MINERALS TECHNOLOGIES INC







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


           


           


           


           


                                         



 

 



 

	 	
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
 


      





 

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





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,


  




 

4





 


  
               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





 

              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





 


                       (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.


 

7





 

              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





 


     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





 


                       (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





           

     


                              10





 


                       (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





 


  
                                 (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
 


 

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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
 


           

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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


  




 

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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





 

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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.


 

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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





 




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,
 





 

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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





 


                       (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.


 

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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


 

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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.


 

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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





 


     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





 


              (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





 

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.


 

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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.


 

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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,





           


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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







     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





 


     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





 


  
    
                   (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





 


     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





 


  
    
               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





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





 


  
    
               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





 


  
          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





 


  
          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





 


     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





 


     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





 

     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.





 

42





 

              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





 


  
               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





 


     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





 


  
          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





 


  
          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



           


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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





 

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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
 


      


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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:


      


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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
 





 

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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;

  




 

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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
 





              

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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
 



           


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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
 




 

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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


      


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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
 


      


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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
 


 

93





 

     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
 


 

94





 

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.]


 

95


 

             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

                          

                     


96





 

 

                         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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