NATIONAL CONSUMER COOPERATIVE BANK
NOTE PURCHASE AGREEMENT
$30,000,000
7.68% Senior Notes
due December 28, 2005
Dated as of December 28, 1999
Table of Contents
(not part of agreement)
Page
1 AUTHORIZATION OF ISSUE OF NOTES. 1
2 PURCHASE AND SALE OF NOTES. 1
3 CONDITIONS OF CLOSING. 6
3A. Certain Documents. 6
3B. Opinion of Purchaser's Special Counsel. 7
3C. Representations and Warranties; No Default. 7
3D. Purchase Permitted by Applicable Laws. 7
3E. Private Placement Number. 7
3F. Proceedings Satisfactory. 7
3G. Payment of Fees. 7
4 PREPAYMENTS. 7
4A. Optional Prepayment With Yield-Maintenance Amount. 8
4B. Notice of Optional Prepayment. 8
4C. Retirement of Notes. 8
5 AFFIRMATIVE COVENANTS. 9
5A. Payment of Taxes and Claims. 9
5B. Maintenance of Properties and Corporate Existence. 9
5C. Payment of Notes and Maintenance of Office. 10
5D. Maintenance of Consolidated Adjusted Net Worth
and Consolidated Effective Net Worth. 10
5E. Line of Business. 10
5F. ERISA Compliance. 10
5G. Incorporation of Affirmative and Negative Covenants. 11
5H. Financial and Business Information. 11
5I. Officers' Certificates. 14
5J. Accountants' Certificates 14
5K. Inspection 14
6 NEGATIVE COVENANTS. 15
6A. Disposal of Shares of a Restricted Subsidiary. 15
6B. Merger or Sale of Assets. 16
6C. Liens. 18
6D. Permitted Debt. 20
6E. Limitations on ▇▇▇▇. ▇▇
▇▇. Long-Term Leases. 21
6G. Guarantees. 21
6H. Consolidated Earnings Available for Fixed Charges. 21
6I. Restricted Payments. 22
6J. Limitation on Investments. 23
6K. Transactions with Affiliates. 23
6L. Repurchase of Notes. 24
6M. Issuance of Subordinated Debt. 24
6N. Voluntary Retirement of Subordinated Debt. 24
6O. Subordination Provisions. 24
6P. Class A Notes. 25
7 EVENTS OF DEFAULT. 25
7A. Nature of Events. 25
7B. Default Remedies. 27
7C. Annulment of Acceleration of Notes. 28
8 REPRESENTATIONS, COVENANTS AND WARRANTIES. 29
8A. Subsidiaries and Affiliates. 29
8B. Corporate Organization and Authority. 29
8C. Financial Statements; Material Adverse Change;
Description of Business. 29
8D. Full Disclosure. 30
8E. Pending Litigation and ▇▇▇▇▇▇▇▇▇. ▇▇
▇▇. Title to Properties. 30
8G. Patents and Trademarks. 31
8H. Issuance is Legal and Authorized; Conflicting
Agreements and Other Matters. 31
8I. No Defaults. 31
8J. Governmental Consent. 31
8K. Taxes. 32
8L. Margin Securities, etc. 32
8M. Private Offering. 32
8N. Compliance with Law. 32
8O. Indebtedness. 33
8P. Restrictions on Company. 33
8Q. Employee Retirement Income Security Act of 1974. 33
8R. Investment Company Act. ▇▇
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇. ▇▇
▇▇. Nature of Purchase. 34
9B. Source of Funds. 34
10 DEFINITIONS. 34
10A. Yield-Maintenance Terms. 34
10B. Other Terms. 35
10C. Accounting Principles, Terms and Determinations. 54
11 MISCELLANEOUS. 54
11A. Note Payments. 54
11B. Expenses. 55
11C. Consent to Amendments. 55
11D. Form, Registration, Transfer and Exchange of
Notes; Lost Notes. 56
11E. Persons Deemed Owners; Participations. 56
11F. Survival of Representations and Warranties;
Entire Agreement. 56
11G. Successors and Assigns. 57
11H. Disclosure to Other Persons. 57
11I. Notices. 57
11J. Payments Due on Non-Business Days. 58
11K. Severability. 58
11L. Descriptive Headings. 58
11M. Satisfaction Requirement. 58
11N. Governing Law. 58
11O. Counterparts. 58
11P. Binding Agreement. 58
EXHIBITS AND SCHEDULES
Annex 1 -- Information Schedule
Annex 2 -- Schedule 6C: Liens
Schedule 8A: Subsidiaries and Affiliates
Schedule 8C: Description of Business
Schedule 8O: Outstanding Indebtedness
Schedule 8P: Restrictive Agreements
Exhibit A -- Form of Note
Exhibit B -- Form of Opinion of Company Counsel
Exhibit C -- Form of Certificate of Officers
Exhibit D -- Form of Certificate of Secretary
NATIONAL CONSUMER COOPERATIVE BANK
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
As of December 28, 1999
To: The Prudential Insurance Company
of America (herein called "Prudential")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential, the
"Purchasers")
c/o Prudential Capital Group
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, National Consumer Cooperative Bank (herein
called the "Company"), hereby agrees with you as follows:
1 AUTHORIZATION OF ISSUE OF NOTES.
1A. Authorization of Issue of Notes. The Company will
authorize the issue of its senior promissory notes (the "Notes")
in the aggregate principal amount of $30,000,000, to be dated the
date of issue thereof, to mature December 28, 2005, to bear
interest on the unpaid balance thereof from the date thereof
until the principal thereof shall have become due and payable at
the rate of 7.68% per annum and on overdue principal, Yield-
Maintenance Amount and interest at the rate specified therein,
and to be substantially in the form of Exhibit A attached hereto.
The terms "Note" and "Notes" as used herein shall include each
Note delivered pursuant to any provision of this Agreement and
each Note delivered in substitution or exchange for any such
Series A Note pursuant to any such provision.
2 PURCHASE AND SALE OF NOTES.
The Company hereby agrees to sell to Purchasers
and, subject to the terms and conditions herein set forth,
Purchasers agree to purchase from the Company the aggregate
principal amount of Notes set forth opposite its name on the
Information Schedule, attached hereto as Annex 1, at 100% of such
aggregate principal amount. On December 28, 1999 or any other
date prior to December 28, 1999 upon which the Company and
Purchasers may agree (herein called the "Closing Day"), the
Company will deliver to Purchasers at the offices of Prudential
Capital Group, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇, one or more Notes registered in its name, evidencing
the aggregate principal amount of Series A Notes to be purchased
by each Purchaser and in the denomination or denominations
specified with respect to each Purchaser in the Information
Schedule, attached hereto as Annex 1, against payment of the
purchase price thereof by transfer of immediately available funds
for credit to the Company's account #2065202934399 at First Union
National Bank, Richmond, Virginia (ABA No. ▇▇▇▇▇▇▇▇▇), for credit
to National Cooperative Bank Operating Account.
3 CONDITIONS OF CLOSING.
The obligation of any Purchaser to purchase and
pay for any Notes is subject to the satisfaction, on or before
the Closing Day for such Notes, of the following conditions:
3A. Certain Documents. Such Purchaser shall have
received the following, each dated the Closing Day (except with
respect to the certified copies referred to in paragraph 3A(v)
below, which shall be dated as of a date as close as practicable
to such Closing Date):
(i) The Note(s) to be purchased by such Purchaser.
(ii) Favorable opinion of ▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the
Company satisfactory to such Purchaser and substantially in the
form of Exhibit D attached hereto and as to such other matters as
such Purchaser may reasonably request. The Company hereby
directs such counsel to deliver such opinion, agrees that the
issuance and sale of any Notes will constitute a reconfirmation
of such direction, and understands and agrees that each Purchaser
receiving such an opinion will and is hereby authorized to rely
on such opinion.
(iii) An Officer's Certificate, substantially
in the form of Exhibit E to this Agreement, signed by the
President or a Vice President and the Treasurer or an
Assistant Treasurer of the Company, certifying that the
conditions specified in paragraph 3C of this Agreement have
been fulfilled, and certifying to the other matters set
forth therein.
(iv) A certificate signed by the Secretary or an
Assistant Secretary of the Company, substantially in the
form of Exhibit F to this Agreement, with respect to the
matters therein set forth.
(v) Certified copies of Requests for Information
or Copies (Form UCC-11) or equivalent reports listing all
effective financing statements which name the Company or any
Subsidiary (under its present name and previous names) as
debtor, together with copies of such financing statements.
(vi) A copy of Schedule 8O setting forth the Debt
for borrowed money of the Company updated to reflect all
such Debt outstanding as of the close of business on such
Closing Day.
(vii) Additional documents or certificates
with respect to legal matters or corporate or other
proceedings related to the transactions contemplated hereby
as may be reasonably requested by such Purchaser.
3B. Opinion of Purchaser's Counsel. Such Purchaser
shall have received from ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇, Assistant General
Counsel of Prudential, or such other counsel, who is acting as
counsel for it in connection with this transaction, a favorable
opinion satisfactory to such Purchaser as to such matters
incident to the matters herein contemplated as it may reasonably
request.
3C. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 shall be
true on and as of the Closing Day, except to the extent of
changes caused by the transactions herein contemplated; there
shall exist on the Closing Day no Event of Default or Default;
and the Company shall have delivered to such Purchaser an
Officer's Certificate, dated the Closing Day, to both such
effects.
3D. Purchase Permitted by Applicable Laws. The
purchase of and payment for the Notes to be purchased by such
Purchaser on the terms and conditions herein provided (including
the use of the proceeds of such Notes by the Company) shall not
violate any applicable law or governmental regulation (including,
without limitation, Section 5 of the Securities Act or Regulation
T, U or X of the Board of Governors of the Federal Reserve
System) and shall not subject such Purchaser to any tax, penalty,
liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and such Purchaser
shall have received such certificates or other evidence as it may
request to establish compliance with this condition.
3E. Private Placement Number. The Company shall have
obtained a private placement number for the Notes from the CUSIP
Service Bureau of Standard & Poor's, a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc.
3F. Proceedings Satisfactory. All proceedings taken
in connection with the issuance of the Notes and all documents
and papers relating thereto shall be satisfactory to you and your
counsel. You and your counsel shall have received copies of such
documents and papers as you or they may reasonably request in
connection therewith or as a basis for your counsel's closing
opinion, all in form and substance satisfactory to you and your
counsel.
3G. Payment of Fee. The Company shall have paid to
Prudential a fee in the amount of $45,000.
3H. Year 2000 Questionnaire. The Company shall have
delivered to Prudential a copy of its response to the Year 2000
Due Diligence Questionnaire supplied by The Securities Valuation
Office of The National Association of Insurance Commissioners.
4 PREPAYMENTS. The Notes shall be subject to prepayment
only with respect to the optional prepayments permitted by
paragraph 4A.
4A. Optional Prepayment With Yield-Maintenance Amount.
The Notes shall be subject to prepayment, in whole at any time or
from time to time in part (in amounts of at least $1,000,000 and
integral multiples of $100,000), at the option of the Company, at
100% of the principal amount so prepaid plus interest thereon to
the prepayment date and the Yield-Maintenance Amount, if any,
with respect to each such Note. Any partial prepayment of a
Series of Notes pursuant to this paragraph 4A shall be applied in
satisfaction of required payments of principal in inverse order
of their scheduled due dates.
4B. Notice of Optional Prepayment. The Company shall
give the holder of each Note to be prepaid pursuant to paragraph
4A irrevocable written notice of such prepayment not less than 10
Business Days prior to the prepayment date, specifying such
prepayment date, specifying the aggregate principal amount of the
Notes, identifying each Note held by such holder, and the
principal amount of each such Note, to be prepaid on such date
and stating that such prepayment is to be made pursuant to
paragraph 4A. Notice of prepayment having been given as
aforesaid, the principal amount of the Notes specified in such
notice, together with interest thereon to the prepayment date and
together with the Yield-Maintenance Amount, if any, herein
provided, shall become due and payable on such prepayment date.
The Company shall, on or before the day on which it gives written
notice of any prepayment pursuant to paragraph 4A, give
telephonic notice of the principal amount of the Notes to be
prepaid and the prepayment date to each Significant Holder which
shall have designated a recipient for such notices in the
Information Schedule attached hereto or by notice in writing to
the Company.
4C. Retirement of Notes. The Company shall not, and
shall not permit any of its Subsidiaries or Affiliates to, prepay
or otherwise retire in whole or in part prior to their stated
final maturity (other than by prepayment pursuant to paragraph 4A
or upon acceleration of such final maturity pursuant to paragraph
7A), or purchase or otherwise acquire, directly or indirectly,
Notes held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or
purchase or otherwise acquire, as the case may be, the same
proportion of the aggregate principal amount of Notes held by
each other holder of Notes at the time outstanding upon the same
terms and conditions. Any Notes so prepaid or otherwise retired
or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates shall not be deemed to be outstanding
for any purpose under this Agreement, except as provided in
paragraph 4A.
5 AFFIRMATIVE COVENANTS. So long as any Note is
outstanding and unpaid, the Company covenants as follows:
5A. Payment of Taxes and Claims. The Company and each
Subsidiary will pay, before they become delinquent,
(i) all taxes, assessments and governmental
charges or levies imposed upon it or its Property, and
(ii) all claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like
Persons which, if unpaid, might result in the creation of a
Lien upon its Property,
provided that items of the foregoing description need not be paid
while being contested in good faith and by appropriate
proceedings and, provided further, that adequate book reserves
have been established with respect thereto and, provided further,
that the owning company's title to, and its right to use, its
Property is not in the aggregate materially adversely affected
thereby. In the case of any item of the type described in this
paragraph 5A involving an amount in excess of Five Hundred
Thousand Dollars ($500,000), the appropriateness of the
proceeding will be supported by an opinion of the independent
counsel responsible for such proceeding and the adequacy of such
reserves shall be supported by the opinion of the independent
public accountant of the Company.
5B. Maintenance of Properties and Corporate Existence.
The Company and each Subsidiary will:
(i) Property - maintain, or cause to be
maintained, its Property in good condition and will make, or
cause to be made, all necessary renewals, replacements,
additions, betterments and improvements thereto;
(ii) Insurance - maintain, with financially sound
and reputable insurers rated "A" or better by A.M. Best
Company (or accorded a similar rating by another nationally
recognized insurance rating agency of similar standing if
A.M. Best Company is not then in the business of rating
insurers), insurance with respect to its Properties and
business against such casualties and contingencies, of such
types (including, without limitation, public liability,
embezzlement or other criminal misappropriation insurance)
and in such amounts as is customary in the case of
corporations of established reputations engaged in the same
or a similar business and similarly situated;
(iii) Financial Records - keep true books of
records and accounts in which full and correct entries will
be made of all its business transactions, and will reflect
in its financial statements adequate accruals and
appropriations to reserves, all in accordance with generally
accepted accounting principles;
(iv) Corporate Existence and Rights - do or cause
to be done all things necessary to preserve and keep in full
force and effect its existence, rights and franchises,
except as otherwise permitted by paragraph 6B of this
Agreement; and
(v) Compliance with Law - not be in violation of
any laws, ordinances, governmental rules and regulations to
which it is subject and will not fail to obtain any
licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its Properties
or to the conduct of its business, which violations or
failures to obtain might in the aggregate materially
adversely affect the business, profits, Properties or
condition (financial or otherwise) of the Company or any
Subsidiary.
5C. Payment of Notes and Maintenance of Office. The
Company will punctually pay or cause to be paid the principal,
Yield-Maintenance Amount, if any, and interest to become due in
respect of the Notes according to the terms thereof and will
maintain an office in the District of Columbia where notices,
presentations and demands in respect of this Agreement or the
Notes may be made upon it. Such office shall be maintained at
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (Telecopier
No. 202-336-7803) until such time as the Company shall notify the
holders of the Notes in writing of any change of location of such
office within the District of Columbia.
5D. Maintenance of Consolidated Adjusted Net Worth and
Consolidated Effective Net Worth.
(i) The Company shall at all times keep and
maintain Consolidated Adjusted Net Worth in an amount not
less than the sum of (a) One Hundred Million Dollars
($100,000,000) plus (b) the sum, for all fiscal quarters of
the Company ended subsequent to January 1, 1993 and at or
prior to such time, of the greater, for each fiscal quarter,
of (1) Zero Dollars ($0) and (2) fifty percent (50%) of
Consolidated Net Earnings for each such fiscal quarter.
(ii) The Company shall at all times keep and
maintain Consolidated Effective Net Worth in an amount not
less than the sum of (a) Two Hundred Sixty-Five Million
Dollars ($265,000,000) plus (b) the sum, for all fiscal
quarters of the Company ended subsequent to January 1, 1993
and at or prior to such time, of the greater, for each
fiscal quarter, of (1) Zero Dollars ($0) and (2) fifty
percent (50%) of Consolidated Net Earnings for each such
fiscal quarter.
5E. Line of Business. The Company shall, and shall
cause each of the Restricted Subsidiaries to, remain primarily in
the business conducted by the Company and the Restricted
Subsidiaries on the date hereof.
5F. ERISA Compliance. The Company and each Subsidiary
shall promptly comply with all provisions of ERISA applicable to
any of them which, if not complied with, might result in a Lien
or charge upon any Property of the Company or any Subsidiary or
might in the aggregate otherwise materially adversely affect the
business, profits, prospects, Properties or condition (financial
or otherwise) of the Company or any Subsidiary. Without limiting
the generality of the foregoing, neither the Company nor any
Subsidiary will cause any Pension Plan maintained or participated
in by it to:
(i) engage in any "prohibited transaction," as
such term is defined in Section 4975 of the Internal Revenue
Code of 1986, as amended; or
(ii) incur any material "accumulated funding
deficiency," as such term is defined in Section 302 of
ERISA, whether or not waived.
5G. Incorporation of Affirmative and Negative
Covenants.
(i) During all such times as the Bank Loan
Agreement shall remain in force, (i) the Company and the
Restricted Subsidiaries shall comply and remain at all times
in compliance with the provisions of Article 6 and Article 7
thereof and any Financial Covenant set forth in any other
provision thereof and (ii) all of the provisions of
Article 6 and Article 7 of the Bank Loan Agreement and any
other Financial Covenants set forth therein, together with
all relevant definitions pertaining thereto, shall hereby be
incorporated herein by reference, mutatis mutandis. The
Company shall give all holders of Notes written notice of
any amendment modification or waiver of Article 6, Article 7
or any Financial Covenant of the Bank Loan Agreement,
attaching an executed copy of the amendment, modification or
waiver to such written notice, within 2 Business Days of
such amendment, modification or waiver.
(ii) No Financial Covenant incorporated herein by
virtue of paragraph 5G(i) hereof shall supersede, replace,
amend, supplement or modify any other provision of this
Agreement, including any covenant contained herein which
addresses a subject matter similar to that of such
incorporated Financial Covenant.
5H. Financial and Business Information. The Company
shall deliver to you, if at the time you or your nominee holds
any Note, and to each other institutional holder of the then
outstanding Notes:
(i) Quarterly Statements -- as soon as
practicable after the end of the first, second and third
quarterly fiscal periods in each fiscal year of the Company,
and in any event within sixty (60) days thereafter, two (2)
copies of:
(a) consolidated balance sheets of the
Company and its consolidated Subsidiaries, and the
Company and the Restricted Subsidiaries, as at the end
of such quarter, and
(b) consolidated statements of income
and cash flows of the Company and its consolidated
Subsidiaries, and the Company and the Restricted
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,
setting forth in each case in comparative form the figures
for the corresponding periods in the previous fiscal year,
all in reasonable detail and certified as complete and
correct, subject to changes resulting from year-end
adjustments, by a principal financial officer of the
Company;
(ii) 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:
(a) consolidating and consolidated
balance sheets of the Company and its consolidated
Subsidiaries, and the Company and the Restricted
Subsidiaries, as at the end of such year, and
(b) consolidating and consolidated
statements of income, changes in members' equity and
cash flows of the Company and its consolidated
Subsidiaries, and the Company and the Restricted
Subsidiaries, for such year,
setting forth in comparative form the figures for the
previous fiscal year, all in reasonable detail, satisfactory
in scope to the Required Holders and
(A) except in the case of the
consolidating statements which may be certified as
complete and correct by a principal financial
officer of the Company, accompanied by an opinion
thereon, satisfactory in scope and substance to
the Required Holders, of independent certified
public accountants of recognized national standing
selected by the Company, which opinion shall state
that such financial statements have been prepared
in accordance with generally accepted accounting
principles consistently applied (except for
changes in application in which such accountants
concur and which are noted in the financial
statements) and that the examination of such
accountants in connection with such financial
statements has been made in accordance with
generally accepted auditing standards, and
accordingly included such tests of the accounting
records and such other auditing procedures as were
considered necessary in the circumstances,
(B) a statement from such
independent certified public accountants that such
consolidating statements were prepared using the
same work papers as were used in the preparation
of such consolidated statements, and
(C) a certification by a
principal financial officer of the Company (in
scope and substance satisfactory to the Required
Holders) that such consolidating and consolidated
statements are true and correct;
(iii) Opinions Pursuant to Paragraph 5A -- 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 any opinions required
pursuant to paragraph 5A of this Agreement;
(iv) Audit Reports -- promptly upon receipt
thereof, one (1) copy of each interim or special audit made
by independent accountants of the books of the Company or
any Subsidiary;
(v) SEC Reports -- promptly upon their becoming
available (but in no event later than the date of filing),
one (1) copy of each regular or periodic report and any
registration statement or prospectus filed by the Company or
any Subsidiary with any securities exchange or with the
Securities and Exchange Commission or any successor agency;
(vi) Materials Sent to Stockholders -- promptly
upon their becoming available (but in no event later than
the date provided in clause (I) of this paragraph 5H), one
(1) copy of each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to
stockholders (other than, in the case of any Subsidiary, the
Company) generally;
(vii) Notice of Event of Default -- promptly
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 and proposes
to take with respect thereto;
(viii) Notice of Claimed Default -- promptly upon becoming
aware that the holder of any Note or of any evidence of
indebtedness or other Security of the Company or any Subsidiary
has given notice or taken any other action with respect to a
claimed default or Event of Default, a written notice specifying
the notice given or action taken by such holder and the nature of
the claimed default or Event of Default and what action the
Company or such Subsidiary is taking or proposes to take with
respect thereto;
(ix) Loan Portfolio Reports -- together with each
quarterly financial statement required to be delivered
pursuant to clause (a) of this paragraph 5H, one (1) copy of
(a) a monthly Loan Portfolio Report of
the Company setting forth, with respect to loans held
in its portfolio, classifications relating to
delinquency, non-performance, risk rating, loss
allowances and other related matters as of the end of
the last month of the fiscal quarters covered by such
financial statements, to be prepared on substantially
the same basis and to contain substantially the same
information as the Loan Portfolio Report, dated
September 30, 1999, in respect of the month of
September, 1999, a copy of which was delivered to you
prior to the date hereof, and
(b) a quarterly Report on Allowances
for Loan Losses and Reserves of the Company, to be
prepared on substantially the same basis and to contain
substantially the same information as the Report on
Allowances for Loan Losses and Reserves, dated
September 30, 1999, a copy of which was delivered to
you prior to the date hereof,
provided that such monthly and quarterly reports need not,
unless you or any other holder of Notes shall reasonably so
request, disclose the names of the obligors on such loans;
and
(x) Requested Information -- with reasonable
promptness, such other data and information with respect to
the Company and the Restricted Subsidiaries as from time to
time may be reasonably requested, including, without
limitation, information required by 17 C.F.R. 230.144A.
5I. Officers' Certificates. Each set of financial
statements delivered to you or any other institutional holder of
the Notes pursuant to paragraph 5H(i) or paragraph 5H(ii) of this
Agreement will be accompanied by a certificate of the President
or a Vice President and the Treasurer or an Assistant Treasurer
of the Company setting forth:
(i) Covenant Compliance -- the information
(including, where applicable, detailed calculations)
required in order to establish whether the Company was in
compliance with the requirements of paragraph 6 of this
Agreement during the period covered by the financial
statements then being furnished;
(ii) Event of Default -- that the signers have
reviewed the relevant terms of this Agreement and the
Financing Agreement and have made, or caused to be made,
under their supervision, a review of the transactions and
conditions of the Company and the Subsidiaries from the
beginning of the accounting period covered by the financial
statements being delivered therewith to the date of the
certificate and that such review has not 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 has taken or proposes to take with respect
thereto; and
(iii) Loan Portfolio Changes -- an
explanation, in reasonable detail, of the differences
disclosed in the Loan Portfolio Reports accompanying such
financial statements from the information set forth in the
Loan Portfolio Reports delivered after the end of the
immediately preceding fiscal quarter of the Company.
5J. Accountants' Certificates. Each set of annual
financial statements delivered pursuant to paragraph 5H(ii) of
this Agreement will be accompanied by a certificate of the
accountants who certify such financial statements, stating that
they have reviewed this Agreement insofar as it relates to
accounting matters 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 any such condition or event then exists, specifying the
nature and period of existence thereof.
5K. Inspection. The Company will permit any of your
representatives, while you or your nominee holds any Note, or the
representatives of any other institutional holder of the Notes,
at your or such holder's expense so long as no Default or Event
of Default is then continuing and otherwise at the sole expense
of the Company, to visit and inspect any of the Properties of the
Company or any Subsidiary (and to take extracts from, and make
copies of, their respective books and records) 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 to
discuss with your representatives the finances and affairs of the
Company and the Subsidiaries) all at such reasonable times and as
often as may be reasonably requested.
6 NEGATIVE COVENANTS. So long THEREAFTER as any Note is
outstanding and unpaid, the Company covenants as follows:
6A. Disposal of Shares of a Restricted Subsidiary.
The Company shall not at any time sell or otherwise dispose of
any shares of the stock (or any options or warrants to purchase
stock or other Securities exchangeable for or convertible into
stock) of any Restricted Subsidiary (said stock, options,
warrants and other Securities herein called "Subsidiary Stock"),
nor shall the Company permit any Restricted Subsidiary to issue
its own Subsidiary Stock, or to sell or otherwise dispose of any
shares of Subsidiary Stock issued by any other Restricted
Subsidiary, if the effect of the transaction would be to reduce
the proportionate interest of the Company and the other
Restricted Subsidiaries in the outstanding Subsidiary Stock (the
"Disposition Stock") of the Restricted Subsidiary (the
"Disposition Subsidiary") whose shares are the subject of the
transaction, provided that the foregoing restrictions do not
apply to:
(i) the issue of directors' qualifying shares; and
(ii) the sale for a cash consideration at one time
(the "Stock Disposition Date") 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 the other Restricted
Subsidiaries in such Disposition Subsidiary, if all of the
following conditions shall have been satisfied:
(a) the sum of
(1) the Disposition Value of
the assets of the Disposition Subsidiary, plus
(2) the Disposition Value of
the assets of all Restricted Subsidiaries whose
Subsidiary Stock was subject to a disposition
pursuant to this paragraph 6A during the period
ending on the Stock Disposition Date and
commencing three hundred sixty-five (365) days
prior to the Stock Disposition Date, plus
(3) the aggregate Disposition
Value of assets owned by the Company or any
Restricted Subsidiaries the disposition of which
was made other than pursuant to this paragraph 6A
and consummated during the period ending on the
Stock Disposition Date and commencing three
hundred sixty-five (365) days prior to the Stock
Disposition Date,
does not exceed ten percent (10%) of Consolidated
Assets on the first day of such period;
(b) in each of the three (3) fiscal
years of the Company most recently ended, the
contribution (expressed as a percentage and exclusive
of losses) to Consolidated Adjusted Net Income for each
of such fiscal years of
(1) the Disposition
Subsidiary, plus
(2) the Restricted
Subsidiaries whose Subsidiary Stock was subject to
a disposition subsequent to the commencement of
the first of such fiscal years, plus
(3) assets owned by the
Company or any Restricted Subsidiaries sold or
otherwise disposed of subsequent to the
commencement of the first of such fiscal years,
does not exceed ten percent (10%) of Consolidated
Adjusted Net Income for such fiscal year;
(c) in the opinion of the Board of
Directors, the sale is for Fair Market Value and is in
the best interests of the Company;
(d) the Disposition Subsidiary shall
have no continuing investment in the Company or any
other Restricted Subsidiary not being simultaneously
disposed of; and
(e) immediately after the consummation
of the transaction and after giving effect thereto, no
Default or Event of Default would exist.
For purposes of this paragraph 6A(ii), the assets of any
Restricted Subsidiary that ceases to be a Restricted
Subsidiary in a manner other than by the disposition of
Subsidiary Stock shall be deemed disposed of at the time of
such cessation, provided that the requirements of this
paragraph 6A(ii) with regard to the receipt of cash
consideration equal to Fair Market Value shall not apply to
such deemed disposition.
Notwithstanding the foregoing, any disposition of
Subsidiary Stock shall be deemed to be in compliance with
the provisions of the foregoing clause (1) and clause (2) if
the entire proceeds of such sale, net of reasonable and
ordinary transaction costs and expenses incurred in
connection with such sale, are applied by the Company or
such Restricted Subsidiary to a Permitted Proceeds
Application.
6B. Merger or Sale of Assets.
(i) Sale of Assets. Except as specifically
permitted under paragraph 6B(ii) and paragraph 6B(iii) of
this Agreement, the Company shall not, and shall not permit
any Restricted Subsidiary to, sell, lease, transfer or
otherwise dispose of assets; provided that, the foregoing
restriction shall not apply to the sale of such assets (the
"Disposition Assets") for cash consideration at one time
(the "Asset Disposition Date") to a Person other than
directly or indirectly to an Affiliate, if all of the
following conditions are met:
(a) the sum of
(1) the Disposition Value of
the Disposition Assets, plus
(2) the Disposition Value of
the assets of all Subsidiaries that have ceased to
be Restricted Subsidiaries during the period
ending on the Asset Disposition Date and
commencing three hundred sixty-five (365) days
prior to the Asset Disposition Date, plus
(3) the Disposition Value of
the assets of the Company and all other Restricted
Subsidiaries disposed of during the period ending
on the Asset Disposition Date and commencing three
hundred sixty-five (365) days prior to the Asset
Disposition Date,
does not exceed ten percent (10%) of Consolidated
Assets at such time;
(b) in each of the three (3) fiscal
years of the Company most recently ended, the
contribution (expressed as a percentage and exclusive
of losses) to Consolidated Adjusted Net Income for each
of such fiscal years of
(1) the Disposition Assets,
plus
(2) the Restricted
Subsidiaries whose Subsidiary Stock was subject
to a disposition subsequent to the commencement of
the first of such fiscal years, plus
(3) all other assets of the
Company and the Restricted Subsidiaries disposed
of subsequent to the commencement of the first of
such fiscal years,
does not exceed ten percent (10%) of Consolidated
Adjusted Net Income for such fiscal year;
(c) in the opinion of the Board of
Directors, the sale is for Fair Market Value and is in
the best interests of the Company;
(d) immediately after the consummation
of the transaction and after giving effect thereto, no
Default or Event of Default would exist; and
(e) in the case of any such transaction
relating to receivables, such transaction is
consummated in the ordinary course of the business of
the Company or such Restricted Subsidiary.
For purposes of this paragraph 6B(i), the assets of any
Restricted Subsidiary that ceases to be a Restricted
Subsidiary in a manner other than by the disposition of
Subsidiary Stock shall be deemed to have been sold at the
time of such cessation, provided that the requirements of
this paragraph 6B(i) with regard to the receipt of cash
consideration equal to Fair Market Value shall not apply to
any such deemed disposition.
Notwithstanding the foregoing, any sale of assets shall
be deemed to be in compliance with the provisions of the
foregoing clause (1) and clause (2) if the entire proceeds
of such sale, net of reasonable and ordinary transaction
costs and expenses incurred in connection with such sale,
are applied by the Company or such Restricted Subsidiary to
a Permitted Proceeds Application.
(ii) Merger, Consolidation and Sale of All or
Substantially All Assets by the Company and Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, (x) consolidate with, or merge into, any
other Person or permit any other Person to consolidate with,
or merge into, it (except that a Restricted Subsidiary may
consolidate with, or merge into, the Company or another
Restricted Subsidiary) or (y) except as specifically
permitted under paragraph 6B(iii) of this Agreement, sell
all or substantially all of its assets to any other Person.
(iii) Asset Securitizations. Notwithstanding
the provisions of paragraph 6B(i) and paragraph 6B(ii) of
this Agreement, the Company and the Restricted Subsidiaries
may, at any time and from time to time, sell receivables in
connection with an Asset Securitization if:
(a) such receivables are sold for a
cash consideration equal to the Fair Market Value
thereof; provided, however, that the Company may
(1) establish and maintain a
reserve account containing cash or Securities as a
credit enhancement in respect of any such sale or
(2) purchase or retain a
subordinated interest in such receivables being
sold;
(b) the entire proceeds of such sale,
net of reasonable and ordinary transaction costs and
expenses incurred in connection with such sale, are
applied by the Company or such Restricted Subsidiary to
a Permitted Proceeds Application; and
(c) such sale is consummated in the
ordinary course of business of the Company or such
Restricted Subsidiary.
6C. Liens.
(i) Negative Pledge. The Company shall not, and
shall not permit any Restricted Subsidiary to, (x) cause or
permit or (y) agree or consent 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, except that the Company
and any of the Restricted Subsidiaries may
(a) suffer to exist Liens outstanding
on the date of this Agreement and described in Annex 2
to this Agreement;
(b) create, incur or suffer to exist
Liens arising in the ordinary course of business that
secure taxes, assessments or governmental charges or
levies or the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other
like Persons, provided the payment thereof is not at
the time required by paragraph 5A of this Agreement and
that appropriate reserves have been established
therefor on the books of the Company or such Restricted
Subsidiary in accordance with generally accepted
accounting principles;
(c) create, incur or suffer to exist
Liens incurred or deposits made in the ordinary course
of business
(1) in connection with
worker's compensation, unemployment insurance and
other like laws, or
(2) to secure the performance
of letters of credit, bids, tenders, sales
contracts, leases, Eligible Derivatives, statutory
obligations, surety, appeal and performance bonds
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;
(d) create, incur or suffer to exist
attachment, judgment and other similar Liens arising in
connection with court proceedings not in excess of One
Million Dollars ($1,000,000) in the aggregate for all
such Liens, provided the execution or other enforcement
of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good
faith and by appropriate proceedings and that
appropriate reserves have been established therefor on
the books of the Company or such Restricted Subsidiary
in accordance with generally accepted accounting
principles;
(e) create, incur or suffer to exist
Liens on Property of a Restricted Subsidiary, provided
such Liens secure only obligations owing to the Company
or a Restricted Subsidiary;
(f) create, incur or suffer to exist
reservations, exceptions, encroachments, easements,
rights of way, covenants, conditions, restrictions,
leases and other similar title exceptions or
encumbrances affecting real Property, provided such
exemptions or encumbrances do not in the aggregate
materially detract from the value of said Properties or
materially interfere with their use in the ordinary
conduct of the owning company's business;
(g) create, incur or suffer to exist
Liens existing at the date of acquisition on Property
acquired in bona fide liquidation, collection or other
realization upon, or settlement of, collateral held to
secure receivable obligations; provided that any such
Lien will not extend to any Property other than the
Property so acquired;
(h) create, incur or suffer to exist
Liens to secure Debt incurred to finance the cost of
acquisition of any computer or other office equipment
useful and intended to be used in carrying out the
business of the Company or a Restricted Subsidiary;
provided that
(1) any such Lien shall
attach solely to the Property acquired;
(2) the aggregate amount
remaining unpaid on the purchase price shall not
be in excess of one hundred percent (100%) of
(A) the total purchase price or
(B) the Fair Market Value at
the time of acquisition, whichever is lower; and
(3) such Lien is created or assumed
with respect to such Property, at the time of,
or within twelve (12) months after, such
acquisition;
and
(i) modify, extend, renew or replace
any Lien permitted by this paragraph 6C(i) upon the
same Property theretofore subject thereto, or modify,
extend, renew or replace the Debt secured thereby;
provided, that in any such case the principal amount
(outstanding at the time of such modification,
extension, renewal or replacement) of such Debt so
modified, replaced, extended or renewed shall not be
increased.
(ii) Equal and Ratable Lien; Equitable Lien. In
case any Property is subjected to a Lien in violation of
this paragraph 6C, the Company shall make or cause to be
made provision (the documents, agreements and instruments by
which such provision is effected being subject to the
approval of the Required Holders) whereby the Notes will be
secured equally and ratably with all other obligations
secured thereby, and in any case the Notes shall have the
benefit, to the full extent that the holders may be entitled
thereto under applicable law, of an equitable Lien so
equally and ratably securing the Notes. Such violation of
this paragraph 6C shall constitute an Event of Default
whether or not any such provision is made pursuant to this
paragraph 6C.
6D. Permitted Debt. Subject to paragraph 6E of this
Agreement, the Company shall not, and shall not permit any
Restricted Subsidiary to, incur, create, issue, assume or permit
to exist any Debt other than
(i) Senior Debt of the Company;
(ii) Subordinated Debt of the Company;
(iii) liabilities (other than for borrowed
money) incurred in the regular operation of the business of
the Company or a Restricted Subsidiary and not more than
three (3) months overdue, unless contested in good faith by
appropriate proceedings and adequate reserves have been set
aside with respect thereto;
(iv) Debt of a Restricted Subsidiary to the
Company or to a Restricted Subsidiary;
(v) Debt of the Company secured by Liens
permitted under the provisions of paragraph 6C(i)(h) of this
Agreement; and
(vi) Restricted Guarantees of the Company.
6E. Limitations on Debt. The Company shall not at any
time permit
(i) The ratio of Consolidated Debt to
Consolidated Adjusted Net Worth to exceed (a) 9.0 to 1.0
during the period from December 28, 1999 to May 26, 2000 and
(b) 9.5 to 1.0 from May 27, 2000 and all the times
thereafter; or
(ii) Qualified Assets to be less than one hundred
percent (100%) of the sum (at such time) of
(a) Company Senior Obligations, plus
(b) the aggregate unpaid principal
amount of Subordinated Debt, less
(c) the aggregate unpaid principal
amount of Class A Notes.
6F. Long-Term Leases.
(i) The Company shall not, and shall not permit
any Restricted Subsidiary to, become obligated, as lessee,
under any Long-Term Lease if, at the time of entering into
any such Long-Term Lease and after giving effect thereto,
the aggregate Rentals payable by the Company and the
Restricted Subsidiaries, on a consolidated basis, in any one
fiscal year thereafter under all Long-Term Leases would
exceed five percent (5%) of Consolidated Adjusted Net Worth
determined as at the end of the most recently ended fiscal
year of the Company, at such time.
(ii) Any Person that becomes a Restricted
Subsidiary after the date hereof shall be deemed to have
entered into, at the time that it becomes a Restricted
Subsidiary, all Long-Term Leases on which such Person is
lessee existing immediately after it becomes a Restricted
Subsidiary.
6G. Guarantees. The Company shall not, and shall not
permit any Restricted Subsidiary to, become or be liable in
respect of any Guarantee other than a Restricted Guarantee.
6H. Consolidated Earnings Available for Fixed Charges.
The Company shall not permit Consolidated Earnings Available for
Fixed Charges for any period of four (4) consecutive fiscal
quarters of the Company to be less than one hundred ten percent
(110%) of Consolidated Fixed Charges for such period.
6I. Restricted Payments.
(i) The Company shall not:
(a) declare or pay any dividends,
either in cash or Property, on any class of its capital
stock, or otherwise, except
(1) Patronage Dividends
payable in cash and cash dividends payable on
Class B Stock and Class C Stock in any calendar
year in an aggregate amount for all such Patronage
Dividends and other dividends up to (but not
exceeding) twenty percent (20%) of the sum of
Consolidated Taxable Income plus, to the extent
deducted in the determination of Consolidated
Taxable Income, Patronage Dividends, for such
calendar year; and
(2) Patronage Dividends and
other dividends, in each case payable by the
Company solely in common stock or allocated
surplus of the Company;
or
(b) directly, or indirectly or through
any Subsidiary, purchase, redeem or retire any of its
capital stock or any warrants, rights or options to
purchase or otherwise acquire any shares of its capital
stock except
(1) in exchange for or out of
the substantially concurrent issue and sale of
shares of its capital stock, or warrants, rights
or options to purchase or otherwise acquire any
shares of its capital stock, so long as the
proceeds of such concurrent issue and sale are not
required by agreement, statute or regulation to be
otherwise applied by the Company,
(2) out of a substantially
concurrent contribution to capital,
(3) repurchases of Class B1
Common Stock which the Company is required to make
from the holders thereof who no longer have loans
from the Company outstanding, or
(4) redemptions or
cancellations of Class B Stock or Class C Stock
pursuant to Section 6.2(i) of the Company's by-
laws as in effect on the date hereof, so long as
no cash or other Property is paid to the holders
thereof; or
(c) directly, or indirectly or through
any Subsidiary, make any other payment or distribution
in respect of its capital stock
(such declarations and payments of dividends, purchases,
redemptions or retirements of stock, warrants, rights or
options and all such other distributions, together with all
payments in respect of Subordinated Debt pursuant to
paragraph 6N(iii) of this Agreement being herein
collectively called "Restricted Payments"), if after giving
effect thereto the aggregate amount of Restricted Payments,
together with all Patronage Dividends payable in cash and
all cash dividends on Class B Stock and Class C Stock,
declared or made during the period from and after December
31, 1991 to and including the date of the declaration or
making of the Restricted Payment in question, would exceed
the sum of
(1) Fifteen Million Dollars
($15,000,000), plus
(2) fifty percent (50%) of
Consolidated Adjusted Net Income (or minus one
hundred percent (100%) of Consolidated Adjusted
Net Income in the case of a deficit) for the
period commencing on January 1, 1992 and ending on
the last day of the fiscal year of the Company
most recently ended on such date, all computed on
a cumulative basis for said entire period.
(ii) The Company shall not declare any
dividend payable more than sixty (60) days after the
date of the declaration thereof.
(iii) For the purposes of this paragraph 6I,
the amount of any Restricted Payment declared or paid or
distributed in Property of the Company or any Restricted
Subsidiary shall be deemed to be the greater of book value
or Fair Market Value, as determined in good faith by the
Board of Directors (in each case after deducting any
liabilities relating thereto which are, concurrently with
the receipt of such Restricted Payment, assumed by the
recipient thereof), of such Property at the time of the
making of the Restricted Payment in question.
(iv) The Company shall not declare or make any
Restricted Payment if, after giving effect thereto, a
Default or an Event of Default would exist.
6J. Limitation on Investments.
(i) The Company shall not, and shall not permit
any Restricted Subsidiary to, make any Restricted
Investments.
(ii) Any corporation which becomes a Restricted
Subsidiary subsequent to the date of this Agreement shall be
deemed to have made, immediately after becoming a Restricted
Subsidiary, any Restricted Investment that it shall have
outstanding at the time it shall become a Restricted
Subsidiary.
6K. Transactions with Affiliates.
(i) The Company shall not, and shall not permit
any Restricted Subsidiary 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 (i) for the NCB Development Corporation
Contribution and (ii) in the ordinary course of and pursuant
to the reasonable requirements of the Company's or such
Restricted Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such
Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
(ii) Any corporation that becomes a Restricted
Subsidiary subsequent to the date of this Agreement shall be
deemed to have entered into, at the date it becomes a
Restricted Subsidiary, all transactions with Affiliates with
respect to which such corporation will be obligated
immediately after it becomes a Restricted Subsidiary.
6L. Repurchase of Notes. The Company shall not, and
shall not permit any Restricted Subsidiary or any Affiliate,
directly or indirectly, to, purchase or make any offer to
purchase any Notes, unless the Company or such Restricted
Subsidiary or Affiliate has offered to purchase Notes, pro rata
from all holders of the Notes and upon the same terms. In case
the Company purchases any Notes, such Notes shall thereafter be
canceled and no Notes shall be issued in substitution therefor.
6M. Issuance of Subordinated Debt. The Company shall
not create, issue, assume, guarantee or in any manner become
liable after the date of this Agreement in respect of any
Subordinated Debt having a maturity earlier than January 1, 2006,
or the benefit of any mandatory sinking fund or similar provision
for the prepayment thereof prior to January 1, 2006.
6N. Voluntary Retirement of Subordinated Debt. The
Company shall not, directly or indirectly or through any
Subsidiary, purchase, redeem or otherwise retire or acquire prior
to the respective stated maturities thereof, the whole or any
part of any issue of Subordinated Debt except
(i) subject to paragraph 6M of this Agreement, in
accordance with the applicable provisions thereof or of any
indenture, agreement or similar instrument under or pursuant
to which such Debt has been issued, unconditionally
requiring payments into a sinking fund, periodic
prepayments, or other analogous payments for the
amortization of such Debt, or
(ii) out of the proceeds of a substantially
concurrent issue or sale of capital stock or Debt ranking on
a parity with, or junior to, the Debt proposed to be
purchased, redeemed or otherwise retired or acquired, or
(iii) out of funds that at the time are
available for Restricted Payments pursuant to, and within
the limitations of, paragraph 6I of this Agreement, it being
understood that the amounts so used pursuant to this clause
(iii) shall reduce pro tanto the amount otherwise available
for Restricted Payments under paragraph 6I of this
Agreement.
▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇ Provisions. The Company shall not,
at any time, be a party to any amendment, waiver or modification
of any subordination provisions or payment provisions applicable
to any Subordinated Debt.
6P. Class A Notes.
(i) No Voluntary Prepayment. The Company shall
not, directly or indirectly or through any Subsidiary,
purchase, redeem or otherwise retire or acquire, prior to
the respective stated maturities thereof, the whole or any
part of any Class A Notes except out of the net cash
proceeds of a substantially concurrent issue or sale of
Class B Stock or Class C Stock.
(ii) No Amendments. The Company shall not amend,
modify, terminate, or waive any of its rights under the
Financing Agreement or any of the Class A Notes (or any
other agreement or similar instrument under or pursuant to
which such Class A Notes have been issued) without the prior
written consent of the Required Holders, except that the
Company may enter into an amendment of the Financing
Agreement providing for a prepayment of the Class A Notes in
2010 and 2015 with the proceeds of a substantially
simultaneous issue of equity or Subordinated Debt.
7 EVENTS OF DEFAULT.
7A. Nature of Events. An "Event of Default" shall
exist if any of the following occurs and is continuing:
(i) Principal or Yield-Maintenance Amount
Payments -- the Company fails to make any payment of
principal or Yield-Maintenance Amount on any Note on or
before the date such payment is due;
(ii) Interest Payments -- the Company fails to
make any payment of interest on any Note on or before the
date such payment is due and such failure shall continue for
a period of three (3) Business Days;
(iii) Particular Defaults -- the Company or
any Subsidiary fails to perform or observe any covenant
contained in paragraphs 5D and 5F and paragraph 6A through
paragraph 6P (other than paragraph 6J and paragraph 6K) of
this Agreement, inclusive; or the Company shall terminate or
modify any provision of the Financing Agreement or shall
fail to perform or observe any covenant contained in the
Financing Agreement;
(iv) Other Defaults -- the Company or any
Subsidiary fails to comply with any other provision of this
Agreement, and such failure continues for more than thirty
(30) days after any officer of the Company has knowledge
thereof;
(v) Warranties or Representations -- any
warranty, representation or other statement by or on behalf
of the Company contained in this Agreement or in any
instrument furnished by or on behalf of the Company in
compliance with or in reference to this Agreement was or
shall have been false or misleading in any material respect
at the time made;
(vi) Default on Indebtedness or Other Security --
the Company or any Restricted Subsidiary fails to make any
payment due on any one or more Material Obligations or any
event shall occur or any condition shall exist in respect of
any one or more Material Obligations of the Company or any
Restricted Subsidiary, or under any agreement securing or
relating to any such Material Obligations (and any such
failure, event or condition shall not have been cured,
waived or consented to by the holder or holders of such
Material Obligations or a trustee therefor), the effect of
which is
(a) to cause (or permit any holder of
such Material Obligation or a trustee of such holder to
cause) such Material Obligation or Material
Obligations, or a portion thereof, to become due prior
to its or their stated maturity or prior to its or
their regularly scheduled dates of payment (regardless
of any limitations, such as those applicable to
Subordinated Debt, on the amount of such Material
Obligations which may be paid upon such acceleration),
(b) to permit a trustee or the holder
of any Security (other than common stock of the Company
or any Restricted Subsidiary) to elect a majority of
the directors on the board of directors of the Company
or such Restricted Subsidiary, or
(c) to permit the holder of any such
Material Obligation to require the Company or any
Restricted Subsidiary to repurchase such Material
Obligation or a portion thereof from such holder;
(vii) Involuntary Bankruptcy Proceeding -- a
receiver, liquidator, custodian or trustee of the Company or
any Restricted Subsidiary, or of any of the Property of any
of such Persons, is appointed by court order and such order
remains in effect for more than ninety (90) days; or the
Company or any Restricted Subsidiary is adjudicated bankrupt
or insolvent; or any of the Property of any of such Persons
is sequestered by court order and such order remains in
effect for more than ninety (90) days; or a petition is
filed against the Company or any Restricted Subsidiary under
any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and is not
dismissed within thirty (30) days after such filing;
(viii) Voluntary Petitions -- the Company or
any Restricted Subsidiary files a petition in voluntary
bankruptcy or seeking relief under any provisions of any
bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or
consents to the filing of any petition against it under such
law;
(ix) Assignments for Benefit of Creditors, etc. --
the Company or a Restricted Subsidiary makes an assignment
for the benefit of its creditors, is not paying its debts
generally as they become due, admits in writing its
inability to pay its debts generally as they become due or
consents to the appointment of a receiver, trustee,
custodian or liquidator of the Company or such Restricted
Subsidiary or of all or any part of the Property of any of
such Persons; or
(x) Undischarged Final Judgments -- final
judgment or judgments for the payment of money, aggregating
in excess of Five Hundred Thousand Dollars ($500,000) for
all such judgments, is or are outstanding against the
Company or any of the Restricted Subsidiaries and any one of
such judgments has been outstanding for more than thirty
(30) days from the date of its entry and has not been
discharged in full or stayed.
7B. Default Remedies.
(i) Acceleration on Event of Default. If an
Event of Default exists, then
(a) if such Event of Default is an
Event of Default specified in clause (vii), clause
(viii) or clause (ix) of paragraph 7A of this Agreement
with respect to the Company, all of the Notes at the
time outstanding shall automatically become immediately
due and payable at par together with interest accrued
thereon, without presentment, demand, protest or notice
of any kind, all of which are hereby waived by the
Company, and
(b) if such Event of Default is any
other Event of Default, the Required Holders may
exercise any right, power or remedy permitted to such
holder or holders by law, and may, in particular, at
its or their option, by notice in writing to the
Company, declare all of the Notes to be, and all of the
Notes shall thereupon be and become, immediately due
and payable, together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any,
with respect to each Note, without presentment, demand,
protest or other notice of any kind, all of which are
hereby waived by the Company, provided that the Yield-
Maintenance Amount, if any, with respect to each Note
shall be due and payable upon such declaration only if
(1) such event is an Event of
Default specified in any of clause (i) to clause
(vi), inclusive, or clause (x) of paragraph 7A of
this Agreement,
(2) the holders making such
declaration shall have given to the Company, at
least ten (10) Business Days before such
declaration, written notice stating its or their
intention so to declare the Notes to be
immediately due and payable and identifying one or
more such Events of Default whose occurrence on or
before the date of such notice permits such
declaration and
(3) one or more of the Events
of Default so identified shall be continuing at
the time of such declaration.
(ii) Acceleration on Payment Default. During the
existence of an Event of Default described in paragraph
7A(i) or paragraph 7A(ii) hereof, and irrespective of
whether the Notes then outstanding shall have been declared
to be due and payable pursuant to paragraph 7B(i)(b) hereof,
any holder of Notes who or which shall have not consented to
any waiver with respect to such Event of Default may, at his
or its option, by notice in writing to the Company, declare
the Notes then held by such holder to be, and such Notes
shall thereupon become, forthwith due and payable together
with all interest accrued thereon, without any presentment,
demand, protest or other notice of any kind, all of which
are hereby expressly waived, and the Company shall forthwith
pay to such holder the entire principal of and interest
accrued on such Notes and, to the extent permitted by law,
the Yield-Maintenance Amount at such time with respect to
such principal amount of such Notes.
(iii) 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 repayment by the Company (except as herein specifically
provided for) is a valuable right and that the provision for
payment of a Yield-Maintenance 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.
(iv) Other Remedies. If any Event of Default or
Default shall occur and be continuing, the holder of any
Note may proceed to protect and enforce its rights under
this Agreement and such Note by exercising such remedies as
are available to such holder in respect thereof under
applicable law, either by suit in equity or by action at
law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or
in aid of the exercise of any power granted in this
Agreement. No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or
by statute or otherwise.
(v) 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 shall fail to pay when due any principal of, or
Yield-Maintenance Amount or interest on, any Note, or shall
fail to comply with any other provision hereof, the Company
shall pay to each holder of Notes, to the extent permitted
by law, such further amounts as shall be sufficient 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.
7C. Annulment of Acceleration of Notes. If a
declaration is made pursuant to paragraph 7B(i)(b) of this
Agreement in respect of any Notes by any holder or holders
thereof then, and in every such case, the Required Holders may,
by written instrument filed with the Company, rescind and annul
such declaration, and the consequences thereof, provided that at
the time such declaration is annulled and rescinded:
(i) no judgment or decree has been entered for
the payment of any monies due pursuant to the Notes or this
Agreement;
(ii) all arrears of interest upon all of the Notes
and all other sums payable under the Notes and under this
Agreement (except any principal of or interest on the Notes
which has become due and payable by reason of such
declaration under paragraph 7B(i)(b) of this Agreement)
shall have been duly paid; and
(iii) each and every other Default and Event
of Default shall have been waived pursuant to paragraph 11C
of this Agreement 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.
8 REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. Subsidiaries and Affiliates. Annex 2 to this
Agreement states the name of each of
(i) the Subsidiaries (specifying which thereof
are Restricted Subsidiaries), its jurisdiction of
incorporation, the jurisdiction in which it does business,
the percentage of its Voting Stock owned by the Company and
each other Subsidiary and, to the best of the Company's
knowledge, the identity and ownership of any other holders
of its Voting Stock, and
(ii) the Company's corporate or joint venture
Affiliates and the nature of the affiliation.
8B. Corporate Organization and Authority. Each of the
Company and the Subsidiaries
(i) is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation,
(ii) has all requisite power and authority and all
necessary licenses and permits to own and operate its
Properties and to carry on its business as now conducted and
as presently proposed to be conducted, and
(iii) is duly authorized and has duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction where the character of its Properties or the nature
of its activities makes such qualification necessary.
8C. Financial Statements; Material Adverse Change;
Description of Business.
(i) Financial Statements. The consolidated
statements of financial condition of the Company and the
Subsidiaries as of December 31 in the years 1994, 1995,
1996, 1997 and 1998 inclusive, and the related consolidated
statements of income and cash flows and changes in members'
equity for the fiscal years ended on such dates, in each
case accompanied by reports thereon containing opinions
without qualification, except as therein noted, by its
independent certified public accountants, and the
consolidated balance sheet of the Company and the
Subsidiaries as of September 30, 1999 and the related
consolidated statements of income and cash flows and
reconciliation of net income to net cash provided by
operating activities for the nine (9) month period ended on
such date, copies of which have been delivered to you, have
been prepared in accordance with generally accepted
accounting principles consistently applied, and present
fairly the financial position of the Company and the
Subsidiaries as of such dates and the results of their
operations for such periods. All of the above-described
consolidated financial statements include the accounts of
all Subsidiaries for the respective periods during which a
subsidiary relationship has existed.
(ii) Material Adverse Change. Since December 31,
1998, there has been no material adverse change in the
condition, financial or otherwise, of the Company and the
Subsidiaries, taken as a whole.
(iii) Description of Business. The
description of the business conducted and proposed to be
conducted by the Company and the Subsidiaries set forth in
Annex 2 is correct in all material respects.
8D. Full Disclosure. Neither the financial statements
referred to in paragraph 8C of this Agreement, nor any other
written statement furnished by, or on behalf of, the Company to
you in connection with the negotiation hereof, contains any
untrue statement of a material fact or omits a material fact
necessary to make the statements contained therein or herein not
misleading. There are no facts which the Company has not
disclosed to you in writing that in the aggregate materially
affect adversely or, so far as the Company can now foresee, will
in the future in the aggregate materially affect adversely the
Properties, business, prospects, profits or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a
whole, or the ability of the Company to perform its obligations
under this Agreement or the Notes.
8E. Pending Litigation and Judgments. There are no
proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or the Subsidiaries
in any court or before any governmental authority or arbitration
board or tribunal that in the aggregate involve more than a
remote possibility of materially and adversely affecting the
Properties, business, prospects, profits or condition (financial
or otherwise) of the Company or the Subsidiaries, taken as a
whole, or the ability of the Company to perform its obligations
under this Agreement or the Notes. Neither the Company nor the
Subsidiaries is in default with respect to any order of any
court, governmental authority or arbitration board or tribunal.
No unsatisfied judgment against the Company or any of the
Subsidiaries is outstanding.
8F. Title to Properties. Each of the Company and the
Subsidiaries has good and marketable title in fee simple (or its
equivalent under applicable law) to all the real Property, and
has good title to all the other Property, it purports to own,
including that reflected in the most recent balance sheet
referred to in paragraph 8C of this Agreement (except as sold or
otherwise disposed of in the ordinary course of business). All
such Property owned by the Company is free from Liens not
permitted by paragraph 6C of this Agreement. All leases
necessary in any material respect for the conduct of the business
of the Company and each of the Subsidiaries are valid and
subsisting and are in full force and effect.
8G. Patents and Trademarks. Each of the Company and
the Subsidiaries owns or possesses all the patents, trademarks,
service marks, trade names, copyrights, licenses and rights with
respect to the foregoing which are necessary for the present and
planned future conduct of its and their business, without any
known conflict with the rights of others, which, if adversely
determined, would have a materially adverse effect on the
Properties, business, prospects, profits or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a
whole, or the ability of the Company to perform its obligations
under this Agreement or the Notes.
8H. Issuance is Legal and Authorized; Conflicting
Agreements and Other Matters.
(i) Issuance is Legal and Authorized. The
issuance, execution and delivery of the Notes by the Company
and compliance by the Company with all of the provisions of
this Agreement and of the Notes are within the corporate
powers of the Company.
(ii) Conflicting Agreements and Other Matters.
Neither the Company nor any Subsidiary is a party to one or
more contracts or agreements or subject to one or more
charter or other corporate restrictions which in the
aggregate materially and adversely affects the Properties,
business, prospects, profits or condition (financial or
otherwise) of the Company or the Subsidiaries, taken as a
whole, or the ability of the Company to perform its
obligations under this Agreement or the Notes. The
execution and delivery of this Agreement and the Notes, the
offering, issuance, execution and delivery of the Notes and
the fulfillment of and compliance with the terms and
provisions of this Agreement and of the Notes, will not
conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under,
or result in any violation of, or result in the creation of
any Lien upon any of the Property of the Company or any of
the Subsidiaries pursuant to, the charter or by-laws of the
Company or any of the Subsidiaries, any award of any
arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Company or any of the
Subsidiaries is subject.
8I. No Defaults. No event has occurred and no
condition exists that, upon the issuance of the Notes in
substitution therefor, would constitute a Default or an Event of
Default. The Company is not in violation in any respect of any
term of its charter or bylaws. The Company is not in violation
in any material respect of any term in any agreement or other
instrument to which it is a party or by which it or any of its
Property may be bound.
8J. Governmental Consent. Neither the nature of the
Company or any of the Subsidiaries, or of any of their respective
businesses or Properties, nor any relationship between the
Company or any of the Subsidiaries and any other Person, nor any
circumstance in connection with the offer and issuance of the
Notes 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 as a condition
to the execution, delivery and performance of this Agreement or
the offer, issue, execution, delivery and performance of the
Notes.
8K. Taxes. All tax returns required to be filed by
the Company or any of the Subsidiaries in any jurisdiction have
in fact been filed, and all taxes, assessments, fees and other
governmental charges upon the Company or any of the Subsidiaries,
or upon any of their respective Properties, income or franchises,
shown to be due and payable on said returns have been paid to the
extent such taxes, assessments, fees and charges have become due
and payable. Neither the Company nor any of the Subsidiaries
knows of any proposed additional tax assessments against it. The
Federal income tax liability of the Company and the Subsidiaries
has been finally determined by the Internal Revenue Service and
satisfied for all taxable years up to and including the taxable
year ended December 31, 1995, and no material controversy in
respect of additional income taxes due is pending or, to the
knowledge of the Company, threatened. The provisions for taxes
on the books of the Company and the Subsidiaries are adequate for
all open years, and for its current fiscal period.
8L. Margin Securities, etc. The proceeds realized
upon the issuance of the Notes will not be used, directly or
indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "margin stock" as defined
in Regulation U and X (12 CFR Parts 221 and 224) of the Board of
Governors of the Federal Reserve System (herein called "margin
stock") or for the purpose of maintaining, reducing or retiring
any indebtedness that was originally incurred to purchase or
carry any stock that is a margin stock or for any other purpose
that might constitute such transaction a "purpose credit" within
the meaning of such Regulations. None of the transactions
contemplated in this Agreement will violate or result in a
violation of Section 7 of the Exchange Act or any regulations
issued pursuant thereto, including, without limitation,
Regulations T, U, X or any other regulation of the Board of
Governors of the Federal Reserve System. The Company does not
own or intend to carry or purchase any margin stock. None of the
proceeds from the sale of the Notes will be used to purchase, or
refinance any borrowing the proceeds of which were or will be
used to purchase, any "security" within the meaning of the
Exchange Act.
8M. Private Offering. Neither the Company or any of
the Subsidiaries, nor any agent acting on their behalf, has,
directly or indirectly, offered the Notes or any similar Security
of the Company for sale or exchange to, or solicited any offers
to buy the Notes or any similar Security of the Company from, or
otherwise approached or negotiated with respect to this Agreement
with, any Person other than you, and neither the Company or any
of the Subsidiaries, nor any agent acting on their behalf, has
taken or will take any action that would subject the issuance of
the Notes to the provisions of Section 5 of the Securities Act or
to the provisions of any Securities or Blue Sky law of any
applicable jurisdiction.
8N. Compliance with Law. Neither the Company nor any
of the Subsidiaries:
(i) is in violation of any laws, ordinances, or
governmental rules or regulations to which it is subject; or
(ii) has failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to
the ownership of its Property or to the conduct of its
business,
which violations or failures to obtain might in the aggregate
materially adversely affect the business, prospects, profits,
Properties or condition (financial or otherwise) of the Company
or the Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations under this Agreement or the
Notes.
8O. Indebtedness. Annex 2 to this Agreement correctly
describes all Debt for borrowed money of the Company outstanding
as of the close of business on the date of execution and delivery
of this Agreement, and indicates which of such indebtedness (if
any, and the amount thereof) is secured by a Lien. There is no
Subordinated Debt outstanding other than the Class A Notes. The
aggregate amount of indebtedness for borrowed money of the
Company outstanding as of the date of execution and delivery of
this Agreement does not exceed one thousand percent (1000%) of
the sum of the paid-in capital and surplus of the Company at such
date.
8P. Restrictions on Company. Neither the Company nor
any of the Subsidiaries is a party to any contracts or
agreements, or subject to any charter or other corporate
restrictions, that in the aggregate materially and adversely
affect its business. The Company is not a party to any contract
or agreement that restricts its right or ability to incur
additional Debt, other than this Agreement and the agreements
relating to the Debt described in Annex 2 to this Agreement. The
Company has not 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 paragraph 6C(i) of this
Agreement.
8Q. Employee Retirement Income Security Act of 1974.
The present value of all benefits vested under all Pension Plans
did not, as of December 31, 1998, the last annual valuation date
for which a report is available, exceed the value of the assets
of the Pension Plans allocable to such vested benefits. The
consummation of the transactions herein provided for and
compliance by the Company with the provisions of this Agreement
and the Notes will not involve any "prohibited transaction"
within the meaning of ERISA or Section 4975 of the Internal
Revenue Code of 1986, as amended. The representation by the
Company in the second sentence of this paragraph 8Q is made in
reliance upon and subject to (i) the accuracy of your
representation in paragraph 9B as to the sources of the funds
used to pay the purchase price of the Notes to be purchased by
you and (ii) the assumption, made solely for the purpose of
making such representation, that Department of Labor Interpretive
Bulletin 75-2 with respect to prohibited transactions remains
valid in the circumstances of the transactions contemplated
herein. The Company, the Subsidiaries, their respective employee
benefit plans and any trusts thereunder are in substantial
compliance with ERISA. Neither any of the employee benefit plans
maintained by the Company or the Subsidiaries, or to which the
Company or the Subsidiaries makes any contribution, nor any
trusts thereunder have been terminated or have incurred any
"accumulated funding deficiency," as such term is defined in
Section 302 of ERISA (whether or not waived), since the effective
date of ERISA, nor have there been any "reportable events," as
that term is defined in Section 4043 of ERISA, since the
effective date of ERISA.
8R. Investment Company Act. The Company is not
directly or indirectly controlled by, or acting on behalf of any
Person which is, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
9 REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. Nature of Purchase. Such Purchaser is not
acquiring the Notes purchased by it hereunder with a view to or
for sale in connection with any distribution thereof within the
meaning of the Securities Act, provided that the disposition of
such Purchaser's property shall at all times be and remain within
its control.
9B. Source of Funds. The source of funds being used
by such Purchaser to pay the purchase price of the Notes
purchased by such Purchaser hereunder constitutes assets
allocated to: (a) the "insurance company general account" of
such Purchaser (as such term is defined under Section V of the
United States Department of Labor's Prohibited Transaction Class
Exemption ("PTCE") 95-60), and as of the date of the purchase of
the Notes such Purchaser satisfies all of the applicable
requirements for relief under Sections I and IV of PTCE 95-60, or
(b) a separate account maintained by such Purchaser in which no
employee benefit plan, other than employee benefit plans
identified on a list which has been furnished by such Purchaser
to the Company, participates to the extent of 10% or more. For
the purpose of this paragraph 9B, the terms "separate account"
and "employee benefit plan" shall have the respective meanings
specified in section 3 of ERISA.
10 DEFINITIONS. For the purpose of this Agreement, the
terms defined in paragraphs 1 and 2 shall have the respective
meanings specified therein, and the following terms shall have
the meanings specified with respect thereto below:
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any
Note, the principal of such Note that is to be prepaid pursuant
to paragraph 4 or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.
"Discounted Value" shall mean, with respect to the
Called Principal of any Note, the amount obtained by discounting
all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which
interest on such Note is payable) equal to the Reinvestment Yield
with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the
Called Principal of any Note, the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York City local
time) on the Business Day next preceding the Settlement Date with
respect to such Called Principal, on the display designated as
"Page 678" on the Bridge/Telerate Service (or such other display
as may replace page 678 on the Bridge/Telerate Service) for
actively traded U.S. Treasury securities having a maturity equal
to the Remaining Average Life of such Called Principal as of such
Settlement Date, or if such yields shall not be reported as of
such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series yields
reported, for the latest day for which such yields shall have
been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, if necessary, by (a)
converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent
yields in accordance with accepted financial practice and
(b) interpolating linearly between yields reported for various
maturities.
"Remaining Average Life" shall mean, with respect to
the Called Principal of any Note, the number of years (calculated
to the nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will
elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" shall mean, with respect
to the Called Principal of any Note, all payments of such Called
Principal and interest thereon that would be due on or after the
Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled
due date.
"Settlement Date" shall mean, with respect to the
Called Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to paragraph 4 or is declared
to be immediately due and payable pursuant to paragraph 7A, as
the context requires.
"Yield-Maintenance Amount" shall mean, with respect to
any Note, an amount equal to the excess, if any, of the
Discounted Value of the Called Principal of such Note over the
sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance
Amount shall in no event be less than zero.
10B. Other Terms.
"Adjusted Tangible Assets" at any time means all assets
(including, without duplication, the capitalized value of any
leasehold interest under any Capitalized Lease) except:
(a) deferred assets and intangible assets,
(b) patents, copyrights, trademarks, trade names,
franchises, goodwill, organizational expense, experimental
expense and other similar intangible assets,
(c) unamortized debt discount and expense, and
(d) assets located, and notes and receivables due
from obligors domiciled, outside the United States of
America, Puerto Rico or Canada.
"Affiliate" shall mean any Person directly or
indirectly controlling, controlled by, or under direct or
indirect common control with, the Company, except a Subsidiary.
A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of such corporation,
whether through the ownership of voting securities, by contract
or otherwise.
"Agreement" shall have the meaning specified in
paragraph 11C.
"Asset Disposition Date" shall have the meaning
specified in paragraph 6B(i).
"Asset Securitization" means, with respect to any
Person, a transaction involving the sale or transfer of
receivables by such Person (an "Originator") to a special purpose
corporation or grantor trust (an "SPV") established solely for
the purpose of purchasing such receivables from the Company for
cash in an amount equal to the Fair Market Value thereof;
provided, however, that the Company may (A) establish and
maintain a reserve account containing cash or Securities as a
credit enhancement in respect of any such sale or (B) purchase or
retain a subordinated interest in such receivables being sold.
"Asset Securitization Recourse Liability" means, at any
time, with respect to any Person, the maximum amount of such
Person's liability (whether matured or contingent) under any
agreement, note or other instrument in connection with any one or
more Asset Securitizations in which such Person has agreed to
repurchase receivables or other assets, to provide direct or
indirect credit support (whether through cash payments, the
establishment of reserve accounts containing cash or Securities,
an agreement to reimburse a provider of a letter of credit for
any draws thereunder, the purchase or retention of a subordinated
interest in such receivables or other assets, or other similar
arrangements), or in which such Person may be otherwise liable
for all or a portion of any SPV's obligations under Securities
issued in connection with such Asset Securitizations.
"Authorized Officer" shall mean (i) in the case of the
Company, its chief executive officer, its chief financial
officer, any vice president of the Company designated as an
"Authorized Officer" of the Company in the Information Schedule
attached hereto as Annex 1 or any vice president of the Company
designated as an "Authorized Officer" of the Company for the
purpose of this Agreement in an Officer's Certificate executed by
the Company's chief executive officer or chief financial officer
and delivered to Prudential, and (ii) in the case of Prudential,
any officer of Prudential designated as its "Authorized Officer"
in the Information Schedule or any officer of Prudential
designated as its "Authorized Officer" for the purpose of this
Agreement in a certificate executed by one of its Authorized
Officers. Any action taken under this Agreement on behalf of the
Company by any individual who on or after the date of this
Agreement shall have been an Authorized Officer of the Company
and whom Prudential in good faith believes to be an Authorized
Officer of the Company at the time of such action shall be
binding on the Company even though such individual shall have
ceased to be an Authorized Officer of the Company, and any action
taken under this Agreement on behalf of Prudential by any
individual who on or after the date of this Agreement shall have
been an Authorized Officer of Prudential and whom the Company in
good faith believes to be an Authorized Officer of Prudential at
the time of such action shall be binding on Prudential even
though such individual shall have ceased to be an Authorized
Officer of Prudential.
"Bank Loan Agreement" means the Third Amended and
Restated Loan Agreement, dated as of May 28, 1997, by and among
the Company, the banks signatory thereto and Fleet Bank, N.A.
(formerly known as Natwest, N.A), as amended from time to time.
"Board of Directors" at any time means the board of
directors of the Company or any committee thereof which, in the
instance, shall have the lawful power to exercise the power and
authority of such board of directors.
"Business Day" shall mean any day other than (i) a
Saturday or a Sunday, and (ii) a day on which commercial banks in
New York City are required or authorized to be closed.
"Capitalized Lease" means any lease the obligation for
Rentals with respect to which is required to be capitalized on a
balance sheet of the lessee in accordance with generally accepted
accounting principles.
"Class A Notes" means "class A notes" the terms of
which are defined in 12 U.S.C. 3014 as in effect on the Date of
Assumption and Restatement.
"Class B Stock" means "class B stock" the terms of
which are defined in 12 U.S.C. 3014 as in effect on the Date of
Assumption and Restatement.
"Class B1 Common Stock" means the series of Class B
stock comprising Class B stock purchased for cash after June 28,
1984.
"Class C Stock" means "class C stock" the terms of
which are defined in 12 U.S.C. 3014 as in effect on the Date of
Assumption and Restatement.
"Closing Day" shall have the meaning specified in
paragraph 2.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Company" shall have the meaning specified in the
introductory sentence to this Agreement.
"Company Senior Obligations" at any time means, with
respect to the Company, the sum of
(a) the aggregate unpaid principal amount of
Senior Debt of the Company, plus
(b) the aggregate amount of all Capitalized
Leases of the Company plus
(c) Restricted Guarantees of the Company computed
on the basis of total outstanding contingent liability, plus
(d) Asset Securitization Recourse Liabilities of
the Company (meeting the conditions set forth in either
clause (i) or clause (ii) below):
(1) to the extent, but only to the
extent, that such obligations arise from the Company's
obligation to repurchase receivables or other assets as
a result of a default in payment by the obligor
thereunder or any other default in performance by such
obligor under any agreement related to such
receivables; or
(2) if the Company shall maintain a
reserve account containing cash or Securities in
respect of any such obligations or shall retain or
purchase a subordinated interest therein, to the
extent, but only to the extent, of the amount of such
reserve account or subordinated interest.
"Consolidated Adjusted Net Income" for any fiscal
period of the Company means net earnings or net loss (determined
on a consolidated basis) of the Company and the Restricted
Subsidiaries after income taxes for such period, but excluding
from the determination of such earnings the following items
(together with the income tax effect, if any, applicable
thereto):
(a) the proceeds of any life insurance
policy;
(b) any gain or loss arising from the sale
of capital assets;
(c) any gain arising from any reappraisal,
revaluation or write-up of assets;
(d) any gain arising from transactions of a non-
recurring or nonoperating and material nature or arising
from sales or other dispositions relating to the
discontinuance of operations;
(e) earnings of any Restricted Subsidiary accrued
prior to the date it became a Restricted Subsidiary;
(f) earnings of any corporation, substantially
all the assets of which have been acquired in any manner,
realized by such other corporation prior to the date of such
acquisition;
(g) net earnings of any business entity (other
than a Restricted Subsidiary) in which the Company or any
Restricted Subsidiary has an ownership interest, unless such
net earnings shall have actually been received by the
Company or such Restricted Subsidiary in the form of cash
distributions;
(h) any portion of the net earnings of any
Restricted Subsidiary which for any reason is unavailable
for payment of dividends to the Company or any other
Restricted Subsidiary;
(i) the earnings of any Person to which assets of
the Company shall have been sold, transferred or disposed
of, or into which the Company shall have merged, prior to
the date of such transaction;
(j) any gain arising from the acquisition of any
Securities of the Company or any Subsidiary; and
(k) any amortization of deferred or other credit
representing the excess of the equity in any Subsidiary at
the date of acquisition thereof over the amount invested in
such Subsidiary.
"Consolidated Adjusted Net Worth" at any time means,
with respect to the Company and the Restricted Subsidiaries
(determined on a consolidated basis):
(a) the amount of capital stock liability plus
(or minus in the case of a deficit) the capital surplus and
earned surplus of the Company and the Restricted
Subsidiaries, less (without duplication) the sum of
(b) the net book value, after deducting any
reserves applicable thereto, of all items of the following
character which are included in the assets of the Company
and the Restricted Subsidiaries:
(1) all deferred charges and prepaid
expenses other than prepaid taxes and prepaid insurance
premiums;
(2) treasury stock;
(3) unamortized debt discount and
expense and unamortized stock discount and expense;
(4) goodwill, the excess of the cost of
assets acquired over the book value of such assets on
the books of the transferor, the excess of the cost of
investments in any Person (including any Subsidiary)
over the value of such investments on the books of such
Person at the time of making such investments,
organizational or experimental expense, patents,
trademarks, copyrights, trade names and other
intangibles;
(5) all receivables (other than
Eurodollar deposits) owing by Persons whose principal
place of business or principal assets are located in
any jurisdiction other than the United States of
America or Canada; and
(6) any increment resulting from any
reappraisal, revaluation or write-up of capital assets
subsequent to December 31, 1991.
If, notwithstanding paragraph 6J, the Company shall have any
Restricted Investments outstanding at any time, such Restricted
Investments shall be excluded from Consolidated Adjusted Net
Worth.
"Consolidated Assets" at any time means the assets of
the Company and the Restricted Subsidiaries that would be
reflected on a consolidated balance sheet for the Company and the
Restricted Subsidiaries at such time.
"Consolidated Debt" at any time means all Debt of the
Company and the Restricted Subsidiaries (including, without
limitation, advances under the Blanket Agreement for Advances and
Security Agreement, dated as of March 23, 1990, with the Federal
Home Loan Bank of Cincinnati, as referenced in Annex 2 to this
Agreement), plus, without duplication, the aggregate amount of
the face amount of all letters of credit issued by the Company or
any Restricted Subsidiary and all bankers' acceptances accepted
by the Company or any Restricted Subsidiary at such time.
"Consolidated Earnings Available for Fixed Charges"
for any fiscal period of the Company means the sum of
(a) Consolidated Adjusted Net Income for such
period; plus
(b) to the extent deducted in determining
Consolidated Adjusted Net Income for such period,
(1) all provisions for any Federal,
state or other income taxes made by the Company and the
Restricted Subsidiaries during such period, and
(2) Consolidated Fixed Charges during
such period;
plus
(c) the NCB Development Corporation Contribution.
"Consolidated Effective Net Worth" at any time means
the sum of
(a) Consolidated Adjusted Net Worth at such time;
plus
(b) the aggregate outstanding principal amount of
Class A Notes at such time.
"Consolidated Fixed Charges" for any fiscal period of
the Company means, on a consolidated basis for the Company and
the Restricted Subsidiaries, the sum of:
(a) all interest and all amortization of Debt
discount and expense on all Debt for borrowed money of the
Company and the Restricted Subsidiaries; plus
(b) all Rentals payable during such period by the
Company and the Restricted Subsidiaries.
"Consolidated Net Earnings" means, for any period, the
net income or loss of the Company and the Restricted
Subsidiaries, as applicable (determined on a consolidated basis
for such Persons at such time), for such period, as determined in
accordance with generally accepted accounting principles in
effect at such time.
"Consolidated Senior Debt" at any time means the
aggregate amount of the obligations of the Company and the
Restricted Subsidiaries set forth below that would be reflected
on a consolidated balance sheet for the Company and the
Restricted Subsidiaries at such time:
(a) the Notes;
(b) all other Debt of the Company or a Restricted
Subsidiary for borrowed money that is not expressed to be
subordinate or junior to any other Debt;
(c) all Guarantees of the Company or a Restricted
Subsidiary;
(d) all obligations in respect of Capitalized
Leases;
(e) in respect of the Company or any Restricted
Subsidiary, the aggregate amount of all demand and term
deposits made by any Person with the Company or such
Restricted Subsidiary (including, without limitation,
certificates of deposit issued by the Company or such
Restricted Subsidiary); and
(f) Asset Securitization Recourse Liabilities to
the extent, but only to the extent, that such obligations
have matured.
"Consolidated Taxable Income" means, in respect of the
Company for any calendar year, the taxable income for such
calendar year reported by the Company on its tax return filed
with the Internal Revenue Service (or other successor federal
agency) for such calendar year.
"Date of Assumption and Restatement" means December 15,
1993.
"Debt" at any time with respect to any Person means all
obligations of such Person that in accordance with generally
accepted accounting principles would be classified on a balance
sheet of such Person as liabilities of such Person (except as
specified in clause (d) below), including (without limitation)
all
(a) direct debt and other similar recourse and
non-recourse monetary obligations of such Person,
(b) obligations secured by any Lien upon Property
owned by such Person, even though such Person has not
assumed or become liable for the payment of such
obligations,
(c) obligations created or arising under any
conditional sale, financing lease, or other title retention
agreement with respect to Property acquired by such Person,
notwithstanding the fact that the rights and remedies of the
seller, lender or lessor under such agreement in the event
of default are limited to repossession or sale of such
Property,
(d) Guarantees of such Person (whether or not
such Guarantees are classified as liabilities on the balance
sheet of such Person at such time),
(e) obligations in respect of Capitalized Leases,
and
(f) in respect of the Company or any Restricted
Subsidiary, the aggregate amount of all demand and term
deposits made by any Person with the Company or such
Restricted Subsidiary (including, without limitation,
certificates of deposit issued by the Company or such
Restricted Subsidiary).
"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.
"Disposition Assets" shall have the meaning specified
in paragraph 6B(i).
"Disposition Stock" shall have the meaning specified in
paragraph 6A.
"Disposition Subsidiary" shall have the meaning
specified in paragraph 6A.
"Disposition Value" with respect to any Property means
the greater of
(a) the book value of such Property as reflected
on the balance sheet of the owner of such Property and
(b) the Fair Market Value of such Property,
in each case as of the time of the disposition of such
Property.
"Eligible Derivatives" means derivative Securities
which are sold in the ordinary course of the business of the
Company and the Restricted Subsidiaries for the purpose of
hedging or otherwise managing portfolio risk.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"Event of Default" shall mean any of the events
specified in paragraph 7, provided that there has been satisfied
any requirement in connection with such event for the giving of
notice, or the lapse of time, or the happening of any further
condition, event or act.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Fair Market Value" at any time with respect to any
Property, means the sale value of such Property that would be
realized in an arm's-length sale at such time between an informed
and willing buyer and an informed and willing seller, under no
compulsion to buy or sell, respectively.
"Financial Covenant" shall mean any covenant, agreement
or provision (including, without limitation, the definitions
applicable thereto) of or applicable to the Company or any
Restricted Subsidiary contained in any agreement governing, or
instrument evidencing, any Debt (or commitment to lend), other
than Debt or a commitment to lend among the Company and one or
more Restricted Subsidiaries, of the Company or any Restricted
Subsidiary in an aggregate principal amount greater than Five
Million Dollars ($5,000,000), which covenant, agreement or
provision:
(a) requires the Company or any Restricted
Subsidiary to maintain specified financial amounts or ratios
or to meet other financial tests;
(b) restricts the ability of the Company or any
Restricted Subsidiary to:
(1) make distributions, investments,
capital expenditures or operating expenditures of any
kind;
(2) incur, create or maintain any Debt
(or other obligations) or Liens;
(3) merge, consolidate or acquire or be
acquired by any Person;
(4) sell, lease, transfer or dispose of
any Property (other than restrictions imposed solely
upon collateral, and not upon Property of the Company
or any Restricted Subsidiary generally, by holders of
Liens thereon which are permitted by this Agreement);
or
(5) issue or sell any capital stock of
any kind;
(c) is similar to any provision in paragraphs 5
or 6 of this Agreement; or
(d) provides that a default or event of default
shall occur, or that the Company or any Restricted
Subsidiary shall be required to prepay, redeem or otherwise
acquire for value any Debt or security as a result of its
failure to comply with any provision similar to any of those
set forth in any of the foregoing clauses (a), (b) or (c).
"Financing Agreement" means the Financing Agreement,
made as of December 21, 1989, by and between the Department of
the Treasury, an executive department of the United States
government, and the Company, as in effect on the Date of
Assumption and Restatement.
"Guarantees" at any time means, subject to the last
sentence of this definition, all obligations of any Person
guaranteeing or in effect guaranteeing any indebtedness or
obligation or dividend of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person
(a) to purchase any indebtedness or obligation or
any Property constituting security therefor,
(b) to advance or supply funds
(1) for the purchase or payment of any
indebtedness or obligation or
(2) to maintain working capital, equity
capital or other balance sheet condition or otherwise
to advance or make available funds for the purchase or
payment of any indebtedness or obligation,
(c) to purchase Property, Securities or services
primarily for the purpose of assuring the owner of any
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 (including, without limitation,
contingent reimbursement obligations under letters of
credit).
For purposes of this definition, (i) liabilities or endorsements
in the ordinary course of business of checks and other negotiable
instruments for deposit or collection, (ii) obligations of the
Restricted Subsidiaries to acquire assets from the Company in the
ordinary course of business, and (iii) Asset Securitization
Recourse Liabilities shall be deemed not to be "Guarantees."
"Hedge Treasury Note(s)" shall mean, with respect to
any Accepted Note, the United States Treasury Note or Notes whose
duration (as determined by Prudential) most closely matches the
duration of such Accepted Note.
"Hostile Tender Offer" shall mean, with respect to the
use of proceeds of any Note, any offer to purchase, or any
purchase of, shares of capital stock of any corporation or equity
interests in any other entity, or securities convertible into or
representing the beneficial ownership of, or rights to acquire,
any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly
traded on any securities exchange or in any over-the-counter
market, other than purchases of such shares, equity interests,
securities or rights representing less than 5% of the equity
interests or beneficial ownership of such corporation or other
entity for portfolio investment purposes, and such offer or
purchase has not been duly approved by the board of directors of
such corporation or the equivalent governing body of such other
entity prior to the date on which the Company makes the Request
for Purchase of such Note.
"Investments" shall have the meaning specified in the
definition of "Restricted Investments".
"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. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-
way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property. For the purposes
of this Agreement, the Company or a Restricted Subsidiary shall
be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, financing lease
or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security
purposes.
"Long-Term Lease" means any lease (other than a
Capitalized Lease) having an original term, including any period
for which the lease may be renewed or extended at the option of
the lessor, of more than one (1) year at the time the lessee
shall have entered into such lease.
"Material Obligation(s)" means any one or more Debts or
other Securities having an aggregate outstanding principal or
stated amount for all such Debts or other Securities of One
Million Dollars ($1,000,000) or more.
"NCB Development Corporation Contribution" means the
contribution made by the Company to NCB Development Corporation
in any fiscal period of the Company pursuant to 12 U.S.C.
3051(d), as in effect on the Date of Assumption and Restatement.
"Notes" shall have the meaning specified in paragraph
1.
"Officer's Certificate" shall mean a certificate signed
in the name of the Company by an Authorized Officer of the
Company.
"Patronage Dividends" means "patronage dividend", as
such term is defined in 12 U.S.C. 3019(b)(2) as in effect on
the Date of Assumption and Restatement.
"Pension Plans" means all "employee pension benefit
plans", as such term is defined in Section 3 of ERISA, maintained
or participated in by the Company or any of the Subsidiaries, as
from time to time in effect.
"Permitted Proceeds Application" means, in connection
with a sale of assets in accordance with paragraph 6B hereof or a
sale of Subsidiary Stock in accordance with paragraph 6A hereof,
the application by the Company or a Restricted Subsidiary of the
amount of proceeds specified in such paragraph to any of the
following:
(a) the acquisition by the Company or such
Restricted Subsidiary of Adjusted Tangible Assets to be used
in the ordinary course of business of the Company or such
Restricted Subsidiary within ninety (90) days of such sale,
so long as any proceeds to be applied pursuant to this
clause (a) are invested in accordance with clause (c) hereof
until such time as such proceeds are so applied,
(b) the prepayment, allocated in proportion to
the respective outstanding principal amounts thereof, of
each of the Notes in accordance with paragraph 4 of this
Agreement and Section 5.2 of each of the Other Restated
Agreements, as the case may be, within ten (10) Business
Days following the consummation of such sale, so long as any
proceeds to be applied pursuant to this clause (b) are
invested in accordance with clause (c) hereof until such
time as such proceeds are so applied,
(c) the investment of such proceeds in any
Investment specified in clauses (d) to (k), inclusive, of
the definition of "Restricted Investment" no later than the
next Business Day following the consummation of such sale;
provided that such proceeds are applied as provided in
either of the foregoing clauses (a) or (b) of this
definition within the period therein specified, or
(d) the repayment of Debt outstanding under any
revolving credit or similar agreement which provides for
successive reborrowings and repayments thereunder at the
Company's option; provided that (i) the aggregate amount of
such proceeds so applied shall not exceed the lesser of
Fifty Million Dollars ($50,000,000) and ten percent (10%) of
Consolidated Total Assets and (ii) the amount of Debt so
repaid shall be reborrowed and applied as provided in either
of the foregoing clauses (a) or (b) within the period
therein specified.
"Person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a limited liability
company, a trust, an unincorporated organization and a government
or any department or agency thereof.
"Property" means any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or
intangible.
"Prudential" shall mean The Prudential Insurance
Company of America.
"Prudential Affiliate" shall mean any corporation or
other entity all of the Voting Stock (or equivalent voting
securities or interests) of which is owned by Prudential either
directly or through Prudential Affiliates.
"Qualified Assets" at any time means the sum of
(a) the principal amount of all promissory notes
and other interest bearing obligations of the Company owned
in the ordinary course of the Company's business less (i)
reserves for credit losses applicable thereto, and (ii)
unearned income,
(b) the Company's cash on hand and in banks, and
(c) the Company's Investments other than
Restricted Investments.
"Rentals" at any time means all fixed rentals
(including as such all payments which the lessee is obligated to
make to the lessor on termination of a lease or surrender of
leased Property) payable by the Company or a Restricted
Subsidiary, as lessee or sublessee under a lease of Property,
exclusive of any amounts required to be paid by the Company or a
Restricted Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Required Holder(s)" shall mean at any time, the holder
or holders of at least sixty-six and two thirds percent (66 2/3%)
of the aggregate principal amount of the Notes outstanding at
such time.
"Restricted Guarantees" at any time means all
Guarantees by the Company of obligations of others that
constitute sum certain obligations at the time such Guarantees
are incurred.
"Restricted Investments" at any time means all
investments, made in cash or by delivery of Property, by the
Company and the Restricted Subsidiaries (x) in any Person,
whether by acquisition of stock, indebtedness or other
obligations or Securities, or by loan, advance or capital
contribution, or otherwise, or (y) in any Property (items (x) and
(y) herein called "Investments"), except the following:
(a) Investments in and to Restricted
Subsidiaries, including any Investment in a corporation
which, after giving effect to such Investment, will become a
Restricted Subsidiary and including Investments in a
Restricted Subsidiary that is designated as a Subsidiary in
compliance with the proviso to the definition of "Restricted
Subsidiary" so long as such Investments were made prior to
the date of such designation;
(b) Investments in Property to be used by the
Company and the Restricted Subsidiaries in the ordinary
course of their respective businesses;
(c) Investments in promissory notes and other
interest bearing obligations acquired in the ordinary course
of business of the Company or the Restricted Subsidiaries;
(d) Investments in commercial paper of any
corporation which, at the time of acquisition by the Company
or a Restricted Subsidiary, is accorded the highest rating
by Standard & Poor's Rating Service, a division of ▇▇▇▇▇▇-
▇▇▇▇, Inc., Duff & ▇▇▇▇▇▇, Inc. or ▇▇▇▇▇'▇ Investors
Service, Inc. (or any other nationally recognized credit
rating agency of similar standing if none of such
corporations is then in the business of rating commercial
paper);
(e) Investments in direct obligations of the
United States of America;
(f) Investments in marketable obligations fully
guaranteed or insured by the United States of America or
marketable obligations for which the full faith and credit
of the United States of America is pledged for the repayment
in full of all principal and interest thereon;
(g) Investments in marketable obligations issued
or fully guaranteed or insured by any agency,
instrumentality or corporation of the United States of
America established by the United States Congress or
marketable obligations for which the credit of any such
agency, instrumentality or corporation is pledged for the
repayment in full of all principal and interest thereon;
(h) Investments in marketable general obligations
of any state, territory or possession of the United States
of America, or any political subdivision of any of the
foregoing, or the District of Columbia, given one of the
three (3) highest credit ratings in respect of the type of
such obligations by Standard & Poor's Rating Service, a
division of McGraw Hill, Inc. or ▇▇▇▇▇'▇ Investors Service,
Inc., and the obligor of which
(1) has general taxing authority and
the power to levy such taxes as may be required for the
payment of principal and interest thereon, and
(2) has unconditionally fully secured
the payment of principal and interest on such
obligations with its full faith and credit;
(i) Investments in domestic and Eurodollar
negotiable time and variable rate certificates of deposit
issued by Selected Commercial Banks;
(j) Investments in marketable bankers'
acceptances and finance bills accepted by Selected
Commercial Banks;
(k) Investments in repurchase, reverse repurchase
and security lending agreements fully collateralized by
marketable obligations issued by the United States of
America or by any agency or instrumentality thereof;
(l) Investments in federal funds or similar
unsecured loans to Selected Commercial Banks having a
maturity of not more than four (4) days from the date of
acquisition thereof;
(m) Investments in marketable corporate debt
securities given a credit rating of "A" or better by each of
Standard & Poor's Rating Service, a division of McGraw Hill,
Inc. and ▇▇▇▇▇'▇ Investors Service, Inc.;
(n) Investments in asset-backed securities issued
against a pool of receivables which (i) have an average life
or final maturity of not more than five (5) years and (ii)
have been given a long-term rating of "AAA" or better by
Standard & Poor's Rating Service, a division of McGraw Hill,
Inc. or ▇▇▇▇▇'▇ Investors Service, Inc.;
(o) Investments in mortgage-backed securities issued
against an underlying pool of mortgages which (i) have an average
life, as determined by the dealer's prepayment assumptions at the
time of purchase, of not more than five (5) years and (ii) have
been given a long-term rating of "AAA" or better by Standard & Poor's
Corporation or ▇▇▇▇▇'▇ Investors Service, Inc.; and
(p) "Equity Investments" provided that (i) the aggregate
amount of such Equity Investments (on a cumulative basis) does not
exceed an amount equal to ten (10%) percent of Consolidated
Adjusted Net Worth as at any date of determination thereof, after
giving effect to any such Equity Investment, and (ii) no single
Equity Investment in any Person may be greater than $2,000,000.
For purposes hereof, Equity Investment(s) shall mean the amount
paid or committed to be paid in connection with the acquisition
of any stock (common or preferred) or other equity securities of
any Person or any obligation convertible into or exchangeable for
a right, option or warrant to acquire such equity securities;
provided, that notwithstanding the foregoing clauses (a) through
(p), inclusive, the term Restricted Investments shall for all
purposes include all Investments described in the foregoing
clauses (d) through (k), inclusive, to the extent that they
mature more than one (1) year from the date of acquisition
thereof by the Company or a Restricted Subsidiary.
"Restricted Payments" shall have the meaning specified
in paragraph 6I(i).
"Restricted Subsidiary" means a Subsidiary engaged in
one or more of the businesses referred to in paragraph 8C(iii) of
this Agreement:
(a) organized under the laws of the United States
of America or a jurisdiction thereof;
(b) that conducts substantially all of its
business and has substantially all of its Property within
the United States of America and/or Canada;
(c) one hundred percent (100%) of all stock and
equity Securities (except directors' qualifying shares) of
which are legally and beneficially owned, directly or
indirectly, by the Company; and
(d) that is designated by the Board of Directors
to be included in the definition of Restricted Subsidiary
for all purposes of this Agreement;
provided, that any Subsidiary having been designated a Restricted
Subsidiary may thereafter become a Subsidiary (other than a
Restricted Subsidiary) by designation of the Board of Directors
if at the time of such change in characterization and after
giving effect thereto
(1) no Default or Event of Default
shall exist, and
(2) after the elimination of the net
earnings of any such Subsidiary from Consolidated
Adjusted Net Income for the period subsequent to
December 31, 1991, the Company would have been
entitled, pursuant to the provisions of paragraph 6I,
to declare or make all Restricted Payments declared or
made during such period.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Security" shall have the same meaning as in Section
2(1) of the Securities Act; provided, however, that Asset
Securitization Recourse Liabilities shall not constitute
"Securities" except (i) to the extent that such obligations arise
from the Company's obligation to repurchase receivables or other
assets as a result of a default in payment by the obligor
thereunder or any other default in performance by such obligor
under any agreement related to such receivables or (ii) if the
Company shall maintain a reserve account containing cash or
Securities in respect of any such obligations or shall retain or
purchase a subordinated interest therein, to the extent of the
amount of such reserve account or subordinated interest.
"Selected Commercial Bank" means
(a) one of the one hundred (100) largest
commercial banks organized under the laws of the United
States of America or any state thereof and accorded a rating
of "B" or better by Thomson BankWatch, Inc. (or accorded a
comparable rating by another nationally recognized rating
agency of similar standing if Thomson BankWatch, Inc. is not
then in the business of rating commercial banks); or
(b) one of the fifty (50) largest commercial
banks organized under the laws of the United States of
America or any state thereof and accorded a rating of "B/C"
or better by Thomson BankWatch, Inc. (or accorded a
comparable rating by another nationally recognized rating
agency of similar standing if Thomson BankWatch, Inc. is not
then in the business of rating commercial banks).
"Senior Debt" means the Notes, all other Debt of the
Company for borrowed money that is not expressed to be
subordinate or junior to any other Debt, and Asset Securitization
Recourse Liabilities to the extent, but only to the extent, that
such obligations have matured.
"Significant Holder" shall mean (i) Prudential, so long
as Prudential or any Prudential Affiliate shall hold (or be
committed under this Agreement to purchase) any Note, or (ii) any
other holder of at least 5% of the aggregate principal amount of
the Notes from time to time outstanding.
"SPV" has the meaning assigned to such term in the
definition of "Asset Securitization" in this paragraph 10B.
"Stock Disposition Date" shall have the meaning
specified in paragraph 6A.
"Subordinated Debt" means (a) the Class A Notes and (b)
all notes, debentures or other evidences of indebtedness of the
Company for borrowed money of the Company which shall contain or
have applicable thereto subordination provisions providing for
the subordination of such indebtedness to the Notes and all other
Senior Debt (but not to any other Debt) of the Company
substantially in the following form:
"Anything in this subordinated note to the contrary
notwithstanding, the indebtedness evidenced by this
subordinated note shall be subordinate and junior in right
of payment, to the extent and in the manner hereinafter set
forth, to all indebtedness of the Company for money
borrowed, whether outstanding at the date of this
subordinated note or incurred after the date of this
subordinated note, which is not by its terms subordinate or
junior to any other indebtedness of the Company (such
indebtedness of the Company, together with (i) all premiums
(if any) due on such indebtedness, (ii) all interest accrued
on such indebtedness (including, without limitation, any
interest which accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Company, whether or not
such interest is allowed under applicable law), and (iii)
all other amounts payable from time to time to the holders
of, or in respect of, such indebtedness (including, without
limitation, all costs and expenses relating thereto) to
which this subordinated note is subordinate and junior being
herein called "Superior Indebtedness"):
(a) in the event of any sale under or in
accordance with any judgment or decree rendered in any
proceeding by or on behalf of the holder or holders of this
subordinated note or in the event of any distribution,
division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any
part of the assets of the Company, or the proceeds thereof,
to creditors of the Company occurring by reason of any
liquidation, dissolution or winding up of the Company or in
the event of any execution sale, receivership, insolvency,
bankruptcy, liquidation, readjustment, reorganization or
other similar proceeding relative to the Company or its
debts or properties, then in any such event the holders of
any and all Superior Indebtedness shall be preferred in the
payment of their claims over the holder or holders of this
subordinated note, and such Superior Indebtedness shall be
first paid and satisfied in full before any payment or
distribution of any kind or character, whether in cash,
property or securities (other than securities which are
subordinate and junior in right of payment to the payment of
all Superior Indebtedness which may at the time be
outstanding pursuant to terms substantially identical to the
terms of this subordinated note), shall be made upon this
subordinated note; and in any such event any dividend or
distribution of any kind or character, whether in cash,
property or securities (other than in securities which are
subordinate and junior in right of payment to the payment of
all Superior Indebtedness which may at the time be
outstanding pursuant to terms substantially identical to the
terms of this subordinated note) which shall be made upon or
in respect of the indebtedness evidenced by this
subordinated note, or any renewals or extensions hereof,
shall be paid over to the holders of such Superior
Indebtedness, pro rata, for application in payment thereof
unless and until such Superior Indebtedness shall have been
paid and satisfied in full;
(b) in the event that pursuant to the provisions
hereof this subordinated note is declared or becomes due and
payable before its expressed maturity because of an
occurrence of an event of default described herein (under
circumstances when the foregoing clause (a) shall not be
applicable) or otherwise, no amount shall be paid by the
Company in respect of the principal, interest or premium on
this subordinated note (or any other amounts due in respect
thereof), except at the stated maturity hereof (all subject
to the foregoing clause (a) above), unless and until all
Superior Indebtedness outstanding at the time this
subordinated note so becomes due and payable because of any
such event shall have been paid in full in cash or payment
thereof shall have been provided for in a manner
satisfactory to the holders of such outstanding Superior
Indebtedness;
(c) without limiting the effect of any of the
other provisions hereof, during the continuance of any
default with respect to any Superior Indebtedness or any
agreement relating thereto, or any default in the payment of
any Superior Indebtedness, no payment of principal, sinking
fund, interest or premium (or any other amount) shall be
made on or with respect to the indebtedness evidenced by
this subordinated note or any renewals or extensions hereof;
and
(d) during any period of time when, pursuant to
the foregoing paragraphs (b) or (c), payment may not be made
on the indebtedness evidenced by this subordinated note,
then the holder of this subordinated note shall take no
action against or with respect to the Company to seek or to
enforce collection of the Notes or to exercise any of such
holder's rights with respect to this subordinated note,
which prohibition shall include, without limitation, a
prohibition against any acceleration of this subordinated
note, the filing of a collection action, or the initiation
of a bankruptcy petition against the Company.
The Company covenants and agrees, for the benefit of
each and every present and future holder of Superior
Indebtedness, that in the event that pursuant to the
provisions hereof this subordinated note is declared or
becomes due and payable because of an occurrence of an event
of default described herein or otherwise, then each holder
of any Superior Indebtedness then outstanding shall have the
right to declare immediately due and payable on demand all
or any part of such Superior Indebtedness owing and payable
to such holder, regardless of any other maturity or terms of
said Superior Indebtedness; and if and when any such default
has occurred, or any notice of default under the terms
hereof may be served upon the Company, then in each such
event the Company shall and hereby agrees that it will
immediately notify the holders of the Superior Indebtedness
of such default or notice thereof, as the case may be.
No right of any present or future holder of any
Superior Indebtedness of the Company to enforce
subordination as herein provided shall at any time or in any
way be prejudiced or impaired by any failure to act on the
part of the Company, or by any noncompliance by the Company
with the terms, provisions and covenants of this
subordinated note, regardless of any knowledge thereof that
any such holder of Superior Indebtedness may have or be
otherwise charged with. The provisions hereof are solely
for the purpose of defining the relative rights of the
holders of Superior Indebtedness on the one hand, and the
holder or holders of this subordinated note on the other
hand, and nothing herein shall impair, as between the
Company and the holder of this subordinated note, the
obligation of the Company to pay to the holder hereof the
principal, premium, if any, and interest hereon in
accordance with its terms, nor shall anything herein prevent
the holder of this subordinated note from exercising all
remedies otherwise permitted by applicable law or hereunder
upon default hereunder, subject to the rights, if any, of
holders of Superior Indebtedness as herein provided. Each
and every holder of this subordinated note by acceptance
hereof shall undertake and agree for the benefit of each
holder of Superior Indebtedness to execute, verify, deliver
and file any proofs of claim, consents, assignments or other
instruments which any holder of Superior Indebtedness may at
any time require in order to prove and realize upon any
rights or claims pertaining to this subordinated note and to
effectuate the full benefit of the subordination contained
herein and, upon failure of any such holder of this
subordinated note so to do, any such holder of Superior
Indebtedness shall be deemed to be irrevocably appointed the
agent and attorney-in-fact of such holder of this
subordinated note to execute, verify, deliver and file any
such proofs of claim, consents, assignments or other
instruments."
"Subsidiary" means a corporation organized under the
laws of the United States or Canada, or any province of Canada,
which conducts the major portion of its business in and makes the
major portion of its sales to Persons located in the United
States of America or Canada, and at least fifty percent (50%) of
the Voting Stock of which shall, at the time as of which any
determination is being made, be owned by the Company either
directly or through Subsidiaries.
"Subsidiary Stock" shall have the meaning specified in
paragraph 6A.
"Transferee" shall mean any direct or indirect
transferee of all or any part of any Note purchased by any
Purchaser under this Agreement.
"Voting Stock" means Securities of any class or classes
of a corporation the holders of which are ordinarily, in the
absence of contingencies, entitled to vote in the election of the
corporate directors (or persons performing similar functions).
10C. Accounting Principles, Terms and Determinations.
All references in this Agreement to "general accepted accounting
principles" shall be deemed to refer to generally accepted
accounting principles in effect in the United States at the time
of application thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall
be made, and all unaudited financial statements and certificates
and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally
accepted accounting principles applied on a basis consistent with
the most recent audited consolidated financial statements of the
Company and its Subsidiaries delivered pursuant to clause (b) of
paragraph 5H or, if no such statements have been so delivered,
the most recent audited financial statements referred to in
clause (a) of paragraph 8C.
11 MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long
as any Purchaser shall hold any Note, it will make payments of
principal of, interest on, and any Yield-Maintenance Amount
payable with respect to, such Note, which comply with the terms
of this Agreement, by wire transfer of immediately available
funds for credit (not later than 12:00 noon, New York City local
time, on the date due) to the account or accounts of such
Purchaser, if any, as are specified in the Information Schedule,
attached hereto, or, in the case of any Purchaser not named in
the Information Schedule or any Purchaser wishing to change the
account specified for it in the Information Schedule, such
account or accounts in the United States as such Purchaser may
from time to time designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the
place of payment. Each Purchaser agrees that, before disposing
of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made
thereon and of the date to which interest thereon has been paid.
The Company agrees to afford the benefits of this paragraph 11A
to any Transferee which shall have made the same agreement as the
Purchasers have made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay,
and save Prudential, each Purchaser and any Transferee harmless
against liability for the payment of, all out-of-pocket expenses
arising in connection with such transactions, including (i) all
document production and duplication charges and the fees and
expenses of any special counsel engaged by the Purchasers or any
Transferee in connection with this Agreement, the transactions
contemplated hereby and any subsequent proposed modification of,
or proposed consent under, this Agreement, whether or not such
proposed modification shall be effected or proposed consent
granted, and (ii) the costs and expenses, including attorneys'
fees, incurred by any Purchaser or any Transferee in enforcing
(or determining whether or how to enforce) any rights under this
Agreement or the Notes or in responding to any subpoena or other
legal process or informal investigative demand issued in
connection with this Agreement or the transactions contemplated
hereby or by reason of any Purchaser's or any Transferee's having
acquired any Note, including without limitation costs and
expenses incurred in any bankruptcy case. The obligations of the
Company under this paragraph 11B shall survive the transfer of
any Note or portion thereof or interest therein by any Purchaser
or any Transferee and the payment of any Note.
11C. Consent to Amendments. This Agreement may be
amended, and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it,
if the Company shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s)
of the Notes except that, (i) with the written consent of the
holders of all Notes at the time outstanding (and not without
such written consents), the Notes may be amended or the
provisions thereof waived to change the maturity thereof, to
change or affect the principal thereof, or to change or affect
the rate or time of payment of interest on or any Yield-
Maintenance Amount payable with respect to the Notes and (ii)
without the written consent of the holder or holders of all Notes
at the time outstanding, no amendment to or waiver of the
provisions of this Agreement shall change or affect the
provisions of paragraph 7A or this paragraph 11C insofar as such
provisions relate to proportions of the principal amount of the
Notes, or the rights of any individual holder of Notes, required
with respect to any declaration of Notes to be due and payable or
with respect to any consent, amendment, waiver or declaration.
Each holder of any Note at the time or thereafter outstanding
shall be bound by any consent authorized by this paragraph 11C,
whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation
referring to any such consent. No course of dealing between the
Company and the holder of any Note nor any delay in exercising
any rights hereunder or under any Note shall operate as a waiver
of any rights of any holder of such Note. As used herein and in
the Notes, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or
supplemented.
11D. Form, Registration, Transfer and Exchange of
Notes; Lost Notes. The Notes are issuable as registered notes
without coupons in denominations of at least $1,000,000, except
as may be necessary to reflect any principal amount not evenly
divisible by $1,000,000. The Company shall keep at its principal
office a register in which the Company shall provide for the
registration of Notes and of transfers of Notes. Upon surrender
for registration of transfer of any Note at the principal office
of the Company, the Company shall, at its expense, execute and
deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such
transferee or transferees. At the option of the holder of any
Note, such Note may be exchanged for other Notes of like tenor
and of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Note to be exchanged at
the principal office of the Company. Whenever any Notes are so
surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the
exchange is entitled to receive. Each installment of principal
payable on each installment date upon each new Note issued upon
any such transfer or exchange shall be in the same proportion to
the unpaid principal amount of such new Note as the installment
of principal payable on such date on the Note surrendered for
registration of transfer or exchange bore to the unpaid principal
amount of such Note. No reference need be made in any such new
Note to any installment or installments of principal previously
due and paid upon the Note surrendered for registration of
transfer or exchange. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by
a written instrument of transfer duly executed, by the holder of
such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon
transfer thereof shall carry the rights to unpaid interest and
interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of
written notice from the holder of any Note of the loss, theft,
destruction or mutilation of such Note and, in the case of any
such loss, theft or destruction, upon receipt of such holder's
unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the
Company will make and deliver a new Note, of like tenor, in lieu
of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to
due presentment for registration of transfer, the Company may
treat the Person in whose name any Note is registered as the
owner and holder of such Note for the purpose of receiving
payment of principal of and interest on, and any Yield-
Maintenance Amount payable with respect to, such Note and for all
other purposes whatsoever, whether or not such Note shall be
overdue, and the Company shall not be affected by notice to the
contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in all or any
part of such Note to any Person on such terms and conditions as
may be determined by such holder in its sole and absolute
discretion.
11F. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained herein
or made in writing by or on behalf of the Company in connection
herewith shall survive the execution and delivery of this
Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of
any investigation made at any time by or on behalf of any
Purchaser or any Transferee. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter.
11G. Successors and Assigns. All covenants and other
agreements in this Agreement contained by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto
(including, without limitation, any Transferee) whether so
expressed or not.
11H. Disclosure to Other Persons. The Company
acknowledges that Prudential, each Purchaser and each holder of
any Note may deliver copies of any financial statements and other
documents delivered to it, and disclose any other information
disclosed to it, by or on behalf of the Company or any Subsidiary
in connection with or pursuant to this Agreement to (i) its
directors, officers, employees, agents and professional
consultants, (ii) any Purchaser or holder of any Note, (iii) any
Person to which it offers to sell any Note or any part thereof,
(iv) any Person to which it sells or offers to sell a
participation in all or any part of any Note, (v) any Person from
which it offers to purchase any security of the Company, (vi) any
federal or state regulatory authority having jurisdiction over
it, (vii) the National Association of Insurance Commissioners or
any rating agency or similar organization, or (viii) any other
Person to which such delivery or disclosure may be necessary or
appropriate (a) in compliance with any law, rule, regulation or
order applicable to it, (b) in response to any subpoena or other
legal process or informal investigative demand, (c) in connection
with any litigation to which it is a party or (d) in order to
protect the investment of any holder in any Note.
11I. Notices. All written communications provided for
hereunder (other than communications provided for under paragraph
2) shall be sent by first class mail or nationwide overnight
delivery service (with charges prepaid) and (i) if to any Person
listed in the Information Schedule attached hereto, addressed to
it at the address specified for such communications in such
Information Schedule, or at such other address as it shall have
specified in writing to the Person sending such communication,
and (ii) if to any Purchaser or holder of any Note which is not a
Person listed in such Information Schedule, addressed to it at
such address as it shall have specified in writing to the Person
sending such communication or, if any such holder shall not have
so specified an address, then addressed to such holder in care of
the last holder of such Note which shall have so specified an
address to the Person sending such communication, provided,
however, that any such communication to the Company may also, at
the option of the Person sending such communication, be delivered
by any other means either to the Company at its address specified
in the Information Schedule or to any Authorized Officer of the
Company. Any communication pursuant to paragraph 2 shall be made
by the method specified for such communication in paragraph 2,
and shall be effective to create any rights or obligations under
this Agreement only if, in the case of a telephone communication,
an Authorized Officer of the party conveying the information and
of the party receiving the information are parties to the
telephone call, and in the case of a telecopier communication,
the communication is signed by an Authorized Officer of the party
conveying the information, addressed to the attention of an
Authorized Officer of the party receiving the information, and in
fact received at the telecopier terminal the number of which is
listed for the party receiving the communication in the
Information Schedule or at such other telecopier terminal as the
party receiving the information shall have specified in writing
to the party sending such information.
11J. Payments Due on Non-Business Days. Anything in
this Agreement or the Notes to the contrary notwithstanding, any
payment of principal of or interest on, or Yield-Maintenance
Amount payable with respect to, any Note that is due on a date
other than a Business day shall be made on the next succeeding
Business Day. If the date for any payment is extended to the
next succeeding Business Day by reason of the preceding sentence,
the period of such extension shall not be included in the
computation of the interest payable on such Business Day.
11K. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11L. Descriptive Headings. The descriptive headings of
the several paragraphs of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
11M. Satisfaction Requirement. If any agreement,
certificate or other writing, or any action taken or to be taken,
is by the terms of this Agreement required to be satisfactory to
any Purchaser, to any holder of Notes or to the Required
Holder(s), the determination of such satisfaction shall be made
by such Purchaser, such holder or the Required Holder(s), as the
case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11N. Governing Law. IN ACCORDANCE WITH THE PROVISIONS
OF 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
STATE OF NEW YORK.
11O. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.
11P. Binding Agreement. When this Agreement is
executed and delivered by the Company and Prudential, it shall
become a binding agreement between the Company and Prudential.
This Agreement shall also inure to the benefit of each Purchaser
which shall have executed and delivered a Confirmation of
Acceptance, and each such Purchaser shall be bound by this
Agreement to the extent provided in such Confirmation of
Acceptance.
[Remainder of this page is intentionally left blank.
Next page is signature page.]
If you are in agreement with the foregoing, please sign
below on the several counterparts of this letter and returning at
least one fully executed copy of this letter to the Company,
whereupon this letter shall become a binding agreement between
the Company and Prudential.
Very truly yours,
NATIONAL CONSUMER
COOPERATIVE BANK
By
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer
By
Name: ▇▇▇▇▇▇▇ ▇. Seas
Title: Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
ANNEX 1
INFORMATION SCHEDULE
Prudential/Purchaser(s)
The Prudential Insurance and notices:
Company of America
The Prudential Insurance
Company of America
(1) All payments on account c/o Prudential Capital Group
of Notes held by such 1114 Avenue of the Americas,
purchaser shall be made by 30th Floor
wire transfer of immediately ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
available funds for credit to: Attention: Managing Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Account No. ▇▇▇-▇▇▇▇-▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Prudential Managed Account
Bank Of New York (4) Recipient notices of
New York, New York telephonic or facsimile
(ABA No.: 021-000-018) prepayment:
Each such wire transfer shall Manager, Trade Management
set forth
the name of the Company, a Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
reference to Fax: (▇▇▇) ▇▇▇-▇▇▇▇
the due date and application
(as among principal, interest (5) Tax Identification No.:
and Yield-Maintenance Amount) ▇▇-▇▇▇▇▇▇▇
of the payment being made and
the Security Number identified (6) Authorized Officers:
in the Confirmation of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Acceptance. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(2) Address for all notices ▇▇▇▇▇▇ ▇▇▇▇▇
relating to payments:
The Prudential Insurance
Company of America
Three Gateway Center, 12th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager, ▇▇▇▇▇▇▇▇
and Collections
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Prudential Capital Group
1114 Avenue of the ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Managing Director
(3) Address for all other
communications
and notices:
The Company
National Consumer Cooperative
Bank
(1) Address for Notices:
National Consumer Cooperative Bank
Suite 700
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: President
(2) Receipt of telephonic or
facsimile notices:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
(3) Authorized Officers:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Chief Financial Officer
▇▇▇▇▇▇▇ ▇. Seas
Treasurer
ANNEX 2
Disclosures of the Company
LIENS (PARAGRAPH 6C)
Section 10.5 of the Bank Loan Agreement provides for a Lien
and right of setoff in favor of the Agent and the banks party
thereto with respect to deposits or other sums due to the Company
from the Agent or such banks.
Each of the Company and NCB Capital Corporation sells
mortgage loans, ESOP loans and other loans from its portfolio in
the ordinary course of business, structured either as an Asset
Securitization or a sale of whole loans. The purchaser typically
provides for an alternative security interest and files a
financing statement covering the loans sold to it in order to
protect itself against a subsequent determination that such sale
was not a sale but rather a loan.
In order to provide a liquidity facility, NCB Savings Bank,
FSB ("NCBSB") is party to a Blanket Agreement for Advances and
Security Agreement, dated as of October 19, 1993, with the
Federal Home Loan Bank of Cincinnati (the "FHLB") pursuant to
which it grants a security interest to the FHLB in its FHLB stock
and in its mortgage portfolio as security for advances that the
FHLB agrees to make to NCBSB.
SUBSIDIARIES AND AFFILIATES (PARAGRAPH 8A)
Name of Jurisdiction Nature and Extent of
Subsidiary/Affiliate of Affiliation
Incorporation
NCB Capital Delaware The Company is the
Corporation** owner of all
outstanding voting
stock of NCB Capital
Corporation
NCB Financial Delaware Wholly owned subsidiary
Corporation** of the Company
NCB Savings Bank, Federal Charter Wholly owned subsidiary
FSB** of NCB Financial Corporation
NCB Development District of The Company was
Corporation Columbia non- directed by 12.U.S.C.
profit 3051(b) to organize
corporation NCBDC, which has no
capital stock. Six of
its nine directors are
directors of the Company.
The Company makes annual
contributions to NCBDC
and provides office
space and services for
which the Company is
reimbursed at its cost.
NCB Insurance Brokers, New York Wholly owned subsidiary
Inc.** of NCB Capital
Corporation
NCB Retail Finance Delaware Special purpose
Corporation corporation and wholly
owned subsidiary of the
Company
NCB I, Inc.** Delaware Special purpose
corporation and wholly
owned subsidiary of the
Company
** Restricted Subsidiary
DESCRIPTION OF BUSINESS (PARAGRAPH 8C(c))
The Company and the Subsidiaries provide a broad array of
financial services and products to the Nation's cooperative-
related business sector, including but not limited to commercial
and real estate lending, mortgage banking, capital markets and
advisory services, leasing and lease financing, depository
services, asset securitization, derivatives, and insurance
brokerage.
INDEBTEDNESS (PARAGRAPH 8O)
As of the date hereof, the Company had outstanding Debt for
borrowed money as follows:
Investor Amount Maturity
Lutheran Brotherhood $7,000,000 ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇ Life Insurance Company $3,000,000 March 31, 2000
International Life Investors $6,100,000 March 31, 2000
Insurance Company
The Canada Life Assurance $3,900,000 March 31, 2000
Company
National Westminster Bank, et al. $170,000,000 December 31,1996
($70,000,000
outstanding)
Signet Bank/Maryland $11,000,000 Upon demand
($11,000,000
outstanding)
PNC Bank $10,000,000 Upon demand
($10,000,000
outstanding)
Credit Suisse $10,000,000 November 10, 1997
Massachusetts Mutual Life $25,000,000 October 15, 1995
Insurance Company
Equitable Variable Life $7,000,000 June 24, 1997
Insurance Company
$2,000,000 December 24, 1997
The Equitable Life Assurance $3,000,000 December 24, 1997
Society of the United States
Mellon Bank, N.A., as Trustee $3,000,000 December 24, 1997
for First Plaza Group Trust (as
directed by Equitable Capital
Management Corporation)
Principal Mutual Life Insurance $10,000,000 December 24, 1997
Company
IDS Certificate Company $8,000,000 June 24, 1997
Safeco Life Insurance Company $4,000,000 June 24, 1997
Phoenix Home Life Mutual $5,000,000 June 24, 1998
Insurance Company
Provident Mutual Life Insurance $2,500,000 June 24, 1998
Company of Philadelphia
Provident Mutual Life and $1,000,000 June 24, 1998
Annuity Company of America
Mutual Service Life Insurance $500,000 June 24, 1998
Company
All such indebtedness is unsecured.
RESTRICTIONS ON DEBT (PARAGRAPH 8P)
The National Westminster Bank indebtedness and all of the
other indebtedness, referred to in the above table, each restrict
the Company's right to incur Debt, but none of such restrictions
is violated by the sale of the Notes.
EXHIBIT A
[FORM OF NOTE]
NATIONAL CONSUMER COOPERATIVE BANK
7.68% SENIOR NOTE DUE DECEMBER 28, 2005
No. R- 1
$30,000,000
FOR VALUE RECEIVED, NATIONAL CONSUMER COOPERATIVE BANK
(the "Company"), a corporation organized and existing under the
laws of the United States of America, hereby promises to pay to
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, or registered
assigns, the principal sum of THIRTY MILLION DOLLARS
($30,000,000) with interest (computed on the basis of a three
hundred sixty (360) day year of twelve (12) thirty (30) day
months) (a) on the unpaid balance thereof at the rate of 7.68%
per annum from the date hereof, payable semi-annually on the 28th
day of June and December in each year commencing with the June or
December next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) on any overdue
payment (including any overdue prepayment) of principal, any
overdue payment of interest, and any overdue payment of any Yield-
Maintenance Amount (as defined in the Agreement referred to
below), payable semi-annually as aforesaid (or, at the option of
the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) two percent (2%) in
excess of the interest rate referenced in the preceding clause
(a) or (ii) the rate of interest publicly announced by ▇▇▇▇▇▇
Guaranty Trust Company of New York from time to time in New York
City as its Prime Rate.
Payments of principal of, and interest on, and any
Yield-Maintenance Amount payable with respect to, this Note are
to be made at the main office of Bank of New York in New York
City or at such other place as the holder hereof shall designate
to the Company in writing, in lawful money of the United States
of America.
This Note is one of a series of Notes (herein called
the "Notes") issued pursuant to a Note Purchase Agreement, dated
as of December 28, 1999 (herein called the "Agreement"), between
the Company and The Prudential Insurance Company of America and
is entitled to the benefits thereof. As provided in the
Agreement, this Note is subject to optional prepayment, in whole
or from time to time in part on the terms specified in the
Agreement.
This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument
of transfer duly executed, by the registered holder hereof or
such holder's attorney duly authorized in writing, a new Note for
a like principal amount will be issued to, and registered in the
name of, the transferee. Prior to due presentment for registra
tion of transfer, the Company may treat the person in whose name
this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
In case an Event of Default, as defined in the Agree
ment, shall occur and be continuing, the principal of this Note
may be declared or otherwise become due and payable in the
manner and with the effect provided in the Agreement.
This Note is intended to be performed in the State of
New York and shall be construed and enforced in accordance with
the law of such State.
NATIONAL CONSUMER COOPERATIVE BANK
By
Vice President
By
Treasurer
EXHIBIT B
FORM OF COMPANY COUNSEL'S CLOSING OPINION
[Letterhead of ▇▇▇▇ & ▇▇▇▇▇▇▇]
December 28, 1999
To the Persons Listed on
Annex 1 hereto
Ladies and Gentlemen:
We have acted as counsel for the National Consumer
Cooperative Bank (the "Company"), a corporation organized under
the laws of the United States and which does business as the
National Consumer Cooperative Bank, in connection with the
execution and delivery by the Company of the Note Purchase
Agreement, dated as of December 28, 1999, between the Company and
The Prudential Insurance Company of America (the "Agreement"),
pursuant to which the Company has issued to you today 7.68% Notes
Due December 28, 1999 of the Company in the aggregate principal
amount of $30,000,000 (the "Notes"). All capitalized terms used
but not specifically defined in this opinion letter have the
respective meanings assigned to them in the Agreement. This
letter is being delivered to you in satisfaction of the condition
set forth in paragraph 3A(ii) of the Agreement and with the
understanding that you are purchasing the Notes in reliance on
the opinions expressed herein.
As such counsel, we have examined such certificates of
public officials, certificates of officers of the Company, and
copies certified to our satisfaction of trust documents and
records of the Company and of other papers, and have made such
other investigations, as we have deemed relevant and necessary as
a basis for our opinion hereinafter set forth. In our
examination of all such documents, we have
(i) assumed the genuineness of all signatures (other
than signatures of officers of the Company), the conformity
to original documents of documents submitted to us as
certified or photostatic copies, and the authenticity of the
originals of such documents, and
(ii) relied upon such certificates of public officials
and of officers of the Company with respect to the accuracy
of material factual matters contained therein which were not
independently established.
With respect to the opinion expressed in paragraph 5 hereof, we
have also relied upon the representation made by you in paragraph
9A of the Agreement.
Based on the foregoing, it is our opinion that:
1. At the time of the execution of the Financing Agreement
the Company was a corporation duly organized, validly existing
and in good standing under the laws of the United States and had
the necessary corporate power and authority to carry on its
businesses as then being conducted and to enter into and perform
its obligations under the Financing Agreement.
2. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the United States
and has the necessary corporate power and authority to carry on
its businesses as now being conducted and to enter into and
perform its obligations under the Agreement and the Notes.
3. The Company is duly qualified as a foreign entity and
in good standing in each jurisdiction where the nature of the
business transacted or Properties owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing would not, in the aggregate, have a
materially adverse effect on the operations or financial
condition of the Company.
4. The Agreement, the Notes and the Financing Agreement:
(a) have been duly authorized by all requisite
corporate action on the part of the Company (no action by
any holder of any beneficial interest of the Company being
required by law, by the Charter of the Company or the Bylaws
of the Company (as each is in effect on the date hereof), or
otherwise);
(b) have been duly executed and delivered by duly
authorized officers of the Company; and
(c) are the valid obligations of the Company, legally
binding upon and enforceable against the Company in
accordance with their respective terms.
The Notes are entitled to the benefits of the terms of the
Agreement.
5. It is not necessary, under the circumstances
contemplated by the Agreement, to register the Notes under the
Securities Act, or to qualify an indenture in respect of the
Notes under the Trust Indenture Act of 1939, as amended.
6. None of the transactions contemplated by the Agreement
will result in any violation of Regulation, T, U or X of the
Board of Governors of the Federal Reserve System.
7. The execution and delivery of the Agreement and the
Notes and the fulfillment of and compliance with the respective
provisions of the Agreement, the Notes, and the Financing
Agreement do not and will not conflict with, or result in a
breach of the terms, conditions, or provisions of, or constitute
a default under, or result in any violation of, or result in the
creation of any Lien upon any of the Properties or assets of the
Company pursuant to, or require, except as has been obtained or
performed, any authorization, consent, approval, exemption, or
other action by or notice to or filing with any state or Federal
court, administrative or governmental body, or other Person
pursuant to
(a) the Charter, as in effect on the date hereof, or
the Bylaws, as in effect on the date hereof, of the Company,
(b) any applicable law (including any securities or
"Blue Sky" law), statute, rule, or regulation, or
(c) insofar as is known to us, any agreement,
instrument, order, judgment, or decree to which the Company
is a party or otherwise subject as of the date hereof.
All opinions herein contained with respect to the
enforceability of documents and instruments are qualified to the
extent that:
(a) the availability of equitable remedies, including
without limitation, specific enforcement and injunctive
relief, is subject to the discretion of the court before
which any proceedings therefor may be brought; and
(b) the enforceability of certain terms provided in
the Agreement and the Notes may be limited by
(i) applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights
generally as at the time in effect, and
(ii) general principles of equity and the
discretion of a court in granting equitable remedies
(whether enforceability is considered in a proceeding
at law or in equity).
This opinion may be relied upon subsequent holders, if any,
of the Notes.
Very truly yours,
ANNEX 1
ADDRESSEES
The Prudential Insurance Company of America
c/o Prudential Capital Group
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT C
FORM OF CERTIFICATE OF OFFICERS
NATIONAL CONSUMER COOPERATIVE BANK
OFFICERS' CERTIFICATE
We, ______ and ______ each hereby certify that we are,
respectively, the ______ and the ______ of NATIONAL CONSUMER
COOPERATIVE BANK (the "Company"), a corporation organized under
the laws of the United States, and that, as such, we are
authorized to execute and deliver this Certificate in the name
and on behalf of the Company, and that:
1. This Certificate is being delivered pursuant to
paragraph 3A(iii) of the Note Purchase Agreement, dated as of
December 28, 1999, between the Company and The Prudential
Insurance Company of America (the "Agreement"), pursuant to which
the Company has issued to you today 7.68% Notes of the Company
due December28, 2005, in the aggregate principal amount of
$30,000,000 (the "Notes"). All capitalized terms used, and not
defined in this Certificate have the respective meanings assigned
to them in the Agreement.
2. The warranties and representations contained in
paragraph 8 of the Agreement are true in all material respects on
the date hereof with the same effect as though made on and as of
the date hereof.
3. The Company has not taken any action or permitted any
condition to exist which would have been prohibited by paragraph
6 of the Agreement had such paragraph been binding and effective
at all times during the period from December 28, 1999 to and
including the date hereof.
4. The Company has performed and complied with all
agreements and conditions contained in the Agreement that are
required to be performed or complied with by the Company before
or at the date hereof.
5. True and correct copies of each of
(a) the Bank Loan Agreement,
(b) the Financing Agreement,
(c) each of the outstanding Class A Notes, and
(d) Federal Home Loan Bank of Cincinnati Blanket
Agreement for Advances and Security Agreement, as
referenced in Annex 2 to the Agreement;
in each case, as in effect on December 28, 1999, are attached to
this Certificate as Attachment A, Attachment B, Attachment C, and
Attachment D, respectively, together with any amendments
subsequent to such date. Any amendment to the Financing
Agreement and the Class A Notes has been effected in compliance
with paragraph 6P of the Agreement.
6. ___________ is on and as of the date hereof, and at all
times subsequent to __________ has been, the duly elected,
qualified and acting [Assistant] Secretary of the Company, and
the signature appearing on the Certificate of [Assistant]
Secretary dated the date hereof and delivered to the Purchasers
contemporaneously herewith is his or her genuine signature.
IN WITNESS WHEREOF, we have executed this Certificate in the
name and on behalf of the Company on December 28, 1999.
NATIONAL CONSUMER COOPERATIVE
BANK
By
_______________________________
Name:
Title:
ATTACHMENT A
[THE BANK LOAN AGREEMENT]
ATTACHMENT B
[THE FINANCING AGREEMENT]
ATTACHMENT C
[OUTSTANDING CLASS A NOTES]
ATTACHMENT D
[FEDERAL HOME LOAN BANK OF CINCINNATI BLANKET AGREEMENT
FOR ADVANCES AND SECURITY AGREEMENT]
EXHIBIT D
FORM OF CERTIFICATE OF SECRETARY
NATIONAL CONSUMER COOPERATIVE BANK
CERTIFICATE OF [ASSISTANT] SECRETARY
I, ______, hereby certify that I am the duly elected,
qualified and acting [Assistant] Secretary of the NATIONAL
CONSUMER COOPERATIVE BANK (the "Company"), a corporation
organized under the laws of the United States, and that, as such,
I have access to its corporate records and am familiar with the
matters herein certified, I am authorized to execute and deliver
this Certificate in the name and on behalf of the Company, and
that:
1. This Certificate is being delivered pursuant to
paragraph 3A(iv) of the Note Purchase Agreement, dated as of
December 28, 1999, between the Company and The Prudential
Insurance Company of America (the "Agreement"), pursuant to which
the Company has issued to you today 7.68% Notes of the Company
due December 28, 2005, in the aggregate principal amount of
$30,000,000 (the "Notes"). All capitalized terms used and not
defined in this Certificate have the respective meanings assigned
to them in the Agreement.
2. Attached hereto as Attachment A1 is a true and correct
copy of resolutions, and the preamble thereto, adopted by the
Board of Directors of the Company on _________ __, 1999 and such
resolutions and preamble set forth in Attachment A hereto were
duly adopted by said Board of Directors and are in full force and
effect on and as of the date hereof, not having been amended,
altered or repealed, and such resolutions are filed with the
records of said Board of Directors.
3. The documents listed below were executed and delivered
by the Company pursuant to and in accordance with the resolutions
set forth in Attachment A hereto and said documents as executed
are substantially in the form submitted to and approved by the
Board of Directors of the Company as aforementioned:
(a) the Agreement; and
(b) the Notes in the respective principal amounts,
bearing the registration numbers and payable as set forth in
the Agreement;
4. Attached hereto as Attachment B is a true, correct and
complete copy of the Bylaws of the Company as in full force
and effect on and as of the date hereof, which Bylaws were
last amended by the Board of Directors of the Company on,
and have been in full effect in said form at all times from
and after ________ __, 199_ to and including the date
hereof, without modification or amendment in any respect.
5. Each of the following named persons is on and as of the
date hereof, and at all times subsequent to _____ has been a duly
elected, qualified and acting officer of the Company holding the
office or offices set forth below opposite his or her name:
Officers Executing Documents
Name Office Signature
[President] /s/________________________
[Assistant Secretary /s/_______________________
[Treasurer] /s/________________________
6. The signature appearing opposite the name of each such
person set forth above is his or her, as the case may be, genuine
signature.
7. There have been no amendments or supplements to
restatements of the Charter of the Company since ____________ __,
19___.
IN WITNESS WHEREOF, I have hereunto set my hand on December
__, 1999.
[Assistant] Secretary
ATTACHMENT A
BOARD OF DIRECTORS
NATIONAL CONSUMER COOPERATIVE BANK
RESOLUTIONS ADOPTED
WHEREAS, this Board has previously enacted Resolution No.
______; and
WHEREAS, pursuant to Resolution No. ______, the Company and
The Prudential Insurance Company of America entered into the Note
Purchase Agreement (together with all exhibits and schedules
thereto, the "Agreement"), dated as of December 28, 1999,
pursuant to which the Company may issue Notes of the Company in
the aggregate principal amount of up to Thirty Million Dollars
($30,000,000) (the "Notes"); and
WHEREAS, this Board has reviewed in detail and discussed the
terms and provisions of the Agreement, including the forms of the
Notes specified therein; and
WHEREAS, this Board deems it advisable to ratify the
Company's execution and delivery of the Agreement and to adopt
certain other resolutions; and
WHEREAS, capitalized terms used in these preambles and
resolutions and not herein defined shall have the respective
meanings ascribed to them in the Agreement;
NOW THEREFORE, BE IT RESOLVED, that the execution and
delivery of the Agreement by Authorized Officers of the Company
(as defined below) is hereby approved and ratified in every
respect; and each and every transaction effected or to be
effected pursuant to and substantially in accordance with the
terms of the Agreement, including, but not limited to, each
specific transaction that is described, authorized and approved
in these resolutions, is hereby authorized and approved in each
and every respect; and
RESOLVED, that the Company borrow from the Purchasers an
aggregate amount of up to Thirty Million Dollars ($30,000,000),
as provided in the Agreement, such indebtedness to be evidenced
by the Notes, in the amounts and upon the terms and conditions
provided for in the Agreement; and that each of the President,
any Vice President, the Treasurer and each other officer of the
Company (each, an "Authorized Officer") is hereby severally
authorized to execute and deliver, in the name and on behalf of
the Company, the Notes, substantially in the form thereof
presented to this Board and heretofore approved, with such
changes therein as shall be approved by the officer executing and
delivering the same, such approval to be evidenced conclusively
by such execution and delivery; and
RESOLVED, that this Board hereby authorizes each of the
Authorized Officers, severally, to execute and deliver for and on
behalf of the Company the certificates required by the Agreement;
and
RESOLVED, that the Authorized Officers and any person or
persons designated and authorized so to act by any Authorized
Officer are hereby each severally authorized to do and perform or
cause to be done and performed, in the name and on behalf of the
Company, all other acts, to pay or cause to be paid, on behalf of
the Company, all related costs and expenses and to execute and
deliver or cause to be executed and delivered such other notices,
requests, demands, directions, consents, approvals, orders,
applications, agreements, instruments, certificates,
undertakings, supplements, amendments, further assurances or
other communications of any kind, under the corporate seal of the
Company or otherwise and in the name of and on behalf of the
Company or otherwise, as he, she or they may deem necessary,
advisable or appropriate to effect the intent of the foregoing
Resolutions or to comply with the requirements of the instruments
approved and authorized by the foregoing Resolutions, including
but not limited to the Agreement and the Notes; and
RESOLVED, that any acts of any Authorized Officer of the
Company and of any person or persons designated and authorized to
act by any Authorized Officer of the Company, which acts would
have been authorized by the foregoing Resolutions except that
such acts were taken prior to the adoption of such Resolutions,
are hereby severally ratified, confirmed, approved and adopted as
the acts of the Company; and
RESOLVED, that the Secretary of the Company is hereby
authorized and empowered to certify to the passage of the
foregoing Resolutions under the seal of this Company or
otherwise.
ATTACHMENT B
Bylaws of the Company
[To be supplied by Company.]