stock for $28.1 million of its 7.75% Convertible Subordinated Notes due 2004, leaving $29.4 million of such notes outstanding at January 28, 1996. The Convertible Subordinated Notes are convertible into shares of common stock at a conversion price of $10.35 per share and are redeemable at the Company's option, beginning in May 1998 at a price of 104.7%, declining to par at maturity. The shares of common stock issued in the exchange in excess of the shares required for conversion were valued at $4.1 million, which was expensed during the quarter. Subsequent to the end of the second quarter and through February 21, 1996, the Company exchanged an additional 0.3 million shares of common stock for $2.7 million of the 7.75% Convertible Subordinated Notes. The Company may enter into additional exchange transactions from time to time. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's analysis of operating results for the second quarter and six months ended January 28, 1996 and January 29, 1995 is presented below. Material developments in the Company's liquidity and capital resources since July 31, 1995, are also presented. These discussions should be read in conjunction with the financial statements and Management's Discussion and Analysis thereof included in the Company's Form 10-K for the fiscal year ended July 31, 1995. RESULTS OF OPERATIONS Second Quarter Fiscal Year 1996 Compared to Second Quarter Fiscal Year 1995 - --------------------------------------------------------------------------- Sales for the second quarter of fiscal 1996 were $180.7 million down from $219.8 million in the second quarter of fiscal 1995, but up from $150.4 million in the first quarter of fiscal 1996. Sales in fiscal 1996, benefited from production deliveries on the MD-90 program. However, in the Page 6 aggregate, sales declined due primarily to previously announced delivery rate reductions on several other commercial programs, reflecting reduced deliveries of commercial aircraft throughout the industry. In addition, government sales declined due to the near completion of the Company's primary military and space programs. Operating income for the second quarter of fiscal 1996, was $16.4 million, an operating margin of 9.1 percent, as compared to $18.0 million, an operating margin of 8.2 percent, for the same period of the prior fiscal year. Operating income in the second quarter of fiscal 1996 declined as compared with the second quarter of fiscal 1995 primarily due to the reduction in sales as discussed above, change in program mix and the revised outlook for the PW4000 program. These items were partially offset by favorable negotiations on certain programs. Operating results in the second quarter of fiscal 1995 were negatively impacted by cost problems on the CF6-80E1 program. Net interest expense was $12.0 million for the second quarter of fiscal 1996 compared to $12.5 million for the second quarter of fiscal 1995. Interest expense declined primarily due to principal payments made in fiscal year 1995 on the Company's 9.33% and 9.35% Senior Notes. In the second quarter of fiscal 1996, the Company privately negotiated the exchange of 3.0 million shares of the Company's common stock for $28.1 million of its 7.75% Convertible Subordinated Notes due 2004. The Convertible Subordinated Notes are convertible into shares of common stock at a conversion price of $10.35 per share and are redeemable at the Company's option, beginning in May 1998 at a price of 104.7%, declining to par at maturity. The shares of common stock issued in the exchange in excess of the shares required for conversion were valued at $4.1 million, which was expensed during the quarter. The additional shares of common stock represent only a portion of the interest expense the Company would have incurred on the exchanged notes through May 1998, the first date on which the Company could force conversion by calling the notes for redemption. This exchange improves the Company's debt-to-equity ratio and will reduce future interest payments by approximately $2.2 million annually. Net income for the second quarter of fiscal 1996 was $0.2 million or 1 cent per share. The charge due to the exchange of the convertible notes reduced net income by $2.4 million or 13 cents per share. During the same period of the prior year, the Company reported net income from continuing operations of $3.3 million or 18 cents per share. Total net income for the second quarter of the prior year, which included $0.3 million of income or 2 cents per share from the discontinuance of the business jet line of business, was $3.6 million or 20 cents per share. Page 7 First Six-Months Fiscal Year 1996 Compared to First Six-Months Fiscal Year 1995 - ------------------------------------------------------------------------------- Sales declined 19.6 percent to $331.1 million in the first six months of fiscal 1996, from $411.9 million for the same period of fiscal 1995. Sales benefited from production deliveries on the MD-90 program. However, in the aggregate, sales declined due primarily to previously announced delivery rate reductions on several other commercial programs, reflecting reduced deliveries of commercial aircraft throughout the industry. In addition, government sales declined due to the near completion of the Company's primary military and space programs. Both the C-130 and the Titan Space programs are scheduled to be substantially completed in fiscal 1996. For the first six months of fiscal 1996, operating income was $28.5 million, an operating margin of 8.6 percent, as compared to $33.3 million, an operating margin of 8.1 percent, for the same period of the prior year. This decline in operating income is primarily the result of a reduction in sales as discussed above, change in program mix and the revised outlook for the PW4000 program. These items were partially offset by favorable negotiations on certain programs. Operating results in the first six months of fiscal 1995 were negatively impacted by cost problems on the CF6-80E1 program. Net interest expense was $23.3 million for the first six months of fiscal 1996, compared to $25.6 million for the first six months of fiscal 1995. The decrease of $2.3 million was due primarily to principal payments made in fiscal year 1995 on the Company's 9.33% and 9.35% Senior Notes. As discussed above, during the second quarter of fiscal 1996, the Company incurred a charge of $4.1 million resulting from the exchange of 3.0 million shares of the Company's stock for $28.1 million of its 7.75% convertible subordinated notes due 2004. Net income for the first six months of fiscal 1996 was $0.7 million or 4 cents per share. The charge due to the exchange of the convertible notes reduced net income by $2.4 million or 13 cents per share. During the same period of the prior year, the Company reported net income from continuing operations of $4.6 million or 26 cents per share. Total net income for the first six months of the prior year was $5.4 million or 30 cents per share. This included $0.8 million or 4 cents per share from the discontinuance of its business jet line of business which was completed in fiscal 1995. Recent indicators continue to point to improved market conditions for new commercial jet aircraft. World airlines continue to report strong operating profits, record load factors, a reduction in the number of "parked aircraft", and an increased rate of orders for new aircraft. Due to the long lead times between orders and deliveries of commercial aircraft, the Company still expects fiscal 1996 to represent the bottom of the commercial aircraft production cycle. Page 8 On February 18, 1996, the International Association of Machinists and Aerospace workers union, which represents the majority of the production workers at the Company's Chula Vista and Riverside, California facilities, ratified a new four year labor contact. This settlement was in line with others throughout the aerospace industry. LIQUIDITY AND CAPITAL RESOURCES At January 28, 1996, the Company had $58.6 million of cash and cash equivalents. In addition, the Company had a $82.8 million revolving credit agreement with no amounts outstanding. The total amount available under the credit agreement is reduced by a $16.9 million letter of credit. The credit agreement will be reduced by $8.3 million in both April 1996 and in October 1996, and matures in April 1997. The Company has entered into preliminary discussions to replace the existing revolving credit agreement. Over the next several years, the Company expects to increase its investment in program inventory in connection with increased deliveries, pre-production cost on the newly awarded BR715 program for application on the McDonnell Douglas MD-95 and other anticipated new business opportunities. The Company believes that its financial resources will be adequate to meet its requirements during this period. Cash provided by operating activities for the second quarter of fiscal 1996 was $13.6 million, resulting primarily from improved receivables collections. Net cash used in operating activities for the first six months of fiscal year 1996 was $20.9 million compared to $30.9 million for the first six months of the prior fiscal year. Contributing to the use of cash in the first six months of fiscal 1996 was an increase in production inventory reflecting the Company's preparation for a scheduled increase in deliveries during its third and fourth quarters. Contributing to the use of cash in the first six months of the prior fiscal year was a $36.0 million contribution to the Company's pension plans. Cash flow from operating activities is subject to significant variations from period to period. The Company's total financings (balance sheet debt plus off-balance sheet financings) aggregated $574.6 million at January 28, 1996, compared to $605.6 million at July 31, 1995. This reduction in debt is due primarily to the exchange of the 7.75% Convertible Subordinated Notes. Subsequent to the end of the second quarter, the Company made its annual $12.0 million principal payment on its 9.35% Senior Notes. The Company has a $40.0 million receivables sales program. Under this off- balance sheet financing program, the Company sells receivables from specified customers on an on-going basis. Due to the slowdown in the aerospace industry, the amount of outstanding receivables from these customers has fallen below levels required to support the total program. As a result, Page 9 the Company has elected to deposit cash collateral as necessary to support the program and withdraws such cash when it is no longer required to be deposited. At January 28, 1996, $16.0 million of cash collateral was on deposit. The Company is also a party to certain equipment leases, treated as off-balance sheet financings, totaling $23.1 million at January 28, 1996. The Company's net inventory increased from $390.3 million at July 31, 1995, to $437.8 million at January 28, 1996. This increase is due primarily to an increase in production inventory, reflecting the Company's preparation for a scheduled increase in deliveries during its third and fourth quarters. The Company is in negotiations to sell Rohr Credit Corporation, a wholly owned subsidiary of Rohr, Inc., whose principal assets include beneficial interests in two aircraft, an A300 and a DC10, currently on lease through 2003 and 2004, respectively. These assets are included on Rohr's consolidated balance sheet as "Investment in Leases" in the amount of $33.5 million. Preliminary negotiations indicate that the Company will receive approximately $21 million of cash and a note receivable in excess of $6 million and will retain an interest in the residual value of the aircraft. The sale is expected to result in a pretax book loss of approximately $6 million which may ultimately be recovered at the end of the lease periods through the Company's interest in the residual value of the aircraft. As a result of the slow-down, over the last several years, in the commercial aerospace industry and reductions in the Company's military and space programs, many of the Company's facilities are operating below capacity. The Company is in the process of reviewing its long-range site strategy and assessing the facilities and equipment necessary to meet its future needs. If management concludes that any facilities or equipment are in excess of the Company's projected needs and that their book value will not be recovered from future activities, then an impairment write-down will be recorded to reduce the assets to their estimated fair value. 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 $1.0 billion at both January 28, 1996 and July 31, 1995. Approximately $0.3 billion of the $1.0 billion backlog is expected to be delivered in the remainder of fiscal 1996. (Sales during any period include 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 equitable adjustment in contract amounts. The Company has an additional $2.7 billion in anticipated backlog, which represents the sales price Page 10 of units which the Company expects that its customers will order under existing contracts and the Company will deliver within seven years. Page 11 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company held its Annual Meeting of Shareholders on Saturday, December 2, 1995, at the offices of the Company in Chula Vista, California. Of the 18,108,579 shares eligible to vote at the meeting, 14,725,309 were represented. Messrs. Wallace Barnes, Eugene E. Covert, and D. Larry Moore were elected as Directors for the three year terms expiring at the Annual Meeting in 1998, each received in excess of 14.4 million affirmative votes. Directors whose terms of office as Directors continued after the meeting included Messrs. Sam F. Iacobellis, Robert H. Rau, William P. Sommers, James R. Wilson, Robert M. Price, and Jack D. Steele. Mr. Wayne M. Hoffman, having reached the mandatory retirement age for Directors, retired at the conclusion of the Annual Meeting. At a meeting of the Board of Directors held immediately following the Annual Meeting, the Directors selected Mr. Vincent N. Marafino as the successor to Mr. Hoffman to serve until the Annual Meeting of Shareholders in 1997 and until his successor is elected and qualified. The Shareholders also approved the selection of Deloitte & Touche as the Company's auditors for fiscal 1996. The selection of Deloitte & Touche received 14,656,892 affirmative votes, 46,197 negative votes, and 22,220 abstentions. The Shareholders then voted to approve the adoption of the 1995 Stock Incentive Plan under which shares of Company stock may be awarded to certain employees. The Plan received 7,846,204 affirmative votes, 3,917,271 negative votes and 68,183 abstentions. Finally, the Shareholders cast a non-binding, advisory vote on a three-year extension of the Company's Shareholder Rights Plan. That proposition received 6,974,897 affirmative votes, 4,667,808 negative votes and 188,953 abstentions. Page 12 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Index to Exhibits: * 4.5.2 Amended and Restated Note Agreement, dated as of January 1, 1996, relating to the 9.35% Series A Senior Notes due January 29, 2000, the 9.35% Series B Senior Notes due January 29, 2000, and the 9.33% Series C Senior Notes due December 15, 2001. * 4.7 Amendment No. 1 to Amended and Restated Rights Agreement. *10.13.10 Tenth Amendment to Credit Agreement, dated as of November 17, 1995. *10.13.11 Eleventh Amendment to Credit Agreement, dated as of January 15, 1996. *10.15.8 Fifth Amendment Agreement, dated as of November 17, 1995, to Sublease Agreement, dated as of September 14, 1992. *10.15.9 Sixth Amendment Agreement, dated as of January 19, 1996, to Sublease Agreement, dated as of September 14, 1992. *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. *27. Financial Data Schedule (Filed with EDGAR filing only.) (b) Reports on Form 8-K There were no reports on Form 8-K during this period. (c) Exhibits required by Item 601 of Regulation S-K: See subparagraph (a) above. (d) Financial Statements required by Regulation S-X: See subparagraphs (a) and (b) above. ___________________________ *Exhibits filed with this report. Page 13 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. February 23, 1996 By: /s/ L. A. CHAPMAN ----------------------- L. A. Chapman Senior Vice President and Chief Financial Officer February 23, 1996 By: /s/ A. L. MAJORS ----------------------- A. L. Majors Vice President and Controller (Chief Accounting Officer) Page 14 EX-4.5.2 2 AMENDED NOTE AGREEMENT DATED JANUARY 1, 1996 ================================================================================ - -------------------------------------------------------------------------------- ROHR, INC. AMENDED AND RESTATED NOTE AGREEMENT DATED AS OF JANUARY 1, 1996 9.35% SERIES A SENIOR NOTES DUE JANUARY 29, 2000 9.35% SERIES B SENIOR NOTES DUE JANUARY 29, 2000 9.33% SERIES C SENIOR NOTES DUE DECEMBER 15, 2001 - -------------------------------------------------------------------------------- ================================================================================ TABLE OF CONTENTS I.
PAGE ........................................................................ 1. BACKGROUND; AMENDMENT AND RESTATEMENT; NON-WAIVER...................... 1 1A. Background......................................................... 1 1B. Amendment and Restatement of Existing Note Agreements.............. 2 1C. Non-waiver......................................................... 2 2. AMENDMENT AND RESTATEMENT OF EXISTING NOTES............................ 2 2A. Series A Notes..................................................... 2 2B. Series B Notes..................................................... 3 2C. Series C Notes..................................................... 4 2D. Notes.............................................................. 4 2E. Surrender of Existing Notes; Issuance of Amended and Restated Notes..................................................... 4 3. CONDITIONS TO EFFECTIVENESS............................................ 5 3A. Opinion of Purchasers' Special Counsel............................. 5 3B. Opinion of Company's Counsel....................................... 5 3C. Representations and Warranties; No Default......................... 5 3D. Legality........................................................... 5 3E. Proceedings........................................................ 6 3F. Private Placement Numbers.......................................... 6 3G. Other Purchasers................................................... 6 3H. Expenses........................................................... 6 4. PREPAYMENTS............................................................ 6 4A. Required Prepayments............................................... 6 4B. Optional Prepayment With Yield-Maintenance Amount.................. 7 4C. Notice of Optional Prepayment...................................... 7 4D. Partial Prepayments Pro Rata....................................... 7 4E. Right to Put....................................................... 8 4F. Retirement of Notes................................................ 8 4G. Tender of Notes in Payment of Warrant Exercise Price............... 8 4H. Effect of Partial Prepayments and Acquisitions..................... 9 5. AFFIRMATIVE COVENANTS.................................................. 9 5A. Payment of Taxes and Claims........................................ 9 5B. Maintenance of Properties and Corporate Existence; Other Matters... 9 5C. Payment of Notes and Maintenance of Office......................... 10 5D. Financial Statements............................................... 10 5E. Default Notices.................................................... 13 5F. Information Required by Rule 144A.................................. 13 5G. Inspection of Property............................................. 13 5H. Covenant to Secure Notes Equally................................... 13 5I. Involuntary Prepayment............................................. 13 6. NEGATIVE COVENANTS..................................................... 15 6A. Limitations on Liens............................................... 15
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PAGE 6B. Limitations on Leases.............................................. 17 6C. Limitations on Indebtedness........................................ 18 6D. Limitations on Mergers and Sales of Assets......................... 19 6E. Adjusted Consolidated Tangible Net Worth Maintenance............... 20 6F. Limitations on Distributions....................................... 20 6G. Fixed Charge Coverage.............................................. 21 6H. Limitations on Capital Expenditures................................ 22 6I. Private Offering................................................... 22 6J. Transactions with Affiliates....................................... 22 6K. Line of Business................................................... 22 6L. Limitation on Certain Obligations.................................. 22 6M. Incorporation of Negative Covenants................................ 23 6N. Maintenance of Senior Status....................................... 24 6O. Certain Amendments................................................. 24 6P. Sales of Assets.................................................... 25 6Q. Sale of Receivables................................................ 26 6R. Debt Ratio......................................................... 27 7. EVENTS OF DEFAULT...................................................... 27 7A. Acceleration....................................................... 27 7B. Rescission of Acceleration......................................... 30 7C. Notice of Acceleration or Rescission............................... 30 7D. Other Remedies..................................................... 30 8. REPRESENTATIONS AND WARRANTIES......................................... 31 8A. Corporate Organization and Authority............................... 31 8B. Actions Pending.................................................... 31 8C. Authorization, Enforceability...................................... 31 8D. Governmental Consent............................................... 32 8E. No Defaults........................................................ 32 9. REPRESENTATIONS OF EACH PURCHASER...................................... 32 10. DEFINITIONS............................................................ 32 10A. Yield-Maintenance Terms........................................... 32 10B. Other Terms....................................................... 34 11. MISCELLANEOUS.......................................................... 62 11A. Note Payments..................................................... 62 11B. Expenses.......................................................... 63 11C. Consent to Amendments............................................. 63 11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes.... 64 11E. Persons Deemed Owners; Participations............................. 64 11F. Accounting........................................................ 64 11G. Directly or Indirectly............................................ 65 11H. Survival of Representations and Warranties; Entire Agreement...... 65 11I. Successors and Assigns............................................ 65 11J. Disclosure to Other Persons....................................... 65
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PAGE 11K. Notices........................................................... 66 11L. Payments Due on Non-Business Days................................. 67 11M. Satisfaction Requirement.......................................... 67 11N. Governing Law..................................................... 67 11O. Severability...................................................... 67 11P. Descriptive Headings.............................................. 67 11Q. Counterparts...................................................... 67 11R. Severalty of Obligations.......................................... 67 12. CONSENT; WAIVER........................................................ 68 12A. Consent to Amendment of Credit Agreement.......................... 68 12B. Waiver of Certain Provisions of Existing 9.33% Note Agreement..... 68
Annex 1 - Purchaser Schedule Annex 2 - Information as to Company Exhibit A1 - Form of 9.35% Series A Senior Note Due January 29, 2000 Exhibit A2 - Form of 9.35% Series B Senior Note Due January 29, 2000 Exhibit A3 - Form of 9.33% Series C Senior Note Due December 15, 2001 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 iii ROHR, INC. 850 Lagoon Drive Chula Vista, California 91910 AMENDED AND RESTATED NOTE AGREEMENT 9.35% Series A Senior Notes Due January 29, 2000 9.35% Series B Senior Notes Due January 29, 2000 9.33% Series C Senior Notes Due December 15, 2001 Dated as of January 1, 1996 To each of the Purchasers listed on Annex 1 hereto Ladies and Gentlemen: The undersigned, Rohr, Inc., a Delaware corporation (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. BACKGROUND; AMENDMENT AND RESTATEMENT; NON-WAIVER. 1A. Background. The Company, previously named Rohr Industries, Inc., authorized the issuance of its senior promissory 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 (as amended up to, but excluding, the Amendment Date, individually, an "Existing 9.35% Note" and, collectively, the "Existing 9.35% Notes"). The Company authorized the issuance of its senior promissory notes in the aggregate principal amount of Sixty-Two Million Dollars ($62,000,000), dated the date of issue thereof, to mature on 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 (as amended up to, but excluding, the Amendment Date, individually, an "Existing 9.33% Note" and, collectively, the "Existing 9.33% Notes;" the Existing 9.35% Notes and the Existing 9.33% Notes are referred to herein collectively as the "Existing Notes"). The Purchasers are the holders of all of the Existing Notes. 1 The Existing 9.35% Notes were issued pursuant to those certain separate Note Agreements, each dated as of January 15, 1990, between the Company and the purchasers identified on Annex 1 thereto (collectively, as amended and restated up to, but excluding, the Amendment Date, the "Existing 9.35% Note Agreement"). The Existing 9.33% Notes were issued pursuant to that certain Note Agreement, dated as of December 21, 1992, between the Company and the purchasers identified on Annex 1 thereto (as amended and restated up to, but excluding, the Amendment Date, the "Existing 9.33% Note Agreement;" the Existing 9.35% Note Agreement and the Existing 9.33% Note Agreement are referred to herein collectively as the "Existing Note Agreements"). Pursuant to a certain Prepayment Agreement, dated as of June 30, 1995, among the Company and the holders of the Existing 9.35% Notes, and a certain Prepayment Agreement, dated as of June 30, 1995, among the Company and the holders of the Existing 9.33% Notes, all holders of Existing Notes were offered partial prepayments of their respective Existing Notes, on the terms set forth in such Prepayment Agreements. Pursuant to such Prepayment Agreements, the Company, the holders of the Existing 9.35% Notes and the holders of the Existing 9.33% Notes agreed to enter into an agreement for the purpose, among other things, of specifying the required prepayments in respect of the Existing Notes subsequent to the partial prepayments. 1B. Amendment and Restatement of Existing Note Agreements. Each of the Company and, subject to the satisfaction of the conditions set forth in paragraph 3 hereof, the Purchasers, hereby consents and agrees to the amendment and restatement of the Existing Note Agreements, as set forth herein, including, without limitation, the amalgamation of the Existing 9.35% Note Agreement and the Existing 9.33% Note Agreement into this Agreement and the amendment and restatement by the Company of the Existing Notes, as set forth herein. 1C. Non-Waiver. The terms of this Agreement shall not operate as a waiver by any Purchaser of, or otherwise prejudice any Purchaser's rights or remedies under, the Existing Notes, the Existing Note Agreements or applicable law. 2. AMENDMENT AND RESTATEMENT OF EXISTING NOTES. 2A. Series A Notes. Each of the Company and, subject to the satisfaction of the conditions set forth in paragraph 3 hereof, the Purchasers, hereby consents and agrees to the amendment and restatement, in accordance with the provisions of this Agreement, of the Existing 9.35% Notes with registration numbers R-5, R-6, R-11 and R-17, which Existing 9.35% Notes are to be registered for transfer to the holders indicated on Annex 1 hereto contemporaneously with the consummation of the transactions contemplated by this Agreement and have an aggregate principal amount outstanding as of the date hereof of Thirteen Million Two Hundred Fifty Thousand Dollars ($13,250,000) (such Existing 9.35% Notes, as amended and restated as herein provided, shall be referred to collectively as the "Series A Notes," such term to include each Series A Note delivered from time to time in accordance with this Agreement). Each Series A Note delivered pursuant to this Agreement will: 2 (i) bear interest (computed on the basis of a 360-day year of twelve 30- day months) on the unpaid principal balance thereof from the date of such Series A Note at the rate of nine and thirty-five one-hundredths percent (9.35%) per annum, payable monthly on the first (1st) day of each month of each year commencing on the interest payment date next succeeding the date of such Series A Note; (ii) bear interest, payable monthly as aforesaid (or, at the option of the registered holder thereof, on demand), on any overdue payment (including any overdue prepayment) of principal, any overdue payment of Yield-Maintenance Amount, and, to the extent permitted by applicable law, any overdue payment of interest, at a rate equal to the lesser of (a) the highest rate allowed by applicable law, or (b) the greater of (I) eleven and thirty-five one-hundredths percent (11.35%) per annum and (II) the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time in New York City as its prime rate; (iii) mature on January 29, 2000; and (iv) be in the form of the Series A Note set out in Exhibit A1 hereto. 2B. Series B Notes. Each of the Company and, subject to the satisfaction of the conditions set forth in paragraph 3 hereof, the Purchasers, hereby consents and agrees to the amendment and restatement, in accordance with the provisions of this Agreement, of the Existing 9.35% Notes with registration numbers R-1, R-2, R-8, R-9 and R-10, which Existing 9.35% Notes have an aggregate principal amount outstanding as of the date hereof of Thirty-Eight Million Five Hundred Seven Thousand Twenty-Eight Dollars ($38,507,028) (such Existing 9.35% Notes, as amended and restated as herein provided, shall be referred to collectively as the "Series B Notes," such term to include each Series B Note delivered from time to time in accordance with this Agreement). Each Series B Note delivered pursuant to this Agreement will: (i) bear interest (computed on the basis of a 360-day year of twelve 30- day months) on the unpaid principal balance thereof from the date of such Series B Note at the rate of nine and thirty-five one-hundredths percent (9.35%) per annum, payable monthly on the first (1st) day of each month of each year commencing on the interest payment date next succeeding the date of such Series B Note; (ii) bear interest, payable monthly as aforesaid (or, at the option of the registered holder thereof, on demand), on any overdue payment (including any overdue prepayment) of principal, any overdue payment of Yield-Maintenance Amount, and, to the extent permitted by applicable law, any overdue payment of interest, at a rate equal to the lesser of 3 (a) the highest rate allowed by applicable law, or (b) the greater of (I) eleven and thirty-five one-hundredths percent (11.35%) per annum and (II) the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time in New York City as its prime rate; (iii) mature on January 29, 2000; and (iv) be in the form of the Series B Note set out in Exhibit A2 hereto. 2C. Series C Notes. Each of the Company and, subject to the satisfaction of the conditions set forth in paragraph 3 hereof, the Purchasers, hereby consents and agrees to the amendment and restatement, in accordance with the provisions of this Agreement, of the Existing 9.33% Notes with registration numbers R-1, R-2, R-3 and R-4, which Existing 9.33% Notes have an aggregate principal amount outstanding as of the date hereof of Fifty-One Million Three Hundred Forty-Two Thousand Nine Hundred Seventy-Two Dollars ($51,342,972) (such Existing 9.33% Notes, as amended and restated as herein provided, shall be referred to collectively as the "Series C Notes," such term to include each Series C Note delivered from time to time in accordance with this Agreement). Each Series C Note delivered pursuant to this Agreement will: (i) bear interest (computed on the basis of a 360-day year of twelve 30- day months) on the unpaid principal balance thereof from the date of such Series C Note at the rate of nine and thirty-three one-hundredths percent (9.33%) per annum, payable monthly on the first (1st) day of each month of each year commencing on the interest payment date next succeeding the date of such Series C Note; (ii) bear interest, payable monthly as aforesaid (or, at the option of the registered holder thereof, on demand), on any overdue payment (including any overdue prepayment) of principal, any overdue payment of Yield-Maintenance Amount, and, to the extent permitted by applicable law, any overdue payment of interest, at a rate equal to the lesser of (a) the highest rate allowed by applicable law, or (b) the greater of (I) eleven and thirty-three one-hundredths percent (11.33%) per annum and (II) one percent (1%) plus the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time in New York City as its prime rate; (iii) mature on December 15, 2001; and (iv) be in the form of the Series C Note set out in Exhibit A3 hereto. 2D. Notes. The term "Note" as used herein shall include each Series A Note, Series B Note and Series C Note delivered pursuant to this Agreement and each Note 4 delivered in substitution or exchange for any such Note pursuant to paragraph 4G or paragraph 11D hereof. 2E. SURRENDER OF EXISTING NOTES; ISSUANCE OF AMENDED AND RESTATED NOTES. (i) Surrender and Issuance. On January 26, 1996 (the "Amendment Date") at 11:00 a.m., Eastern time, at the office of the Purchasers' special counsel, Hebb & Gitlin, a Professional Corporation, One State Street, Hartford, Connecticut 06103, each Purchaser will surrender to the Company all Existing Notes held by it, whereupon the Company will execute and deliver to each Purchaser, in accordance with the provisions hereof, one or more Notes (as set forth below its name on Annex 1 hereto) in the Series and denominations indicated on Annex 1 hereto, dated January 1, 1996 and payable as indicated on Annex 1 hereto. (ii) Expenses. Whether or not the conditions to effectiveness set forth in paragraph 3 of this Agreement are satisfied, the Company shall pay all out-of- pocket expenses of the Purchasers in connection with the negotiation, preparation, execution and delivery of this Agreement, including, without limitation, all the reasonable fees and expenses of special counsel engaged by the Purchasers in connection therewith. Without limiting the generality of the foregoing, the Company will pay, on the Amendment Date, the reasonable fees and disbursements of the Purchasers' 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 the Purchasers' special counsel rendered after the Amendment Date in connection with this Agreement. 3. CONDITIONS TO EFFECTIVENESS. The agreement and consent of each Purchaser to the amendment and restatement of the Existing Note Agreements and the Existing Notes, all as provided herein, are subject to the satisfaction, on or before the Amendment Date, of the following conditions precedent: A. 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. B. 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. C. Representations and Warranties; No Default. The representations and warranties contained in paragraph 8 hereof shall be true on and as of the Amendment Date, except to the extent of changes caused by the transactions herein contemplated; there shall exist on the Amendment Date no Event of Default or Default; and the Company shall have delivered to such Purchaser a certificate dated the Amendment Date, substantially in the form 5 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 Amendment 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. D. Legality. The amendment and restatement of the Existing Note Agreements and the Existing Notes, all as provided in this Agreement, 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 any Purchaser to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and each Purchaser shall have received such certificates or other evidence as it may request to establish compliance with this condition. E. 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. F. Private Placement Numbers. The Company shall have obtained or caused to be obtained private placement numbers for the Series A Notes, the Series B Notes and the Series C Notes from the CUSIP Service Bureau of Standard & Poor's, a division of McGraw-Hill, Inc., and the Purchasers shall have been informed of such private placement numbers. G. Other Purchasers. None of the Purchasers shall have failed to execute and deliver this Agreement. H. Expenses. The Company shall have paid on the Amendment Date the statement for fees and disbursements of the special counsel of the Purchasers presented on the Amendment Date. 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, and repurchase by the Company at the option of each holder as specified in paragraph 4E, paragraph 4G and paragraph 5I hereof. A. Required Prepayments. (i) Series A Notes. Until the Series A Notes shall be paid in full, the Company shall apply to the prepayment of the Series A Notes, without premium, the sum of Two Million Six Hundred Fifty Thousand Dollars ($2,650,000) on January 29 in each of the years 1996 to 1999, inclusive, and such principal amounts of the Series A Notes, together with accrued and unpaid interest thereon to the prepayment dates, shall become due on such prepayment dates. The remaining Two Million Six Hundred Fifty Thousand Dollars ($2,650,000) in principal amount of the Series A Notes, together 6 with accrued and unpaid interest thereon, shall become due on the maturity date of the Series A Notes. (ii) Series B Notes. Until the Series B Notes shall be paid in full, the Company shall apply to the prepayment of the Series B Notes, without premium, the sum of Nine Million Three Hundred Seventy-Five Thousand Dollars ($9,375,000) on January 29 in each of the years 1996 to 1999, inclusive, and such principal amounts of the Series B Notes, together with accrued and unpaid interest thereon to the prepayment dates, shall become due on such prepayment dates. The remaining One Million Seven Thousand Twenty-Eight Dollars ($1,007,028) in principal amount of the Series B Notes, together with accrued and unpaid interest thereon, shall become due on the maturity date of the Series B Notes. (iii) Series C Notes. Until the Series C Notes shall be paid in full, the Company shall apply to the prepayment of the Series C 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 2000, inclusive, and such principal amounts of the Series C Notes, together with accrued and unpaid interest thereon to the prepayment dates, shall become due on such prepayment dates. The remaining Seven Million Ninety-Two Thousand Nine Hundred Seventy-Two Dollars ($7,092,972) in principal amount of the Series C Notes, together with accrued and unpaid interest thereon, shall become due on the maturity date of the Series C Notes. B. 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 accrued and unpaid interest thereon to the prepayment date and the Yield-Maintenance Amount, if any, in respect of the principal amount of each Series of the Notes being so prepaid. Any partial prepayment of the Notes of any Series pursuant to this paragraph 4B shall be applied in satisfaction of required payments of principal in inverse order of their scheduled due dates. C. 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 thirty (30), nor more than sixty (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 accrued and unpaid 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 each holder of Notes specifying the principal amount of 7 each Note to be prepaid, the interest to be paid on each such Note, accrued to the prepayment date, and the amount of the Yield-Maintenance Amount, if any, together with supporting calculations in reasonable detail. D. Partial Prepayments Pro Rata. (i) Required Prepayments. If, at the time of any payment of the principal amount of Notes of any Series made pursuant to paragraph 4A, there is more than one Note of such Series outstanding, the aggregate principal amount of such payment shall be allocated among the Notes of such Series at the time outstanding pro rata in proportion to the respective unpaid principal amounts of all such outstanding Notes of such Series. (ii) Optional Prepayments with Yield-Maintenance Amount. If, at the time of any optional prepayment of the principal of the Notes made pursuant to paragraph 4B, there is more than one Note outstanding, the aggregate principal amount of each such optional prepayment of the Notes shall be allocated among the Notes at the time outstanding pro rata in proportion to the respective unpaid principal amounts of all such outstanding Notes, without regard to Series of Notes. E. 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 8 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. F. 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 hereof or upon acceleration of such final maturity pursuant to paragraph 7A hereof), or purchase or otherwise acquire, directly or indirectly (other than pursuant to paragraph 4E, 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 (without distinguishing among the different Series) 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. G. Tender of Notes in Payment of Warrant Exercise Price. The Warrant Agreement provides 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 under 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, of the same Series as the tendered 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. The Company and each of the Purchasers, being all of the Persons that are party to the Warrant Agreement, agree that the term "Note," as used and defined in the Warrant Agreement, shall be amended to mean "Note," as defined in this Agreement, without further action on the part of any such Person. H. Effect of Partial Prepayments and Acquisitions. Upon any partial prepayment of Notes of any Series pursuant to paragraph 4E or paragraph 5I, or any acquisition of Notes of any Series permitted by paragraph 4F or paragraph 4G, each required principal payment becoming due under clause (i), clause (ii) or clause (iii), as applicable, of paragraph 4A with respect to such Series on and after the date of such prepayment or acquisition shall be reduced in the same proportion as the aggregate unpaid principal amount that such Series of Notes is reduced as a result of such prepayment or acquisition. 5. AFFIRMATIVE COVENANTS. A. 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 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. B. 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; (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; 10 (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; and (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. C. 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. 11 D. Financial Statements. The Company covenants that it will deliver to each Significant Holder in duplicate (or such number of copies as any holder may request): (i) as soon as practicable and in any event within forty-five (45) 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 (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 ninety (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 Subsidiaries 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, 12 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); (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 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 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 6R hereof and paragraph 5I hereof, (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 13 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 of Default or Default which would not be disclosed in the course of an audit conducted in accordance with generally accepted auditing standards. E. 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. F. 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. G. 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. 14 H. Covenant to Secure Notes 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. I. 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 15 pursuant to paragraph 11A 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, of the same Series as such surrendered 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, 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. 16 (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 4E 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 respects 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 of Notes under paragraph 7 hereof. 6. NEGATIVE COVENANTS. A. 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 December 22, 1992 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, 17 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 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 18 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 6A or to evidence for informational purposes a lessor's interest in Property leased to the Company or any such Subsidiary. B. 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 (1) 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 Amendment 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. C. 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 Debt, in an aggregate principal amount not to exceed Ten Million Dollars ($10,000,000) at any time outstanding; provided, that no more than Five Million Dollars ($5,000,000) of such amount may be Debt of Subsidiaries; and provided further, that all of such Debt shall be unsecured, except that up to Two Million Dollars ($2,000,000) of such Debt, to be incurred in connection with a loan from the State of Maryland or an entity acting in conjunction with the State of Maryland to 19 finance the Company's purchase of equipment for its facility located in Hagerstown, Maryland, may be secured by such equipment; (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 Five Million Dollars ($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 dates of the original issuance of the Existing Notes 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: 20 (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. D. 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 21 (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 6C hereof. E. Adjusted Consolidated Tangible Net Worth Maintenance. The Company will not permit, as of the last day of each fiscal quarter of the Company, Adjusted Consolidated Tangible Net Worth to be 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 generally accepted accounting principles) 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 May 19, 1994. F. 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 One Dollar ($1.00) of additional Debt pursuant to paragraph 6C 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 22 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. G. Fixed Charge Coverage. The Company will not permit, as of the last day of each fiscal quarter of the Company, the ratio of Consolidated Net Income Available for Fixed Charges for the period of three hundred sixty-five (365) consecutive days (or three hundred sixty-six (366) consecutive days for any such period that includes February 29) ending on such day to Consolidated Fixed Charges for such period, to be 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 Years 1995 and 1996 1.55 to 1.00 1st Quarter, Fiscal Year 1997 1.60 to 1.00 2nd Quarter, Fiscal Year 1997 1.65 to 1.00 3rd Quarter, Fiscal Year 1997 1.75 to 1.00 4th Quarter, Fiscal Year 1997 1.80 to 1.00 Fiscal Year 1998 and thereafter 2.00 to 1.00.
H. 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 (4) full consecutive fiscal quarters to exceed the sum of the amounts set forth below opposite such four (4) 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
I. 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. 23 J. 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. K. 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 February 2, 1990, 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. L. 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 February 2, 1990, and (z) Combined Subsidiary Debt, in each case at such time, to exceed fifteen percent (15%) of Consolidated Tangible Net Worth at such time. M. 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 May 19, 1994 (after giving effect to the Seventh Amendment to the Credit Agreement), but without amendment, supplement or modification (except as set forth in 24 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 May 19, 1994, 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 May 19, 1994 (after giving effect to the Seventh Amendment to the Credit Agreement dated as of such date); (b) after June 30, 1993, 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 June 30, 1993, 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 25 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. N. 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 Debt 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 Debt not being junior or subordinated in right of payment to the Notes to the same extent such Existing Subordinated Notes or 1994 Subordinated Debt, as the case may be, were subordinated to the Existing Notes on May 19, 1994 (after giving effect to the issuance of the 1994 Subordinated Debt). 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 Debt. O. 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 May 19, 1994 (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; 26 (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. P. Sales of Assets. The Company will not, and will not permit any Consolidated Subsidiary to, at any time after June 30, 1993, 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 June 30, 1993 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 June 30, 1993 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 27 (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. Q. 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. R. Debt Ratio. The Company shall not permit the Debt Ratio, as of the last day of each fiscal quarter of the Company, to be greater than the ratio set forth opposite the period set forth in the chart below in which such day occurs: 28
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. A. 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 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 29 (iv) any representation or warranty made by the Company herein, in the Existing Note Agreements or any amendment thereto or restatement thereof 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 in connection with the foregoing agreements) 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 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, 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 30 (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 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 31 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. B. 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. C. 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. D. 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 32 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 to each of the Purchasers as follows: A. Corporate Organization and Authority. 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 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 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 license or permit, 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, (iv) 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, except where the failure to be so qualified 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, and (v) has the corporate power and authority to authorize, execute and deliver this Agreement and the Notes and to enter into this Agreement and to perform its obligations hereunder. B. Actions Pending. Except as disclosed 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 33 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. C. Authorization, Enforceability. (i) Authorization. The amendment and restatement of the Existing Notes are not, the authorization, execution and delivery by the Company of this Agreement are not, and the performance by the Company of its obligations under this Agreement and the Notes 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. (ii) Notes are Enforceable. The amendment and restatement of the Existing Notes and the execution and delivery of this Agreement have been duly authorized by the Company. The Notes and this Agreement constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms, except as such enforceability 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. D. Governmental Consent. 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 Amendment Date), is required with respect to the authorization, execution and delivery by the Company of this Agreement and the Notes, or the performance by the Company of its obligations under this Agreement or the Notes. E. No Defaults. No event has occurred and no condition exists that constitutes a Default or an Event of Default under the Existing Note Agreements or that, upon the amendment and restatement of the Existing Notes and the execution of this Agreement, would constitute a Default or an Event of Default hereunder. 9. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser represents that it is not acquiring the Notes 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. 10. DEFINITIONS. For the purpose of this Agreement, the following terms shall have the meanings specified with respect thereto below: 34 A. 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 4E or paragraph 5I hereof 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 of any Series, 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. 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 (y) with respect to the Series A Notes and the Series B Notes, in the case of any Settlement Date occurring after January 29, 1996 35 and (z) with respect to the Series C Notes, 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 of any Series, 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 of any Series, 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 of any Series, 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 of any Series, 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 36 (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. B. 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 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: - ------------ ---------------- ----------------------- May 19, 1994 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
37 "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 and accepted by the Board of Directors (including updates thereto presented to and accepted by the Board of Directors 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; (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 and accepted by the Board of Directors (including updates thereto presented to and accepted by the Board of Directors through the date of effectiveness of such facility) 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; 38 (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; (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; 39 (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, (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 40 (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 4E or paragraph 5I, 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 Amount as of such date with respect to such Notes. "Agreement" and references thereto shall mean this Amended and Restated Note Agreement, as it may be amended, restated or supplemented from time to time. "Amendment Date" shall have the meaning specified in paragraph 2E of this Agreement. "Bankruptcy Law" shall have the meaning specified in clause (viii) of paragraph 7A. 41 "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. "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, with respect to any holder of Notes, any information furnished to such holder by the Company or any agent of the Company in connection with this Agreement (including, without limitation, any information furnished pursuant to paragraph 5D hereof) or obtained by such holder 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 such holder, at the time the information was furnished to it, (ii) that subsequently becomes publicly known through no act or omission by such holder, or (iii) that otherwise becomes known to such holder, 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 42 (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; (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; 43 (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 Thirty-Eight Million Dollars ($38,000,000) in the aggregate, established by the Company in the third quarter of its 1993 Fiscal Year; (g) non-cash expenses incurred by the Company on or after November 1, 1995 in connection with one or more exchanges by the Company of shares of its common stock for all or any portion of the 1994 Subordinated Debt or the Company's 7% Convertible Subordinated Debentures due 2012, in an amount not to exceed Ten Million Dollars ($10,000,000) in the aggregate (such non-cash expenses being 44 attributable to (I) the fair market value of the shares of common stock issued by the Company for such exchanged Debt in excess of the shares of common stock that would have been issued for such exchanged Debt upon the conversion thereof in accordance with the terms of the indentures related to such Debt and (II) the write-off of unamortized Debt issuance expense); and (h) non-cash expenses incurred by either the Company or Rohr Credit Corporation in connection with (I) the Company's sale of Rohr Credit Corporation or (II) the sale by Rohr Credit Corporation of all or substantially all of its assets, in an amount not to exceed Six Million Dollars ($6,000,000) in the aggregate (such non-cash expenses being attributable to the amount by which the net book value of the assets sold by the Company or Rohr Credit Corporation exceeds the consideration received therefor that may be recognized as an asset on the consolidated balance sheet of the Company in accordance with generally accepted accounting principles); 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. "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: 45 (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). 46 "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. "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 Credit Agreement, any Acceptable Replacement Credit Facility, the 1994 Senior Debt, the 1994 Subordinated Debt or the Existing Subordinated Notes of either Subordinated 47 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 February 2, 1990: (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 persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act), of (a) 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 (b) 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 (2) 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 48 (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 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 December 22, 1992, 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. 49 "Equipment Sublease Prepayment Event" shall mean, with respect to the Sublease Agreements, any mandatory or optional prepayment of rent or payment made to acquire all or a portion of any sublessor's interest in any subleased equipment, or any event which occurs that gives rise to an obligation of the Company or any Subsidiary to make any such prepayment or payment, in each case, other than: (i) regularly scheduled payments of periodic rent, as scheduled on December 31, 1994; (ii) payments of the stipulated loss value with respect to an item of equipment that shall become worn out, lost, stolen, destroyed, irreparably damaged in the reasonable determination of the Company, or permanently rendered unfit for use from any cause whatsoever; (iii) payments of the stipulated loss value with respect to an item of equipment that the Company has discontinued using for valid operational reasons; (iv) payments made on or about February 28, 2000 to acquire all of a sublessor's interests in the equipment subleased under a Sublease Agreement in accordance with the early purchase option set forth in such Sublease Agreement; and (v) payments made on or after February 28, 2003, the expiration of the basic term of the Sublease Agreements. As used in this definition, "rent" shall mean regularly scheduled periodic rent and shall not include any fee, cost, expense, tax, indemnity, loss or other charge that the Company is required to pay or reimburse to a sublessor and which may be characterized as additional or supplemental rent in a Sublease Agreement. "Equity Issuance Acquisitions" shall mean the acquisition by the Company of Debt (including, without limitation, the Notes, the 1994 Subordinated Debt 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 50 (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 9.35% Notes" shall have the meaning specified in paragraph 1A of this Agreement. "Existing 9.33% Notes" shall have the meaning specified in paragraph 1A of this Agreement. "Existing Notes" shall have the meaning specified in paragraph 1A of this Agreement. "Existing 9.35% Note Agreement" shall have the meaning specified in paragraph 1A of this Agreement. "Existing 9.33% Note Agreement" shall have the meaning specified in paragraph 1A of this Agreement. "Existing Note Agreements" shall have the meaning specified in paragraph 1A of this Agreement. "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 "Subordinated 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. 51 "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 Five Million Dollars ($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 (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). "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. 52 "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 advance or make available funds for the purchase or payment of such indebtedness or obligation; (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, 53 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. "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 54 (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; 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 55 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 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. 56
Maximum Projected 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
"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, (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 57 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. "Note" shall have the meaning specified in paragraph 2D of this Agreement. "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. "Notice of Sale" shall have the meaning specified in clause (ii) of paragraph 4E 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 58 (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 May 19, 1994, 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 Subordinated Series of Existing Subordinated Notes, the purchase or acquisition by the Company or any Subsidiary of Existing Subordinated Notes of such Subordinated 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 Subordinated 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 Subordinated Series not exceeding (together with any Existing Subordinated Notes of such Subordinated 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 Subordinated 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; 59 (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 Subordinated 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 (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; and 60 (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 Preferred Dividend" shall mean dividends in respect of any Permitted Preferred Stock in an aggregate amount not to exceed in any period of three hundred sixty-five (365) days (or three hundred sixty-six (366) days in any year in which there is a February 29th) the product of (i) the lesser of: (a) an amount equal to one hundred (100) basis points in excess of the yield on the U.S. Treasury security with a constant maturity of thirty (30) years on the date of issuance of the Permitted Preferred Stock; and (b) ten percent (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. "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 Equipment Sublease 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: 61 (i) Originally Scheduled Payments; (ii) Permitted Existing Subordinated Debt Acquisitions; (iii) Permitted IDB Acquisitions; (iv) Equity Issuance Acquisitions; and (v) De Minimus Payments. Payments (excluding payments in common stock of the Company) 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 that has any Debt, as described in clause (vi) of the definition of "Debt", as of the January 1 immediately preceding the beginning of such fiscal year, shall not give rise to a Prepayment Event, but a Prepayment Event will result from the payment (excluding payments in common stock of the Company) 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, repair, upgrade or alter assets owned by the Company or any Subsidiary on December 22, 1992) acquired, improved or constructed by the Company or any Subsidiary after December 22, 1992, 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. 62 "Ratable Prepayment Amount" shall mean, in respect of the Notes: (i) in connection with any Equipment Sublease Prepayment Event, a principal amount of the Notes equal to the product of: (a) the quotient of: (I) the aggregate amount by which regularly scheduled periodic rent under the Sublease Agreements is to be reduced during the basic term of such Sublease Agreements as a result of such Equipment Sublease Prepayment Event; divided by (II) the aggregate amount of all regularly scheduled periodic rent under the Sublease Agreements from the date of such Equipment Sublease Prepayment Event until the end of the basic term of such Sublease Agreements (calculated without regard to such Equipment Sublease Prepayment Event); multiplied by (b) the outstanding principal amount of the Notes; and (ii) in connection with any Letter of Credit Prepayment Event, a principal amount of the Notes equal to 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; and (iii) 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 (662/3%) 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. 63 "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 4E 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 amended from time to time. "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. "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. "Series" shall mean any or all of any series of Notes issued hereunder. "Series A Notes" shall have the meaning specified in paragraph 2A of this Agreement. "Series B Notes" shall have the meaning specified in paragraph 2B of this Agreement. "Series C Notes" shall have the meaning specified in paragraph 2C of this Agreement. "Significant Holder" shall mean (i) each Purchaser, so long as such Purchaser shall hold 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. 64 "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. "Sublease Agreements" shall mean the Sublease Agreements, dated as of September 14, 1992, between the Company and State Street Bank and Trust Company of California, National Association, and an individual trustee, not in their individual capacities but solely as owner trustees, as such Sublease Agreements may be amended from time to time. "Subordinated Debt" shall mean all Debt of the Company and the Subsidiaries that is not Senior Debt. "Subordinated Series" shall have the meaning set forth in the definition of "Existing Subordinated Notes." "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. "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 65 (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 February 2, 1990, 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 (10) 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 issued 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, dated as of July 31, 1993, among the Company and the Persons identified on Annex 1 thereto. "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. 66 11. MISCELLANEOUS.MISCELLANEOUS. A. 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 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. B. 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. C. 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 67 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 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. D. 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 the same Series as such surrendered Note, 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 the same Series as such exchanged Note, 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. 68 E. 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, 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). F. 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. G. 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. H. 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. 69 I. 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. J. 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 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, 70 (b) in response to any subpoena or other legal process, or (c) in connection with any litigation to which such holder is a party. K. 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. 850 Lagoon Drive Chula Vista, CA 91910 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. L. 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. M. 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. N. 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. 71 O. 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. P. 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. Q. 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. R. 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 3G, 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. 12. CONSENT; WAIVER. A. Consent to Amendment of Credit Agreement. The Purchasers hereby consent to an amendment of the definition of "Repayment Date" in the Credit Agreement for the purpose of including the dates upon which Equipment Sublease Prepayment Events occur. Such amendment is set forth in the eleventh amendment to the Credit Agreement, dated as of January 19, 1996, and the Company hereby represents and warrants that a true and correct copy of such eleventh amendment has been delivered to each Purchaser. The aforesaid consent is given pursuant to the requirements of paragraph 6O of this Agreement. B. Waiver of Certain Provisions of Existing 9.33% Note Agreement. The Purchasers hereby waive any Default or Event of Default hereunder resulting solely as a consequence of a violation, prior to the Amendment Date, of the provisions of the second and third paragraphs of paragraph 5D of the Existing 9.33% Note Agreement by virtue of any failure of the Company to deliver to the holders of the Existing 9.33% Notes the Officer's Certificate and the certificate of the Company's accountants in compliance with the requirements set forth therein. [Remainder of page intentionally blank. Next page is signature page.] 72 IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Note Agreement to be duly executed by their respective authorized officers as of the day and year first above written. ROHR, INC. By: /s/ L. A. Chapman ----------------- Name: L. A. Chapman Title: Senior Vice President & Chief Financial Officer THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /s/ Stephen Haeckel ------------------- Name: Stephen Haeckel Title: Vice President PRINCIPAL MUTUAL LIFE INSURANCE COMPANY By: /s/ Warren Shank ---------------- Name: Warren Shank Title: Counsel By: /s/ Austin Ramzy ---------------- Name: Austin Ramzy Title: Assistant Director Investment Securities MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By: /s/ Bruce E. Gaudette ---------------------- Name: Bruce E. Gaudette Title: Vice President 73 CONNECTICUT GENERAL LIFE INSURANCE COMPANY 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 SUN LIFE ASSURANCE COMPANY OF CANADA By: /s/ John N. Whelihan -------------------- Name: John N. Whelihan Title: Vice President, U.S. Private Placements - for President By: /s/ Jeffrey J. Skerry --------------------- Name: Jeffrey J. Skerry Title: Associate Counsel - for Secretary SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) By: /s/ L. Brock Thomson -------------------- Name: L. Brock Thomson Title: Treasurer EX-4.7 3 AMENDMENT NO. 1 TO RIGHTS AGREEMENT ROHR, INC. (FORMERLY ROHR INDUSTRIES, INC.) and THE FIRST NATIONAL BANK OF CHICAGO Rights Agent AMENDMENT NO. 1 to AMENDED AND RESTATED RIGHTS AGREEMENT Dated as of April 6, 1990 February 22, 1996 The undersigned do hereby amend the Amended and Restated Rights Agreement dated as of April 6, 1990, by and between Rohr, Inc., formerly Rohr Industries, Inc., a Delaware Corporation, and The First National Bank of Chicago, a national banking association (the "Rights Agent"), as set forth herein. Capitalized terms used herein which are defined in the Agreement are intended to have the meanings set forth therein. 1. The following exception (iii) shall be added to the definition of "Acquiring Person" in Section 1(a), at the end of the first sentence thereof: "(iii) J. P. Morgan & Co., Incorporated, for so long as the number of voting Shares Beneficially Owned by it does not exceed 3,899,156." 2. The following sentence shall be added at the end of Section 3(a): "Notwithstanding the foregoing, no Distribution Date shall be deemed to have occurred by reason of the public announcement (including the public announcement prior to the date hereof) that J. P. Morgan & Co., Incorporated, has acquired Beneficial Ownership of Voting Shares not exceeding 3,899,156 in number." 3. The definition of "Final Expiration Date" in Section 7(b) shall be changed to August 25, 1999. 4. The following paragraph (c) shall be added at the end of Section 28: "(c) Prior to the Final Expiration Date, not less frequently than every three years, the Company shall provide for holders of Voting Shares to vote, on an advisory basis, on the question of whether the Final Expiration Date should EXHIBIT 4.7 be extended or whether the Agreement should be allowed to expire in accordance with its terms. Any such vote shall be nonbinding, shall be solely for consideration by the Board of Directors, and shall have no legal effect whatsoever." IN WITNESS WHEREOF, the parties hereto have caused this amendment to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. ATTEST ROHR, INC. (FORMERLY ROHR INDUSTRIES, INC.) /s/ WILLIAM BILLINGSLEA, JR. /s/ RICHARD W. MADSEN By: _________________________________ By: _______________________________ Name: William Billingslea, Jr. Name: Richard W. Madsen Title: Corporate Counsel and Title: Vice President, General Assistant Secretary Counsel and Secretary ATTEST THE FIRST NATIONAL BANK OF CHICAGO /s/ THOMAS A. FERRARI /s/ KEVIN J. LAURITA By: _____________________________ By: _______________________________ Name: Thomas A. Ferrari Name: Kevin J. Laurita Title Vice President Title: Assistant Vice President EX-10.13.10 4 TENTH AMENDMENT TO CREDIT AGREEMENT TENTH AMENDMENT This TENTH AMENDMENT, dated as of November 17, 1995, is entered into by and 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"), and CITICORP USA, INC., a Delaware corporation, 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, the Fifth Amendment dated as of July 9, 1993, the Sixth Amendment dated as of September 24, 1993, the Seventh Amendment dated as of May 10, 1994, the Eighth Amendment dated as of November 29, 1994, and the Ninth Amendment dated as of June 30, 1995 (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 2 below, hereby amended follows: (a) The definition of "Net Income Available for Fixed Charges" contained in Section 1.01 of the Credit Agreement is hereby amended to read as follows: "Net Income Available for Fixed Charges" means, for any period, -------------------------------------- net income (or net deficit, as the case may be) before taxes for such period, as determined in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e), plus amounts which, in the determination of net income for such period, have been deducted for (i) the items referred to in the definition of "Fixed Charges" in this Section 1.01, (ii) depreciation, (iii) in the case of any such period that includes the month of April 1992, the $50,000,000 special provision which was established by the Borrower in the third quarter of Fiscal Year 1992, (iv) in the case of any such period that includes the fiscal month 1 ending May 2, 1993 (A) the cumulative effect through May 2, 1993 of the accounting changes adopted by the Borrower, effective as of August 1, 1992, as described in the Borrower's Form 10-Q filed with the Securities and Exchange Commission for third Fiscal Quarter 1993, and (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, and (v) non-cash expenses, in an amount not to exceed $10 million in the aggregate from November 1, 1995 through the Termination Date, that are incurred by Borrower in connection with one or more exchanges by Borrower of shares of its common stock for all or any portion of Borrower's Convertible Subordinated Notes due 2004 or Borrower's Convertible Subordinated Debentures due 2012. (b) The definition of "Repayment Date" contained in Section 1.01 of the Credit Agreement is hereby amended to read as follows: "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 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, (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 (d) prepayments, redemptions, purchases, defeasances and other satisfactions of convertible Debt for consideration consisting solely of common stock of the Borrower, and provided, further, that it is -------- ------- understood and agreed that the scheduled repayment date or stated maturity of the industrial development bonds (in an 2 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. SECTION 2. Conditions of Effectiveness. This Tenth Amendment shall --------------------------- become effective as of the date hereof when the Agent shall have received counterparts of this Tenth Amendment executed by the Borrower and the Majority Lenders, or, as to any of the Lenders, advice satisfactory to the Agent that such Lenders have executed counterparts of this Tenth Amendment. Notwithstanding the provisions of the foregoing sentence, the amendment to the definition of "Net Income Available for Fixed Charges" contemplated by Section 1(a) of this Tenth Amendment shall not become effective until: (a) the definition of "Consolidated Net Income Available for Fixed Charges" contained in paragraph 10B of the Amended and Restated Note Agreement, dated as of May 10, 1994, between the Borrower and the note holders parties thereto and relating to the Borrower's 9.33% Senior Notes, as such agreement has been amended to date, shall have been amended in substantially the same manner as set forth in Section 1(a) hereof; (b) the definition of "Consolidated Net Income Available for Fixed Charges" contained in paragraph 10B of the Amended and Restated Note Agreement, dated as of May 10, 1994, between the Borrower and the note holders parties thereto and relating to the Borrower's 9.35% Senior Notes, as such agreement has been amended to date, shall have been amended in substantially the same manner as set forth in Section 1(a) hereof; and (c) the Sublease Agreement, dated as of September 14, 1992, between the Borrower and State Street Bank and Trust Company of California, National Association, and an individual trustee, not in their individual capacities but solely as owner trustees under a trust for the benefit of General Electric Capital Corporation, as amended to date, shall have been amended to incorporate by reference the definition of "Net Income Available For Fixed Charges" contained in Section 1.01 of the Credit Agreement, as amended by this Tenth Amendment. SECTION 3. Reference to and Effect on the Credit Agreement. (a) ----------------------------------------------- Upon the effectiveness of this Tenth Amendment, on and after the date hereof each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or 3 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 Tenth Amendment. (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 Tenth 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 Tenth 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 Tenth 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 Tenth Amendment, or of any document required to be delivered hereunder, by telecopier shall be effective as delivery of a manually executed counterpart of this Tenth Amendment or such document. SECTION 6. Governing Law. This Tenth Amendment shall be governed by, ------------- and construed in accordance with, the laws of the State of New York. 4 IN WITNESS WHEREOF, the parties hereto have caused this Tenth Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. ROHR, INC. By: /s/ Kenneth W. Scholz --------------------- Title: Treasurer CITICORP USA, INC., as Agent By: /s/ Marjorie Futornick ---------------------- Title: Vice President Lenders ------- CITIBANK, N.A. By: /s/ Arezoo Jafari ----------------- Title: Assistant Vice President CITICORP USA, INC. By: /s/ Marjorie Futornick ---------------------- Title: Vice President WELLS FARGO BANK, N.A. By: /s/ Craig T. Ingram ------------------- Title: Vice President THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Jacqueline P. Yardley ------------------------- Title: Vice President MANUFACTURERS BANK By: ________________________ Title: 5 ROYAL BANK OF CANADA By: /s/ Brian W. Dixon ------------------- Title: Senior Manager THE LONG-TERM CREDIT BANK OF JAPAN, LTD., Los Angeles Agency By: /s/ Motokazu Uematsu -------------------- Title: Deputy General Manager BANQUE FRANCAISE DU COMMERCE EXTERIEUR By: ______________________ Title: By: /s/ Henry Lee ------------- Title: Assistant Vice President BANCA COMMERCIALE ITALIANA, Los Angeles Foreign Branch By: /s/ Richard E. Iwanicki ----------------------- Title: Vice President By: /s/ Jack Wityak --------------- Title: Vice President BANCO CENTRAL HISPANOAMERICANO, S.A. By: /s/ Louis M. Ferreira --------------------- Title: Vice President THE MITSUBISHI TRUST AND BANKING CORPORATION, LOS ANGELES AGENCY By: /s/ Hiroaki Koseski ------------------- Title: Senior Vice President 6 EX-10.13.11 5 ELEVENTH AMENDMENT TO CREDIT AGREEMENT ELEVENTH AMENDMENT This ELEVENTH AMENDMENT, dated as of January 19, 1996, is entered into by and 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"), and CITICORP USA, INC., a Delaware corporation, 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, the Fifth Amendment dated as of July 9, 1993, the Sixth Amendment dated as of September 24, 1993, the Seventh Amendment dated as of May 10, 1994, the Eighth Amendment dated as of November 29, 1994, the Ninth Amendment dated as of June 30, 1995, and the Tenth Amendment dated as of November 17, 1995 (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 3 below, hereby amended follows: (a) Section 1.01 is hereby amended by adding the following definition in appropriate alphabetical order: "'Sublease Agreements' means those certain Sublease Agreements, dated as of September 14, 1992, between the Borrower and State Street Bank and Trust Company of California, National Association, and W. Jeffrey Kramer as Trustees for the benefit of General Electric Capital Corporation, Sanwa General Equipment Leasing, Incorporated, ELLCO Leasing Corporation and JCB Credit Corporation and their respective successors and assigns, as such agreements may be amended from time to time." (b) The definitions of "Net Income Available For Fixed Charges", "Pro Rata Amount" and "Repayment Date" in Section 1.01 are hereby amended to read, respectively, as follows: 1 "'Net Income Available for Fixed Charges' means, for any period, --------------------------------------- net income (or net deficit, as the case may be) before taxes for such period, as determined in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e), plus amounts which, in the determination of net income for such period, have been deducted for (i) the items referred to in the definition of "Fixed Charges" in this Section 1.01, (ii) depreciation, (iii) in the case of any such period that includes the month of April 1992, the $50,000,000 special provision which was established by the Borrower in the third quarter of Fiscal Year 1992, (iv) in the case of any such period that includes the fiscal month ending May 2, 1993 (A) the cumulative effect through May 2, 1993 of the accounting changes adopted by the Borrower, effective as of August 1, l992, as described in the Borrower's Form 10-Q filed with the Securities and Exchange Commission for third Fiscal Quarter 1993, and (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, (v) non-cash expenses, in an amount not to exceed $10 million in the aggregate from November 1, 1995 through the Termination Date, that are incurred by Borrower in connection with one or more exchanges by Borrower of shares of its common stock for all or any portion of Borrower's Convertible Subordinated Notes due 2004 or Borrower's Convertible Subordinated Debentures due 2012 and (vi) non-cash expenses, in an amount not to exceed Six Million Dollars ($6,000,000), incurred by the Borrower in connection with the sale of Rohr Credit Corporation." "'Pro Rata Amount' means, in respect of any Repayment Date, the --------------- amount which bears to the total of the Lenders' Commitments the same ratio as the aggregate principal amount of that prepayment, redemption, purchase, defeasance or other satisfaction of Debt which caused such Repayment Date to occur bears to the aggregate principal amount of such Debt outstanding at the date of (but without giving effect to) such prepayment, redemption, purchase, defeasance or other satisfaction; provided, however, with respect to any Repayment Date -------- ------- described in the last sentence of the definition of 'Repayment Date', 'Pro Rata Amount' means an amount equal to the total of the Lenders' Commitments multiplied by the quotient of (a) the aggregate amount by which rent under the Sublease Agreements is to be reduced during the basic term of the Sublease Agreements as a result 2 of the prepayment or other satisfaction giving rise to such Repayment Date, divided by (b) the aggregate amount of all rent under the Sublease Agreements from the date of such prepayment or other satisfaction until the end of the basic term of the Sublease Agreements (calculated without regard to such prepayment or other satisfaction)." "'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 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, (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 (d) prepayments, redemptions, purchases, defeasances and other satisfactions of convertible Debt for consideration consisting solely of common stock of the Borrower, 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. 'Repayment Date' shall also mean the date on which the Borrower prepays or otherwise satisfies prior to the scheduled payment date any rent, or makes any payment to acquire all or a portion of any sublessor's interest in any subleased equipment, under any of the Sublease Agreements; provided, however, that the date -------- ------- on which 3 any of the following occurs shall not be a Repayment Date: (i) regularly scheduled payments of periodic rent, as scheduled on December 31, 1994, (ii) payments of the stipulated loss value with respect to an item of equipment that shall become worn out, lost, stolen, destroyed, irreparably damaged in the reasonable determination of the Borrower, or permanently rendered unfit for use from any cause whatsoever; (iii) payments of the stipulated loss value with respect to an item of equipment that the Borrower has discontinued using for valid operational reasons; (iv) payments made on or about February 28, 2000, to acquire all of a sublessor's interests in the equipment subleased under a Sublease Agreement in accordance with the early purchase option set forth in such Sublease Agreement; and (v) payments made on or after February 28, 2003, the expiration of the basic term of the Sublease Agreements; and provided, further, that it is -------- ------- understood that the term 'rent', as used in this definition and the definition of the term 'Pro Rata Amount', shall mean regularly scheduled periodic rent and shall not include any fee, cost, expense, tax indemnity, loss or other charge that the Borrower is required to pay or reimburse to a sublessor and which may be characterized as additional or supplemental rent in any of the Sublease Agreements." (c) Section 5.02(k) is hereby amended by adding to the end thereof a parenthetical clause to read as follows: "(except that up to $2,000,000 of the Debt described in clause (iii) above may be secured by a Lien described in clause (iv) of the definition of "Permitted Liens" provided that such Debt consists of a loan from the State or Maryland, or an entity acting in conjuction with the State of Maryland, to the Company to finance the acquisition of equipment to be used at the Company's facility in Hagerstown, Maryland)". SECTION 2. Waiver. The provisions of Section 5.02(g)(iii) of the ------ Credit Agreement are, eEffective as of the date hereof and subject to the satisfaction of the conditions set forth in Section 3 below,: (a) the provisions of Section 5.02(g)(iii) of the Credit Agreement are hereby waived solely to permit the Amended and Restated Note Agreement, dated as of May 10, 1994 and relating to Borrower's 9.35% senior notes due 2000, and the Amended and Restated Note Agreement, dated as of May 10, 1994 and relating to Borrower's 9.33% senior notes due 2002, each as amended to date, to be amended, restated and amalgamated into the Exchange Agreement and Amended and Restated Note Agreement (the "Amended Agreement") substantially in 4 the form of the Exchange Agreement and Amended and Restated Note Agreement delivered to Shearman & Sterling, special counsel to the AgentLenders, prior to the execution of this Eleventh Amendment; and (b) the provisions of Section 5.03(l) of the Credit Agreement which require the Borrower to furnish a copy of the Amended Agreement to each Lender at least two Business Day prior to the effective date of the Amended Agreement are hereby waived, provided that (i) the Borrower furnishes a draft of the Amended Agreement to each Lender at least one Business Day prior to the effective date of the Amended Agreement, and (ii) the Amended Agreement executed by the Borrower is substantially similar to the draft of the Amended Agreement furnished to the Lenders, (it being understood by the parties that the Borrower has agreed to furnish to each Lender a true and correct copy of the Amended Agreement promptly after such agreement becomes effective). SECTION 3. Conditions of Effectiveness. This Eleventh Amendment --------------------------- shall become effective as of the date hereof when: (a) the Agent shall have received counterparts of this Eleventh Amendment executed by the Borrower and the Majority Lenders, or, as to any of the Lenders, advice satisfactory to the Agent that such Lenders have executed counterparts of this Eleventh Amendment; (b) the Amended Agreement shall have become effective; and (c) the Sublease Agreement, dated as of September 14, 1992, between the Borrower and State Street Bank and Trust Company of California, National Association, and W. Jeffrey Kramer as Trustees for the benefit of General Electric Capital Corporation, as amended to date, shall have been amended to incorporate by reference the definition of "Net Income Available For Fixed Charges" contained in Section 1.01 of the Credit Agreement, as amended by this Eleventh Amendment. SECTION 4. Reference to and Effect on the Credit Agreement. (a) Upon ----------------------------------------------- the effectiveness of this Eleventh Amendment, 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 or otherwise modified by this Eleventh Amendment. 5 (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 Eleventh 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 5. 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 Eleventh 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 6. Execution in Counterparts. This Eleventh 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 Eleventh Amendment, or of any document required to be delivered hereunder, by telecopier shall be effective as delivery of a manually executed counterpart of this Eleventh Amendment or such document. SECTION 7. Governing Law. This Eleventh Amendment shall be governed ------------- by, and construed in accordance with, the laws of the State of New York. 6 IN WITNESS WHEREOF, the parties hereto have caused this Eleventh Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. ROHR, INC. By: /s/ Kenneth W. Scholz --------------------- Title: Treasurer CITICORP USA, INC., as Agent By: /s/ David L. Harris --------------------- Title: Assitant Vice President Lenders CITIBANK, N.A. By: /s/ Carolyn R. Bodmer ---------------------- Title: Vice President CITICORP USA, INC. By: /s/ David L. Harris -------------------- Title: Assistant Vice President WELLS FARGO BANK, N.A. By: /s/ Craig T. Ingram -------------------- Title: Vice President THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Jacqueline P. Yardley -------------------------- Title: Vice President MANUFACTURERS BANK By: /s/ Virginia Hanagami ---------------------- Title: Vice President 7 ROYAL BANK OF CANADA By: __________________________ Title: THE LONG-TERM CREDIT BANK OF JAPAN, LTD., Los Angeles Agency By: __________________________ Title: BANQUE FRANCAISE DU COMMERCE EXTERIEUR By: /s/ Daniel Touffu ------------------ Title: First Vice President and Regional Manager By: __________________________ Title: BANCA COMMERCIALE ITALIANA, Los Angeles Foreign Branch By: /s/ Iacopo Navone ------------------ Title: Vice President and Manager By: /s/ Jack Wityak ---------------- Title: Vice President BANCO CENTRAL HISPANOAMERICANO, S.A. By: /s/ Francisco Alcon --------------------- Title: Executive Vice President and General Manager THE MITSUBISHI TRUST AND BANKING CORPORATION, LOS ANGELES AGENCY By: /s/ Hiroaki Koseski -------------------- Title: Senior Vice President 8 EX-10.15.8 6 FIFTH AMENDMENT TO SUBLEASE AGREEMENT FIFTH AMENDMENT AGREEMENT This Fifth Amendment Agreement (this "Amendment"), dated as of November 17, 1995, is entered into by Rohr, Inc., a Delaware corporation ("Rohr), State Street Bank and Trust Company of California, National Association, a national banking association, not in an individual capacity but solely as owner trustee ("Trustee"), 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 Trustee and an individual trustee, 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"); and WHEREAS, Rohr has requested that a definition 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 Citicorp USA, Inc., as agent (after giving effect to the Tenth Amendment thereto dated as of November 17, 1995), 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 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 1 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 Trustee. GE Capital hereby joins in this Amendment -------------------- to acknowledge its consent to the terms and provisions hereof and to direct the Trustee to enter into this Amendment and any other agreements, instruments and documents to be executed in connection herewith in its capacity as owner trustee. 4. Expenses. Rohr agrees to pay all reasonable costs and expenses -------- of the Trustee 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. 7. 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. 8. Tenth Amendment. A copy of the Tenth Amendment to the Credit --------------- Agreement, referred to in Section 1 of this Amendment, is attached hereto as Exhibit A. 2 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 as Corporate By: /s/ Kenneth W. Scholz Trustee ---------------------- Name: Kenneth W. Scholz Title: Treasurer By: /s/ Scott C. Emmons -------------------- Name: Scott C. Emmons Title: Trust Officer General Electric Capital Corporation By: /s/ James R. Newman ------------------- Name: James R. Newman Title: Credit Manager 3 EX-10.15.9 7 SIXTH AMENDMENT TO SUBLEASE AGREEMENT SIXTH AMENDMENT AGREEMENT This Sixth Amendment Agreement (this "Amendment"), dated as of January 19, 1996, is entered into by Rohr, Inc., a Delaware corporation ("Rohr), State Street Bank and Trust Company of California, National Association, a national banking association, not in an individual capacity but solely as owner trustee ("Trustee"), 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 Trustee and an individual trustee, 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"); and WHEREAS, Rohr has requested that a definition 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 Citicorp USA, Inc., as agent (after giving effect to the Eleventh Amendment thereto dated as of January 19, 1996), 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 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 1 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 Trustee. GE Capital hereby joins in this Amendment -------------------- to acknowledge its consent to the terms and provisions hereof and to direct the Trustee to enter into this Amendment and any other agreements, instruments and documents to be executed in connection herewith in its capacity as owner trustee. 4. Expenses. Rohr agrees to pay all reasonable costs and expenses -------- of the Trustee 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. 7. 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. 8. Exhibit A. The definition of "Net Income Available For Fixed --------- Charges", as amended by the Eleventh Amendment to the Credit Agreement, referred to in Section 1 of this Amendment, is attached hereto as Exhibit A. 9. Conditions to Effectiveness. This Amendment shall become --------------------------- effective, as of the date first written above, when it has been executed and delivered by each of the parties hereto and GE Capital has received copies of the Credit Agreement and each amendment thereto through 2 the date hereof (including the Eleventh Amendment thereto dated as of January 19, 1996), which copies shall be certified by the Secretary or an Assistant Secretary of Rohr as true and correct copies. 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 By: /s/ Kenneth W. Scholz individual capacity but solely as Corporate --------------------- Trustee Name: Kenneth W. Scholz Title: Treasurer By: /s/ Stephen Rivero ------------------- Name: Stephen Rivero Title: Vice President General Electric Capital Corporation By: /s/ James R. Newman -------------------- Name: James R. Newman Title: Credit Manager 3 EX-11.1 8 CALCULATON OF PRIMARY NET INCOME PER SHARE ROHR, INC. AND SUBSIDIARIES --------------------------- CALCULATION OF PRIMARY NET INCOME PER SHARE ------------------------------------------- OF COMMON STOCK --------------- (in thousands except for earnings per share data) -------------------------------------------------
SECOND QUARTER ENDED SIX MONTHS ENDED -------------------- ------------------- JAN. 28, JAN. 29, JAN. 28, JAN. 29, 1996 1995 1996 1995 --------- -------- -------- -------- Net income from continuing operations $ 205 $ 3,252 $ 687 $ 4,621 Income from discontinued operations - net of taxes - 337 - 835 --------- -------- -------- -------- Net income applicable to primary earnings per common share $ 205 $ 3,589 $ 687 $ 5,456 ========= ======== ======== ======== Common stock and common stock equivalents: Average shares of common stock outstanding during the period 18,934 18,054 18,516 18,052 Net effect of common stock equivalents (principally stock options and rights) 558 34 574 61 --------- -------- -------- -------- Total common stock and common stock equivalents 19,492 18,088 19,090 18,113 ========= ======== ======== ======== Net income per average share of common stock: Net income from continuing operations $ 0.01 $ 0.18 $ 0.04 $ 0.26 Income from discontinued operations - net of taxes - 0.02 - 0.04 --------- -------- -------- -------- Primary net income per share $ 0.01 $ 0.20 $ 0.04 $ 0.30 ========= ======== ======== ========
EXHIBIT 11.1 Page 15 EX-11.2 9 CALCULATION OF DILUTED NET INCOME PER SHARE ROHR, INC. AND SUBSIDIARIES --------------------------- CALCULATION OF FULLY DILUTED NET INCOME PER SHARE ------------------------------------------------- OF COMMON STOCK - UNAUDITED --------------------------- (in thousands except for earnings per share data) -------------------------------------------------
SECOND QUARTER ENDED SIX MONTHS ENDED -------------------- ------------------- JAN. 28, JAN. 29, JAN. 28, JAN. 29, 1996 1995 1996 1995 --------- -------- -------- -------- Net income from continuing operations applicable to primary earnings per common share $ 205 $ 3,252 $ 687 $ 4,621 Add back interest and issue expense on convertible debentures and notes - net of tax adjustment 588 699 1,278 1,400 --------- -------- -------- -------- Adjusted income from continuing operations applicable to common stock on a fully diluted basis 793 3,951 1,965 6,021 Income from discontinued operations - net of taxes - 337 - 835 --------- -------- -------- -------- Net income applicable to fully diluted earnings per share $ 793 $ 4,288 $ 1,965 $ 6,856 ========= ======== ======== ======== Average number of shares outstanding on a fully diluted basis: Shares used in calculating primary earnings per share 19,492 18,088 19,090 18,113 Unexercised options 145 170 129 143 Shares issuable on conversion of debentures and notes 2,838 5,555 2,838 5,555 --------- -------- -------- -------- Average number of shares outstanding on a fully diluted basis 22,475 23,813 22,057 23,811 ========= ======== ======== ======== Fully diluted net income per share from continuing operations $ 0.04 $ 0.17 $ 0.09 $ 0.25 Income from discontinued operations - net of taxes - 0.01 - 0.04 --------- -------- -------- -------- Fully diluted net income per average common share $ 0.04 $ 0.18 $ 0.09 $ 0.29 ========= ======== ======== ========
Note: Fully diluted net income per average common share is not presented in the Company's Consolidated Statements of Operations for the three-months and six- months periods ending January 28, 1996, as the effect of the assumed conversion of the Company's convertible debentures and notes was anti-dilutive. EXHIBIT 11.2 Page 16 EX-27 10 FINANCIAL DATA SCHEDULE - ARTICLE 5
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JUL-31-1996 JAN-28-1996 58,592 0 81,861 0 437,801 594,770 526,222 (315,059) 996,595 184,199 511,543 21,192 0 0 188,429 996,595 0 331,102 0 290,604 16,050 0 23,300 1,148 461 687 0 0 0 687 0.04 0.04
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