EXHIBIT 10.16

 

 

 

MINERALS TECHNOLOGIES INC.

 

 

 

NOTE PURCHASE AGREEMENT

 

 

Dated as of July 24, 1996

 

 

 

$50,000,000 7.49% Guaranteed Senior Notes
Due July 24, 2006

 

 

 

 

 

 

 

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TABLE OF CONTENTS

     

PAGE

     

1.

PURCHASE AND SALE OF NOTES

1

 

1.1 Issue of Notes

1

 

1.2 The Closing

2

 

1.3 Representations of the Purchaser

3

 

1.4 Failure To Deliver, Failure of Conditions

4

 

1.5 Expenses

4

       

2.

REPRESENTATIONS AND WARRANTIES

5

 

2.1 Nature of Business

5

 

2.2 Financial Statements; Debt; Material Adverse Change

6

     

 

2.3 Subsidiaries and Affiliates

6

 

2.4 Pending Litigation

7

 

2.5 Properties; Insurance

8

 

2.6 Patents, Trademarks, Licenses, etc.

8

 

2.7 Taxes

8

 

2.8 Full Disclosure

9

 

2.9 Corporate Organization and Authority

9

 

2.10 Restrictions on the Company, Guarantors and Subsidiaries
of the Company

10

 

2.11 Compliance with Law

11

 

2.12 ERISA

11

 

2.13 Certain Laws

14

 

2.14 Environmental Compliance

15

 

2.15 Sale is Legal and Authorized; Obligations are Enforceable

16

 

2.16 Governmental Consent

17

 

2.17 Private Offering

17

 

2.18 No Defaults

18

 

2.19 Use of Proceeds

18

 

2.20 Relationship of Company, Subsidiaries and Guarantors

19

       

3.

CLOSING CONDITIONS

19

 

3.1 Opinions of Counsel

19

 

3.2 Representations and Warranties True; No Prohibited Action

20

 

3.3 Officers' Certificates

20

 

3.4 Legality

21

 

3.5 Private Placement Number

21

 

3.6 Expenses

21

 

3.7 Proceedings Satisfactory

21

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3.8 Compliance with this Agreement

22

 

3.9 No Dissolution, Merger or Change in Control

22

       

4.

SPECIAL RIGHTS OF INSTITUTIONS

22

 

4.1 Direct Payment

22

 

4.2 Delivery Expenses

23

 

4.3 Issue Taxes

23

       

5.

PREPAYMENTS

24

 

5.1 Offer to Prepay upon Change in Control

24

 

5.2 Optional Prepayments

25

 

5.3 Notice of Optional Prepayment

25

5.4 Partial Prepayment Pro Rata

26

 

5.5 Notation of Notes on Prepayment

27

 

5.6 No Other Optional Prepayments

27

       

6.

REGISTRATION; SUBSTITUTION OF NOTES

28

 

6.1 Registration of Notes

28

 

6.2 Exchange of Notes

28

 

6.3 Replacement of Notes

29

 

6.4 Guarantors' Responsibility in respect of New Notes

29

     

7.

COMPANY BUSINESS COVENANTS

29

 

7.1 Payment of Taxes and Claims

29

 

7.2 Maintenance of Properties and Corporate Existence

30

 

7.3 Payment of Notes and Maintenance of Office

31

 

7.4 Merger; Acquisition; Sale of Assets

31

 

7.5 Restricted Payments and Restricted Investments

34

 

7.6 Subsidiary Debt

35

 

7.7 Consolidated Funded Debt to Consolidated Total
Capitalization

35

 

7.8 Consolidated Net Worth

36

 

7.9 Liens

36

 

7.10 ERISA

40

 

7.11 Transactions with Affiliates

41

 

7.12 Pro-Rata Offers

42

 

7.13 Private Offering

42

 

7.14 Environmental Compliance

42

 

7.15 Sales of Subsidiary Stock

43

 

7.16 Pari Passu Ranking of Notes

45

     

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8.

INFORMATION AS TO COMPANY

45

 

8.1 Financial and Business Information

45

 

8.2 Officers' Certificates

50

 

8.3 Accountants' Certificates

50

 

8.4 Inspection

51

 

8.5 Report to NAIC

51

       

9.

EVENTS OF DEFAULT

51

 

9.1 Nature of Events

51

 

9.2 Default Remedies

54

 

9.3 Annulment of Acceleration of Notes

57

 

9.4 Application of Acceleration Payments

57

       

10.

GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS OF GUARANTORS

58

 

10.1 Guaranteed Obligations

58

 

10.2 Performance by Guarantors

59

 

10.3 Waivers; Subrogation; Offsets

59

 

10.4 Releases

60

 

10.5 Marshaling; Revival of Obligations

61

 

10.6 Subordination

62

 

10.7 No Election

62

 

10.8 Severability

63

 

10.9 Other Enforcement Rights

63

 

10.10 Delay or Omission; No Waiver

63

 

10.11 Restoration of Rights and Remedies

64

 

10.12 Cumulative Remedies

64

 

10.13 Miscellaneous

64

 

10.14 Continuing Guaranty

65

 

10.15 Inspection

65

 

10.16 Maintenance of Properties and Corporate Existence

66

 

10.17 Merger; Acquisition

66

 

10.18 Pro-Rata Offers

67

 

10.19 Private Offering

67

 

10.20 Pari Passu Ranking of Guaranty

67

     

11.

INTERPRETATION OF THIS AGREEMENT

68

 

11.1 Terms Defined

68

 

11.2 Directly or Indirectly

88

 

11.3 Section Headings; Table of Contents; Construction

88

 

11.4 Governing Law

88

     

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12.

MISCELLANEOUS

88

 

12.1 Communications

88

 

12.2 Reproduction of Documents

90

 

12.3 Survival

90

 

12.4 Successors and Assigns

91

 

12.5 Amendment and Waiver

91

 

12.6 Payments, When Received

93

 

12.7 Entire Agreement

94

 

12.8 Duplicate Originals, Execution in Counterpart

94

 

12.9 Confidentiality

94

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MINERALS TECHNOLOGIES INC.

 

NOTE PURCHASE AGREEMENT

 

$50,000,000 7.49% GUARANTEED SENIOR NOTES
DUE JULY 24, 2006

Dated as of July 24, 1996

 

 

Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010

 

Ladies and Gentlemen:

    Each of MINERALS TECHNOLOGIES INC. (together with its successors and
assigns, the "Company"), a Delaware corporation, and SPECIALTY MINERALS INC., a
Delaware corporation, MINTEQ INTERNATIONAL INC., a Delaware corporation and
BARRETTS MINERALS INC., a Delaware corporation (the last three together with
their respective successors and assigns, being referred to collectively herein
as the "Guarantors" and individually as a "Guarantor"), hereby agrees with you
as follows:

1. PURCHASE AND SALE OF NOTES

    1.1 Issue of Notes.

The Company has authorized the issuance of Fifty Million Dollars ($50,000,000)
in aggregate principal amount of its seven and forty-nine one-hundredths percent
(7.49%) Guaranteed Senior Notes due July 24, 2006(the "Notes"). Each Note shall:

    (a) 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 Note at
the rate of

 

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seven and forty-nine one-hundredths percent (7.49%) per annum, payable
semi-annually on the 24th day of each July and the 24th day of each January in
each year commencing on January 24, 1997,until the principal amount thereof
shall be due and payable, and

    (b) bear interest, payable on demand, on any overdue principal (including
any overdue prepayment of principal) and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) on any overdue installment of interest, at a
rate equal to the lesser of

        (i) the highest rate allowed by applicable law or

        (ii) eight and forty-nine one-hundredths percent (8.49%) per annum,

    (c) mature on July 24, 2006 and

    (d) otherwise be in the form of the Note set out in Exhibit A hereto.

    1.2 The Closing.

    (a) Purchase and Sale of Notes. The Company hereby agrees to sell to you and
you hereby agree to purchase from the Company, on the Closing Date, in
accordance with the provisions hereof, the principal amount of Notes set forth
opposite your name on Annex 1.2 hereto (in the amount or amounts set forth
therein) at one hundred percent (100%) of the principal amount thereof.

    (b) The Closing. The closing (the "Closing") of the Company's sale of Notes
shall be held on July 24, 1996 (the "Closing Date"), at 10:00 a.m., at the
offices of Skadden, Arps,Slate, Meagher & Flom, your special counsel, or at such
other time and place as you and the Company shall agree in writing. At the
Closing, the Company shall deliver to you one or more Notes(as set forth
opposite your name on Annex 1.2 hereto), in the denominations indicated on Annex
1.2 hereto, in the aggregate principal amount of your purchase, dated the
Closing Date and payable to you or payable as indicated on Annex 1.2 hereto,
against payment by federal funds wire transfer in immediately available funds of
the purchase price

2

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thereof, as directed by the Company on Annex 1.2 hereto.

    1.3 Representations of the Purchaser.

    (a) Purchase Other Than For Resale. You represent to the Company that you
are purchasing the Notes listed on Annex 1.2 hereto opposite your name for your
own account or for the account of one or more separate accounts maintained by
you, with no present intention of distributing the Notes or any part thereof,
but without prejudice to your right at all times to

>     (i) sell or otherwise dispose of all or any part of the Notes in a
> transaction which complies with theregistration requirements, if any, of the
> Securities Act, or in a transaction exempt from the registrationrequirements
> of the Securities Act, and
> 
>     (ii) have control over the disposition of all of your assets and sell or
> otherwise dispose of assets to the fullest extent required by any applicable
> insurance law.

It is understood that, in making the representations set out in Section 2.16 and
Section 2.17 hereof, the Company is relying, to the extent applicable, upon your
representation as aforesaid.

(b) ERISA. You further represent (and each subsequent transferee, by acceptance
of a replacement Note, shall be deemed to represent) that either

>     (i) you are acquiring the Notes for your own account with your general
> corporate assets and that no part of such assets constitutes assets of an
> "employee benefit plan" (as defined in this Section 1.3(b)) or a "plan" (as
> defined in this Section 1.3(b)), or
> 
>     (ii) you are acquiring the Notes for your own account with general
> corporate assets and the purchase will be exempt under the provisions of the
> Department of Labor Prohibited Transaction Class Exemption 95-60, issued July
> 12, 1995 (60 FR 35925).

 

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As used in this Section 1.3(b), the term "employee benefit plan" has the meaning
specified in section 3(3) of ERISA, and the term "plan" has the meaning
specified in section 4975(e)(1) of the IRC.

    1.4 Failure To Deliver, Failure of Conditions.

    If at the Closing the Company fails to tender to you the Notes to be
purchased by you thereat, or if the conditions specified in Section 3 hereof to
be fulfilled prior to or at such Closing have not been fulfilled, you may
thereupon elect to be relieved of all further obligations hereunder. Nothing in
this Section 1.4 shall operate to relieve the Company or any of the Guarantors
from any of their obligations hereunder or to waive any of your rights against
the Company or the Guarantors.

    1.5 Expenses.

>     (a) Generally. Whether or not the Notes are sold, the Company shall
> promptly (and in any event within thirty (30) days of receiving any statement
> or invoice therefor) pay all fees, expenses and costs relating hereto,
> including but not limited to:
> 
>         (i) the cost of reproducing this Agreement and the Notes;
> 
> >     (ii) the reasonable fees and disbursements of your special counsel in an
> > amount not to exceed $25,000;
> > 
> >     (iii) the cost of delivering to your home office or custodian bank,
> > insured to your satisfaction, the Notes purchased by you at the Closing;
> > 
> >     (iv) the fees, expenses, costs and disbursements incurred complying with
> > each of the conditions to closing set forth in Section 3 hereof without
> > duplication of any fees or disbursements included in Section 1.5(a)(ii)
> > above; and
> > 
> >     (v) the fees, expenses, costs and disbursements relating to the
> > consideration, negotiation, preparation or execution of any amendments,

 

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> > waivers or consents requested by the Company or occasioned by the occurrence
> > of a Default or Event of Default pursuant to the provisions hereof
> > (including, without limitation, the reasonable fees and disbursements of
> > your special counsel and the allocated cost of your counsel who are your
> > employees or your affiliates' employees), whether or not any such
> > amendments, waivers or consents are executed.
> 
>     (b) Counsel. Without limiting the generality of the foregoing, it is
> agreed and understood that the Company will pay, at the Closing, the
> reasonable fees and disbursements of your special counsel, in an amount not to
> exceed $25,000, pursuant to an estimate thereof presented at least three days
> prior to such Closing, and the Company will also pay upon receipt of any
> statement thereof, any additional reasonable fees and additional disbursements
> of your special counsel pursuant to a statement thereof rendered after the
> Closing.
> 
>     (c) Survival. The obligations of the Company under this Section 1.5 (and
> the Guarantors under Section 10 hereof in respect of this Section 1.5) shall
> survive the payment or prepayment of the Notes and the termination hereof.

2. REPRESENTATIONS AND WARRANTIES

    To induce you to enter into this Agreement and to purchase the Notes
designated to be purchased by you on Annex 1.2, the Company and the Guarantors
jointly and severally warrant and represent, as of the date hereof, as follows:

    2.1 Nature of Business.

    The Company has delivered to you complete and correct copies of its annual
report on Form 10-K for the fiscal year ended December 31, 1994 and 1995 (the
"Forms 10-K"). The Forms 10-K correctly describe the general nature of the
business and principal Properties of the Company, such Guarantors and the
Subsidiaries of the Company as of their respective dates.

 

5

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    2.2 Financial Statements; Debt; Material Adverse Change.

>     (a) Financial Statements. The Consolidated Balance Sheet of the Company
> and Subsidiary Companies as of December 31, 1995 and 1994, and the related
> Consolidated Statements of Income, Shareholders' Equity and Cash Flows for
> each of the years in the three-year period ended December 31, 1995, all
> accompanied by the opinion thereon by KPMG Peat Marwick, independent certified
> public accountants, have been delivered to you, were prepared in accordance
> with generally accepted accounting principles consistently applied, and
> present fairly, in all material respects, the consolidated financial position
> of the Company and its Subsidiary Companies as of such dates and the results
> of their operations and their cash flows for such periods. All such financial
> statements include the accounts of the Company, the Guarantors and all
> Subsidiaries of the Company for the respective periods during which a
> subsidiary relationship has existed.
> 
>     (b) Neither the Company nor any Guarantors nor any Subsidiary is liable
> for the repayment of any Debt other than the Debt listed on Annex 2.2 as being
> outstanding on the date hereof nor in an amount, as to any item or class of
> Debt in excess of the amount set forth in Annex 2.2.
> 
>     (c) Material Adverse Change. Since December 31, 1995, there has been no
> change in the business, prospects, profits, Properties or condition (financial
> or otherwise) of the Company, any of the Guarantors or any of their respective
> Subsidiaries except changes in the ordinary course of business that,
> individually and in the aggregate, have not had a Material Adverse Effect; on
> the date hereof the fair saleable value of the assets of the Company exceeds
> its liabilities and the Company is meeting current obligations as they mature
> in the ordinary course of business.

    2.3 Subsidiaries and Affiliates.

    Annex 2.3 hereto completely and accurately states,

 

6

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>     (a) the name of each of the Subsidiaries of the Company, its jurisdiction
> of incorporation and the percentage of its Voting Stock owned by the Company
> and/or each of the other Subsidiaries of the Company, and
> 
>     (b) the name of each of the Affiliates that are corporations, partnerships
> or joint ventures (other than Subsidiaries of the Company), the percentage of
> its Voting Stock or other voting Securities owned by the Company, such
> Guarantors and/or the other Subsidiaries of the Company, if any, and the
> nature of the affiliation.

    Each of the Company and the Subsidiaries of the Company has good and
marketable title to (i) all of the shares it purports to own of the Capital
Stock of each of their respective Subsidiaries, free and clear in each case of
any Lien, and (ii) the Securities of any Affiliate it purports to own, free and
clear in each case of any Lien. Except as set forth in Annex 2.3, all such
shares and/or Securities have been duly issued and are fully paid and
non-assessable. Except as set forth in Annex 2.3, fair saleable value of the
assets of each Subsidiary exceeds its liabilities and each Subsidiary is meeting
current liabilities as they mature in the ordinary course of business.

    2.4 Pending Litigation.

    There are no proceedings, actions or investigations pending or, to the
knowledge of the Company or any of the Guarantors, threatened against or
affecting the Company, any Guarantor or any of the Subsidiaries of the Company
in any court or before any Governmental Authority or arbitration board or
tribunal that, individually or in the aggregate, could have a Material Adverse
Effect and the Company has no knowledge of any basis for any of the foregoing.
Neither the Company, any Guarantor nor any of the Subsidiaries of the Company is
in default with respect to any judgment, order, writ, injunction, or decree of
any court, Governmental Authority or arbitration board or tribunal that,
individually or in the aggregate, could have a Material Adverse Effect.

 

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    2.5 Properties; Insurance.

    Individually or collectively, each of the Company, the Guarantors and the
Subsidiaries of the Company has good and marketable title in fee simple to all
real Property, and good title to all of the other Property which is material to
the business or operations of the Company and its Subsidiaries, reflected in the
most recent audited balance sheet referred to in Section 2.2 hereof or purported
to have been acquired since that date (except as sold or otherwise disposed of
in the ordinary course of business), free from Liens not otherwise permitted by
Section 7.9 hereof.

    The Company, each Guarantor and each Subsidiary maintains or causes to be
maintained with financially sound and reputable insurers, insurance with respect
to its Property and business against such casualties and contingencies, of such
types including, without limitation, insurance with respect to losses arising
out of Property loss or damage, public liability, workers' compensation,
business interruption, larceny, embezzlement or other criminal misappropriation)
and in such amounts as is customary in the case of corporations of established
reputation engaged in the same or a similar business and similarly situated.

    2.6 Patents, Trademarks, Licenses, etc.

    Each of the Company and the Subsidiaries of the Company, owns, possesses or
has the unrestricted right to use all of the patents, trademarks, service marks,
trade names, copyrights, licenses, and rights with respect thereto, necessary
for the conduct of its business as presently conducted or presently proposed to
be conducted, without any known conflict with the rights of others.

    2.7 Taxes.

>     (a) Returns Filed; Taxes Paid. All tax returns required to be filed by
> each of the Company, each Guarantor and each of the Subsidiaries of the
> Company or any other Person insofar as such Person is a Person with which the
> Company, any Guarantor or any such Subsidiary files or has filed a
> consolidated return in any jurisdiction have in fact been filed on a timely
> basis, and all taxes, assessments,

 

8

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> fees and other governmental charges upon each of the Company, each Guarantor,
> each such Subsidiary and any such Person, and upon any of their respective
> Properties, income or franchises, that are due and payable (i) have been paid
> or (ii) are being contested in good faith through appropriate proceedings and
> no judgment has been entered or lien filed in respect thereof. Neither the
> Company nor any Guarantor knows of any material proposed additional tax
> assessment against it or any such Person.
> 
>     (b) Book Provisions Adequate. The amount of the liability for taxes
> reflected in the consolidated balance sheet of the Company as of December 31,
> 1995 referred to in Section 2.2 hereof is an adequate provision for taxes
> (including without limitation, any payment due pursuant to any tax sharing
> agreement) as are or may become payable by any one or more of the Company, the
> Guarantors and their respective consolidated Subsidiaries in respect of all
> tax periods ending on or prior to such date.

    2.8 Full Disclosure.

    Except as set forth in Annex 2.8, the Company has timely filed all reports
required to be filed by it pursuant to the Securities Exchange Act of 1934. Such
reports and the financial statements referred to in Section 2.2 hereof do not,
nor does this Agreement or any written statement furnished by or on behalf of
the Company or the Guarantors to you in connection with the negotiation of the
sale of the Notes, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or herein not
misleading. There is no fact that the Company or any Guarantor has not disclosed
to you in writing that has had or, so far as the Company or such Guarantors can
now reasonably foresee, will have a Material Adverse Effect.

    2.9 Corporate Organization and Authority.

    Each of the Company, the Guarantors and the Subsidiaries of the Company,

 

9

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>     (a) is a corporation duly incorporated, validly existing and in good
> standing under the laws of its jurisdiction of incorporation,
> 
>     (b) has all legal and corporate power and authority to own and operate its
> Properties and to carry on its business as now conducted and as presently
> proposed to be conducted,
> 
>     (c) has all licenses, certificates, permits, franchises and other
> governmental authorizations necessary 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 such licenses, certificates,
> permits, franchises and other governmental authorizations, individually or in
> the aggregate, would not have a Material Adverse Effect, and
> 
>     (d) has duly qualified or has been duly licensed, and is authorized to do
> business and is in good standing, as a foreign corporation, in each state
> where such qualification, licensing and authorization is required by law,
> except where the failure to be so qualified, licensed or authorized,
> individually or in the aggregate, would not have a Material Adverse Effect.

    2.10 Restrictions on the Company, Guarantors and Subsidiaries of the
Company.

    Neither the Company, any Guarantor nor any of the Subsidiaries of the
Company:

>     (a) is a party to any contract or agreement, or subject to any charter or
> other corporate restriction that could have a Material Adverse Effect,
> 
>     (b) is a party to any contract or agreement, other than this Agreement and
> the agreements listed on Annex 2.10 hereto, that restricts the right or
> ability of such corporation to incur Debt, and no contract or agreement to
> which the Company or any of its Subsidiaries is a party is violated by the
> issuance of the Notes by the Company or the execution and delivery of, or
> compliance with, this Agreement by the Company and the Guarantors, or

 

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>     (c) has agreed or consented to cause or permit in the future (upon the
> happening of a contingency or otherwise) any of its Property, whether now
> owned or hereafter acquired, to be subject to a Lien not permitted by Section
> 7.9 hereof.

    2.11 Compliance with Law.

    Neither the Company, any Guarantor nor any of the Subsidiaries of the
Company is in violation of any law, ordinance, governmental rule or regulation
to which it is subject, which violations, individually or in the aggregate,
could have a Material Adverse Effect.

    2.12 ERISA.

>     (a) Relationship of Vested Benefits to Pension Plan Assets. Except as
> described in Annex 2.12,

> >     (i) the present value of all benefits, determined as of the most recent
> > valuation date for such benefits as provided in Section 7.10 hereof, vested
> > under each Pension Plan does not exceed the value of the assets of such
> > Pension Plan allocable to such vested benefits, determined as of such date
> > as provided in Section 7.10 hereof, and (ii) no Welfare Plan provides
> > benefits, including without limitation death or medical benefits (whether or
> > not insured), with respect to current or former employees after retirement
> > or other termination of service (other than (i) coverage mandated by
> > applicable law, (ii) death benefits or retirement benefits under any
> > "employee pension plan," as that term is defined in section 3 of ERISA,
> > (iii) benefits accrued as liabilities on the books of the Company or any
> > ERISA Affiliate, or (iv)benefits, the full cost of which is borne by the
> > current or former employee (or such employee's beneficiary).
> 
>     (b) ERISA Requirements. Each of the Company, the Guarantors and the ERISA
> Affiliates

 

11

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> >     (i) has fulfilled all obligations under the minimum funding standards of
> > ERISA and the IRC with respect to each Pension Plan,
> > 
> >     (ii) has satisfied all of its respective obligations under the minimum
> > funding standards of ERISA and the IRC in respect of, and all of its other
> > respective contribution obligations provided for in, each Multiemployer
> > Plan,
> > 
> >     (iii) is in compliance in all material respects with all other
> > applicable provisions of ERISA and the IRC with respect to each Pension
> > Plan, Welfare Plan and each Multiemployer Plan, and (iv) has not incurred
> > any liability under Title IV of ERISA to the PBGC (other than in respect of
> > required insurance premiums, all of which that are due having been paid),
> > with respect to any Pension Plan, any Multiemployer Plan or any trust
> > established thereunder.

No Pension Plan, or trust created thereunder, has incurred any "accumulated
funding deficiency" (as such term is defined in section 302 of ERISA), whether
or not waived, as of the last day of the most recently ended plan year of such
Pension Plan.

    (c) Prohibited Transactions.

>     (i) The purchase of the Notes by you will not constitute a "prohibited
> transaction" (as such term is defined in section 406 of ERISA or section 4975
> of the IRC)that could subject any Person to the penalty or tax on prohibited
> transactions imposed by section 502 of ERISA or section 4975 of the IRC, and
> neither the Company, nor any Guarantor nor any ERISA Affiliate, nor any
> "employee benefit plan" (as such term is defined in this Section 2.12(c)) of
> the Company, any Guarantor or any ERISA Affiliate or any trust created
> thereunder or any trustee or administrator thereof, has engaged in any
> "prohibited transaction" that could subject any such Person, or any other
> party dealing with such employee benefit plan or trust, to any

 

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> material penalty or tax. The representation by the Company and the Guarantors
> in the preceding sentence is made in reliance upon and subject to the accuracy
> of the representations in Section 1.3(b) hereof as to the source of funds used
> by you.
> 
>     (ii) Annex 2.12 hereto completely lists, as of the Closing Date, all ERISA
> Affiliates and all employee benefit plans, other than those which are of the
> type described in Section 4(b)(4) of ERISA, with respect to which the Company,
> any Guarantor or any "affiliate" of either (as such term is defined in this
> Section 2.12(c)) is a "party-in-interest" (as such term is defined in this
> Section 2.12(c)) or in respect of which the Notes could constitute an
> "employer security" (as such term is defined in this Section 2.12(c)).

As used in this Section, the terms "employee benefit plan" and
"party-in-interest" have the meanings specified in section 3 of ERISA and
"affiliate" and "employer security" have the meanings specified in section
407(d) of ERISA.

    (d) Reportable Events. No Pension Plan or trust created thereunder has been
terminated, and there have been no "reportable events" (as such term is defined
in section 4043 of ERISA), with respect to any Pension Plan or trust created
thereunder, which reportable event or events will or could result in the
termination of such Pension Plan or give rise to a liability of the Company, any
Guarantor or any ERISA Affiliate in respect thereof.

    (e) Multiemployer Plans. Neither the Company nor any Guarantor nor any ERISA
Affiliate is, or has ever been, an employer required to contribute to any
Multiemployer Plan.

    (f) Multiple Employer Pension Plans. Except as set forth in Annex 2.12 to
this Agreement, neither the Company nor any Guarantor nor any ERISA Affiliate is
a "contributing sponsor" (as such term is defined in section 4001 of ERISA) in
any Multiple Employer Pension Plan and neither the Company nor any Guarantor nor
any ERISA Affiliate has incurred

 

13

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(without fully satisfying the same), or reasonably expects to incur, withdrawal
liability in respect of any such Multiple Employer Pension Plan listed in Annex
2.12 to this Agreement, which withdrawal liability could have a Material Adverse
Effect.

    (g) Foreign Pension Plan. Except as set forth in Annex 2.12 hereof, the
present value of all benefits vested under each Japanese Foreign Pension Plan
and each other material Foreign Pension Plan, determined as of the most recent
valuation date in respect thereof does not exceed the value of the assets of
such Foreign Pension Plan, and all required payments in respect of funding such
Foreign Pension Plan have been made.

    2.13 Certain Laws.

        (a) Investment Company Act. Neither the Company nor any Guarantor nor
any of the Subsidiaries of the Company is, or is directly or indirectly
controlled by, or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

        (b) Holding Company Status. Neither the Company nor any Guarantor nor
any of the Subsidiaries of the Company is a "holding company" or an "affiliate"
of a "holding company," or a "subsidiary company" of a "holding company," or a
"public utility" within the meaning of the Public Utility Holding Company Act of
1935, as amended.

        (c) Absence of Foreign or Enemy Status. Neither the Company nor any
Guarantor nor any Subsidiary of the Company is an "enemy" or an "ally of the
enemy" within the meaning of section 2 of the Trading with the Enemy Act (50
U.S.C. App. Sections 1 et seq.), as amended. Neither the Company nor any
Guarantor nor any Subsidiary of the Company is in violation of, and neither the
issue and sale of the Notes by the Company nor its use of the proceeds thereof
as contemplated by this Agreement, will violate, the Trading with the Enemy Act,
as amended, or any executive orders, proclamations or regulations issued
pursuant thereto, including, without limitation, regulations administered by the
Office of Foreign Asset Control

 

14

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of the Department of the Treasury (31 C.F.R., Subtitle B, Chapter V).

    2.14 Environmental Compliance.

    Except as set forth in Annex 2.14 hereto:

>     (a) Compliance -- each of the Company, the Guarantors and the Subsidiaries
> of the Company is in compliance with all Environmental Protection Laws in
> effect in each jurisdiction where each is presently doing business, and in
> which the failure so to comply could be reasonably expected to have a Material
> Adverse Effect.

>     (b) Liability -- neither the Company nor any Guarantor nor any of the
> Subsidiaries of the Company is subject to any liability under any
> Environmental Protection Laws that, individually or in the aggregate, could be
> reasonably expected to have a Material Adverse Effect; and

> (c) Notices -- neither the Company nor any Guarantor nor any of the
> Subsidiaries of the Company has received any

> >     (i) notice from any Governmental Authority by which any real Property
> > presently or previously owned or leased by it has been designated, listed,
> > or identified in any manner by any Governmental Authority charged with
> > administering or enforcing any Environmental Protection Law as a Hazardous
> > Substance disposal or removal site, "Super Fund" clean-up site, or candidate
> > for removal or closure pursuant to any Environmental Protection Law,
> > 
> >     (ii) notice of any Lien arising under or in connection with any
> > Environmental Protection Law that has attached to any revenues of, or to,
> > any of its owned or leased real Properties, or
> > 
> >     (iii) summons, citation, notice, directive, letter, or other
> > communication, written or oral, from any Governmental Authority concerning
> > any intentional or unintentional action

 

15

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> > or omission by the Company, any Guarantor or any Subsidiary in connection
> > with its ownership or leasing of any real Property and involving the
> > releasing, spilling, leaking, pumping, pouring, emitting, emptying, dumping,
> > or other use, storage or disposition of any Hazardous Substance resulting in
> > violation of any Environmental Protection Law, if the effect thereof could
> > be reasonably expected to have a Material Adverse Effect.

    2.15 Sale is Legal and Authorized; Obligations are Enforceable.

>     (a) Sale is Legal and Authorized. Each of the issuance, sale and delivery
> of the Notes by the Company, the issuance, execution and delivery of the
> Guaranty of each Guarantor herein and in the Notes, the execution and delivery
> of this Agreement by the Company and the Guarantors, the compliance by the
> Company and each Guarantor with all of the provisions hereof and the
> compliance by the Company and each Guarantor with all the provisions of the
> Notes:
> 
> >     (i) is within the corporate powers of each of the Company and such
> > Guarantors, as the case may be; and
> > 
> >     (ii) is legal and does not conflict with, result in any breach in any of
> > the provisions of, constitute a default under, or result in the creation of
> > any Lien upon any Property of the Company, any Guarantor or any of the
> > Subsidiaries of the Company under the provisions of, any agreement, charter
> > instrument, bylaw or other instrument to which any of the Company, any
> > Guarantor or any such Subsidiary is a party or by which any of the Company,
> > the Guarantors or such Subsidiaries or any of their respective Property, may
> > be bound.
> 
>     (b) Obligations are Enforceable. This Agreement has been duly authorized
> by all necessary action on the part of each of the Company and the Guarantors,
> has been executed and delivered by duly authorized officers of each of the
> Company and the Guarantors, and constitutes a legal, valid

 

16

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> and binding obligation of the Company and of each Guarantor, enforceable in
> accordance with its terms, and the Notes and the Guaranty have been duly
> authorized by all necessary action on the part of the Company and the
> Guarantors, as the case may be, have been executed and delivered by duly
> authorized officers of the Company, and constitute a legal, valid and binding
> obligation of the Company, enforceable in accordance with their terms, except,
> in each case, that the enforceability of this Agreement and of the Notes may
> be:

> >     (i) limited by applicable bankruptcy, reorganization, arrangement,
> > insolvency, moratorium, or other similar laws affecting the enforceability
> > of creditors' rights generally; and
> 
>         (ii) subject to the availability of equitable remedies.

    2.16 Governmental Consent.

    Neither the legal nature of the Company, any Guarantor or any of the
Subsidiaries of the Company, or of any of their respective businesses or
Properties, nor any relationship between the Company, any Guarantor or any of
the Subsidiaries of the Company and any other Person, nor any circumstance in
connection with the offer, issue, sale or delivery of the Notes, the issuance,
execution and delivery of the Guaranty of each Guarantor herein and in the
Notes, and the execution and delivery of this Agreement, is such as to require a
consent, approval or authorization of, or filing, registration or qualification
with, any Governmental Authority on the part of the Company or any Guarantor as
a condition to the execution and delivery of this Agreement or the offer, issue,
sale or delivery of the Notes.

    2.17 Private Offering.

    Neither the Company nor any Guarantor has offered any of the Notes or the
guaranties of any Guarantors or any similar Security of the Company or any
Guarantor for sale to, or solicited offers to buy any thereof from, or otherwise
approached or negotiated with respect thereto with, any prospective purchaser,
other than you.

 

17

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    2.18 No Defaults.

>     (a) The Notes. No event has occurred and no condition exists that, upon
> the execution and delivery of this Agreement and the issuance and delivery of
> the Notes pursuant hereto and the Guaranty of each Guarantor herein and in the
> Notes, would constitute a Default or an Event of Default.
> 
>     (b) Charter Instruments, Other Agreements. Neither the Company nor any
> Guarantor nor any of the Subsidiaries of the Company is in violation in any
> respect of any term of any charter instrument or bylaw and neither the Company
> nor any Guarantor nor any such Subsidiary is in violation in any material
> respect of any term in any material agreement or other instrument to which it
> is a party or by which it or any of its Property may be bound. Except as set
> forth in Annex 2.18, all agreements relating to the ownership or operation of
> satellite precipitated calcium carbonate facilities of the Company and its
> Subsidiaries (the "PCC Agreements") are in full force and effect and no
> default by the Company or any Subsidiary has occurred and is continuing under
> any thereof. Since October 30, 1992 neither the Company nor any Subsidiary has
> requested or received any material waiver or consent (other than consents
> delivered to you in connection with the execution and delivery of this
> Agreement) in respect of any PCC agreement or any agreement pursuant to which
> any Debt of the Company or a Subsidiary was issued.

    2.19 Use of Proceeds.

>     (a) Use of Proceeds. The Company shall apply the proceeds from the sale of
> the Notes to refinance commercial bank debt outstanding and the balance for
> capital expenditures and for general corporate purposes of the Company and the
> Guarantors.
> 
>     (b) Margin Securities. None of the transactions contemplated herein and in
> the Notes (including, without limitation, the use of the proceeds from the
> sale of the Notes) violates, will violate or will result in a violation of
> section 7 of the Exchange Act, including, without limitation, Regulations G,
> T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,

 

18

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> Chapter II. Neither the Company nor any Guarantor nor any of the Subsidiaries
> of the Company owns, or with the proceeds of the sale of the Notes intends to
> own, carry or purchase, or refinance borrowings that were used to own, carry
> or purchase, any Margin Security, including Margin Securities originally
> issued by the Company, any Guarantor or any such Subsidiary. The obligations
> of the Guarantors under this Agreement and their respective Guaranties and the
> Company under this Agreement and the Notes are not and will not be secured by
> any Margin Security, and no Notes are being sold on the basis of any such
> collateral.

    2.20 Relationship of Company, Subsidiaries and Guarantors.

    The Guarantors acknowledge that they will receive a direct economic and
financial benefit from the transactions contemplated by this Agreement, and such
transactions are in the best interest of the Company, the Guarantors and the
Subsidiaries of the Company. In recognition and confirmation thereof, each
Guarantor, by specific resolution of its Board of Directors, has caused itself
to become obligated in the manner set forth in Section 10 hereof. Neither the
Company nor any of its Subsidiaries is bound or affected by any contract other
than this Agreement which prohibits, or upon the occurrence of an event or the
passage of time or both would prohibit the declaration or payment of dividends
or the return of capital by a Subsidiary to the Company.

3. CLOSING CONDITIONS

    Your obligation to purchase and pay for the Notes to be delivered to you at
the Closing is subject to the following conditions precedent:

    3.1 Opinions of Counsel.

    You shall have received from

>     (a) S. Garrett Gray, Esq., General Counsel for the Company and counsel for
> the Guarantors, and
> 
>     (b) Skadden, Arps, Slate, Meagher & Flom, your special counsel,

 

19

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> closing opinions, each dated as of the Closing Date, and in the case of the
> opinion of S. Garrett Gray, Esq., substantially in the form set forth in Annex
> 3.1 hereto, and as to such other matters as you may reasonably request.  This
> Section 3.1 shall constitute direction by the Company and each Guarantor to
> such counsel named in the foregoing clause (a) to deliver such closing opinion
> to you.

    3.2 Representations and Warranties True; No Prohibited Action.

>     (a) Representations and Warranties True. The representations and
> warranties contained herein shall be true on the Closing Date with the same
> effect as though made on and as of that date.
> 
>     (b) No Prohibited Action. On and as of the Closing Date, neither the
> Company nor any Guarantor nor any of the Subsidiaries of the Company shall
> have taken any action or permitted any condition to exist that would have been
> prohibited by Section 7.5 through Section 7.16, inclusive, hereof, had such
> Sections been binding and effective at all times during the period from
> December 31, 1995 to and including the Closing Date.

    3.3 Officers' Certificates.

    You shall have received

>     (a) a certificate dated the Closing Date and signed by the President or a
> Vice-President and the Treasurer or an Assistant Treasurer of the Company,
> substantially in the form of Exhibit B1 hereto certifying, among other things,
> that the conditions specified in Sections 3.2 and 3.9 hereof have been
> fulfilled,
> 
>     (b) certificates dated the Closing Date and signed by the President or a
> Vice-President and the Vice President Finance of each Guarantor substantially
> in the form of Exhibit B2 hereto certifying, among other things, that the
> conditions specified in Sections 3.2 and 3.9 hereof have been fulfilled,

 

20

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>     (c) a certificate dated the Closing Date and signed by the Secretary or an
> Assistant Secretary of the Company, substantially in the form of Exhibit C1
> hereto, with respect to the matters therein set forth, and
> 
>     (d) certificates dated the Closing Date and signed by the Secretary or an
> Assistant Secretary of each Guarantor, substantially in the form of Exhibit C2
> hereto, with respect to the matters therein set forth.

    3.4 Legality.

    The Notes shall on the Closing Date qualify as a legal investment for you
under applicable insurance law (without regard to any "basket" or "leeway"
provisions) and you shall have received such evidence as you may reasonably
request to establish compliance with this condition.

    3.5 Private Placement Number.

    The Company shall have obtained or caused to be obtained a private placement
number for the Notes from the CUSIP Service Bureau of Standard & Poor's and you
shall have been informed of such private placement number.

    3.6 Expenses.

    All fees and disbursements required to be paid pursuant to Section 1.5
hereof shall have been paid in full.

    3.7 Proceedings Satisfactory.

    All proceedings taken in connection with the issuance and sale of the Notes
and all documents and papers relating thereto shall be satisfactory to you and
your special counsel. You and your special counsel shall have received copies of
such documents and papers as you or they may reasonably request in connection
therewith or in connection with your special counsel's closing opinion, all in
form and substance satisfactory to you and your special counsel.

 

21

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    3.8 Compliance with this Agreement.

    Each of the Company, the Guarantors and the Subsidiaries of the Company
shall have performed and complied with all agreements and conditions contained
herein that are required to be performed or complied with by the Company, such
Guarantor or any Subsidiary on or prior to the Closing Date, and such
performance and compliance shall remain in effect on the Closing Date.

    3.9 No Dissolution, Merger or Change in Control.

    After the date hereof and through the Closing Date, (a) neither the Company
nor any Guarantor shall have dissolved, nor shall any of them have consolidated
or merged with, or sold, leased, transferred or otherwise disposed of all or
substantially all of its properties and assets to, any Person, whether or not
permitted by Section 7.4, and (b) no Change in Control with respect to the
Company shall have occurred; and you shall have received on the Closing Date a
certificate dated the Closing Date and signed by the President of the Company to
such effect and to the effect that no corporate action shall have been taken to
initiate or to carry out any of the foregoing.

    3.10 [Reserved].

4. SPECIAL RIGHTS OF INSTITUTIONS

    4.1 Direct Payment.

    Notwithstanding anything to the contrary herein or in the Notes, the Company
shall pay all amounts payable with respect to each Note held by an Institutional
Investor (without any presentment of such Notes and without any notation of such
payment having been made thereon) by crediting, by federal funds bank wire
transfer of immediately available funds, the account of such Institutional
Investor in any bank in the United States of America as may be designated in
writing by such Institutional Investor, or in such other manner as may be
reasonably directed or to such other address in the United States of America as
may be reasonably designated in writing by such Institutional Investor. Your
address on Annex 1.2 hereto shall be deemed to constitute notice, direction or
designation (as appropriate) to the Company with respect to direct

 

22

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payments as aforesaid. In all other cases, all amounts payable with respect to
each Note shall be made by check mailed and addressed to the registered holder
of each Note at the address shown in the register maintained by the Company
pursuant to Section 6.1 hereof.

    Each holder of Notes agrees that in the event it shall sell or transfer any
Note

>     (a) it shall, prior to the delivery of such Note (unless it shall have
> already done so), make a notation thereon of all principal, if any, prepaid on
> such Note and shall also note thereon the date to which interest shall have
> been paid on such Note, and
> 
>     (b) it shall promptly notify the Company of the name and address of the
> transferee of any such Note so transferred and the effective date of such
> transfer.

    4.2 Delivery Expenses.

    If any holder of Notes surrenders any Note to the Company pursuant hereto,
the Company shall pay the cost of delivering to or from such holder's home
office or custodian bank from or to the Company, insured to the reasonable
satisfaction of such holder, the surrendered Note and any Note issued in
substitution or replacement for the surrendered Note.

    4.3 Issue Taxes.

    The Company and the Guarantors shall pay all taxes in connection with the
issuance and sale of the Notes, the execution and delivery of the Guaranties of
the Notes pursuant to Section 10 hereof and in connection with any modification
of this Agreement, the Notes or the Guaranty of the Notes pursuant to Section 10
hereof, and shall save each holder of Notes harmless without limitation as to
time against any and all liabilities with respect to all such taxes. The
obligations of the Company and such Guarantors under this Section 4.3 shall
survive the payment or prepayment of the Notes and the termination hereof.

 

23

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5. PREPAYMENTS

    5.1 Offer to Prepay upon Change in Control.

>     (a) Notice and Offer. In the event of a Change in Control, and whether
> pursuant to Section 7.4 or otherwise as permitted by this Agreement, then the
> Company and each Guarantor having knowledge of such Change in Control will,
> within three (3) Business Days of such Change in Control give written notice
> of such Change in Control to each holder of Notes by registered mail (with a
> copy thereof sent via an overnight courier of national reputation) and,
> simultaneously with the sending of such written notice, give telephonic advice
> of such Change in Control to an investment officer or other similar
> representative or agent of each such holder specified on Annex 1.2 to this
> Agreement at the telephone number specified thereon, or to such other Person
> at such other telephone number as any holder of a Note may specify to the
> Company and the Guarantors in writing. Such notice shall be dated the date on
> which it is given. In the event of a Change in Control, such written notice
> shall contain, and such written notice shall constitute, an irrevocable offer
> to prepay all, but not less than all, of the Notes held by such holder on a
> date specified in such notice (the "Control Prepayment Date") that is not less
> than fifteen (15) days and not more than forty-five (45) days after the date
> of such notice. (If the Control Prepayment Date shall not be specified in such
> notice, the Control Prepayment Date shall be the fifteenth (15th) day after
> the date of such notice.) If the Company shall not have received a written
> response to such notice from each holder of Notes within ten (10) days after
> the date of posting of such notice to such holder of Notes, then a second
> written notice shall be immediately sent (via an overnight courier of national
> reputation) to each such holder of Notes who shall have not previously
> responded to the Company.
> 
>     (b) Acceptance and Payment. To accept such offered prepayment, a holder of
> Notes shall cause a notice of such acceptance to be delivered to the Company
> not later than one day prior to the Control Prepayment Date and shall
> designate in such notice the principal amount of its Notes that it has elected
> to 

 

24

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> have prepaid. If so accepted by such holder, such offered prepayment in
> respect of such principal amount of such Notes shall be due and payable on the
> Control Prepayment Date. Such offered prepayment shall be made at one hundred
> percent (100%) of the principal amount of such Notes so elected to be prepaid,
> together with interest on the Notes then being prepaid accrued to the Control
> Prepayment Date.

>     (c) Officer's Certificate. Each offer to prepay the Notes pursuant to this
> Section 5.1 will be accompanied by an officer's certificate, executed by the
> President or a Vice President of the Company and dated the date of such offer,
> specifying:
> 
>         (i)    the Control Prepayment Date;
> 
> > > (ii)   the principal amount of each Note offered to be prepaid;
> > > 
> > > (iii)  the interest to be paid on each such Note, accrued to the Control
> > > Prepayment Date; and
> > > 
> > > (iv)   in reasonable detail, the nature of the Change in Control.

    5.2 Optional Prepayments. The Company may prepay the principal amount of the
Notes in whole or in part at any time in multiples of One Million Dollars
($1,000,000) (or, if the aggregate outstanding principal amount of the Notes is
less than One Million Dollars ($1,000,000) at such time, then such principal
amount), together with 

>         (i) an amount equal to the Make-Whole Amount in respect of the
> principal amount of the Notes being so prepaid, and
> 
>         (ii) interest on such principal amount then being prepaid accrued to
> the prepayment date.

    5.3 Notice of Optional Prepayment.

    The Company will give notice of any optional prepayment of the Notes to each
holder of the Notes not less than thirty (30) days or more than sixty (60) days
before the date fixed for prepayment, specifying:

 

25

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>     (a) such prepayment date;
> 
>     (b) that the prepayment is being made pursuant to Section 5.2 hereof;
> 
>     (c) the principal amount of each Note to be prepaid on such date;
> 
>     (d) the interest to be paid on each such Note, accrued to the date fixed
> for prepayment; and
> 
>     (e) the Company's calculation of an estimated Make-Whole Amount, if any,
> (assuming the date of prepayment was the date of such notice) due in
> connection with such prepayment, accompanied by a copy of any applicable
> documentation used in connection with determining the Make-Whole Discount Rate
> in respect thereof.

Such notice of prepayment shall also certify all facts that are conditions
precedent to any such prepayment. Notice of prepayment having been so given, the
aggregate principal amount of the Notes specified in such notice, together with
the Make-Whole Amount, if any, and accrued interest thereon shall become due and
payable on the specified prepayment date. Contemporaneously with such
prepayment, the Company shall deliver to each holder of Notes, as of the
specified prepayment date, the determination of the Make-Whole Amount referred
to in the definition of "Make-Whole Amount" in Section 11.1 hereof (and
previously delivered to the Company as provided for in such definition),
accompanied by a copy of any applicable documentation likewise previously
delivered to the Company and used in connection with determining the Make-Whole
Discount Rate in respect of such prepayment. Interest on any overdue prepayment
and on any "Make-Whole Amount" to be paid in connection therewith, shall be due
to the date of payment, at the rate set forth in Section 1.1(b).

    5.4 Partial Prepayment Pro Rata.

    If at the time any optional prepayment is due under Section 5.2 hereof and
there is more than one Note outstanding immediately prior to, as well as after
giving effect to, such prepayment, the aggregate principal amount of each
optional partial prepayment of the Notes shall be allocated among the holders of
the Notes at the time outstanding in proportion, as nearly as practicable, to
the.

 

26

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respective unpaid principal amounts of the Notes outstanding immediately prior
to such prepayment, with adjustments, to the extent practicable, to equalize for
any prepayments not in such proportion.

    5.5 Notation of Notes on Prepayment.

    Upon any partial prepayment of a Note, the holder thereof may (but such
holder shall not be compelled to) require that such Note be

>     (a) surrendered to the Company pursuant to Section 6.2 hereof in exchange
> for a new Note in a principal amount equal to the principal amount remaining
> unpaid on the surrendered Note,
> 
>     (b) made available to the Company for notation thereon of the portion of
> the principal so prepaid, or
> 
>     (c) marked by such holder with a notation thereon of the portion of the
> principal so prepaid.

If any Note is surrendered to the Company pursuant to this Section 5.5 or
otherwise hereunder, such Note shall be cancelled and shall not be reissued and
no new Note shall be reissued in respect of any principal amount of a
surrendered Note that shall have been previously paid. This Section 5.5 shall
not limit or restrict the Company's obligation to effect payment of any partial
prepayment of Notes in accordance with requirements of Section 4.1 hereof.

    5.6 No Other Optional Prepayments.

    Except as provided in Section 5.2 hereof or in accordance with an offer made
in compliance with Section 5.1 or pursuant to Section 7.4(c) or Section
7.15(c)(ii) hereof, the Company may not make, without the prior written consent
of all holders of Notes, any optional prepayment (whether directly or indirectly
by purchase or other acquisition) in respect of the Notes.

 

27

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6. REGISTRATION; SUBSTITUTION OF NOTES

    6.1 Registration of Notes.

    The Company shall cause to be kept at its office, maintained pursuant to
Section 7.3 hereof, a register for the registration and transfer of Notes. The
name and address of each holder of one or more Notes, each transfer thereof and
the name and address of each transferee of one or more Notes shall be registered
in the register. The Person in whose name any Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes hereof, and
neither the Company nor any Guarantor shall be affected by any notice or
knowledge to the contrary. The Company shall deem such subsequent holder to have
made the representations and warranties set forth in Section 1.3 hereof and will
promptly furnish to any such subsequent holder, upon request made prior to or
subsequent to a transfer, the type of information described in Section
2.12(c)(ii) hereof.

    6.2 Exchange of Notes.

    Upon surrender of any Note at the office of the Company maintained pursuant
to Section 7.3 hereof duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of such Note or such holder's
attorney duly authorized in writing, the Company shall execute and deliver, at
the Company's expense (except as provided below), new Notes in exchange
therefor, in denominations of at least Fifty Thousand Dollars ($50,000) (except
as may be necessary to reflect any principal amount not evenly divisible by
Fifty Thousand Dollars ($50,000)), in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit A hereto. Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered
Note or dated the date of the surrendered Note if no interest shall have been
paid thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes.

 

28

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    6.3 Replacement of Notes.

    Upon receipt by the Company of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Note and

>     (a) in the case of loss, theft or destruction, of indemnity reasonably
> satisfactory to it (provided that if the holder of such Note is an
> Institutional Investor, such holder's own unsecured agreement of indemnity
> shall be deemed to be satisfactory), or
> 
>     (b) in the case of mutilation, upon surrender and cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.

    6.4 Guarantors' Responsibility in respect of New Notes.

    Each Guarantor agrees to execute each new Note, as provided for in the form
thereof attached hereto as Exhibit A, being exchanged or delivered in accordance
with Section 6.2 and Section 6.3 hereof.

7. COMPANY BUSINESS COVENANTS

    The Company covenants that on and after the Closing Date and so long as any
of the Notes shall be outstanding:

    7.1 Payment of Taxes and Claims.

    The Company will, and will cause each of its Subsidiaries to, pay before
they become delinquent,

>     (a) all taxes, assessments and governmental charges or levies imposed upon
> it or its Property, and
> 
>     (b) all claims or demands of materialmen, mechanics, carriers,
> warehousemen, landlords and other like Persons that, if unpaid, might result
> in the creation of a Lien upon its Property,

 

29

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provided, that items in clause (a) and clause (b) above need not be paid

>     (x) while being contested in good faith and by appropriate proceedings as
> long as adequate book reserves (as required by GAAP) have been established and
> maintained and exist with respect thereto, and
> 
>     (y) so long as the title of the Company or any of its Subsidiaries (as the
> case may be) to, and its right to use, such Property, is not materially
> adversely affected thereby.

    7.2 Maintenance of Properties and Corporate Existence.

    The Company will, and will cause each of its Subsidiaries to,

>     (a) Property -- maintain its Property in good condition, ordinary wear and
> tear excepted, and make all necessary renewals, replacements, additions,
> betterments  and improvements thereto;
> 
>     (b) Insurance -- maintain, with financially sound and reputable insurers,
> insurance with respect to its Property and business against such casualties
> and contingencies, of such types (including, without limitation, insurance
> with respect to losses arising out of Property loss or damage, public
> liability, workers' compensation, business interruption, larceny, embezzlement
> or other criminal misappropriation) and in such amounts as is customary in the
> case of corporations of established reputation engaged in the same or a
> similar business and similarly situated;
> 
>     (c) Financial Records -- keep true books of records and accounts in which
> full and correct entries shall be made of all its business transactions and
> which will permit the preparation of accurate and complete consolidated
> financial statements in accordance with GAAP;
> 
>     (d) Corporate Existence and Rights -- do or cause to be done all things
> necessary to preserve and keep in full force and effect its corporate
> existence, rights (charter and statutory) and franchises, subject

 

30

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> to Section 7.4 hereof, except where the failure to do so could not reasonably
> be expected to have a Material Adverse Effect;
> 
>     (e) Compliance with Law -- not be in violation of any law, ordinance or
> governmental rule or regulation to which it is subject and not fail to obtain
> any license, certificate, permit, franchise or other governmental
> authorization necessary to the ownership of its Properties or to the conduct
> of its business if such violation or failure to obtain could be reasonably
> expected to have a Material Adverse Effect; and
> 
>     (f) Rule 144A Eligibility -- not take or omit to take any action which
> would cause the Notes not to be eligible for resale pursuant to Rule
> 144A(d)(3) and (4) as the same may be amended from time to time.

    7.3 Payment of Notes and Maintenance of Office.

    The Company will punctually pay, or cause to be paid, the principal of and
interest (and Make-Whole Amount, if any) on, the Notes, as and when the same
shall become due according to the terms hereof and of the Notes, and will
maintain an office at the address of the Company set forth in Section 12.1
hereof where notices, presentations and demands in respect hereof or of the
Notes may be made upon it. Such office will be maintained at such address until
such time as the Company will notify the holders of the Notes of any change of
location of such office, which will in any event be located within the United
States of America.

    7.4 Merger; Acquisition; Sale of Assets.

>     (a) Merger and Consolidation. The Company will not, and will not permit
> any of its Subsidiaries to, merge with or into, consolidate with, or sell,
> lease as lessor, transfer or otherwise dispose of all or substantially all of
> its Property to, any other Person or permit any other Person to merge with or
> into or consolidate with it (except that a Subsidiary of the Company may merge
> with or into, consolidate with, or sell, lease, transfer or otherwise dispose
> of all or substantially all of its assets to, the Company or a Wholly-Owned
> Subsidiary); provided that the foregoing restriction does not apply to the
> merger or consolidation

 

31

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> of the Company with or into, or the sale, lease, transfer or other disposition
> by the Company of all or substantially all of its Property to, another
> corporation, if:
> 
> >     (i) the corporation that results from such merger or consolidation or
> > that purchases, leases, or acquires all or substantially all of such
> > Property (the "Surviving Corporation") shall be organized under the laws of,
> > and have substantially all of its Property located in, the United States of
> > America or any jurisdiction thereof;
> > 
> >     (ii) the due and punctual payment of the principal of and Make-Whole
> > 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
> > contained herein and in the Notes to be performed and observed by the
> > Company, shall be expressly assumed by the Surviving Corporation pursuant to
> > such agreements or instruments as shall be satisfactory to the Required
> > Holders;
> > 
> >     (iii) each Guarantor shall have reconfirmed its obligations hereunder in
> > writing;
> > 
> >     (iv) the Company shall have caused to be delivered to each holder of
> > Notes an opinion of independent counsel (which opinion and counsel are
> > satisfactory in form and substance to the Required Holders) to the effect
> > that (i) such agreements, reconfirmations and instruments are enforceable in
> > accordance with their terms, (ii) no taxable event or consequence will
> > result to any holder of Notes solely by virtue of such merger,
> > consolidation, purchase, lease or acquisition and the assumption by the
> > Surviving Corporation of the obligations of he Company hereunder and under
> > the Notes, and (iii) the obligations of the Guarantors are in full force and
> > effect; and
> > 
> >     (v) immediately prior to, and immediately after the consummation of such
> > transaction, and after giving effect thereto,

 

32

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> > >     (A) no Default or Event of Default shall exist, and
> > > 
> > >     (B) the Surviving Corporation would be permitted to incur at least One
> > > Dollar ($1.00) of additional Funded Debt pursuant to Section 7.7 hereof.
> 
>     (b) Acquisition of Stock. The Company will not, and will not permit any of
> its Subsidiaries to, acquire any stock of any corporation if upon completion
> of such acquisition such corporation would be a Subsidiary of the Company, or
> acquire all of the assets of, or such of the assets as would permit the
> transferee to continue any one or more integral business operations of, any
> Person unless, immediately after the consummation of such acquisition, and
> after giving effect thereto, no Default or Event of Default exists or would
> exist and the Company would be permitted to incur at least One Dollar ($1.00)
> of additional Funded Debt pursuant to Section 7.7 hereof and a Subsidiary of
> the Company would be permitted to incur at least One Dollar ($1.00) of
> additional Debt pursuant to Section 7.6 hereof. Upon any corporation becoming
> a Subsidiary of the Company, all of its then existing Debt and Liens securing
> such Debt shall be deemed incurred for purposes of Section 7.6, Section 7.7
> and Section 7.9 hereof.
> 
>     (c) Sale of Assets. The Company will not, and will not permit any of its
> Subsidiaries to, sell, lease, abandon or otherwise dispose of any of its
> assets (except for sales and leases in the ordinary course of business,
> including sales and leases to customers and dispositions of plant and
> equipment in connection with normal closures) unless, immediately after giving
> effect to such proposed disposition, the assets so disposed of by the Company
> and its Subsidiaries during the then current fiscal year of the Company shall
> have an aggregate net book value (determined as to particular assets as of the
> end of the immediately preceding fiscal year), not in excess of ten percent
> (10%) of Consolidated Net Worth at the end of the immediately preceding fiscal
> year. In determining such aggregate value, there shall be included the value
> of any assets disposed of through dispositions of shares pursuant to Section
> 7.4(a) or

 

33

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> Section 7.15 but there shall be excluded the value of assets disposed of to
> the extent that, after giving effect to such sale or lease no Default or Event
> of Default shall exist and either (i) the Company or such Subsidiary at the
> time of such disposition either has previously acquired or is simultaneously
> acquiring, in contemplation of such disposition, substantially similar assets,
> or has previously entered into, or is simultaneously entering into, a binding
> purchase or lease agreement or agreements to acquire or lease substantially
> similar assets, which assets are acquired or leased within one hundred eighty
> (180) days of such disposition or (ii) the Company or such Subsidiary shall,
> within such period of one hundred eighty (180) days, use the proceeds from the
> disposition to repay Debt of the Company or such Subsidiary, in which event
> the Company shall offer to prepay, at par and in the manner provided in
> Section 5.5 hereof, a principal amount of Notes which bears the same ratio to
> the aggregate outstanding amount of all Notes outstanding as other Debt to be
> repaid bears to the aggregate outstanding amount of such issues or series of
> Debt.

    7.5 Restricted Payments and Restricted Investments.

>     (a) Limitation on Restricted Payments. The Company will not make or incur
> and will not suffer or permit any of its Subsidiaries to make or incur (i) any
> liability to declare or make any Restricted Payment in respect of its Capital
> Stock or the Capital Stock of any of its Subsidiaries or any Guarantor or (ii)
> any Restricted Investment or any undertaking or agreement to make a Restricted
> Investment unless immediately after giving effect to any proposed Restricted
> Payment or Restricted Investment,

> >     (A) the aggregate amount of all Restricted Investments and Restricted
> > Payments declared, made or authorized after December 31, 1992 does not
> > exceed the sum of

> > >     (I) seventy-five percent (75%) of the aggregate Consolidated Net
> > > Income (or, in case such aggregate Consolidated Net Income shall be a

 

34

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> > > deficit, minus 100% of such deficit) for the period commencing on January
> > > 1, 1993 and ending on the date of such proposed transaction; plus

>             (II) Twenty-Five Million Dollars ($25,000,000);
> 
> >     (B) no Default or Event of Default exists or would, after giving effect
> > to such Restricted Payment or Restricted Investment, as the case may be,
> > exist; and
> > 
> >     (C) the Company would be permitted to incur at least One Dollar ($1.00)
> > of additional Funded Debt pursuant to Section 7.7 hereof and a Subsidiary of
> > the Company would be permitted to incur at least One Dollar ($1.00) of
> > additional Debt pursuant to Section 7.6 hereof.

>     (b) Time of Payment. The Company will not authorize a Distribution on its
> Capital Stock that is not payable within sixty (60) days of authorization.

    7.6 Subsidiary Debt.

    The Company will not at any time permit any of its Subsidiaries to create,
incur, issue, assume, guarantee or otherwise become liable in respect of any
Debt, other than Debt owing to the Company or a Wholly-Owned Subsidiary, unless,
(i) immediately after giving effect thereto, Total Subsidiary Debt does not
exceed ten percent (10%) of Consolidated Net Worth at such time, and (ii)
immediately prior to, and immediately after the consummation of such
transaction, and after giving effect thereto, no Default or Event of Default
exists or would exist and the Company would be permitted to incur at least One
Dollar ($1.00) of additional Funded Debt pursuant to Section 7.7.

    7.7 Consolidated Funded Debt to Consolidated Total Capitalization.

    The Company will not, and will not permit any of its Subsidiaries to,
create, incur, issue, assume, guarantee or otherwise become liable in respect of
any Funded Debt (other than the Notes) at any time, unless, (i) immediately
after giving

 

35

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effect thereto, Consolidated Funded Debt does not exceed forty percent (40%) of
Consolidated Total Capitalization at such time, and (ii) immediately prior to,
and immediately after the consummation of such transaction, and after giving
effect thereto, no Default or Event of Default exists or would exist.

    7.8 Consolidated Net Worth.

    The Company will not permit Consolidated Net Worth at the end of any fiscal
quarter of the Company to be less than the sum of (i) Three Hundred Twenty-five
Million Dollars ($325,000,000) and (ii) twenty-five percent (25%) of
Consolidated Net Income earned after December 31, 1995.

    7.9 Liens.

>     (a) Negative Pledge. The Company will not, nor will it permit any of its
> Subsidiaries to, grant, incur, assume, create or cause or permit to exist, or
> agree or consent to grant, incur, assume, create or cause or permit to exist
> in the future (upon the happening of a contingency or otherwise), a Lien upon
> any of its Property (including, without limitation, any Capital Stock of the
> Subsidiaries of the Company owned by the Company or any other Subsidiary of
> the Company), whether now owned or hereafter acquired, except:
> 
> >     (i) Liens securing the claims or demands of materialmen, mechanics,
> > carriers, warehousemen, landlords and other like Persons, provided that the
> > payment thereof is not at the time required by Section 7.1 hereof;

> >     (ii) Liens incurred or deposits made in the ordinary course of business
> > 
> > >     (A) in connection with workers' compensation, unemployment insurance,
> > > social security and other like laws, and (B) to secure the performance of
> > > letters of credit, bids, tenders, sales contracts, leases, statutory
> > > obligations, surety and performance bonds (of a type other than set forth
> > > in Section 7.9(a)(iii)

 

36

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> > > hereof) and other similar obligations not incurred in connection with the
> > > borrowing of money, the obtaining of advances or the payment of the
> > > deferred purchase price of Property;
> 
>         (iii) Liens
> 
> > >     (A) arising from judicial attachments and judgments,
> > > 
> > >     (B) securing appeal bonds or supersedeas bonds, and
> > > 
> > >     (C) arising in connection with court proceedings (including, without
> > > limitation, surety bonds and letters of credit or any other instrument
> > > serving a similar purpose),

provided that (1) the execution or other enforcement of such Liens is
effectively stayed, (2) the claims secured thereby are being actively contested
in good faith and by appropriate proceedings, (3) adequate reserves (in
accordance with GAAP) have been established and maintained in respect thereof
and (4) the existence of the judgment or attachment giving rise to the Lien
shall not constitute an Event of Default;

> >     (iv) Liens on Property of a Subsidiary of the Company, provided that
> > such Liens secure only obligations owing to the Company;
> > 
> >     (v) Liens in the nature of reservations, exceptions, encroachments,
> > easements, rights-of-way, covenants, conditions, restrictions, leases and
> > other similar title exceptions or encumbrances affecting real Property,
> > provided that such Liens do not individually or in the aggregate materially
> > detract from the value of said Properties or materially interfere with the
> > use by the Company or its Subsidiaries of such Property in the ordinary
> > conduct of the business of the Company and such Subsidiaries;
> > 
> >     (vi) Liens on Property arising in connection with Capital Leases so long
> > as each such

 

37

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> > Lien encumbers only Property that is the subject of the related Capital
> > Lease and no other Property of the Company or any of its Subsidiaries and
> > immediately before, and after giving effect thereto, no Default or Event of
> > Default exists or would exist and (A) the Company would be permitted to
> > incur at least One Dollar ($1.00) of additional Funded Debt pursuant to
> > Section 7.7 hereof and (B) a Subsidiary of the Company would be permitted to
> > incur at least One Dollar ($1.00) of additional Debt pursuant to Section 7.6
> > hereof; (vii) Liens in existence on the Closing Date securing Debt and
> > listed on Annex 7.9 hereto; and

> >     (viii) Purchase Money Liens, if, after giving effect thereto and to any
> > concurrent transactions:
> > 
> > >     (A) each such Purchase Money Lien secures Debt of the Company or any
> > > of its Subsidiaries in an amount not exceeding one hundred percent (100%)
> > > of the cost of acquisition of the particular Property to which such Debt
> > > relates (or, in the case of a Lien existing on any Property of any
> > > corporation at the time it becomes a Subsidiary of the Company, one
> > > hundred percent (100%) of the Fair Market Value of such Property at such
> > > time);
> > > 
> > >     (B) no Default or Event of Default would exist and (I) the Company
> > > would be permitted to incur at least One Dollar ($1.00) of additional
> > > Funded Debt pursuant to Section 7.7 hereof and (II) a Subsidiary of the
> > > Company would be permitted to incur at least One Dollar ($1.00) of
> > > additional Debt pursuant to Section 7.6 hereof;

> >     (ix) Liens incurred in connection with the sale by the Company or a
> > Subsidiary of accounts receivable of the Company or a Subsidiary (a
> > "receivables sale") permitted by Section 7.4(c) or the borrowing of money by
> > the Company or a

 

38

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> > Subsidiary permitted by Section 7.6 and Section 7.7 and the repayment of
> > which is secured by accounts receivable of the Company or a Subsidiary (a
> > "receivables financing"), including such amount of accounts receivable as
> > may be in excess of the sale price or the amount borrowed, provided that:
> > (A) the Property subject to such Lien shall consist solely of accounts
> > receivable of the Company or a Subsidiary, the obligor of which is a Person
> > other than the Company or a Subsidiary; (B) the purchaser of the accounts
> > receivable or the lender (the repayment of whose loan is secured by such
> > accounts receivable, as the case may be) shall have no recourse to the
> > Company or any Subsidiary or to any Property of the Company or any
> > Subsidiary other than such accounts receivable for any liability arising out
> > of the receivables financing or receivables sale; and (C) the accounts
> > receivable which are subject to the Lien permitted hereby shall be
> > identified at the time the receivables sale or receivables financing is
> > consummated and additional receivables shall not thereafter be subjected to
> > the Lien created at that time; and
> > 
> >     (x) other Liens on Property of the Company or a Subsidiary provided that
> > the Debt or other obligations secured by such Liens shall not at any time
> > exceed ten percent (10%) of Consolidated Net Worth.
> 
>     (b) Equal and Ratable Lien; Equitable Lien. In case any Property shall be
> subjected to a Lien in violation of this Section 7.9, the Company will
> forthwith make or cause to be made, to the fullest extent permitted by
> applicable law, provision whereby the Notes will be secured equally and
> ratably with all other obligations secured thereby, pursuant to such
> agreements and instruments as shall be approved by the Required Holders, and
> the Company will cause to be delivered to each holder of a Note an opinion of
> independent counsel (in form and substance satisfactory to the Required
> Holders) to the effect that such agreements and instruments are enforceable in
> accordance with their terms, and in any such case the Notes shall have the
> benefit, to the full extent that, and with such priority as, the holders of
> Notes may be

 

39

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> entitled under applicable law, of an equitable Lien on such Property securing
> the Notes. Such violation of this Section 7.9 constitutes an Event of Default
> hereunder, whether or not any such provision is made pursuant to this Section
> 7.9(b).
> 
>     (c) Financing Statements. The Company will not, and will not permit any of
> its Subsidiaries to, sign or file a financing statement under the Uniform
> Commercial Code (or similar statute) of any jurisdiction that names the
> Company or such Subsidiary as debtor, or sign any security agreement
> authorizing any secured party thereunder to file any such financing statement,
> except, in any such case, a financing statement filed or to be filed to
> perfect or protect a security interest that the Company or such Subsidiary is
> entitled to create, assume or incur, or permit to exist, under the foregoing
> provisions of this Section 7.9 or to evidence for informational purposes a
> lessor's interest in Property leased to the Company or any such Subsidiary.

    7.10 ERISA.

>     (a) Compliance. The Company will, and will cause each ERISA Affiliate, at
> all times with respect to each Pension Plan and Multiemployer Plan, to make
> timely payment of contributions required to meet the minimum funding standard
> in respect of such Person set forth in ERISA or the IRC with respect thereto,
> and to comply with all other applicable provisions of ERISA.
> 
>     (b) Relationship of Vested Benefits to Pension Plan Assets. Except as, to
> the extent and for the period of time described in Annex 2.12, the Company
> will not at any time permit the present value of all employee benefits vested
> under each Pension Plan to exceed the assets of such Pension Plan allocable to
> such vested benefits at such time, in each case determined pursuant to Section
> 7.10(c) hereof, except to the extent that the Company could, at such time,
> incur Debt in the amount of such excess in compliance with Section 7.6 and
> Section 7.7 and otherwise complies with this Section 7.10.
> 
>     (c) Valuations. All assumptions and methods used to determine the
> actuarial valuation of vested

 

40

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> employee benefits under Pension Plans and the present value of assets of
> Pension Plans will be reasonable in the good faith judgment of the Company and
> will comply with all requirements of law.
> 
>     (d) Prohibited Actions. The Company will not, and will not permit any
> ERISA Affiliate to:

> >     (i) engage in any "prohibited transaction" (as such term is defined in
> > section 406 of ERISA or section 4975 of the IRC) that would result in the
> > imposition of a tax or penalty;
> > 
> >     (ii) incur with respect to any Pension Plan any "accumulated funding
> > deficiency" (as such term is defined in section 302 of ERISA), whether or
> > not waived;
> > 
> >     (iii) terminate any Pension Plan in a manner that could result in
> > 
> > >     (A) the imposition of a Lien on the Property of the Company or any of
> > > its Subsidiaries pursuant to section 4068 of ERISA, or
> > > 
> > >     (B) the creation of any liability under section 4062 of ERISA;
> > 
> >     (iv) fail to make any payment required by section 515 of ERISA; or
> > 
> >     (v) except as disclosed on Annex 2.12 hereto, be an "employer" (as such
> > term is defined in section 3 of ERISA) required to contribute to any
> > Multiemployer Plan or a "substantial employer" (as such term is defined in
> > section 4001 of ERISA) required to contribute to any Multiple Employer
> > Pension Plan.

    7.11 Transactions with Affiliates.

    The Company will not, and will not permit any of its Subsidiaries to, enter
into any transaction, including, without limitation, the purchase, sale or
exchange of Property or the rendering of any service, with any Affiliate, except
in the ordinary course of and pursuant to the

 

41

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reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would be obtained in a comparable arm's-length transaction with a Person
not an Affiliate.

    7.12 Pro-Rata Offers.

    The Company will not, nor will it permit any of its Subsidiaries or any
Affiliate to, directly or indirectly, acquire or make any offer to acquire any
Notes other than as permitted by Section 5.7 and then only if the Company or
such Subsidiary or Affiliate shall have offered to acquire Notes, pro rata, from
all holders of the Notes and upon the same terms. In case the Company acquires
any Notes, such Notes will thereafter be cancelled and no Notes will be issued
in substitution therefor.

    7.13 Private Offering.

    The Company will not, nor will it permit any Person 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, any Person so as to
bring the issuance and sale of the Notes within the provisions of section 5 of
the Securities Act.

    7.14 Environmental Compliance.

>     (a) Compliance. The Company will at all times be, and will at all times
> cause its Subsidiaries to be, in compliance with all Environmental Protection
> Laws in effect in each jurisdiction where each such Person is doing business,
> if the failure to comply with which could reasonably be expected to have a
> Material Adverse Effect.
> 
>     (b) Liability. The Company will not permit itself, nor will it permit any
> of its Subsidiaries, to be subject to any liability under any Environmental
> Protection Laws that, individually or in the aggregate, could reasonably be
> expected to have a Material Adverse Effect.

 

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    7.15 Sales of Subsidiary Stock.

    The Company will not at any time, and will not at any time permit any of its
Subsidiaries to, sell or otherwise dispose of any shares of Capital Stock (or
any options or warrants to purchase Capital Stock or other Securities
exchangeable for or convertible into Capital Stock) of a Subsidiary of the
Company (said Capital Stock, options, warrants and other Securities herein
called "Subsidiary Stock"), nor will any Subsidiary of the Company issue, sell
or otherwise dispose of any shares of its own Subsidiary Stock to any Person
other than the Company or a Wholly-Owned Subsidiary; provided that the foregoing
restrictions do not apply to:

>     (a) the issue of directors' qualifying shares;
> 
>     (b) the sale for an all cash consideration to a Person (other than
> directly or indirectly to an Affiliate) of the entire Investment (whether
> represented by stock, debt, claims or otherwise) of the Company and its other
> Subsidiaries in any Subsidiary, if all of the following conditions are met:
> 
> >     (i) in the good faith opinion of the Board of Directors of the Company,
> > the sale is for Fair Market Value and is in the best interests of the
> > Company;
> > 
> >     (ii) the Subsidiary being disposed of has no continuing Investment (x)
> > in any other Subsidiary not being simultaneously disposed of in a
> > transaction which meets the conditions set forth in this Section 7.15(b) or
> > (y) in the Company; and
> > 
> >     (iii) the aggregate book value of all such Voting Stock (or of the
> > Property or other assets of the Subsidiary if greater) disposed of by the
> > Company and its Subsidiaries during the then current fiscal year of the
> > Company, when added to the aggregate net book value of assets disposed of
> > pursuant to Section 7.4(c) during such fiscal year, shall not exceed ten
> > percent (10%) of Consolidated Net Worth and immediately after the
> > consummation of the transaction, and after giving effect thereto, no Default
> > or Event of

 

43

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> > Default would exist, and (A) the Company would be permitted to incur at
> > least One Dollar ($1.00) of additional Funded Debt pursuant to Section 7.7
> > hereof and (B) a Subsidiary of the Company would be permitted to incur at
> > least One Dollar ($1.00) of additional Debt pursuant to Section 7.6 hereof;
> > and

>     (c) the sale for an all cash consideration to a Person (other than
> directly or indirectly to an Affiliate) of the entire Investment (whether
> represented by stock, debt, claims or otherwise) of the Company and its other
> Subsidiaries in any Subsidiary, if all of the following conditions are met:
> 
> >     (i) the conditions set forth in Section 7.15(b)(i) and (ii) are met;
> > 
> >     (ii) the entire consideration received by the Company shall be used,
> > within one hundred eighty (180) days of the date of such sale (A) to acquire
> > Property or assets useful, in the opinion of the Board of Directors of the
> > Company, in the business of the Company and being acquired, in the opinion
> > of the Board of Directors, at not more than the fair market value thereof or
> > (B) to repay Debt of the Company or its Subsidiaries (in which event the
> > Company shall offer to prepay, at par and in the manner provided in Section
> > 5.5 hereof, a principal amount of Notes which bears the same ratio to the
> > aggregate outstanding amount of all Notes outstanding as the principal
> > amount of other Debt to be repaid bears to the aggregate outstanding
> > principal amount of all such other Debt); and
> > 
> >     (iii) prior to the consummation of such sale, the Company shall have
> > furnished to each holder of Notes a detailed description of the proposed
> > action, together with a certificate of the President of the Company
> > attesting to the action of the Board of Directors as set forth above.
> 
>     (d) the participation by the Company or a Subsidiary of the Company in
> joint ventures or other

 

44

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> commercial endeavors, whether by creation of a minority interest in the Voting
> Stock of a Subsidiary or by contribution of Voting Stock of a Subsidiary to
> such venture or endeavor provided that after giving effect to each such
> transaction (i) there shall not have occurred a Default or Event of Default,
> (ii) the Company shall be in compliance with the provisions of Section 7.5 and
> (iii) the aggregate bookvalue of all such Voting Stock (or of the Property or
> other assets of the Subsidiary attributable to such interest, if greater)
> shall not exceed ten percent (10%) of Consolidated Net Worth.

    Without limiting the foregoing, the Company will not permit any Subsidiary
to issue or have outstanding any Preferred Stock if such Preferred Stock is to
be held by a Person other than the Company or a Wholly-Owned Subsidiary and the
Company shall not sell, or permit any Subsidiary to sell, any Preferred Stock of
any Subsidiary to any Person other than to the Company or to a Wholly-Owned
Subsidiary.

    7.16 Pari Passu Ranking of Notes.

    The Company warrants that its obligations under this Agreement and the Notes
do, and undertakes that the same will continue to, rank at least pari passu with
all its other present and future unsecured senior obligations.

8. INFORMATION AS TO COMPANY

    8.1 Financial and Business Information.

    The Company shall deliver to each holder of Notes:

>     (a) Quarterly Statements -- as soon as practicable after the end of each
> quarterly fiscal period in each fiscal year of the Company (other than the
> last quarterly fiscal period of each such fiscal year), and in any event
> within sixty (60) days thereafter, duplicate copies of:
> 
> >     (i) a consolidated balance sheet of the Company and its Subsidiaries as
> > at the end of such quarter, and

> >     (ii) consolidated statements of income, changes in shareholders' equity
> > and cash flows
> > 
> >  

45

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> > of the Company and its Subsidiaries for such quarter and (in the case of the
> > second and third quarters) for the portion of the fiscal year ending with
> > such quarter;
> 
> (provided that so long as the Company shall continue to file on a timely basis
> required reports on Form 10-Q, such reports may be furnished in satisfaction
> of the requirements of this Section 8.1(a)), setting forth in each case in
> comparative form the figures for the corresponding periods in the previous
> fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
> certified as complete and correct, subject to changes resulting from year-end
> adjustments, by a principal financial officer of the Company, and accompanied
> by the certificate required by Section 8.2 hereof;

>     (b) Annual Statements -- as soon as practicable after the end of each
> fiscal year of the Company, and in any event within ninety (90) days
> thereafter, duplicate copies of:
> 
> >     (i) a consolidated balance sheet of the Company and its Subsidiaries, as
> > at the end of such year, and

> >     (ii) consolidated statements of income, changes in shareholders' equity
> > and cash flows of the Company and its Subsidiaries for such year,
> 
> setting forth in comparative form the figures for the previous year in the
> case of the balance sheets referred to in clause (i) and for the previous two
> fiscal years in the case of the consolidated statements referred to in clause
> (ii), all in reasonable detail, prepared in accordance with GAAP, and
> accompanied by
> 
> >     (x) in the case of such consolidated statements, an opinion thereon of
> > the accountants named in Section 2.2 hereof or other independent certified
> > public accountants of recognized national standing selected by the Company,
> > which opinion shall, without qualification (including, without limitation,
> > 
> >  

46

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> > any qualification with respect to the scope of any audit), state that such
> > financial statements present fairly, in all material respects, the financial
> > position of the companies being reported upon and their results of
> > operations and cash flows and have been prepared in conformity with GAAP,
> > and that the examination of such accountants in connection with such
> > financial statements has been made in accordance with generally accepted
> > auditing standards, and that such audit provides a reasonable basis for such
> > opinion in the circumstances,
> > 
> >     (y) a certification by a principal financial officer of the Company that
> > such consolidated statements are complete and correct, and
> > 
> >     (z) the certificates required by Section 8.2 and Section 8.3 hereof;
> 
>     (c) Audit Reports -- promptly upon receipt thereof, a copy of each other
> report (including, without limitation, any reports to management on internal
> controls) submitted to the Company or any of its Subsidiaries by independent
> accountants in connection with any annual, interim or special audit made by
> them of the books of the Company or any such Subsidiary;
> 
>     (d) SEC and Other Reports -- promptly upon their becoming available one
> copy of each financial statement, report, notice or proxy statement sent by
> the Company or any of its Subsidiaries to stockholders generally, and of each
> regular or periodic report and any registration statement, offering circular,
> prospectus or written communication (other than transmittal letters), and each
> amendment thereto, in respect thereof filed by the Company or any of its
> Subsidiaries with, or received by, such Person in connection therewith from,
> the National Association of Securities Dealers, any securities exchange or the
> Securities and Exchange Commission or any successor agency;

>     (e) ERISA -- as soon as possible, and in any event within ten (10)
> Business Days after, becoming aware of the occurrence of any

 

47

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> >     (i) "reportable event" (as such term is defined in section 4043 of
> > ERISA) as to which the 30-day notice requirement has not been waived by the
> > PBGC or

> >     (ii) "prohibited transaction" (as such term is defined in section 406 or
> > section 4975 of the IRC)

> in connection with any Pension Plan or any trust created thereunder, a written
> notice specifying the nature thereof, what action the Company is taking or
> proposes to take with respect thereto, and, when known, any action taken by
> the IRS, the Department of Labor or the PBGC with respect thereto;
> 
>     (f) ERISA Waivers -- prompt written notice of and a description of any
> request pursuant to section 303 of ERISA or section 412 of the IRC for, or
> notice of the granting pursuant to said section 303 or said section 412 of, a
> waiver in respect of all or part of the minimum funding standard set forth in
> ERISA or the IRC, as the case may be, of any Pension Plan, and, in connection
> with the granting of any such waiver, the amount of any waived "funding
> deficiency" (as such term is defined in said section 303 or said section 412)
> and the terms of such waiver, in each of the cases specified in this clause
> (f), where the effect of such conditions or events or of events or conditions
> related thereto would reasonably be expected to have a Material Adverse
> Effect;
> 
>     (g) Other ERISA Notices -- prompt written notice of and, where applicable,
> a description of
> 
> >     (i) any notice from the PBGC in respect of the commencement of any
> > proceedings pursuant to section 4042 of ERISA to terminate any Pension Plan
> > or for the appointment of a trustee to administer any Pension Plan,
> > 
> >     (ii) any distress termination notice delivered to the PBGC under section
> > 4041 of ERISA in respect of any Pension Plan, and any determination of the
> > PBGC in respect thereof,
> 
>  

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> >     (iii) the placement of any Multiemployer Plan in reorganization status
> > under Title IV of ERISA,
> > 
> >     (iv) any Multiemployer Plan becoming "insolvent" (as such term is
> > defined in section 4245 of ERISA),
> > 
> >     (v) the whole or partial withdrawal of the Company or any ERISA
> > Affiliate from any Multiemployer Plan and the withdrawal liability incurred
> > in connection therewith, and
> > 
> >     (vi) the withdrawal of the Company or any ERISA Affiliate from any
> > Multiple Employer Pension Plan and the withdrawal liability under ERISA
> > incurred in connection therewith;
> 
> in each of the cases specified in the foregoing clauses (i) through (vi),
> inclusive, where the effect of such conditions or events or of events or
> conditions related thereto would reasonably be expected to have a Material
> Adverse Effect,

>     (h) Notice of Default or Event of Default -- immediately upon becoming
> aware of the existence of any condition or event which constitutes a Default
> or an Event of Default, a written notice specifying the nature and period of
> existence thereof and what action the Company is taking or proposes to take
> with respect thereto;
> 
>     (i) Notice of Claimed Default -- immediately upon becoming aware that the
> holder of any evidence of indebtedness or other Security of the Company or any
> of its Subsidiaries shall have given notice or taken any other action with
> respect to a claimed event of default or default thereunder a written notice
> specifying the notice given or action taken by such holder and the nature of
> the claimed event of default or default and what action the Company is taking
> or proposes to take with respect thereto;
> 
>     (j) Rule 144A Information -- with reasonable promptness, such data and
> information as from time to time may be reasonably requested to comply with 17
> C.F.R. Section 230.144A, as amended from time to time; and

 

49

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>     (k) Other Requested Information -- with reasonable promptness, such other
> data and information as from time to time may be reasonably requested by any
> Purchaser or by any other Institutional Investor which is a holder of Notes.

    8.2 Officers' Certificates.

    Each set of financial statements delivered to each holder of Notes pursuant
to Section 8.1(a) or Section 8.1(b) hereof shall be Accompanied by a certificate
of the President or a Vice-President and the Treasurer or an Assistant Treasurer
of the Company setting forth:

>     (a) Covenant Compliance -- the information (including detailed
> calculations) required in order to establish whether the Company was in
> compliance with the requirements of Section 7.4 through Section 7.16 hereof,
> inclusive, during the fiscal period covered by the income statement then being
> furnished (including with respect to each such Section, where applicable, the
> calculations of the maximum or minimum amount, ratio or percentage, as the
> case may be, permissible under the terms of such Sections, and the calculation
> of the amounts, ratio or percentage then in existence); and

>     (b) Event of Default -- a statement that the signers have reviewed the
> relevant terms hereof and have made, or caused to be made, under their
> supervision, a review of the transactions and conditions of the Company and
> its Subsidiaries from the beginning of the accounting period covered by the
> income statements being delivered therewith to the date of the certificate and
> that such review shall not have disclosed the existence during such period of
> any condition or event which constitutes a Default or an Event of Default or,
> if any such condition or event existed or exists, specifying the nature and
> period of existence thereof and what action the Company shall have taken or
> proposes to take with respect thereto.

    8.3 Accountants' Certificates.

    Each set of annual financial statements delivered pursuant to Section 8.1(b)
hereof shall be accompanied by a certificate of the

 

50

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accountants who certify such financial statements, stating that they have
reviewed this Agreement and stating further, whether, in making their audit,
such accountants have become aware of any condition or event which then
constitutes a Default or an Event of Default, and, if such accountants are aware
that any such condition or event then exists, specifying the nature and period
of existence thereof.

    8.4 Inspection.

    The Company shall permit the representatives of any Purchaser or any other
Institutional Investor which is the holder of at least One Million Dollars
($1,000,000) aggregate principal amount of Notes (at the expense of such Person
unless a Default or Event of Default shall have occurred and be continuing and
then at the expense of the Company and without regard to the aggregate principal
amount of Notes held by such holder) upon at least twenty-four (24) hours' prior
notice to the Chief Financial Officer of the Company, to visit and inspect any
of the Properties of the Company or any of its Subsidiaries, to examine all
their respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants (and by this provision the Company authorizes said accountants so to
discuss its finances and affairs and the finances and affairs of its
Subsidiaries) all at such reasonable times and as often as may be reasonably
requested and subject to the provisions of Section 12.9.

    8.5 Report to NAIC.

    Concurrently with the delivery to you of each annual statement required by
Section 8.1(b) hereof, the Company shall deliver a copy thereof to: Securities
Valuation Office, National Association of Insurance Commissioners, 195 Broadway,
New York, New York 10007.

9. EVENTS OF DEFAULT

    9.1 Nature of Events.

    An "Event of Default" shall exist if any of the following occurs and is
continuing:

 

51

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>     (a) Principal or Make-Whole Amount Payments -- the Company shall fail to
> make any payment of principal or Make-Whole Amount on any Note on or before
> the date such payment is due;
> 
>     (b) Interest Payments -- the Company shall fail to make any payment of
> interest on any Note on or before five (5) Business Days after the date such
> payment is due;
> 
>     (c) Default of Guaranty -- the Guaranty set forth in Section 10 hereof or
> in the Notes or any provision thereof, shall cease to be in full force and
> effect, or any Guarantor shall deny or disaffirm all or any portion of its
> obligations under such Guaranty;
> 
>     (d) Other Defaults -- the Company or any of its Subsidiaries shall (i)
> fail to give any notice required to be given pursuant to Section 8.1(h) or
> (ii) fail to perform or observe any other covenant or to comply with any other
> provision hereof, and, in the case of clause (ii) hereof, such failure
> continues for more than thirty (30) days;
> 
>     (e) Warranties or Representations -- any warranty, representation or other
> statement by or on behalf of the Company or any Guarantor contained herein or
> in any instrument furnished in compliance with or in reference hereto shall
> have been false or misleading in any material respect when made;
> 
>     (f) Default on Indebtedness or Other Security -- (i) the Company, any
> Guarantor or any of the Subsidiaries of the Company shall fail to make any
> payment on any Debt when due; or (ii) any event shall occur or any condition
> shall exist in respect of any Debt or any Security of the Company, any
> Guarantor or any of the Subsidiaries of the Company, or under any agreement
> securing or relating to such Debt or Security, that immediately or with any
> one or more of the passage of time, the giving of notice or the expiration of
> waivers or modifications

 

52

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> granted in respect of such event or condition:
> 
> >     (A) causes (or permits any one or more of the holders thereof or a
> > trustee therefor to cause) any such Debt in excess, in the aggregate, of Ten
> > Million Dollars ($10,000,000) to become due prior to its stated maturity or
> > prior to its regularly scheduled date or dates of payment; or
> > 
> >     (B) permits any one or more of the holders thereof or a trustee therefor
> > to require the Company, any Guarantor or any such Subsidiary to repurchase
> > such Debt or such Security from such holder.
> > 
> > (g) Involuntary Bankruptcy Proceedings --
> > 
> >     (iii) a receiver, liquidator, custodian or trustee of the Company, any
> > Guarantor or any of the Subsidiaries of the Company, or of all or any of the
> > Property of any thereof, shall be appointed by court order and such order
> > remains in effect for more than ninety (90) days; or an order for relief
> > shall be entered with respect to the Company, any Guarantor or any of the
> > Subsidiaries of the Company, or the Company, any Guarantor or any of the
> > Subsidiaries of the Company shall be adjudicated a bankrupt or insolvent; or
> > 
> >     (iv) any of the Property of the Company, any Guarantor or any of the
> > Subsidiaries of the Company shall be sequestered by court order and such
> > order remains in effect for more than ninety (90) days; or

> >     (v) a petition shall be filed against the Company, any Guarantor or any
> > of the Subsidiaries of the Company under any bankruptcy, reorganization,
> > arrangement, insolvency, readjustment of debt, dissolution or liquidation
> > law of any jurisdiction, whether now or hereafter in effect, and shall not
> > be dismissed within ninety (90) days after such filing;

 

53

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>     (h) Voluntary Petitions -- the Company, any Guarantor or any o the
> Subsidiaries of the Company shall file a petition in voluntary bankruptcy or
> seeking relief under any provision of any bankruptcy, reorganization,
> arrangement, insolvency, readjustment of debt, dissolution or liquidation law
> of any jurisdiction, whether now or hereafter in effect, or shall consent to
> the filing of any petition against it under any such law;

>     (i) Assignments for Benefit of Creditors, etc. -- the Company, any
> Guarantor or any of the Subsidiaries of the Company shall make an assignment
> for the benefit of its creditors, or admits in writing its inability, or
> fails, to pay its debts generally as they become due, or shall consent to the
> appointment of a receiver, liquidator or trustee of the Company, any Guarantor
> or any of the Subsidiaries of the Company or of all or any part of the
> Property of any thereof; or
> 
>     (j) Undischarged Final Judgments -- a final judgment or final judgments
> for the payment of money aggregating in excess of Twenty-Five Million Dollars
> ($25,000,000) is or are outstanding against one or more of the Company, the
> Guarantors and the Subsidiaries of the Company and any one of such judgments
> shall have been outstanding for more than thirty (30) days from the date of
> its entry and shall not have been discharged in full or stayed.

    9.2 Default Remedies.

> > (a) Acceleration on Event of Default.
> > 
> >     (i)    If an Event of Default specified in clause (g), (h) or (i) of
> > Section 9.1 hereof shall exist, all of the Notes at the time outstanding
> > shall automatically become immediately due and payable together with
> > interest accrued thereon without presentment, demand, protest or notice of
> > any kind or any other action whatsoever, all of which are hereby expressly
> > waived, and the Company shall forthwith pay to the holder or holders of all
> > the Notes then outstanding the entire principal of, and interest accrued on,
> > the Notes and, to the extent permitted

54

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> > by law, the Make-Whole Amount with respect to such principal amount of such
> > Notes and,
> > 
> >     (ii)    If an Event of Default other than those specified in clause (g),
> > (h) or (i) of Section 9.1 hereof shall exist, the holder or holders of at
> > least twenty-five percent (25%) in principal amount of the Notes then
> > outstanding (exclusive of Notes then owned by any one or more of the
> > Company, any Guarantor, any Subsidiary of the Company or any Affiliate) may
> > exercise any right, power or remedy permitted to such holder or holders by
> > law, and shall have, in particular, without limiting the generality of the
> > foregoing, the right to declare the entire principal of, and all interest
> > accrued on, all the Notes then outstanding to be, and such Notes shall
> > thereupon become, forthwith due and payable, without any presentment,
> > demand, protest or other notice of any kind or other action whatsoever, all
> > of which are hereby expressly waived, and the Company shall forthwith pay to
> > the holder or holders of all the Notes then outstanding the entire principal
> > of, and interest accrued on, the Notes and, to the extent permitted by law,
> > the Make-Whole Amount with respect to such principal amount of such Notes.

>     (b) Acceleration on Payment Default. During the existence of an Event of
> Default described in Section 9.1(a) or Section 9.1(b) hereof, and irrespective
> of whether the Notes then outstanding shall have been declared to be due and
> payable pursuant to Section 9.2(a)(ii) hereof, and notwithstanding any action
> taken by holders of the Notes pursuant to Section 9.3 hereof, any holder of
> Notes who or which shall have not consented to any waiver with respect to such
> Event of Default may, at its option, by notice in writing to the Company,
> declare the Notes then held by such holder to be, and such Notes shall
> thereupon become, forthwith due and payable together with all interest accrued
> thereon, without any presentment, demand, protest or other notice of any kind
> or any other action whatsoever, all of which are hereby expressly waived, and
> the Company shall forthwith

 

55

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> pay to such holder the entire principal of and interest accrued on such Notes
> and, to the extent permitted by law, the Make-Whole Amount with respect to
> such principal amount of such Notes.

>     (c) Valuable Rights. The Company acknowledges, and the parties hereto
> agree, that the right of each holder to maintain its investment in the Notes
> free from prepayment by the Company (except as herein specifically provided
> for) is a valuable right and that the provision for payment of a Make-hole
> Amount by the Company in the event that the Notes are prepaid or are
> accelerated as a result of an Event of Default is intended to provide
> compensation for the deprivation of such right under such circumstances.
> 
>     (d) Other Remedies. During the existence of an Event of Default and
> irrespective of whether the Notes then outstanding shall have been declared to
> be due and payable pursuant to Section 9.2(a)(ii) hereof and irrespective of
> whether any holder of Notes then outstanding shall otherwise have pursued or
> be pursuing any other rights or remedies, any holder of Notes may proceed to
> protect and enforce its rights hereunder and under such Notes 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 agreement contained herein or in aid of the
> exercise of any power granted herein, provided that the maturity of such
> holder's Notes may be accelerated only in accordance with Section 9.2(a) and
> Section 9.2(b) hereof.
> 
>     (e) Nonwaiver and Expenses. No course of dealing on the part of any holder
> of Notes nor any delay or failure on the part of any holder of Notes to
> exercise any right shall operate as a waiver of such right or otherwise
> prejudice such holder's rights, powers and remedies. If the Company or any
> Guarantor shall fail to pay when due any principal of, or Make-Whole Amount or
> interest on, any Note, or shall fail to comply with any other provision
> hereof, the Company and each such Guarantor shall pay to each holder of Notes,
> to the extent permitted by law, such further amounts as shall be sufficient

 

56

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> to cover the costs and expenses, including but not limited to reasonable
> attorneys' fees, incurred by such holder in collecting any sums due on such
> Notes or in otherwise assessing, analyzing or enforcing any rights or remedies
> that are or may be available to it.

    9.3 Annulment of Acceleration of Notes.

    If a declaration is made pursuant to Section 9.2(a)(ii) hereof, then and in
every such case, the holders of at least sixty-five (65%) in aggregate principal
amount of the Notes then outstanding (exclusive of Notes then owned by any one
or more of the Company, any Guarantor, any of the Subsidiaries of the Company
and any Affiliates) may, by written instrument filed with the Company or any
Guarantor, rescind and annul such declaration, and the consequences thereof,
provided that at the time such declaration is annulled and rescinded:

>     (a) no judgment or decree shall have been entered for the payment of any
> moneys due on or pursuant hereto or the Notes;
> 
>     (b) all arrears of interest upon all the Notes and all other sums payable
> hereunder and under the Notes (except any principal of, or interest or
> Make-Whole Amount on, the Notes which shall have become due and payable by
> reason of such declaration under Section 9.2(a)(ii) hereof) shall have been
> duly paid; and
> 
>     (c) each and every other Default and Event of Default shall have been
> waived pursuant to Section 12.5 hereof or otherwise made good or cured,

and provided further that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon or effect any holders' rights under Section 9.1(a) and Section 9.1(b).

    9.4 Application of Acceleration Payments.

    Any payments received by any holder of Notes pursuant to, or in respect of,
Section 9.2 hereof shall, at the time of the receipt thereof, be applied by such
holder (i) first, to all unpaid expenses

 

57

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of such holder under Section 1.5, Section 9.2(e) and Section 10.5 hereof, (ii)
second, to all accrued and unpaid interest on such holder's Notes, (iii) third,
to any Make-Whole Amount payable to such holder in respect of its Notes and (iv)
fourth, to the aggregate principal amount of the Notes of such holder then
outstanding.

10. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS OF GUARANTORS.

    10.1 Guaranteed Obligations.

    Each Guarantor hereby irrevocably and unconditionally guarantees, as and for
its own debt, until final and indefeasible payment has been made, the due and
punctual payment of the principal and interest and Make-Whole Amount, if any, on
all Notes at any time outstanding and the due and punctual payment of all moneys
payable, and all other indebtedness owing, by the Company under the Note
Purchase Agreement (collectively, the "Guaranteed Obligations") in each case
when and as the same shall become due and payable, whether at maturity, pursuant
to optional prepayment, by acceleration or otherwise, all in accordance with the
terms and provisions thereof; it being the intent of the Guarantors that the
guaranty set forth in this Section 10 shall be a guaranty of payment and not a
guaranty of collection. Each Guarantor hereby further unconditionally guarantees
the punctual and faithful performance, keeping, observance and fulfillment by
the Company of all duties, agreements, covenants and obligations of the Company
contained in the Notes and in the Note Purchase Agreement. In the event the
Company fails to make, on or before the due date thereof, any payment to be made
of any principal amount of, or interest or Make-Whole Amount (if any) on, or in
respect of, the Notes or of any other amounts due under the Notes and/or the
Note Purchase Agreement or if the Company shall fail to perform, keep, observe
or fulfill any such obligation as aforesaid in the manner provided in any one or
more of the Notes and/or the Note Purchase Agreement, each Guarantor shall cause
forthwith to be paid the moneys to be paid and shall cause to be performed,
kept, observed or fulfilled the obligations to be performed, kept, observed or
fulfilled as if such payment or performance, as the case may be, were being made
under the Notes or the Note Purchase Agreement, as appropriate.

 

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    10.2 Performance by Guarantors.

    Each Guarantor agrees that its liability under this Section 10 shall be
immediate and shall not be contingent upon the exercise or enforcement by any
holder of Notes of whatever remedies it may have against the Company or any
other guarantor or the enforcement of any Lien or realization upon any security
such holder may at any time possess or have available for its benefit.

    The Guaranty set forth in this Section 10 is a primary and original joint
and several obligation of the Guarantors and is an absolute, unconditional,
continuing and irrevocable guaranty of payment and shall remain in full force
and effect without respect to future changes in conditions, including change of
law, or any invalidity or irregularity with respect to the issuance of any
obligations (including, without limitation, any of the Notes) of the Company, or
with respect to the execution and delivery of any agreement (including, without
limitation, any of the Note Purchase Agreement or the Notes) between the Company
and any one or more of the holders of Notes, or with respect to the genuineness,
validity, regularity or enforceability of any of the Guaranteed Obligations.

    10.3 Waivers; Subrogation; Offsets.

    Each Guarantor does hereby waive: notice of acceptance hereof; notice of any
purchase of Notes issued under the Note Purchase Agreement or the extension of
credit from time to time given by any holder of Notes to the Company and the
creation, existence or acquisition of any of the Guaranteed Obligations; notice
of the amount of the Guaranteed Obligations, subject, however, to such
Guarantor's right to make inquiry of any holder of Notes to ascertain the amount
of the Guaranteed Obligations held by such holder at any reasonable time; notice
of adverse change in the financial condition of the Company or of any other fact
which might increase such Guarantor's risk; notice of presentment for payment,
demand, protest and notice thereof as to the Notes or any other instrument;
notice of default (including any Default or Event of Default hereunder); all
defenses, offsets and counterclaims which a Guarantor may at any time have to
any claim of any holder of Notes against the Company; and all other notices and
demands to which such

 

59

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Guarantor might otherwise be entitled. Each Guarantor further waives the rights
by statute or otherwise to require any holder of Notes to institute suit against
the Company or to exhaust its rights and remedies against the Company or any
other guarantor, such Guarantor being bound to the payment of each and all
Guaranteed Obligations in respect of each holder of Notes, whether now existing
or hereafter accruing, as fully as if such Guaranteed Obligations were directly
owing to each such holder of Notes by such Guarantor. Each Guarantor further
waives any defense arising by reason of any disability or other defense of the
Company or by reason of the cessation from any cause whatsoever of the liability
of the Company in respect of the Guaranteed Obligations.

    Until all of the Guaranteed Obligations shall have been indefeasibly paid in
full and subject to Section 10.5 and Section 10.13 hereof, no Guarantor shall
have any right of subrogation, reimbursement or indemnity whatsoever and no
right of recourse to or with respect to any assets or Property of the Company.
Nothing shall discharge or satisfy the liability of such Guarantor hereunder
except the full and final performance and indefeasible payment of the Guaranteed
Obligations.

    Each holder of Notes shall have, to the fullest extent permitted by law, the
right of set-off in respect of any and all credits and any and all other
Property of each Guarantor, now or at any time whatsoever with, or in the
possession of, such holder for any and all obligations of such Guarantor
hereunder.

    10.4 Releases.

    Each Guarantor consents and agrees that, without notice to such Guarantor
and without affecting or impairing the obligations of such Guarantor hereunder,
any holder of Notes may, in the manner provided in the Notes or the Note
Purchase Agreement, by action or inaction, directly or indirectly, compromise or
settle, extend the period of duration or the time for the payment or discharge
or performance of, or may refuse to, or otherwise not, enforce, or may, by
action or inaction, release all or any one or more parties to, any one or more
of the Notes or the Note Purchase Agreement, or may grant other indulgences to
the Company in respect thereof, or may amend or modify in any manner and at any
time (or from time to time)

 

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any one or more of the Notes and the Note Purchase Agreement, or may, by action
or inaction, release or substitute any one or more of the endorsers or
guarantors of the Guaranteed Obligations whether parties hereto or not, or may
exchange, enforce, waive or release, by action or inaction, directly or
indirectly, any security for, the guaranty in this Section 10 or any Guaranteed
Obligation. Further, no holder of Notes shall have any obligation to, and shall
have any liability for failing to, obtain or perfect or to maintain, or cause to
be obtained, perfected or maintained, the perfection of any security interest or
other Lien on Property to secure the Guaranteed Obligations or the obligations
of any guarantor in respect thereof.

    10.5 Marshaling; Revival of Obligations.

    Each Guarantor consents and agrees that no holder of Notes shall be under
any obligation to marshall any assets in favor of any Guarantor, or against or
in payment of any or all of the Guaranteed Obligations. Each Guarantor agrees to
pay all expenses incurred by each holder of Notes in connection with the
evaluation, protection, assertion or enforcement of its rights under the Note
Purchase Agreement and the guaranty set forth in this Section 10, including,
without limitation, court costs, collection charges and reasonable attorneys'
fees and disbursements.

    Each Guarantor further agrees that to the extent the Company makes a payment
or payments to any holder of Notes, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required, for any of the foregoing reasons or for any other reason,
to be repaid or paid over to a custodian, trustee, receiver or any other party
under any bankruptcy act, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the obligation or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if said payment had not been made and the Guarantors shall be primarily,
jointly and severally liable for such obligation.

 

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    10.6 Subordination.

    In the event that for any reason whatsoever, the Company is now or hereafter
becomes indebted to a Guarantor, such Guarantor agrees that the amount of such
indebtedness and all interest thereon shall at all times be subordinate as to
time of payment and in all other respects to all the Guaranteed Obligations, and
that such Guarantor shall not be entitled to enforce or receive payment thereof
until all sums then due and owing to the holders of Notes in respect of the
Guaranteed Obligations shall have been paid in full. If any payment shall have
been made to a Guarantor by the Company on any said indebtedness during any time
that there are Guaranteed Obligations outstanding, such Guarantor shall hold in
trust all such payments for the benefit of the holders of Notes and shall make
said payment to such holders to be credited and applied against obligations of
the Company in accordance with the discretion of, and pursuant to instructions
from, the Required Holders.

    10.7 No Election.

    Each holder of Notes shall (individually or collectively with the other
holders) have the right to seek recourse against any one or more of the
Guarantors to the full extent provided for in this Section 10, and against the
Company to the full extent provided for in the Notes and the Note Purchase
Agreement. No election to proceed in one form of action or proceeding, or
against any party, or on any obligation, shall constitute a waiver of the right
of such holder of Notes, to proceed in any other form of action or proceeding or
against other parties unless such holder of Notes has expressly waived such
right in writing. Specifically, but without limiting the generality of the
foregoing, no action or proceeding by any holder of Notes against the Company
under any document or instrument evidencing Guaranteed Obligations shall serve
to diminish the liability of any Guarantor under this Section 10 except to the
extent that such holder finally and unconditionally shall have realized payment
by such action or proceeding, notwithstanding the effect of any such action or
proceeding upon such Guarantor's right of subrogation against the Company. Each
Guarantor is fully aware of the financial condition of the Company. Each
Guarantor is executing and delivering this guaranty based solely upon its own
independent investigation and in no part upon any representation or

 

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statement of any one or more of the holders of Notes with respect thereto. Each
Guarantor is in a position to obtain, and hereby assumes full responsibility for
obtaining, any additional information concerning the financial condition of the
Company as such Guarantor may deem material to its obligations hereunder, and
such Guarantor is not relying upon, nor expecting, any holder of Notes to
furnish it any information concerning the financial condition of the Company.

    10.8 Severability.

    Subject to Section 9 hereof, each of the rights and remedies granted under
this Section 10 to each holder of Notes in respect of the Notes held by such
holder may be exercised by such holder without notice to, or the consent of or
any other action by, any other holder of Notes.

    10.9 Other Enforcement Rights.

    Each holder of Notes may proceed, as provided in Section 10.8 hereof, to
protect and enforce the guaranty of the Guarantors under this Section 10 by suit
or suits or proceedings in equity, at law or in bankruptcy, and whether for the
specific performance of any covenant or agreement contained herein (including,
without limitation, in this Section 10) or in execution or aid of any power
herein granted; or for the recovery of judgment for or in respect of the
Guaranteed Obligations or for the enforcement of any other proper, legal or
equitable remedy available under applicable law.

    10.10 Delay or Omission; No Waiver.

    No course of dealing on the part of any holder of Notes and no delay or
failure on the part of any such Person to exercise any right under the Note
Purchase Agreement (including, without limitation, this Section 10) shall impair
such right or operate as a waiver of such right or otherwise prejudice such
Person's rights, powers and remedies hereunder. Every right and remedy given in
or by this Section 10 or by law to any holder of Notes may be exercised from
time to time as often as may be deemed expedient by such Person.

 

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    10.11 Restoration of Rights and Remedies.

    If any holder of Notes shall have instituted any proceeding to enforce any
right or remedy in this Section 10, otherwise than under the Note Purchase
Agreement or under any Note held by such holder and such proceeding shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to such holder, then and in every such case each such holder, the
Company and each Guarantor shall, except as may be limited or affected by any
determination in such proceeding, be restored severally and respectively to its
respective former positions hereunder and thereunder, and thereafter the rights
and remedies of such holder shall continue as though no such proceeding had been
instituted.

    10.12 Cumulative Remedies.

    No remedy under the Note Purchase Agreement (including, without limitation,
this Section 10) or the Notes is intended to be exclusive of any other remedy,
but each and every remedy shall be cumulative and in addition to any and every
other remedy given thereunder.

    10.13 Miscellaneous.

    Each Guarantor (to the fullest extent that it may lawfully do so) expressly
waives any claim of any nature arising out of any right of indemnity,
contribution, reimbursement or any similar right in respect of any payment made
under this Section 10 or in connection with this Section 10, or any claim of
subrogation arising in connection with respect to any payment made under this
Section 10, against the Company or the estate of the Company (including Liens on
the Property of the Company or the estate of the Company), in each case if, and
for so long as, the Company is the subject of any proceeding brought under Title
11 of the United States Code, or any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and further agrees that it
will not file any claims against the Company or the estate of the Company in the
course of such proceeding in respect of the rights referred to in this
paragraph, and further agrees that each holder of Notes may specifically enforce
the provisions of this paragraph.

 

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    If an Event of Default exists, then the holders of Notes (as provided in
Section 9 hereof) shall have the right to declare all of the Guaranteed
Obligations to be, and such Guaranteed Obligations shall thereupon become,
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which have been expressly waived by the Company and
each Guarantor, and notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such Guaranteed Obligations from becoming
automatically due and payable) as against the Company. In any such event, the
holders of Notes shall have immediate recourse to the Guarantors to the fullest
extent set forth herein.

    10.14 Continuing Guaranty.

    The Guarantors' obligations in this Section 10 are continuing obligations
and shall apply to all Guaranteed Obligations whenever arising.

    10.15 Inspection.

    Each Guarantor shall permit the representatives of any Purchaser or any
other Institutional Investor which is the holder of at least One Million Dollars
($1,000,000) aggregate principal amount of Notes (at the expense of such Person
unless a Default or Event of Default shall have occurred and be continuing and
then at the expense of the Guarantor), upon at least twenty-four (24) hours'
prior written notice to the Guarantor in care of the Chief Financial Officer of
the Company to visit and inspect any of the Properties of such Guarantor or any
of its Subsidiaries, to examine all their respective books of account, records,
reports and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants (and by this provision each
Guarantor authorizes said accountants to discuss its finances and affairs and
the finances and affairs of its Subsidiaries) all at such reasonable times and
as often as may be reasonably requested.

 

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    10.16 Maintenance of Properties and Corporate Existence.

    Each Guarantor will

>     (a) Property -- maintain its Property in good condition, ordinary wear and
> tear excepted, and make all necessary renewals, replacements, additions,
> betterments and improvements thereto;
> 
>     (b) Financial Records -- keep true books of records and accounts in which
> full and correct entries shall be made of all its business transactions and
> which will permit the provision of accurate and complete financial statements
> in accordance with GAAP;
> 
>     (c) Corporate Existence and Rights -- do or cause to be done all things
> necessary to preserve and keep in full force and effect its corporate
> existence, rights (charter and statutory) and franchises; and
> 
>     (d) Compliance with Law -- not be in violation of any law, ordinance or
> governmental rule or regulation to which it is subject and not fail to obtain
> any license, certificate, permit, franchise or other governmental
> authorization necessary to the ownership of its Properties or to the conduct
> of its business if such violation or failure to obtain could be reasonably
> expected to have a Material Adverse Effect.

    10.17 Merger; Acquisition.

    No Guarantor will merge into, consolidate with, or sell, lease, transfer or
otherwise dispose of all or substantially all of its Property to, any other
Person or permit any other Person to consolidate with or merge into it (except
that the Company may merge with a Guarantor if the Company is the surviving
corporation); provided that the foregoing restriction does not apply to the
merger or consolidation of a Guarantor with another corporation, if:

        (a) the corporation that results from such merger or consolidation or
that purchases, leases,

 

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or acquires all or substantially all of such Property (the "Guarantor Surviving
Corporation") is organized under the laws of the United States of America or any
jurisdiction thereof;

        (b) the due and punctual payment of all the Guaranteed Obligations and
all other obligations of such Guarantor hereunder and the punctual performance
and observance of all the covenants herein to be performed or observed by such
Guarantor are expressly and effectively assumed by such Guarantor Surviving
Corporation pursuant to such agreements and instruments as shall be approved by
the Required Holders, and such Guarantor will cause to be delivered to each
holder of Notes an opinion of independent counsel to the effect that (i) such
agreements and instruments are enforceable in accordance with their terms and
(ii) no taxable event or consequence will result to any holder of Notes solely
by virtue of such merger, consolidation, purchase, lease or acquisition and the
assumption by such Guarantor Surviving Corporation of the obligations of such
Guarantor hereunder; and

        (c) immediately prior to, and immediately after the consummation of the
transaction, and after giving effect thereto, no Default or Event of Default
exists or would exist under any provision hereof.

    10.18 Pro-Rata Offers.

    No Guarantor will, nor will it permit any of its Subsidiaries or any
Affiliate, directly or indirectly, to acquire or make any offer to acquire any
Notes other than as set forth in Section 7.12.

    10.19 Private Offering.

    Each Guarantor will not, nor will it permit any Person acting on its behalf
to, take any action so as to bring the issuance and sale of the Notes or the
Guaranty within the provisions of section 5 of the Securities Act.

    10.20 Pari Passu Ranking of Guaranty.

    Each Guarantor warrants that its obligations under this Section 10 do, and
undertakes that the same will continue to, rank at least pari passu with all its
other present and future unsecured senior obligations.

 

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11. INTERPRETATION OF THIS AGREEMENT

    11.1 Terms Defined.

    As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:

    Acceptable Bank -- means any bank or trust company which (a) is organized
under the laws of and located in the United States of America or any State
thereof, Canada, Japan or a country which is a member of the European Common
Market (b) has capital, surplus and undivided profits aggregating at least One
Hundred Million Dollars ($100,000,000) and (c) whose long-term unsecured debt
obligations (or the long-term unsecured debt obligations of the bank holding
company owning all of the capital stock of such bank or trust company) shall
have received one of the two highest ratings issued by Moody's Investors
Service, Inc. or by Standard & Poor's Corporation or, if neither of such rating
agencies is in existence at the time, comparable ratings issued by any other
rating agency of national standing and reputation.

    Acceptance -- means, with respect to any Person (the "Obligor"), (a) any
outstanding and unpaid sight or time draft maturing not more than three (3)
years from the date of its issuance drawn by the Obligor on a bank or trust
company and accepted by such bank or trust company, (b) any outstanding and
unpaid sight or time draft maturing not more than three (3) years from the date
of its issuance drawn by any Person selling goods or providing services to the
Obligor on a bank or trust company which shall have issued a letter of credit to
such person for the account of the Obligor, provided that if such bank or trust
company shall have paid such sight or time draft and the Obligor shall not have
reimbursed such bank or trust company for such payment, the obligation owing
from the Obligor to such bank or trust company in respect of such reimbursement
shall be deemed to be an Acceptance under this definition, and (c) any
outstanding and unpaid sight or time draft drawn by any Person selling goods or
providing services to the Obligor on the Obligor and accepted by the Obligor.

    Affiliate -- means, at any time, a Person (other than a Subsidiary of the
Company):

 

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>     (a) that directly or indirectly through one or more intermediaries
> controls, or is controlled by, or is under common control with, the Company,
> 
>     (b) that beneficially owns or holds ten percent (10%) or more of any class
> of the Voting Stock of the Company, or
> 
>     (c) ten percent (10%) or more of the Voting Stock (or in the case of a
> Person that is not a corporation, five percent (5%) or more of the equity
> interest) of which is beneficially owned or held by the Company or a
> Subsidiary of the Company, at such time.

As used in this definition, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

    Agreement, this -- means this agreement, as it may be amended and restated
from time to time.

    Board of Directors -- means, at any time, with respect to the Company or a
Guarantor, the board of directors of such Person or any committee thereof that,
in the instance, shall have the lawful power to exercise the power and authority
of such board of directors.

    Business Day -- means, at any time, a day other than a Saturday, a Sunday
or, in the case of any Note with respect to which the provisions of Section 4.1
hereof are applicable, a day on which the bank designated (by the holder of such
Note) to receive (for such holder's account) payments on such Note is required
by law (other than a general banking moratorium or holiday for a period
exceeding four (4) consecutive days) to be closed.

    Capital Lease -- means, at any time, a lease or any conditional sale or
other title retention agreement with respect to which the lessee or the
purchaser thereof is required under GAAP to recognize the acquisition of an
asset and the incurrence of a liability.

 

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    Capital Stock -- means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of any corporation,
including, without limitation, Preferred Stock and Voting Stock of such
corporation.

    Change in Control -- means any Acquisition by any Person, or related Persons
constituting a "group" for purposes of Section 13(d) of the Securities Exchange
Act of 1934, of (a) the power to elect, appoint or cause the election or
appointment of at least a majority of the members of the Board of Directors of
the Company, or (b) beneficial ownership of thirty percent (30%) of the Voting
Stock of the Company or otherwise; provided, however, that a Change in Control
shall not be deemed to have occurred if an Acquisition of Voting Stock is made
as the result of a public offering by the Company of its shares which is
registered under the Securities Act of 1933 and effected in accordance with the
rules of each national securities exchange on which the Voting Stock of the
Company is listed for trading. For the purposes of this definition,
"Acquisition" of the power stated in the preceding sentence means the earlier of
(i) the actual possession thereof and (ii) the taking of any corporate or other
action or the consummation of any transaction or of the first of a series of
related actions or transactions which, with the passage of time, will give such
Person or Persons the actual possession thereof.

    Closing -- Section 1.2 hereof.

    Closing Date -- Section 1.2 hereof.

    Company -- introductory sentence hereof.

    Consolidated Funded Debt -- means, at any time, the aggregate amount of
Funded Debt of the Company and its Subsidiaries determined on a consolidated
basis for such Persons at such time.

    Consolidated Net Income -- means, with respect to any fiscal period, net
earnings (or loss) after income taxes of the Company and its Subsidiaries
determined on a consolidated basis for such Persons for such period in
accordance with GAAP but, in any event, excluding:

 

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>     (a) Any gains or losses (after giving effect to the tax effect thereof)
> arising from the sale or other disposition of investments or fixed or capital
> assets;
> 
>     (b) any extraordinary or nonrecurring gains or losses (after giving effect
> to the tax effect thereof);
> 
>     (c) any gain resulting from any reappraisal, revaluation or write-up of
> assets;
> 
>     (d) net earnings and losses of any Subsidiary of the Company accrued prior
> to the date it became a Subsidiary of the Company;
> 
>     (e) net earnings and losses of any Person, substantially all the assets of
> which have been acquired in any manner by the Company or any of its
> Subsidiaries, realized by such other Person prior to the date of such
> acquisition;
> 
>     (f) net earnings of any Person (other than a Subsidiary of the Company) in
> which the Company or any of its Subsidiaries shall have an ownership interest
> unless such net earnings shall have actually been received by the Company or
> such Subsidiary in the form of cash distributions;
> 
>     (g) any portion of the net earnings of any Subsidiary of the Company that,
> by reason of any contract or charter restriction or applicable law or
> regulation (or in the good faith judgment of the Board of Directors for any
> other reason), is unavailable for payment of dividends to the Company or any
> other Subsidiary of the Company;
> 
>     (h) the earnings and losses of any Person to which assets of the Company
> or any of its Subsidiaries shall have been sold, transferred or disposed of,
> or into which the Company or any of its Subsidiaries shall have been merged,
> prior to the date of such merger or consolidation;
> 
>     (i) any income resulting from the acquisition by the Company or a
> Subsidiary of the Company of the equity interests, Capital Stock or assets of
> another

 

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> Person, in each case where such income is attributable to the fact that the
> net book value of the equity investment of the Company or such Subsidiary in
> such Person exceeds the amount invested by the Company or such Subsidiary in
> such Person;
> 
>     (j) any gain or loss arising from the acquisition of any Securities of the
> Company or any of its Subsidiaries; (k) any portion of the net earnings of the
> Company or any of its Subsidiaries that cannot be freely converted into United
> States dollars; (l) any gain or loss resulting from the receipt of any
> proceeds of any insurance policy; and
> 
>     (m) any restoration during such period to income of any contingency
> reserve, except to the extent that provision for such reserve was made during
> such period out of income accrued during such period.

    Consolidated Net Worth -- means, at any time, the shareholders equity in the
Company and its Subsidiaries, determined in accordance with GAAP.

    Consolidated Total Capitalization -- means, at any time, the sum of

>     (a) Consolidated Net Worth, plus

        (b) Consolidated Funded Debt, determined in each case at such time.

    Control Prepayment Date -- Section 5.2 hereof.

    Current Debt -- with respect to any Person means, at any time, without
duplication

        (a) its liabilities for borrowed money,

>     (b) liabilities secured by any Lien existing on Property owned by such
> Person (whether or not such liabilities have been assumed),

 

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        (c) its liabilities in respect of Capital Leases,

>     (d) its liabilities under any other obligations for borrowed money
> (including, without limitation, any liabilities in respect of Acceptances and
> so-called "take or pay" obligations), and
> 
>     (e) its liabilities under Guaranties of obligations described above in
> clause (a), clause (b), clause (c) and/or clause (d) above of other Persons,

provided that, in each such case, such liability is either payable on demand or
within one (1) year from the creation thereof and is not renewable or extendible
at the option of such Person to a date more than one (1) year from the date of
creation thereof. Any such liability

>     (x) which is renewable or extendible at the option of such Person to a
> date more than one (1) year from the date of creation thereof, or
> 
>     (y) which, for any reason (including any renewals or extensions thereof),
> shall in fact have been outstanding for a period ending at such time of more
> than three hundred sixty-five (365) consecutive days,

shall, in each case, be deemed to be Funded Debt and not Current Debt. If any
indebtedness in respect of any of the foregoing liabilities is expressed to
mature more than one (1) year from the date of its creation but, as of any date
of determination, has principal due and payable within one (1) year of such date
of determination, "Current Debt" shall not include such principal payable within
such one (1) year period but rather the same shall be included in "Funded Debt."
Notwithstanding the foregoing, any Acceptance of such Person shall always be
classified as Current Debt under this Agreement.

    Debt -- means, with respect to any Person, at any time, without duplication,
all Funded Debt and Current Debt of such Person at such time.

 

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    Default -- means an event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, become an Event of Default.

    Environmental Protection Law -- means any federal, state, county, regional
or local law, statute, or regulation (including, without limitation, CERCLA,
RCRA and SARA) enacted in connection with or relating to the protection or
regulation of the environment, including, without limitation, those laws,
statutes, and regulations regulating the disposal, removal, production, storing,
refining, handling, transferring, processing, or transporting of Hazardous
Substances, and any regulations issued or promulgated in connection with such
statutes by any Governmental Authority, and any orders, decrees or judgments
issued by any court of competent jurisdiction in connection with any of the
foregoing.

As used in this definition:

>     CERCLA -- means the Comprehensive Environmental Response, Compensation,
> and Liability Act of 1980, as amended from time to time (by SARA or
> otherwise), and all rules and regulations promulgated in connection therewith;
> 
>     RCRA -- means the Resource Conservation and Recovery Act of 1976, as
> amended, and any rules and regulations issued in connection therewith; and
> 
>     SARA -- means the Superfund Amendments and Reauthorization Act of 1986, as
> amended from time to time, and all rules and regulations promulgated in
> connection therewith.
> 
>     ERISA -- means the Employee Retirement Income Security Act of 1974, as
> amended from time to time.
> 
>     ERISA Affiliate -- means 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 any Guarantor, or

 

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> >     (ii) is under common control (within the meaning of section 414(c) of
> > the IRC) with the Company or any Guarantor.

    Event of Default -- Section 9.1 hereof.

    Exchange Act -- means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated pursuant thereto.

    Fair Market Value -- means, 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.

    Foreign Pension Plan -- means any plan, fund or other similar program

>     (a) established or maintained outside of the United States of America by
> any one or more of the Company, any Guarantor or any of the Subsidiaries of
> the Company primarily for the benefit of the employees (substantially all of
> whom are aliens not residing in the United States of America) of the Company,
> any Guarantor or such Subsidiaries which plan, fund or other similar program
> provides for retirement income for such employees or results in a deferral of
> income for such employees in contemplation of retirement and

        (b) not otherwise subject to ERISA.

    Funded Debt -- means, with respect to any Person, at any time, Without
duplication,

>     (a) its liabilities for borrowed money, other than Current Debt;
> 
>     (b) liabilities secured by any Lien existing on Property owned by such
> Person (whether or not such liabilities have been assumed), other than Current
> Debt;
> 
>     (c) its liabilities in respect of Capital Leases, other than Current Debt;

 

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>     (d) its liabilities under any other obligations for borrowed money
> (including, without limitation, any so-called "take or pay" obligations),
> other than Current Debt; and
> 
>     (e) its liabilities under Guaranties of liabilities of the type set forth
> in clause (a), clause (b), clause (c) and/or clause (d) above of other
> Persons.

    GAAP -- means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States of
America.

    Governmental Authority -- means

>     (a) the government of
> 
> >     (i) the United States of America and any state or political subdivision
> > thereof, or other
> > 
> >     (ii) any other jurisdiction (y) in which any of the Company, the
> > Guarantors or any of the Subsidiaries of the Company conducts all or any
> > part of their respective businesses or (z) that asserts jurisdiction over
> > the conduct of the affairs or Properties of any such Person, or
> 
>     (b) any entity exercising executive, legislative, judicial, regulatory or
> administrative functions of, or pertaining to, any such government.

    Guaranteed Obligation -- Section 10.1 hereof.

    Guarantor -- the introductory sentence hereof.

    Guarantor Surviving Corporation - Section 10.17 hereof.

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    Guaranty -- means with respect to any Person (for the purposes of this
definition, the "General Guarantor") any obligation (except the endorsement in
the ordinary course of business of negotiable instruments for deposit or
collection) of the General 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 the General Guarantor:

>     (a) to purchase such indebtedness or obligation or any Property or assets
> constituting security therefor;
> 
>     (b) to advance or supply funds
> 
> >     (i) for the purpose of payment of such indebtedness or obligation, or
> > 
> >     (ii) 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;
> 
>     (c) 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
> 
>     (d) otherwise to assure the owner of the indebtedness or obligation of the
> Primary Obligor against loss in respect thereof.

For purposes of computing the amount of any Guaranty in connection with any
computation of indebtedness or other liability, it shall be assumed that the
indebtedness or other liabilities that are the subject of such Guaranty are
direct obligations of the issuer of such Guaranty.

    Hazardous Substances -- means any and all pollutants, contaminants, toxic or
hazardous wastes or any

 

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other substances that might pose a hazard to health or safety, the removal of
which may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of which is or
shall be restricted, prohibited or penalized by any applicable law (including,
without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).

    Institutional Investor -- means the Purchasers, any affiliate of any of the
Purchasers, and any holder of Notes that is a bank (including but not limited to
a commercial bank or an investment bank), trust company, insurance company,
pension fund or other similar institutional investor or an entity whose security
holders consist solely of Institutional Investors.

    IRC -- means the Internal Revenue Code of 1986, together with all rules and
regulations promulgated pursuant thereto, as amended from time to time.

    IRS -- means the Internal Revenue Service and any successor agency.

    Investment -- means any investment, made in cash or by delivery of Property,
by the Company or any of its Subsidiaries (a) in any Person, whether by
acquisition of stock, indebtedness or other obligation or Security, or by loan,
Guaranty, advance or capital contribution, or otherwise, or (b) in any Property.

    Lien -- means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes, and the filing of any financing statement under the Uniform
Commercial Code of any jurisdiction, or an agreement to give any of the
foregoing. The term "Lien" includes reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting real Property and includes, with
respect to stock, stockholder agreements, voting trust agreements,

 

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buy-back agreements and all similar arrangements. For the purposes hereof, the
Company and each of its Subsidiaries is deemed to be the owner of any Property
that it shall have acquired or holds subject to a conditional sale agreement,
Capital Lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes, and such
retention or vesting is deemed a Lien. The term "Lien" does not include negative
pledge clauses in agreements relating to the borrowing of money.

    Make-Whole Amount -- means, at any time, with respect to a principal amount
of Notes being prepaid (in whole or in part) or accelerated, the greater of

>     (a) Zero Dollars ($O), and
> 
>     (b) the remainder of
> 
> >     (i) the sum of the present values of the then remaining scheduled
> > payments of principal and interestthat would be payable but for the
> > prepayment or acceleration of such principal amount of Notes being prepaid
> > or accelerated, minus
> > 
> >     (ii) the aggregate principal amount of the Notes so prepaid or
> > accelerated.

In determining such present values, a discount rate equal to the Make-Whole
Discount Rate divided by two (2), and a discount period of six (6) months of
thirty (30) days each, shall be used.

    The Required Holders shall calculate the Make-Whole Amount in respect of any
prepayment under Section 5.2 hereof and shall, immediately prior to the
effecting of such prepayment, deliver a copy of such calculation to the holder
of each Note being prepaid and to the Company and the Guarantors. Such
calculation of the Make-Whole Amount shall be made on the Business Day
immediately preceding the date of such prepayment and shall be binding upon the
Company and the Guarantors absent manifest error.

    The Required Holders in respect of the acceleration of all of the Notes
under Section 9.2(a) hereof shall

 

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calculate the Make-Whole Amount in respect of any such acceleration as of the
Business Day immediately preceding the date of payment of such accelerated
amount and shall deliver a copy of such calculation to each holder of Notes, the
Company and the Guarantors immediately prior to the effecting of the payment of
such accelerated amount. Each calculation referred to in this paragraph shall be
binding upon the Company and the Guarantors absent manifest error.

    Each holder of Notes accelerating its Note under Section 9.2(b) hereof shall
calculate the Make-Whole Amount in respect of any such acceleration as of the
Business Day immediately preceding the date of payment of such accelerated
amount and shall deliver a copy of such calculation to the Company and the
Guarantors immediately prior to the effecting of payment of such accelerated
amount. Each calculation referred to in this paragraph shall be binding upon the
Company and the Guarantors absent manifest error.

    The Required Holders hereby appoint the holder of Notes with the highest
aggregate principal amount outstanding, determined as of the date on which any
calculation required under this definition is to be made, to effect such
calculation on behalf of the Required Holders and to deliver the results of such
calculation to the Company, the Guarantors and each other holder of Notes. Each
calculation referred to in this paragraph shall be binding upon the Company, the
Guarantors and each other holder absent manifest error. If any such holder shall
decline to discharge the undertakings in this paragraph (and each such holder
may elect to so decline), the Required Holders shall, at their option, act
collectively in discharging such undertakings, appoint another holder to effect
the same or authorize the Company to make such calculations.

    Any failure for any reason whatsoever of any holder of Notes or the Required
Holders to deliver a calculation required under this definition to the Company,
the Guarantors and/or any other holder of Notes shall not excuse, release or
discharge the Company or the Guarantors from their respective payment
obligations hereunder and under the Notes, including, without limitation, paying
any Make-Whole Amount that may be payable in connection with any prepayment or
acceleration of all or some of the

 

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Notes. The Company and the Guarantors shall cooperate with the holders of Notes
in making the calculations required in this definition and in coordinating the
distribution of such calculations and the effecting of the payments or
prepayments referred to above.

    Make-Whole Discount Rate -- means, with respect to the calculation of a Make
Whole Amount in respect of any prepayment or acceleration of the Notes the sum
of (a) one half of one percent (0.5%) plus (b) the Treasury Rate determined in
respect of such calculation.

    Margin Security -- means "margin stock" within the meaning of Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II, as amended from time to time.

    Material Adverse Effect -- means a material adverse effect on the business,
prospects, profits, Properties or condition (financial or otherwise) of the
Company, the Guarantors and the Subsidiaries of the Company, taken as a whole,
or the ability of the Company or any Guarantor to perform its obligations set
forth herein or the ability of the Company to perform its obligations set forth
in the Notes.

    Multiemployer Plan -- means any multiemployer plan (as defined in section
3(37) of ERISA) in respect of which the Company, any Guarantor or any ERISA
Affiliate is an "employer" (as such term is defined in section 3 of ERISA).

    Multiple Employer Pension Plan -- means 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, any Guarantor or any ERISA Affiliate
and an employer (as such term is defined in section 3 of ERISA) other than the
Company, any Guarantor or an ERISA Affiliate contribute.

    Notes -- Section 1.1 hereof.

    Note Purchase Agreement -- Section 1.2 hereof.

    PBGC -- means the Pension Benefit Guaranty Corporation and any successor
corporation or governmental agency.

 

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    Pension Plan -- means, at any time, any "employee pension benefit plan" (as
such term is defined in section 3 of ERISA) maintained at such time by the
Company, any Guarantor or any ERISA Affiliate for employees of the Company, any
Guarantor or such ERISA Affiliate, excluding any Multiemployer Plan, but
including, without limitation any Multiple Employer Pension Plan.

    Person -- means an individual, partnership, joint venture, corporation,
trust, unincorporated organization or other form of legal entity and shall
include a government or agency or political subdivision thereof.

    Preferred Stock -- means, with respect to any corporation, capital stock of
such corporation which shall be entitled to preference or priority over any
other capital stock of such corporation in respect of either or both of the
payment of dividends or the distribution of assets upon liquidation or
distribution.

    Property -- means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.

    Purchase Money Lien -- means

>     (a) a Lien held by any Person (whether or not the seller of such assets)
> on real or personal Property acquired or constructed by the Company or any of
> its Subsidiaries, which Lien secures all or a portion of the related purchase
> price or construction costs of such Property and was created not more than one
> hundred eighty (180) days after such Property was acquired or its construction
> completed, provided that such Purchase Money Lien
> 
> >     (i) encumbers only the Property being so purchased or constructed, and
> > 
> >     (ii) is not thereafter extended to any other Property, and
> 
>     (b) any Lien existing on real or personal Property of any corporation at
> the time it becomes a Subsidiary of the Company, provided that

 

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> >     (i) no such Lien shall extend to or cover any Property other than the
> > Property subject to such Lien at the time of any such transaction, and
> > 
> >     (ii) such Lien was not created in contemplation of any such transaction.

For purposes of this definition and Section 7.9(a)(viii) hereof, a Lien on real
Property which also encumbers fixtures and other items of personal Property used
in connection with such real Property shall be deemed to be a Lien on real
Property.

    Purchaser -- means you, Metropolitan Life Insurance Company.

    Required Holders -- means, at any time, the holders of sixty-six and
two-thirds percent (66 2/3%) or more in principal amount of the Notes at the
time outstanding (exclusive of Notes then owned by any one or more of the
Company, any Guarantor any of the Subsidiaries of the Company, any Affiliate and
any officer or director of any thereof).

    Restricted Investments -- means, at any time, all Investments except the
following:

>     (a) Investments in one or more of the Company's Subsidiaries or any
> corporation that concurrently with such Investment becomes a Subsidiary of the
> Company;
> 
>     (b) receivables arising from the sale of goods and services, and
> Investments in Property to be used, in each case in the ordinary course of
> business of the Company or the Company's Subsidiary making such Investment;
> 
>     (c) Investments in direct obligations of the United States of America, or
> any agency thereof, or obligations guaranteed by the United States of America,
> provided that such obligations mature within three (3) years from the date of
> acquisition thereof;

 

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>     (d) Investments in marketable direct obligations issued by any state of
> the United States of America or any political subdivision of any such state or
> any public instrumentality thereof maturing within three (3) years from the
> date of acquisition thereof and having as at any date of determination one of
> the two highest ratings obtainable from either Standard & Poor's Corporation
> or Moody's Investors Service, Inc. or, if neither of such rating agencies is
> in existence at the time, comparable ratings issued by any other rating agency
> of national standing and reputation.
> 
>     (e) Investments in certificates of deposit, time deposits or banker's
> Acceptances issued by Acceptable Banks, provided that such obligations mature
> within three (3) years from the date of acquisition thereof; and (f)
> Investments in commercial paper rated "A-1" or higher by Standard & Poor's
> Corporation or "P-1" or higher by Moody's Investors Service, Inc. (or any
> future comparable ratings issued by Moody's Investors Service, Inc. or by
> Standard & Poor's Corporation), provided that such obligations mature within
> two hundred seventy (270) days from the date of creation thereof.
> 
>     (g) Investments entered into prior to and existing on the date of this
> Agreement, as and to the extent now outstanding, all as described in Annex
> 7.5.
> 
>     (h) Investments not permitted by clauses (a) through
> 
>     (g) above; provided that Investments made pursuant to this clause (h)
> shall not exceed, in the aggregate and valued at the higher of cost or fair
> market value, 10% of Consolidated Net Worth.

    Restricted Payment -- means

>     (a) any dividend or other distribution, direct or indirect, on account of
> Capital Stock of the Company (except dividends payable solely in shares of
> such Capital Stock) or on account of the Capital Stock of any Guarantor or any
> Subsidiary of the Company (except to the extent paid to the Company), and
> 
>     (b) any redemption, retirement, purchase or other acquisition, direct or
> indirect, of any Capital Stock of the Company, any of its Subsidiaries or any
> Guarantor, or of any warrants, rights or other options to acquire any shares
> of such Capital Stock.

    Securities Act -- means the Securities Act of 1933, as amended.

    Security -- means "security" as defined in section 2(l) of the Securities
Act.

    Subsidiary -- means, with respect to any Person, a corporation of which such
Person owns, directly or indirectly, more than fifty percent (50%) of the Voting
Stock.

    Subsidiary Stock -- Section 7.15 hereof.

    Surviving Corporation -- Section 7.4 hereof.

    Total Subsidiary Debt -- means, at any time, the aggregate amount of Debt of
all Subsidiaries of the Company determined at such time other than Debt owed to
the Company or any Wholly-Owned Subsidiary.

    Treasury Rate -- means, with respect to the calculation of a Make Whole
Amount in respect of any prepayment or acceleration of the Notes (a) the yield
reported as of 10:00 a.m., New York City time, on the Business Day on which such
calculation is being made, on the display page on the Telerate Service (page
five hundred (500), Offer Side) or such other display on the Telerate Service as
shall replace such page five hundred (500) providing the most current yields for
actively traded "On The Run" United States Treasury securities with maturities
corresponding most closely to the remaining Weighted Average Life to Maturity of
the principal amount of the Notes then being prepaid or accelerated (such
Weighted Average Life to Maturity being determined as of the date of such
calculation and rounded to the nearest month), or (b) if and only if such
Telerate Service ceases to exist or fails to report such yield, such yield as
reported on a reasonably comparable electronic service as may be designated

 

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by the Required Holders, or (c) if and only if such Telerate Service ceases to
exist or fails to report such yield and the Required Holders shall fail to agree
upon a comparable electronic service, such yield reported under the heading
"This Week" and under the caption "Treasury Constant Maturities" of the maturity
corresponding to the remaining Weighted Average Life to Maturity of the
principal amount of the Notes then being prepaid or accelerated (such Weighted
Average Life to Maturity being determined as of the date of such calculation and
rounded to the nearest month) as most recently published and made available to
the public in the statistical release designated "H.15(519)" or any successor
publication that is published weekly by the Federal Reserve System and that
establishes yields on actively traded United States Treasury securities or if no
such successor publication is available, then any other source of current
information in respect of interest rates on securities of the United States of
America that is generally available and, in the judgment of the Required
Holders, provides information reasonably comparable to the H.15(519) report. If
no maturity exactly corresponds to such rounded Weighted Average Life to
Maturity, yields for the two most closely corresponding published maturities
next above and below the rounded Weighted Average life to Maturity of the Notes
shall be calculated pursuant to the immediately preceding sentence and the
Treasury Rate shall be interpolated from such yields on a straight-line basis,
rounding with respect to each such relevant period to the nearest month.

    As used in this definition:

> >     Weighted Average Life to Maturity -- means, at any time, with respect to
> > a principal amount of Notes being prepaid or accelerated, the number of
> > years obtained by dividing the then Remaining Dollar-Years of such principal
> > amount by such principal amount; and
> > 
> >     Remaining Dollar-Years -- means, at any time, with respect to a
> > principal amount of Notes being prepaid or accelerated the result obtained
> > by
> 
>         (a) multiplying

 

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> > >     (i) an amount equal to the remainder of (1) the amount of principal
> > > that would have become due on each scheduled payment date and at maturity
> > > if such prepayment or acceleration had not been made, minus (2) the amount
> > > of principal on the Notes scheduled to become due on each such date after
> > > giving effect to such prepayment or acceleration and the application
> > > thereof in accordance with the provisions of this Agreement, by
> > > 
> > >     (ii) the number of years (calculated to the nearest one-twelfth) that
> > > will elapse between such time and the date each such scheduled principal
> > > payment would be due if such prepayment or acceleration had not occurred,
> > > and
> > 
> >     (b) calculating the summation of each of the products obtained in the
> > preceding subsection (a).

    Voting Stock -- means capital stock of any class or classes of a corporation
the holders of which (a) are ordinarily, in the absence of contingencies,
entitled to elect corporate directors (or Persons performing similar functions)
and (b) are not otherwise limited in the exercise of the voting rights in
respect of such capital stock.

    Welfare Plan -- means, at any time, any "employee welfare benefit plan" (as
such term is defined in section 3 of ERISA) maintained at such time by the
Company, any Guarantor or any ERISA Affiliate for employees of the Company or
any Subsidiaries, including any multiple employer welfare arrangements (as such
term is defined in section 3 of ERISA).

    Wholly-Owned Subsidiary -- means, at any time, any Subsidiary of the Company
one hundred percent (100%) of all of the Capital Stock (except directors'
qualifying shares) of which are owned by any one or more of the Company and the
Company's other Wholly-Owned Subsidiaries at such time.

 

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    11.2 Directly or Indirectly.

    Where any provision herein 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.

    11.3 Section Headings; Table of Contents; Construction.

>     (a) Section Headings and Table of Contents, etc. The titles of the
> Sections and the Table of Contents appear as a matter of convenience only, do
> not constitute a part hereof and shall not affect the construction hereof. The
> words "herein," "hereof," "hereunder" and "hereto" refer to this Agreement as
> a whole and not to any particular Section or other subdivision.
> 
>     (b) Construction. Each covenant contained herein shall be construed
> (absent an express contrary provision herein) as being independent of each
> other covenant contained herein, and compliance with any one covenant shall
> not (absent such an express contrary provision) be deemed to excuse compliance
> with one or more other covenants.

    11.4 Governing Law.

    THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK.

12. MISCELLANEOUS

    12.1 Communications.

>     (a) Method; Address. All communications hereunder or under the Notes (i)
> shall be in writing, (ii) shall be both (A) hand delivered, deposited into the
> United States mail (registered or certified mail), postage prepaid, or sent by
> overnight courier of national standing and (B) electronically "telecopied" or
> "faxed", and (iii) shall be addressed,

 

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> > (i) if to the Company,
> > 
> > > 405 Lexington Avenue
> > > Chrysler Building
> > > 20th Floor
> > > New York, N.Y. 10174
> > > Attn: General Counsel
> > > Fax: (212) 878-1804
> > > 
> > > if to one or more of the Guarantors,
> > > 
> > > c/o Minerals Technologies Inc.
> > > 405 Lexington Avenue
> > > Chrysler Building
> > > 20th Floor
> > > New York, N.Y. 10174
> > > Attn: General Counsel
> > > Fax: (212) 878-1804
> 
> or at such other address as the Company and/or a Guarantor shall have
> furnished in writing to all holders of the Notes at the time outstanding, and
> 
>     (ii) if to any of the holders of the Notes,
> 
> >     (A) if such holders are the Purchaser, at the address set forth on Annex
> > 1.2 hereto, and further including any parties referred to on such Annex 1.2
> > that are required to receive notices in addition to such holders of the
> > Notes, and
> > 
> >     (B) if such holders are not the Purchaser, at their respective addresses
> > set forth in the register for the registration and transfer of Notes
> > maintained pursuant to Section 7.3 hereof, or to any such party at such
> > other address as such party may designate by notice duly given in accordance
> > with this Section 12.1 to the Company and the Guarantors (which other
> > address shall be entered in such register).
> 
>     (b) When Given. Any communication so addressed and deposited in the United
> States mail,

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> postage prepaid, by registered or certified mail (in each case, with return
> receipt requested) shall be deemed to be received on the third (3rd)
> succeeding Business Day after the day of such deposit (not including the date
> of such deposit). Any notice so addressed and otherwise delivered shall be
> deemed to be received when actually received at the address of the addressee.

    12.1 Reproduction of Documents.

This Agreement and all documents relating thereto, including, without
limitation,

>     (a) consents, waivers and modifications that may hereafter be executed,
> 
>     (b) documents received by you at the Closing (except the Notes
> themselves), and
> 
>     (c) inancial statements, certificates and other information previously or
> hereafter furnished to you or any other holder of Notes,

may be reproduced by any holder of Notes by any photographic, photostatic,
microfilm, micro-card, miniature photographic, digital or other similar process
and each holder of Notes may destroy any original document so reproduced. The
Company and the Guarantors agree and stipulate that any such reproduction shall
be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by such holder of Notes in the regular
course of business) and that any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence. Nothing in this
Section 12.2 shall prohibit the Company, any Guarantor or any holder of Notes
from contesting the accuracy of any such reproduction.

    12.3 Survival.

    All warranties, representations, certifications, statements and covenants
made by the Company and/or the Guarantors herein or in any certificate or other
instrument delivered by any of them or on their behalf hereunder

 

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or otherwise made for your benefit in connection herewith shall be considered to
have been relied upon by you and shall survive the delivery to you of the Notes
regardless of any investigation made by you or on your behalf. All such
statements shall constitute warranties and representations by the Company and/or
such Guarantor hereunder.

    12.4 Successors and Assigns.

    This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Notes, and
shall be enforceable by any such holder, whether or not an express assignment to
such holder of rights hereunder shall have been made by you or your successor or
assign.

    12.5 Amendment and Waiver.

>     (a) Requirements. This Agreement may be amended, and the observance of any
> term hereof may be waived, with (and only with) the written consent of the
> Company, the Guarantors and the Required Holders; provided that no such
> amendment or waiver of any of the provisions of Section 1 through Section 4
> hereof, inclusive, or of Section 6, or any defined term to the extent used in
> any of the foregoing Sections, shall be effective as to any holder of Notes
> unless consented to by such holder in writing; and provided further that no
> such amendment or waiver shall, without the written consent of the holders of
> all Notes (exclusive of Notes held by the Company, such Guarantors, any of the
> Subsidiaries of the Company or any Affiliate) at the time outstanding,
> 
> >     (i) subject to Section 9.3 hereof, change the amount or time of any
> > prepayment or payment of principal or Make-Whole Amount or the rate or time
> > of payment of interest,
> > 
> >     (ii) amend Section 5.6, Section 9 or Section 10 hereof,

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> >     (iii) amend the definition of "Required Holders," or
> > 
> >     (iv) amend this Section 12.5.

The holder of any Note may specify that any such written consent executed by it
shall be effective only with respect to a portion of the Notes held by it (in
which case it shall specify, by dollar amount, the aggregate principal amount of
Notes with respect to which such consent shall be effective) and in the event of
any such specification such holder shall be deemed to have executed such written
consent only with respect to the portion of the Notes so specified.

>     (b) Solicitation of Noteholders.
> 
> >     (i) Solicitation. Neither the Company nor any Guarantor shall, and the
> > Company shall not permit any of its Subsidiaries to, solicit, request or
> > negotiate for or with respect to any proposed waiver or amendment of any of
> > the provisions hereof or the Notes unless each holder of the Notes
> > (irrespective of the amount of Notes then owned by it) shall be informed
> > thereof by the Company or such Guarantor with sufficient information to
> > enable it to make an informed decision with respect thereto. Executed or
> > true and correct copies of any waiver or consent effected pursuant to the
> > provisions of this Section 12.5 shall be delivered by the Company to each
> > holder of outstanding Notes forthwith following the date on which the same
> > shall have been executed and delivered by all holders of outstanding Notes
> > required to consent or agree to such waiver or consent.
> > 
> >     (ii) Payment. Neither the Company nor any Guarantor shall, and the
> > Company shall not permit any of its Subsidiaries, directly or indirectly, to
> > pay or cause to be paid any remuneration, whether by way of supplemental or
> > additional interest, fee or otherwise, or grant any security, to any holder
> > of Notes as consideration for or as an inducement to the entering into by
> > any holder of Notes of any waiver or amendment of any of the terms and
> > provisions
> > 
> >  

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> > hereof unless such remuneration is concurrently paid, or security is
> > concurrently granted, on the same terms, ratably to the holders of all Notes
> > then outstanding.
> > 
> >     (iii) Scope of Consent. Any consent made pursuant to this Section 12.5
> > by a holder of Notes that has transferred or has agreed to transfer its
> > Notes to the Company, a Guarantor, any of the Subsidiaries of the Company or
> > any Affiliate and has provided or has agreed to provide such written consent
> > as a condition to such transfer shall be void and of no force and effect
> > except solely as to such holder, and any amendments effected or waivers
> > granted or to be effected or granted that would not have been or would not
> > be so effected or granted but for such consent (and the consents of all
> > other holders of Notes that were acquired under the same or similar
> > conditions) shall be void and of no force and effect, retroactive to the
> > date such amendment or waiver initially took or takes effect, except solely
> > as to such holder.
> 
>     (c) Binding Effect. Except as provided in Section 12.5 hereof, any
> amendment or waiver consented to as provided in this Section 12.5 shall apply
> equally to all holders of Notes and shall be binding upon them and upon each
> future holder of any Note and upon the Company and the Guarantors whether or
> not such Note shall have been marked to indicate such amendment or waiver. No
> such amendment or waiver shall extend to or affect any obligation, covenant,
> agreement, Default or Event of Default not expressly amended or waived or
> impair any right consequent thereon.

    12.6 Payments, When Received.

    (a) Payments Due on Non-Business Days. If any payment due on, or with
respect to, any Note shall fall due on a day other than a Business Day, then
such payment shall be made on the first Business Day following the day on which
such payment shall have so fallen due; provided that if all or any portion of
such payment shall consist of a payment of interest, for purposes of calculating
such interest, such interest shall accrue to (but not including) the originally

 

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scheduled day of its payment notwithstanding that it shall be payable on such
first following Business Day, and the amount of the next succeeding interest
payment shall be accrued from (and including) such originally scheduled day of
payment as if all interest and principal originally scheduled to be paid on such
day had been paid thereon. If any payment is to be made on the first Business
Day following the day on which the same shall have fallen due, as provided in
this paragraph, and is not so paid on such first Business Day, interest shall
accrue thereon (to the extent permitted by applicable law) at the rate of eight
and forty-nine one-hundredths percent (8.49%) per annum from the originally
scheduled day of its payment.

    (b) Payments, When Received. Any payment to be made to the holders of Notes
hereunder or under the Notes shall be deemed to have been made on the Business
Day such payment actually becomes available to such holder at such holder's bank
prior to 11:00 a.m. (local time of such bank).

    12.7 Entire Agreement.

    This Agreement constitutes the final written expression of all of the terms
hereof and is a complete and exclusive statement of those terms.

    12.8 Duplicate Originals, Execution in Counterpart.

    Two or more duplicate originals hereof may be signed by the parties, each of
which shall be an original but all of which together shall constitute one and
the same instrument. This Agreement may be executed in two or more counterparts
and shall be effective when at least one counterpart shall have been executed by
each party hereto, and each set of counterparts which, collectively, show
execution by each party hereto shall constitute one duplicate original.

    12.9 Confidentiality.

    Each holder shall use reasonable efforts to ensure that any information
concerning the Company or any of its Subsidiaries which is designated in writing
by the Company or such Subsidiary as being proprietary and confidential and
which is in good faith disclosed to or learned by the representatives of such
holder during the course of inspections pursuant to Section 8.4 or Section 10.15
is not (without the prior written consent of the

 

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Company) disclosed to any person not a party to this Agreement unless such
information: (a) has become generally available to the public through no action
or fault of such holder, (b) is included or referred to in good faith in a
report, statement or testimony submitted to any municipal, state, Canadian
provincial or federal regulatory body having or claiming to have jurisdiction
over any holder or submitted to the National Association of Insurance
Commissioners, the Office of the Superintendent of Financial Institutions or
similar organizations or their successors in which case it shall continue to be
subject to any protective order or order of confidentiality which may be imposed
by such body, (c) is disclosed in response to any summons or subpoena or in
connection with any litigation in which case it shall continue to be subject to
any protective order or order of confidentiality which may be imposed by the
court in which such litigation is pending, (d) is disclosed by any holder in
good faith to a third party who had an independent contractual right to obtain
such information, (e) is believed by any holder to be appropriately disclosed in
order to protect its investment in the Notes (provided that in the case of
confidential information with respect to proprietary processes or formulae of
the Company, this exception shall apply only if a Default or Event of Default
shall have occurred or be threatened or if disclosure is required in order to
avoid potential liability under applicable state, federal or Canadian provincial
securities laws), or in order to comply with any law, order regulation or ruling
applicable to it, (f) is disclosed to a prospective transferee in connection
with any contemplated transfer of the Notes if such prospective transferee
agrees to abide by confidentiality provisions substantially the same as set
forth in this Section 12.9 or (g) was known to such holder at the time of
disclosure by the Company or any of its Subsidiaries or becomes known to such
holder from a Person (other than the Company or a Subsidiary of the Company)
not, to the knowledge of such holder, in violation of any confidentiality
agreement between such Person and the Company or one of its Subsidiaries. Each
holder shall be free to disclose such information to and discuss it with such
holder's retained or employed accountants, attorneys and similar consultants and
experts when such disclosure is, in the holder's good faith judgment, necessary
to the performance of services being furnished to the holder by any such Person,
if such service provider agrees to abide by confidentiality provisions
substantially the same as those set forth in this Section 12.9.

[Remainder of Page Intentionally Blank. Next page is signature page.]

 

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    If this Agreement is satisfactory to you, please so indicate by signing the
acceptance at the foot of a counterpart hereof and returning such counterpart to
the Company, whereupon this Agreement shall become binding between us in
accordance with its terms.

Very truly yours,

 

MINERALS TECHNOLOGIES INC.

 

By /S/John R. Stack
Name: John R. Stack
Title: Vice President-Finance

 

 

SPECIALTY MINERALS INC., as
Guarantor

 

By /S/John R. Stack
Name: John R. Stack
Title: Vice President-Finance

 

MINTEQ INTERNATIONAL INC., as
Guarantor

 

By /S/John R. Stack
Name: John R. Stack
Title: Vice President-Finance

 

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BARRETTS MINERALS INC.,
as Guarantor

 

By /S/John R. Stack
Name: John R. Stack
Title: Vice President-Finance

 

The foregoing Agreement

is hereby agreed to as of the

date hereof.

METROPOLITAN LIFE INSURANCE COMPANY
Purchaser

 

By:/s/ Joseph A. Augustin
Name: Joseph A. Augustin
Title: Vice President

 

 

 

 

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